The Russia Conundrum

CHAPTER 6

ALL THINGS TO ALL MEN

When Boris Yeltsin stepped down and Vladimir Putin came to power on the eve of the millennium, everything changed in Russia. In the runup to Yeltsin’s resignation, I heard whispers that Putin would be shooed in as president, but I didn’t say anything. I neither supported him nor spoke out against him. I just accepted that Putin had been chosen by Yeltsin, and that Yeltsin must have known what he was doing; that he knew better than I did what sort of person Putin was.

For a while, at first, I thought that maybe Putin was a good choice. I had been involved in Kremlin politics on and off for a decade and I was conscious that we were living through one of those great turning points in history when Russia’s future is up for grabs: when the nation can go in radically differing directions and that the slightest nudge of events can send her hurtling along the right or wrong path. At all her moments of destiny – the Mongol invasion in 1237, the reigns of Peter the Great and Catherine the Great in the seventeenth and eighteenth centuries, the Decembrist Revolt of 1825, the liberation of the serfs in 1861, the revolutions of 1917, the death of Stalin in 1953 and the attempted coup of 1991 – Russia has found herself at a crossroads between the path of democracy and the continued domination of autocracy. When such moments occur, the individual characters of our leaders have had a disproportionate influence on their outcome. So, I held my breath and hoped Vladimir Putin would make the right choices.

The first time I met him, I had the impression I was dealing with a fairly sensible guy, someone who shared the liberal views of Yeltsin and the rest of us. After that first meeting, he used to call on me at times when he needed advice or information about the economy or Yukos and the company’s activities. We usually met in his offices, but one particular meeting stands out, because on this occasion he invited me and my colleagues to an outdoor barbecue. It was in May 2000, when he was already president, and Putin used the occasion to suggest a deal, a sort of nonaggression pact: the state, he said, would promise not to interfere in our business affairs if we, the so-called oligarchs, would agree not to use the power of our businesses to put pressure on the authorities. He wasn’t demanding an end to commercial lobbying, of course – that would have been naive – but, rather, an agreement not to use the powerful resources of our companies to cause trouble for the government by inciting protests against the authorities or sabotaging deliveries, for instance, and it seemed to me at the time that this was a fair request. Because of the circumstances of the encounter, it became known as ‘the barbecue meeting’ and people started talking about the ‘barbecue agreement’ between the two sides. There were plenty of more formal meetings between us, always in the Kremlin, sometimes sitting at the large round negotiating table in St Catherine Hall, often with other members of the Bureau of the Russian Union of Industrialists and Entrepreneurs.

Putin, without a doubt, has a convincing manner. It’s a skill that I think he acquired in the KGB and then developed when he was deputy mayor of St Petersburg, when Mayor Anatoly Sobchak had used him as a go-between in the three-way conspiracy of officials, security forces and criminals that ruled the city, divvying up the loot between them. He acquired a talent for taking people in, and he used it in the first period of his time in power: if Putin needed your help, he would do everything possible to convince you that you shared the same aims and opinions. One conversation I had with him in those early days was in a basement restaurant next to the Cathedral of Christ the Saviour, a few hundred metres from the Kremlin. Putin started by saying ‘This is what the state needs…’ but immediately corrected himself. ‘No, it’s not the state,’ he said. ‘It’s the country! The country is much more than the state; it’s the country that’s the important thing!’ And, of course, I immediately thought that he was a right-thinking and well-meaning man. It seemed that he knew the needs of Russian citizens are more important than the interests of a powerful state – he must be one of us. Even Yeltsin didn’t really understand that politicians must work for individual rights rather than for ‘the state’.

But Putin was dissembling: it turned out he didn’t really believe the liberal views he was spouting. He was simply saying the right words to lull me into believing he was a liberal like myself. And for a while it worked. I persisted in giving Putin the benefit of the doubt. Even when he said terrible things – things that showed he really didn’t care about the lives of individual Russian citizens – it took me a long time to understand that he was a cunning liar and hypocrite. When Putin responded to the dreadful tragedy of the Kursk submarine with an uncaring shrug and a throwaway put-down, ‘So OK, it sank’, I convinced myself he had just made a slip in the emotion of the moment; and when he was reported as calling the protesting widows of the dead sailors ‘ten-dollar whores’, I made myself believe it was a fabrication by his outspoken opponent, Boris Berezovsky. When Moscow apartment blocks started to get blown up in late 1999, conveniently just in time for Putin – who was then prime minister – to use the bombings as a pretext for his military intervention in Chechnya, I refused to believe the terrible rumours of a conspiracy. Surely, it really must have been terrorists, I told myself; surely the bags of leftover explosives they found were just dummies from some training exercise … But more and more facts began to accumulate, until in the end I could no longer deny the truth.

In the early part of Putin’s reign, my Kremlin connections meant I was on hand when the new president needed guidance. The inexperienced Putin was initially good at asking for and taking advice. He certainly said all the right things, reaffirming his commitment to democracy, internationalism and reform. Looking back, I do wonder how I managed to get him so wrong. Did he genuinely believe in the liberal values he proclaimed, and did he then change as the years went by? Or did he never really mean what he said? If it were the latter – which I now believe to be the case – how did Putin manage to take me in, and manage to convince many others who supported democracy in Russia that he was the man to secure it? My only answer is that I think Putin is very good at being all things to all men. His technique is to look at you and mirror what you are saying. He tells people what he knows they want to hear. If you’re conservative, he makes out that he’s a conservative, too; if you’re a liberal, then he makes sure he comes over as a liberal. He’s a chameleon who leaves everyone thinking he’s on their side, a powerful trick for a politician determined to get his way at any cost. It goes a long way to explaining why the West started out believing that Putin was going to continue the sympathetic, market-oriented, democratic policies of Boris Yeltsin. But, after a while, it became clear that Putin wasn’t the open-minded liberal he’d seemed to be. That is when I began to realise he wasn’t a man I could support; and that’s what led to the public confrontation between us.

Because I was, first and foremost, a businessman, and my involvement in politics was sporadic, it was no coincidence that my challenge to Putin came over questions of business. After the crash of 1998, I had recast Yukos as an open, transparent, rules-based entity, capable of matching Western standards in all areas. It saved us as a company and brought us considerable success in the years that followed. I came to believe passionately that the same recipe could rescue not just Russian business, but the Russian state itself; and I felt it was my duty to convey the message to anyone who would listen. In numerous speeches and articles, I promoted the need for a new approach to standards of politics and governance, calling for an end to the ingrained practices of economic corruption and social coercion, the pillaging of the national economy for personal gain and the repression of free expression, that Putin’s administration had increasingly come to rely on.

Putin took this personally. As soon as he became president in January 2000, he had appointed many of his former KGB and FSB colleagues to senior positions in the Kremlin. The Siloviki, or ‘Strongmen’, were determined to arrogate all power to themselves, unprepared to countenance other centres of opinion outside of the Kremlin, and resentful of anyone who proposed a different model of behaviour from the one they were intent on imposing. Putin announced that he was going to ‘destroy the oligarchs as a class’, echoing Stalin’s bloody promise to ‘destroy the kulaks [rich peasants] as a class’. In fact, as later became clear, Putin’s actual aim was simply the redistribution of wealth into the pockets of his inner circle, who would themselves become the real oligarchs. Having established his ‘nonaggression pact’ in May, Putin once again summoned Russia’s top executives to a meeting in July, this time to lay down the law. He said we must keep our companies out of politics, but only later did it become clear that he meant much more than that.⁵ What he really wanted was to appropriate the resources of our private companies to serve his own interests and the interests of his friends. He wanted an end to the denunciations of official corruption, because corruption was the business he was in; corruption was the means by which he was planning to rule the Russian state and he didn’t want anyone trying to curb it.

Some of those on the receiving end of Putin’s lecture reacted with fury. Boris Berezovsky, who believed he had personally helped bring Putin to power, felt insulted by the upstart president and pledged himself to enduring opposition. Vladimir Gusinsky tried to retain the independence of his media empire but was arrested, locked up and driven into exile, where he was soon joined by Berezovsky and others.

As for myself, I took a step back. I soon began to minimise my personal interactions with Putin and work instead with the prime minister and the government. When we needed to interact with Putin, I asked my colleagues to go instead of me. I knew my antipathy would come to the surface and I wouldn’t be able to hide my disgust at some of the things he was doing. So, it was better for our company if someone else dealt with the Kremlin.

Soon, Putin began to show his true face, without even bothering to disguise it. He ordered the closure of the independent TV channel NTV, claiming he was doing so for financial reasons, but making little secret of the fact that it was actually because NTV had the temerity to criticise the president. And then there were the bare-faced lies he told about the Nord-Ost theatre siege in October 2002 and the Beslan school massacre in September 2004, when Chechen terrorists seized innocent hostages and the subsequent actions of Russian security forces resulted in many unnecessary deaths.

I look back now on our conversation over the barbecued kebabs in the grounds of the presidential residence with very different eyes. ‘Let’s stop going back to the past,’ Putin said to us. ‘Let’s build a new life in this country, where the state doesn’t try to dominate and control business, and business doesn’t use its resources to disrupt the working of the state.’ His words completely coincided with my own views. I vividly remembered the difficult days after the collapse of the USSR, when the ‘red directors’ used to blackmail the government by taking workers out on strike, refusing to deliver supplies and creating artificial shortages of vital goods. Putin told us he didn’t want that sort of blackmail from business and I completely agreed with him. But he later claimed that what had been agreed between us was something very different. He started telling people that we business leaders had pledged to withdraw ourselves completely from anything to do with politics – not just from blackmailing the state with strikes and so forth, but from expressing our views or lobbying or supporting political parties and candidates. That, of course, was complete nonsense. Putin knew he couldn’t ask us for commitments like that; it just wouldn’t have been possible. All big companies have to lobby for their own interests – it’s just a fact of business life, in Russia and in the West.

Throughout all his lying and deceit, and even after those moments when the mask fell, Putin carried on pretending to be a man of principle. He was good at pretending; people found it hard to see through him. It was a crucial time for Russia and I wanted to ensure our country took the path of legality, transparency and Western standards of integrity. If Russia were to founder in the old, familiar ways of corruption, cronyism and patronage, it would be impossible for Yukos to continue to function as an open, Western-style corporation; all sorts of doors would be closed to us and things would start to get worse. It was Putin who had to make that crucial choice for Russia’s future. And when I saw he was going down the wrong path, I knew I had to go on the offensive. Sooner or later, I would have to challenge the hardline Siloviki who were surrounding him and try to turn the tide.

By the early 2000s, it became clear that many of Vladimir Putin’s closest aides were no longer interested in democratic freedoms, but were instead determined to return Russia to the old ways of corruption and personalised autocracy. My first reaction was to tell Russians – and, in particular, young Russians – that things don’t have to be this way. I knew Russia could still take a different course from the one the Siloviki were proposing, and I believed Putin himself had not made a final decision. I believed he could still be persuaded to take the path of freedom and democracy. With the benefit of hindsight, it is evident that I was wrong; but in the early 2000s, I and those who shared my values campaigned with genuine optimism to promote the ethos of unfettered liberal thinking.

When I founded my educational and philanthropic organisation Open Russia in 2001, I took my inspiration from George Soros’s Open Society Institute (now Open Society Foundations) and its mission statement of ‘building inclusive and vibrant democracies … changing the way we think about each other and the way we work together.’ I wanted Open Russia to effect real societal change in our country, not just to patch up the failures of the current regime. And back then, I was full of optimism. In 2002, I gave an interview to the Washington Post, in which I laid out my hopes for how we could improve Russia’s future: ‘We believe the key point here is education, and that’s why we give money for education in various aspects – teaching kids how to use the internet, establishing contacts between young people in the UK, the US and Russia, training young journalists etc. The aim is very simple. Twenty years have passed. Another twenty or thirty years and we might become a normal country.’

We were prioritising young people because they are the way forward; their thinking has not been colonised by the old spirit of cowed conformity. They are the future ‘elite policymakers’ identified by the Chatham House think tank on international affairs as necessary for ‘the emergence of advanced democratic institutions after Putin leaves’. So, Open Russia ran summer camps where children would camp in tents, play games and learn the basic tenets of a democratic society. We called it ‘New Civilisation’ and we cheekily copied the outdoor learning activities from the American Scout movement. The children played the roles of businesspeople, workers, state officials and politicians. For the duration of the camp, they were asked to run their own society in microcosm, setting up businesses, hiring and firing workers, collecting taxes and providing pensions, calling elections and running campaigns, and having votes. We were showing Russia’s young generation how a free-market democracy can and should function, opening their eyes to another, better way than Putin’s ‘managed democracy’ in which they were growing up – where the hand of the state was guided by the criminal group in the Kremlin.

Open Russia supported Schools of Public Politics in regional centres around the country that would take in youngsters interested in a political career and teach them the values of multi-party democracy. We supported schools for young journalists, helping them realise the importance of the profession and master its secrets. Our Federation of Internet Education trained more than 50,000 teachers and promoted opportunities for access to alternative sources of information and communication, to challenge the monolith of media narratives propagated by Putin’s state.

Our ideas and achievements would all subsequently be appropriated by the Kremlin’s own youth movement, Nashi, which espoused very different aims. Like the Young Pioneers before them, Putin’s Nashi has taken a hold on young people’s minds, inculcating the statist, anti-Western values of the Kremlin. Putin’s methods of shaping people’s thinking – young and old – are powerful and are supported by all the resources of the state. Does that mean he is certain to win? Maybe, or maybe not.

There is undoubtedly a section of the Russian population that is inclined to support his hardline values. This was strikingly evident in the large number of people who gave their unconditional backing to Putin’s invasion of Ukraine in February 2022. Older people, in particular, can fear societal change and wish to cling to a regime that claims it is protecting them from hostile outside forces. But I think things are very different where young people are concerned. Young people have more hope for the future and are less scared of demanding individual rights and liberties – all the things that a backward-looking autocracy cannot offer. Youngsters have dreams and ambitions; they want to make the world a better place. It’s the same in the East and in the West. If a society doesn’t offer its younger generation a positive dream of hope for the future – something other than just ‘work hard, do what you’re told and save up for your old age’ – then they are going to find that dream somewhere else: in superstition, fanaticism or even religious extremism. The aim of Open Russia was to offer young Russians a real way forward. We wanted to give people the choice of how they would like to think and how they would like to live their lives.

To make informed choices, people need information and they weren’t getting it from the Kremlin. So Open Russia tried another initiative, called ‘Help and Advise’. It was a volunteer service run by youngsters that resembled a sort of do-it-yourself network of Citizens Advice Bureaus. Anyone with a practical problem involving access to public services, difficulties obtaining medical help or complaints about the performance of local authorities could ring a telephone number and speak to a volunteer. The volunteer would then find out the right person for the client to contact and put the two of them in touch. Our ‘People’s Verdict’ programme offered a basic level of assistance for people unable to afford legal representation or – more likely – unable to afford the bribes needed to get justice from the courts. It offered victims help in finding lawyers and advice on how to insist on their legal rights and a fair hearing.

Open Russia funded an orphanage, Korallovo, outside Moscow for the sons and daughters of parents who had died in the service of Russia. It was run by my father, Boris, and my mother, Marina. It, too, was used to teach social values to the younger generation. Conditions were not luxurious, but there was a sports hall, a swimming pool and reliable medical care. When the Beslan school massacre happened in September 2004, a number of injured children who had lost their parents were taken to hospital in Moscow. I was already in jail at the time, but when I heard what was happening, I took an active role in trying to help. It seemed to me that some of the orphaned children were in danger of being abandoned, so we offered them places in our boarding school. While the massacre was in the headlines, the state made a show of caring for the children; but a month later, when they were released from hospital, they were forgotten. That taught me a lesson.

All the orphans and children from broken families who came to us at Korallovo were given a proper education that prepared many of them to go on to university. Every child was given access to the internet, encouraged to explore a diverse range of opinions and to look critically at official propaganda. We wanted to roll out the internet programme to schools across the country to help children think for themselves, instead of just accepting what they were told by state television and newspapers. I gave many public lectures about the work of Open Russia, and reading them now makes me realise how optimistic we were at that time about the impact education could have on the generation that would decide Russia’s future.

We consider that our own mentality, the mentality of the older generation is very difficult to alter. But if our work with the youth of Russia is successful, then in 15 or 20 years they will start to determine the politics of our country. They will have been born in the new Russia and they will turn Russia into a normal country. The size of our big companies will no longer be dwarfed by those in the West; our pensions will no longer be smaller; things here will become normal.

By ‘normal’, I meant a turn away from the distorted model of social values that Putin had imposed on Russia and a move towards Western standards of openness, pluralism and enterprise.

The economic growth of Russia depends on its intellectual potential – the scientists, scholars and entrepreneurs, our intellectual elite … who are the active, driving force of our society. Our task is the production of highly qualified individuals; so, how do we do that? Most importantly through education and the cultivation of initiative … And equally importantly, we must ensure that it is attractive for these people to remain in Russia and not go abroad … The state should serve the interests of the people. The state should not be some great idol that they have created … An individual’s responsibility is first to serve his own interests, those of his family and then those of the society he lives in. The state should be there to serve the interests of the individual. We need to work hard so that these values become natural for our young generation. That is the work that Open Russia has been trying to do.

Open Russia’s emphasis on changing mindsets and its prescriptions for civic government and free-market capitalism were in stark contrast to Putin’s model of ‘managed democracy’. That was a model that had failed; it had destroyed the initiative and the originality of thought that underpin a thriving civil society, and I felt it was my duty to point it out.

We don’t even need to go back as far as Carnegie and Rockefeller for the example I was following; one needs only to look at Bill Gates, Warren Buffett and George Soros and the importance they have attached to education and the development of civil society. Our goal, like theirs, was helping people to be free, creating equal conditions for people to get quality education and build a normal future. The difference, of course, was that the Americans were operating in an open society, while we were attempting to produce free people in a country of restricted freedoms, in a nation whose leaders feared and opposed what we were doing and took every opportunity to try to foil us.

I have always said that I want my children and grandchildren to live in a democratic Russia. If I live to see the day that Russia gets a new political system, I will feel my life has been a success. But for that to happen, Russia needs to do more than just replace Vladimir Putin. If we do not make fundamental changes to the system, if we do not bring governance under the control of society as a whole, I fear that whoever takes Putin’s place will become another version of him. We need to remake our state into a parliamentary republic; we need this parliamentary republic to be based on democratic, federalist principles, similar to what took place when the United States was founded. And, like America, we need talented young leaders to take us forward.

Open Russia did much to develop these young leaders, working in political education and participatory electoral democracy, providing legal support and information to society. Our organisation had a presence in 40 of Russia’s largest regions, with more than a thousand associates. But today Open Russia has been declared ‘undesirable’ by the state, a completely senseless designation that exposes anyone who cooperates with it to civil and criminal charges. Because of her membership of Open Russia, Anastasia Shevchenko has been under house arrest for more than two years, charged with participating in an ‘undesirable’ organisation; when her daughter died, she was prevented from sharing her final days with her. Open Russia’s executive director, Andrei Pivovarov is now in prison on the same charge and other activists have been arrested or put on wanted lists. As a result, we have been forced to announce the cessation of our activities in Russia, although a large number of activists is continuing to work, either in secret or from exile abroad.

The aim of Open Russia is to give the Russian people the information they need to make decisions about their lives; to encourage free debate; to provide the means for people to think for themselves. In the West, none of these things is in any way controversial – they are the accepted norms of a free society. But Vladimir Putin sees things differently. When a ruler is so afraid of scrutiny by the people, it can mean only one thing: that he knows the legitimacy of his rule is tenuous, and he knows his power depends on deception and coercion, without which his authority would collapse and he himself would be in the dock.