Gusinsky was given a choice: sell his media empire to Gazprom or face prosecution for large-scale fraud. It was blackmail. He agreed and fled the country. Russia’s freest media group was now under Kremlin control.
The other big media tycoon, Boris Berezovsky, fared no better. He had been accused of fraud under the premiership of Primakov, but the charges were dropped when Putin became prime minister, and he was seen as by far the most powerful oligarch – with a media empire as well as massive industrial and commercial assets, including the oil company Sibneft and the airline Aeroflot. As he was gradually squeezed out of Putin’s inner circle, so his media became ever more critical. In June he criticised plans announced by Putin for a recentralisation of power, and the day after Gusinsky’s arrest the public prosecutor announced he was extending an investigation into Aeroflot’s finances. Berezovsky was suspected of fraud and money-laundering on a massive scale.
Just before his election in March, Putin had pledged to outlaw the oligarchs: ‘Those people who fuse power and capital – there will be no oligarchs of this kind as a class.’ The phrase sent a chill down many spines, as it recalled Stalin’s policy of liquidating the kulaks, or rich peasants, ‘as a class’. What he objected to was the idea that wealth (especially fabulous, ill-gotten wealth) should render political influence. Even though Berezovsky had helped him come to power, Putin resented the influence he wielded through his media empire (which included not just ORT but another channel, TV-6, and several newspapers).
As in Gusinsky’s case, Berezovsky’s downfall may have been triggered, or hastened, by a television programme. When the Kursk nuclear submarine sank in the Barents Sea on 12 August 2000, leading to the deaths of 188 crew members, ORT excoriated Putin for his tardy response. The station’s top presenter, Sergei Dorenko – the attack-dog taken on to help Putin’s party win the election at the end of 1999 – now poured his bile on the president. Putin had remained on holiday in Sochi for a full five days following the accident, and it was another four before he visited the northern garrison town and met the dead servicemen’s families. He had also turned down offers of help from Britain and Norway. Dorenko dissected an interview given by Putin to justify his response, and sneered at every phrase, as though he had nothing but contempt for the country’s president. For example, Putin was shown saying that foreign help was offered only on the 16th. Dorenko heaved a big sigh and retorted: ‘I’m sorry, but in fact they offered to help on the 15th, and they would have offered earlier if we hadn’t been lying to the world that everything was OK and we didn’t need help.’ Dorenko also broadcast a secret recording of a meeting Putin held behind closed doors with relatives of the dead, in which he was heard blaming the media for the disaster: ‘They’re liars. They’re liars,’ he said. ‘For the last ten years television has been destroying our army and navy, that people are dying in today…’
Dorenko’s show was axed. And soon it was Berezovsky’s turn to follow Gusinsky into exile. At the end of August Berezovsky went to the Kremlin to see Putin’s chief of staff, Alexander Voloshin, who gave him an ultimatum: to transfer his ORT shares to the state or ‘follow Gusinsky’ – that is, face prosecution. The next day Berezovsky was received by Putin himself, who accused the businessman of deliberately trying to destroy him. They had a furious row. According to Berezovsky, Putin said to him: ‘You should return your shares under my personal control… I will manage ORT on my own.’ Berezovsky vowed never to do that, and stormed out.
In fact Berezovsky did surrender his control of the station, selling his stake to fellow oligarch Roman Abramovich, who meekly transferred his voting rights to the state, thus completing the government’s takeover of the channel. But this did not stop the attacks against Berezovsky. On 1 November the state prosecutor accused him of defrauding Aeroflot of hundreds of millions of dollars. Berezovsky was abroad at the time and decided to stay there. From the safety of exile he claimed that the money he was alleged to have embezzled was partly used to finance Putin’s election campaigns.
Berezovsky has lived in London ever since, despite repeated Russian attempts to have him extradited, and was granted political asylum in September 2003. Putin personally intervened to try to persuade Britain to send him back, and in so doing betrayed his lack of understanding of Western systems. He asked Prime Minister Tony Blair to put pressure on the courts to extradite Berezovsky. According to a well-informed source, Blair explained that this was impossible in the UK: it was a magistrate’s decision, not the government’s. Putin, unable to fathom the independence of the courts, took offence.[1] This was the KGB man speaking, the product of a Soviet upbringing unwittingly applying his own undemocratic standards to a Western country.
There is no reason to think that Putin was dissembling; rather, it seems clear that he actually believes that it is normal for Western politicians to influence the courts in the same way as Russian leaders can. His belief that governments control the media is similar: in 2005 he accused President Bush to his face of personally ordering the sacking of the veteran CBS news anchor Dan Rather. And on another occasion he told a journalist who questioned why Russian police routinely beat up peaceful protestors that in the West it was ‘normal’ for demonstrators who found themselves in the wrong place to be ‘beaten around the head with a baton’.
The vertical of power
The crackdown on the free media was not the only reason why the West’s admiration for President Putin’s first steps in foreign policy and economic reform, described in the first two chapters of this book, was tempered from the start by wariness about his understanding of democracy.
One of Putin’s earliest decisions as president was to start creating what he called the ‘vertical of power’ – the gathering-in of all political power to the centre, and effectively into his own hands. He believed that lack of central control lay at the heart of Russia’s woes, that Yeltsin’s weak leadership had allowed crime and corruption to flourish, oligarchs to amass power and the country’s regions to spin off into separate orbits. Yeltsin had encouraged the regions to ‘take as much sovereignty as you can swallow’, which had had the unwanted effect of allowing governors quietly to ignore or even sabotage edicts from the centre, threatening the disintegration of the federation. Many regions passed laws that contradicted the Russian constitution, withheld taxes from the centre and struck bilateral agreements with foreign countries. Some of them could have survived well as independent countries: the republic of Yakutia, for example, produces one-quarter of the world’s diamonds (and has a population of less than half a million); Khanty-Mansiisk (population 1.5 million) is the world’s second largest oil producer.
On 13 May – just six days after his inauguration – Putin announced that the country’s 89 regions would be placed under the control of seven ‘super-governors’ personally appointed by the president. Five of Putin’s seven enforcers turned out to be siloviki[2] – men with careers in the security services and armed forces. They included Viktor Cherkesov, first deputy director of the FSB, whose work in the past had included the persecution of Soviet dissidents.
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1. The magistrate who rejected the extradition request for Berezovsky (and also for an exiled Chechen leader, Akhmed Zakayev, who was also wanted by Moscow) was Judge Timothy Workman. A few months later, in January 2004, an 83-year-old man with the same surname, Robert Workman, was shot dead when he opened his front door to a stranger in a quiet village north of London. No motive for the murder has been established and the killer has not been found. There was speculation that the murder could have been a case of mistaken identity.
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2. The word