Many of those involved in the corrupt world of St Petersburg in the 1990s would later rise to prominence in Putin’s Kremlin, following the mafia principle that the family looks after its own. Politicians who were foolish enough to attempt to expose the corruption found themselves threatened.
As president, Putin has not only continued to rely on this model of governance, he has taken it to new levels. He rules through patronage, personal connections, corruption and the brazen manipulation of the state apparatus. So, if you want to get an important post, you have to be anointed into the mafia clan – you have to show that you know how to elicit bribes, how to steal and pass on the cut to the bosses upstairs. And even then, you’re not safe. As soon as they have got what they wanted from you – or if you fail to carry out their orders – you may find yourself arrested on trumped up charges and facing jail.
Of course, Putin’s system of rule through cronyism and personal patronage isn’t new. Tsars as far back as Ivan the Terrible ran Russia as a capricious autocracy, with the tsar at the top, the people at the bottom, and no effective civic institutions to mediate power and justice between them. The tsar simply appointed his favourites – corrupt, often uneducated men, who gained advancement through connections and grift – to positions where they wielded unchecked authority over justice, taxes and daily life. The system was known as kormlenie – literally ‘feeding’ – because the appointee would receive no salary, but he would have the right to enrich himself from the cashflow his position generated, taking his cut from the money raised from the people. It was an unfettered licence to steal from the country and its people, and it fostered resentment and unrest.
Russia today is run by what can best be described as a neo-feudal model where the regional elites, Putin’s placemen, undertake to provide votes and revenue for the centre and in return get a free hand to run the finances of their region as they see fit. To be more precise, these elites have free rein to pursue personal financial incentives and the Kremlin turns a blind eye, so long as it receives its cut. The mechanism goes something like this: 60 per cent of the revenues that are collected from the population go to the centre, which leaves 40 per cent for the region’s spending. But that isn’t enough to keep the regional elite happy, so the centre then funnels them another 10 to 20 per cent of the money (in the case of Ramzan Kadyrov in Chechnya, the figure is more than 90 per cent of the regional budget) in return for their unwavering loyalty and political support.
That’s one mechanism that the Kremlin uses to maintain its grip on the country. Another is to make sure that all officials are forced to take bribes. If you don’t take bribes, the centre simply removes you from power. And if your loyalty at any point starts to waver, they have evidence of the previous bribes so they have a cast-iron criminal charge on which they can lock you up.
There is also a third mechanism that Putin uses, which involves the maintenance of a shifting balance of power between groups of officials whose interests may potentially conflict. The central economy continues to be administered by the so-called liberal group – they are by no means liberal, but that’s what it has become accepted practice to call them. On the other side are the Siloviki – the people from the military and enforcement agencies. The Siloviki are constantly in search of money, so Putin plays a game. On the one hand, he instructs the liberal group not to give one kopek more to the Siloviki. On the other hand, he complains, I’m barely holding on to them, these guys are champing at the bit. From time to time the two groups lock horns and the odd one of them is sent to jail. At other times, Putin sets sub-factions within the Siloviki against one another, with similar results.
Putin needs these Machiavellian mechanisms to maintain his grip on the system, to prevent the administrative machine falling apart. He needs to do things this way because Russia under his rule does not have the formal structures and institutions that usually keep societies functioning properly, with civic integrity and the rule of law. Apart from the fact that this makes Russia look like a third world country, it also creates a potentially very dangerous situation. This is because the continued existence of the whole Byzantine apparatus depends exclusively on Putin being there to keep pulling the levers. If one were to remove Putin from the equation, the system would lose its equilibrium and the country would enter a catastrophic state of clan fragmentation. This, of course, is no accident: Putin has arranged things that way with the deliberate intention of making it impossible for him to be removed.
How many people are there in today’s Kremlin mafia? It’s hard to give exact figures, but at the top are Putin’s favoured associates, made up of people like Igor Sechin, Gennady Timchenko, Arkady Rotenberg, the brothers Yuri and Mikhail Kovalchuk, and Nikolai Patrushev. I will say more about most of these in a moment. But there are also further circles, including the ‘overseers’ in the presidential administration, such as Putin’s chief of staff, Anton Vaino, and his deputy, Sergei Kiriyenko; and the top guys in the FSB, Alexander Bortnikov, Sergei Korolev, Ivan Tkachev, Alexei Sedov, whose job it is to persecute the political opposition, and Oleg Feoktistov, who is nominally retired, but is still hard at work. Then there are the regional bosses, men like Alexei Dyumin and Sergei Sobyanin, who do the president’s bidding in big cities and regions; plus, of course, the Kremlin’s ‘oligarchs’, such as Alexei Miller at Gazprom and Andrei Kostin at VTB Bank; and the heads of some courts, certain judges and the directors of the Investigative Committee and the Prosecutor’s Office; and, finally, their henchmen who do the dirty work.
All in all, there are a few thousand people working for the Kremlin mafia, but between them they control a huge proportion of the nation’s wealth. They don’t keep the money in their own names and their own bank accounts – that would be far too obvious – but assign it instead to other people, who are told they need to keep silent or face serious consequences. The men Putin trusts with his money come from a small retinue of old friends, most of whom he now keeps at arm’s length. By maintaining a low profile, they are able to stay out of the spotlight, while holding the vast wealth that Putin can’t keep in his own name. The Panama Papers investigation of 2016 revealed that Sergei Roldugin, a professional cellist whom Putin has known since the 1970s, is the front-man for companies worth in excess of $2 billion, rather more wealth than most classical musicians have access to, with the money widely considered to be part of the cash Putin has plundered from the Russian state. Arkady and Boris Rotenberg, childhood friends of the president (Arkady is his former judo sparring partner), have been handed lucrative contracts from the state energy giant Gazprom and for infrastructure projects such as the bridge connecting Crimea to the Russian mainland. It’s made both of them billionaires and Arkady a ‘Hero of Labour’, an honorary title left over from the Soviet period. Gennady Timchenko, a Russian businessman and long-time ally of Putin who was formerly based in Switzerland but is now back in Russia because of international sanctions, is rumoured to hold billions of dollars on behalf of his old friend. Timchenko’s oil distribution business, Gunvor, served for many years as the conduit for overseas revenue from Russia’s energy sector, with the US Department of the Treasury claiming that ‘Timchenko’s activities in the energy sector have been directly linked to Putin, that Putin has investments in Gunvor and that he may have access to Gunvor funds’. A claim which Guvnor denies.Putin’s cronies all benefit from their association with him. They benefit from the commercial opportunities that he bestows, and they benefit knowingly from the criminal activities of the Kremlin mafia. The Siloviki occupy the commanding heights of power in politics, the economy and national institutions. They have at their disposal all sorts of powerful resources, including the FSB and the GRU, the foreign military intelligence agency. And they support each other as members of the same organisation. Their ideology is best described as nash-ism (‘ours-ism’), because it opposes ‘us’ and ‘ours’ to ‘them’ and ‘theirs’. They are beyond the reach of the law, so they are free to use violence against anyone who challenges them in any field – political, financial, journalistic. Their rule is, ‘if someone touches one of ours, he must suffer’. Because Putin and the Siloviki wield power on a personal and clan basis, public and state institutions have become irrelevant. The civilian oversight and control of the security forces that exists in much of the West is absent in Russia. The Siloviki are far from being a united group, however, and they encompass various cliques and groupings of shifting loyalties.