When the oligarch refused to back down, the two fought. This struggle finalized the shape of the post-Soviet state. It was a battle over who really controlled Russia’s resources. It decided whether the unexpected 2000s oil boom would fuel the power of the state or private corporations. Khodorkovsky was the greatest of the oligarchs and he had wanted to set the political tone for Russia. He had wanted to be as influential as Putin. But it was Putin who became Khodorkovsky, taking his hydrocarbons and throwing him into a Siberian prison colony, into a zone where sometimes thieves’ law prevails, or sometimes no law at all.
Khodorkovsky was never a dissident. He was intelligent, ambitious and, yes, ruthless, whilst being at the same time somewhat temperamental to the point of being volatile. Always something of an actor, more than a commander, in the end someone foolish despite his superior, mocking grin. But he was never a dissident.
He came from the other side of Russia. The half-Jewish Khodorkovsky was from the Moscow lower middle class. He dreamed of being a captain of industry, of being the boss. Putin’s breaks had come because he was loyal and calculating; Khodorkovsky always got lucky as the gambler. Putin could go on one knee and say something he didn’t believe, because these were only tactics; Khodorkovsky would never do this, because what mattered to him was his pride. Putin had clung to his superiors; Khodorkovsky had never held back from risk.
In the late 1980s, he was not distributing copies of The Gulag Archipelago but a leading agitator at his university in the Komsomol, the communist youth league that fed the party with recruits. This organization was so unpopular that polls showed it was loathed by Soviet youth more than the party, the KGB or even the emerging neo-fascist street thugs. ‘I know now my parents always hated the Soviet state,’ remembered Khodorkovsky, but he did not think twice about being part of an organization that photographed ‘refusnik’ Jews outside their synagogue for the authorities.16
The collapse of the Soviet Union was the collapse of authority. This meant the crumbling of state power over its own property rights. Khodorkovsky was smart. He understood this. The party youth were encouraged to experiment with ‘self-financing’ business, in the name of market socialism. So, Khodorkovsky opened a small cafe that was one of thousands of Komsomol businesses popping up across Russia. Yet all around them, the bureaucratic eyes that looked after those assets in the name of the people, were starting to look elsewhere. Just as Khodorkovsky was experimenting with business, the party apparatchiks felt this anaemia of authority, especially over what they ran in the name of the state, realizing that if they were quick they could make off with it before the bureaucratic doors slammed shut.
As administration itself imploded, Vladimir Putin picked up the phone in Dresden and was informed – ‘Moscow is silent.’ The USSR had not been hit by a nuclear strike but ‘Soviet institutions were victimized by the organizational equivalent of a colossal ‘bank run’, to quote the political scientist Steven Solnick.17 As it dawned on Putin that the country was gripped by ‘the paralysis of power’, the cadres at the other end of the telephone were rushing to claim as many assets as they could.
At the last all-Union Komsomol meeting in 1990 there was such chaos that they forgot to sing the Soviet national anthem. The brightest people in Komsomol were not there. Together with their superiors, they were turning the state assets they had access to into private assets. Khodorkovsky was one of those men stealing little bits of the state. As more and more officials sensed impending doom, this star cadet was given the privilege by the party, with backing from the highest level, to turn the ‘non-cash’ that was a hypothetical accounting unit between state enterprises, into ‘cash’ that could be used in real life. They gave him the right to create a bank and the right to create money out of nothing in a country where almost 50 per cent were about to be plunged into poverty. Many said he was the ‘party’s experimental capitalist’, others that he had a relationship with the KGB. By now, the failed 1991 coup had turned the ‘bureaucratic bank run’ into a stampede. The last two treasurers of the Communist Party mysteriously fell from windows, as the cash and gold they administered ran out the door. There was speculation, which Khodorkovsky has denied, that he knew where it had gone.
The Komsomol disappeared. What it had owned did not. This made Khodorkovsky rich; he grew richer still by trading in computers and bootlegging counterfeit cognac. They said that he and his friends, most of them Jews, traded in much, much more. The year Putin returned to St Petersburg a depressed lieutenant colonel and the father of two small girls, uncertain how he was going to pay for them, Khodorkovsky was in love with this new world. He had learnt how to live in a country where everyone else was drowning. Nothing expressed his pleasure in the new Russia more than his 1993 manifesto called Man With A Ruble, which crowed: ‘Our idol is his financial majesty the capital.’18
Khodorkovsky was never a man like Sakharov, the anti-Soviet dissident. He did not grow up in opposition to the system that created Putin but was one of its architects. Khodorkovsky was one of the oligarchs who did more to discredit liberal and Western-looking politics in the country than all the propaganda that came afterwards. He is one of the culprits of the historic failure of Russian liberalism. This man was an insider at the heart of the Yeltsin regime, the advisor to the Russian prime minister in 1991, the deputy minister for fuel and energy in 1993, a regular guest in the Kremlin – whilst Putin was a provincial official. Looking back after it had all gone wrong, he remembered the 1990s:
Into this chasm, through media and bureaucratic channels, they pumped pretty liberal ideas about reality, manipulating information. By the way, it was in the 90s when the concept of the all-powerful Political Technologist first arose — a person who is supposed to be able to make up for the absence of real politics in one or another area with clever ‘virtual’ throwaway products.19
Khodorkovsky was speaking with experience when he spoke of political technologists. It was he who had first employed Vladislav Surkov, the greatest of them all. He discovered this cynic in velvet trousers, who became Kremlin deputy chief of staff and Putin’s key ‘controller’ of domestic politics, creating fake parties, rigging elections and screaming at Duma deputies to vote this way or that in his office. Surkov was working for him as a bodyguard, when Khodorkovsky recognized he had a talent. Together they would put the first advert on Soviet TV.
This kind of politics was not atypical, and is not considered a travesty. What Khodorkovsky is loathed for is that he was on the inside of the infamous ‘loans for shares’ deal. This was the rigged auction that sold much of Russia’s oil, gas and mining infrastructure to Yeltsin’s 1996 backers – not mere companies but gigantic Soviet mega-complexes built by armies of geologists, slaves and ‘heroes of labour’.
Khodorkovsky was one of those swindlers. For a mere $350 million he got the Yuganskneftegaz complex in western Siberia, with proven oil reserves far larger than Mexico, Angola or Norway. Just two years later his stake would be worth twenty times more than he had put up for it. To the rest of the country this auction was considered a crime.
This discredited ‘democrats’ in Russian eyes. It tainted the liberalism that the oligarchy claimed for its own. This made it all too easy to vilify ‘democracy’ itself. That the tycoons had abused their access to a desperate, sick president of a weak state so that they could privatize the nation’s mineral wealth at a fraction of its real value, became one of the main propaganda points of the Putin regime. Much later, Khodorkovsky would come to see that ‘my sinful self’, a leader in that alliance of giant money and the neoliberal reformers, had lost society. He wrote in one bilious open letter on ‘Russians liberals’: