Unmasking Team Putin

by Hannah Gais

This article was originally published by U.S. News and World Report.

Author Karen Dawisha explains how Vladimir Putin and his cronies climbed to power.

Russia’s authoritarian turn under President Vladimir Putin may have been kicked into high gear the past few years, but it’s been a long time coming.

That’s what author Karen Dawisha found in her newest book, “Putin’s Kleptocracy: Who Owns Russia?”, published in September 2014. Dawisha, a professor of political science at the Miami University in Ohio, offers an account of Putin’s rise to power, beginning with his stint in the KGB, the Soviet police and intelligence agency, in the 1980s. In delving into Putin’s professional and criminal ties, she found that Russia’s current struggles are not those of “an inchoate democratic system,” but a product of careful planning by Putin’s close-knit inner circle — one that placed their individual economic interests above all else. In an email interview, Dawisha explains how Putin’s kleptocracy came into being, how the West emboldened the regime and her struggles with getting her book published. An edited transcript follows:

You argue in your book that instead of seeing modern Russia as a failure of democracy, we should see it as embodying a new form of Russian authoritarianism that uses “democracy for decoration rather than direction.” Can you briefly summarize what findings led you to that conclusion? What should the West to do move beyond the narrative of Russia as a failed democratic experience?

I began research for the book with the idea that at some point Russia had tipped away from democracy. The question I asked myself was “when did they decide to do what they have clearly done — i.e., establish an authoritarian regime [that] maintains only elements of decorative democracy?” Clearly the 2011–12 elections were subject to huge fraud, and so I started working back and found that the 2007–08 and 2003–04 cycles were also fraudulent. That led me to the very first election that brought Putin to power. After working closely with the electoral results down to the regional level, I came to the conclusion that Putin would not have won in the first round as he did in 2000 without fraud. I was faced with accepting the fact that Putin and the group he brought to power never planned to give it up.

That led me to research the origins and activities of the group around Putin — in the 1990s and before. That’s when I began to undercover quite significant allegations both of corrupt activity and of involvement in organized crime. [St.] Petersburg at that time was known as the “bandits’ capital,” and Putin was regarded by many as the link between organized crime and the mayor’s office. There were many cases in which his activity was investigated by city and federal officials. All were squashed when he came to power.

The West has a huge problem. [Russia] is the largest country in the world, with significant raw material and energy resources, and it has nuclear weapons. It has a history of involvement with regimes that we have close relations and interests in. It cannot simply be walled off.

We can have relations with authoritarian regimes, [but] we don’t invite [them] to sit at the “democratic table.” Why is Russia still a member of the Council of Europe and its Parliamentary Assembly? Its voting rights were suspended after the annexation of Crimea, but its membership was not.

How did the 2014 invasion of Crimea and eastern Ukraine serve the interests of Putin’s inner cadre? What effect have Western sanctions had on them? Is there a chance they could foster divisions within the kleptocracy?

By 2014 Russia’s economy was already facing a slowdown. The social contract the Kremlin had previously agreed to — you let us steal and we will improve your standard of living a little — was coming unraveled. How to reduce the public space for legitimate protest against corruption? A popular and no/low-cost foreign war — i.e., the annexation of Crimea. Ukraine was in an uproar following the protest movements’ … ousting [of] Ukrainian president [Viktor] Yanukovych — a key Kremlin ally. The fear of this “virus” spreading to Russia increased the Kremlin’s interest in destabilizing Ukraine.

Western sanctions came as a surprise in Moscow. They did not expect visa bans and asset seizures of the cabal closest to Putin. He has spent much of the last nine months reassuring this group that whatever the West takes from them, he will make up out of state funds. That means that the Russian economy is facing multiple storms, from a devalued ruble, a declining oil price, and also calls on the state budget (including the pension fund, the national stabilization fund, and the health and education budgets) to offset the losses of the inner core.

Putin’s reputation as the guarantor of stability for this group is in jeopardy. That’s why he feels the need to rob from the Russian people in order to maintain his authority with this group. But the core elite now is not as small as it was when he first took power, and underwriting them will be a very expensive and continuing proposition.

In the final chapter of the book, you write “there has a been a partner in this kleptocracy, and that partner is the West.” How has the West emboldened Putin? Has the situation signaled a turning point in our support for the regime?

Russia was the last great frontier for investors. And we benefited in several ways:

1. Direct investment: The amounts they could make were staggering. Bill Browder’s Hermitage Capital had $4.5 billion in assets under management at its height in the early 2000s. Browder accepted the corruption and still had huge margins. It was only when the Russians themselves wanted to push Hermitage out of Russia that Browder lost his offices there.

2. Banking: Russian Central Bank figures suggest that half a trillion [dollars] has been subject to capital flight from Russia since 2005. This money goes primarily to Western banks.

3. Real estate: Russians seeking to move money to the West without the scrutiny of either the Russian or Western states can establish an LLC and purchase a property without revealing who the actual owner is.

How does all of this affect Putin? Putin has a … cynical view of the West. He believes that it can easily be manipulated through appealing to investors’ and bankers’ interests. The paltry and resistant attitude by some European states, especially initially, to the imposition of sanctions showed that his view was not entirely incorrect. And the continued calls from some quarters in Europe for sanctions to be lifted underlines that if the U.S. wants to maintain them or even deepen them, there will be significant resistance in Europe.

I’d like to cover some of the struggles you’ve faced in getting this book published. You first approached Cambridge University Press in England, which turned the book down over the potential legal risks. Can you tell me about your experience with Cambridge, as well as some of the hurdles you’ve faced gathering information for the book?

Gathering information for the book was both easier and more difficult than I had imagined. Easier because I was dealing primarily with events that occurred in the 1990s when there was a free press in Russia. More difficult because at some point I began to notice that documents and newspaper articles that were once on Russian [websites] were scrubbed. Digging for them became a major priority — looking for runs of newspapers that were no longer available in the major libraries or on the Internet, for example. YouTube (or RuTube) exposes of Putin’s criminal activities were suddenly not there. Luckily, I had started downloading and archiving everything.

I had published six books already with Cambridge. The prospectus was favorably reviewed by external reviewers, and I went about the business of finishing the manuscript. I always knew it would be an explosive book. … When I submitted it, I agreed with the editor that it should go first to the lawyers. After many months, I received an email saying that [Cambridge] would not proceed with the manuscript: “The decision has nothing to do with the quality of your research or your scholarly credibility. It is simply a question of risk tolerance in light of our limited resources.”

I accepted that they understood the libel situation in the U.K. better than I, and they were protecting their own interests. At the same time, I felt that their very rejection sounded an alarm bell about one of the Kremlin’s real powers — the power to cow Western institutions into submission. The Kremlin and its supporters use the courts to scare off researchers who want to expose the corruption at the core of this regime. I know of several manuscripts that have been suppressed in this way. My own book is not available anywhere outside the United States, and my own wonderful publisher, Simon and Schuster, has taken the view that they should not allow it to be published in any foreign language. So this is a kind of win for Team Putin. But I doubt he will stay ahead of the game for long.

Hannah Gais is assistant editor at the Foreign Policy Association and a fellow at Young Professionals in Foreign Policy. You can follow her on Twitter @hannahgais.