Robbery and Videocracy
TV had undone Putin’s predecessors. Every night the Soviet evening news had framed Brezhnev in senile degeneration. It had built up Gorbachev as a charismatic saviour only to expose him as a confused failure when he couldn’t compete with a rambunctious, then sober Yeltsin. It destroyed the reputation of this ‘great democrat’ with a hundreds clips of his slurring and shaking, demeaning peasant alcoholism. The power of TV turned Yeltsin into nothing better than the drunken Brezhnev of a failed democracy. This is why within weeks of his inauguration Putin began to build a ‘videocracy’ – his autocracy over the airwaves to the masses that mattered.
The oligarchs who controlled TV knew how powerful they were – powerful enough to extort the state. Especially Vladimir Gusinsky, a failed theatre director and the emotional owner of NTV, a channel that had more than 100 million viewers and reached nearly every corner of Russia. It could make or break election campaigns. Its ‘pundits’ and ‘commentators’ were screeching guard dogs for their master’s interests, hounding politicians into concessions. They were not impartial journalists; Gusinsky thought he could do the same to Putin, shouting to his inner circle, ‘I’ll destroy him.’17 In October 1999 he arrived at the terse new prime minister’s office for lunch. He was angry that the government had just handed over $100 million to Berezovsky’s TV channel, ORT, in order to tide it through an advertising slump. Gusinsky thought he was powerful enough to deserve the same. According to the Kremlin and his own associates, he said at lunch:
‘I understand you have very little chance of becoming president, but if we work with you and you do what we say, we’ll try to make you win. And we need $100 million in credit.’18
Gusinsky denies this version of events, but has admitted he asked for ‘funding’ at the same level as ORT from Putin at a subsequent meeting.19 He may have asked for what looked like a bribe to support the out-of-focus successor, because this is how he had done business with Yeltsin. That tawdry Kremlin had been so desperate to get the ‘media oligarchs’ on side to win the 1996 elections that it had effectively subsidized their empires. The sums were enormous for a bankrupt country. Gusinsky alone had been given more than $1.5 billion in state support over the years.20 In the months before the 1996 election, Gazprom had started buying shares in his Media-Most company. This was the beginning of the state company making a series of economically senseless loans to Gusinsky worth over $1 billion. It ended up owning 30 per cent of Media-Most. To prop up the regime, the state-controlled gas giant seemed to be investing in everything apart from its own pipelines and reserves. It was being used like a giant government slush fund and not a natural resource company. It was feeding the oligarchs when it should have been saving the collapsing mining cities of the north.
When Putin first sat in Yeltsin’s chair, the Kremlin lived in fear of the two great ‘media oligarchs’: Vladimir Gusinsky of NTV and Boris Berezovsky of ORT. Both thought Putin was a provincial bureaucrat who they could push about. They were archetypal oligarchs – both brilliant, both Jewish, both excluded from the ‘Slavs only’ club of the inner sanctums of the KGB, the finest Soviet research institutes and the upper echelons of the party itself. Whilst Putin was preparing for his dream job as foreign intelligence officer, they were festering in dead ends in the run-up to perestroika. Gusinsky was an illegal ‘gypsy cab’ driver; Berezovsky was a frustrated mathematician without his own car.
Then the tables turned. Both had sussed the financial promise of post-communism whilst Putin was still shell-shocked, watching the unravelling of Soviet power in Dresden. By the time Yeltsin was considering Putin as his successor, the old Soviet power dynamics were topsy-turvy. These formerly fringe men now had TV channels with the ability to make or break government policy by whipping up their millions of viewers to such an extent that they thought they could pitch up in government offices and ask for $100 million. Putin feared these stations. They had such huge audiences they could have undermined a fragile regime if he botched his relationship with them.
After conniving to install Putin, Berezovsky felt strong enough to publicly boast that he was the manipulator of Moscow. ‘It is acceptable,’ he claimed, ‘indeed necessary to interfere directly in the political process to defend democracy.’21 Yet in the weeks after his inauguration, the new president made a comment flatly contradicting him. It confused and unnerved Moscow. ‘These people who fuse, or who help a fusion of power and capital, there will be no oligarchs or the like as a class.’22 It sounded eerily Stalinist. It was a promise to ‘liquidate the oligarchs as a class’.23 This surprised the shabby city, where the tycoons still had the wardrobes of bandits – which had expected Yeltsin’s heir to be the protector of Berezovsky and the oligarchy against those they painted as unreconstructed communists or ex-KGB revanchists. Berezovsky had admired Putin for being ‘brave’. He had not understood that he was also ruthless.
Off the airwaves, Putin behaved rather differently. He was conscious of the limits of his power over the oligarchs. They had funded his campaign. They hoped to influence him as they had Yeltsin. Yet the public saw them as little better than thieves. Inside the security establishment that had reared the new president, it was considered criminal, even absurd, that a bunch of businessmen could have been handed over control of the country’s natural resources for next to nothing. Whatever Putin’s personal feelings towards the oligarchs, he offered them a compromise in July 2000. Gathering the country’s twenty-one leading tycoons in the Kremlin he made a simple deal – they could keep their businesses, if they stayed out of politics. Two men were not invited – Berezovsky and Gusinsky.
What was happening to the uninvited oligarchs was an example of how expensive it would be to refuse Putin’s offer. He had already gone after Gusinsky. He despised him. Gusinsky had refused to support Putin in the elections and his channel had dedicated only 5 per cent of its coverage to the pro-Kremlin party Unity, almost all of it negative, in the 1999 vote for the Duma.24 To make matters worse, Gusinsky had shown a documentary two nights before the presidential elections hinting at FSB involvement in the apartment bombings.25 And he had asked for more money.
Putin wanted to illustrate in the plainest financial terms that the era of an extorted government subsidizing oligarchs was over. So, he asked for Gusinsky’s company to pay back the 1996 loan from Gazprom. It was nothing less than asking him to return Yeltsin’s bribe. The tycoon at first didn’t understand what was happening. He was arrested, thrown into the overcrowded and flea-ridden Butyrka jail and under duress made to sign over stakes in NTV to Gazprom. It was the beginning of a legal assault to grab the channel through its debts to the state. In June 2000, less than five weeks after Putin’s inauguration, Gusinsky fled the country – and the twenty-one businessmen invited to meet Putin the following month to hear the terms of ‘his deal’ took note.
It appeared everyone had understood – apart from Berezovsky – that they had made a mistake. Putin was the protector of no class. But Berezovsky was busy coming up with more fantastic ideas. He mused that Russia should be converted into a confederation of independent states.26 He was beginning to fight with Putin, criticizing his policies and preparing to throw ORT into battle against him. This is how Berezovsky had always operated under Yeltsin, supporting him only then to swivel and undermine him. The former president even once lamented that he wished he could send Berezovsky on a business trip abroad – ‘forever’.27 Yet Berezovsky underestimated Putin.