By the mid-1990s Russia was still struggling to get on its feet. The state was weaker than it had been at any point since the Civil War. It had lost 50 per cent of its industrial capacity, opponents – from both inside and outside the country – circled it, actively supporting chaos and instability, and the plummeting price of oil tore great holes in the government’s budget.
Russia’s entire political system had been crippled, which meant that in turn the entire legal system had collapsed too. I witnessed a great deal in my role as head of the North-West Inspectorate of the Chief Control Directorate of the President, an institution that was established in 1991 to ensure that presidential decrees were implemented and, once the process had begun, to provide a degree of oversight (something Russia had never had before). You could describe us as the President’s watchdog.
The rule people lived by was as follows: if it was not expressly prohibited, then you could consider it permitted (echoing Gorbachev’s Law on Cooperatives, an ostensibly modest document that contained a ticking time bomb). The legal system had had to be retooled to allow it to be able to regulate the new Russia, but, inevitably, given that the political, social and economic landscapes seemed to be changing by the second, the redrafting of legislation left many gaps. So Yeltsin had to constantly issue decrees to close loopholes or resolve anomalies. The problem was exacerbated by the fact that the accounts chamber of the Duma (the equivalent to the British Treasury’s audit committee) was poorly organised and toothless – by comparison, the Directorate was far stronger. There was no doubt that we were needed. When I started, approximately 50 per cent of Yeltsin’s orders were being ignored or going unfulfilled. The Soviet Union had been dissolved over half a decade ago, and yet still the state’s ability to actually govern remained perilously weak.
It was not just that it did not feel as if the state could protect or support the people any more – those who were supposed to be running the country actually gave a good impression of being more interested in filling their own pockets. We created monsters during that era; and we fed them, too. They became fat and strong off Russia’s flesh and blood. When today I hear how some officials in the Putin administration are being criticised for corruption, for having improperly obtained 2 million roubles, I want desperately to remind them that tens of trillions were stolen during the ’90s – ‘appropriated’ by the so-called Democrats and Liberals, shapeshifters who lauded the state one moment, and the next were demanding that it should be reformed out of existence. They were the men who were lionised in the West because, by making all the right noises about introducing a market economy, they were perceived to be behaving correctly. They were privatising state-owned property (it was the largest transfer of state assets into private hands in history, and it was not just industries like gas and oil – it was everything: bakeries, hairdressers, biscuit makers); they were forming new cadres of leaders; they were sweeping away the crumbling dead remnants of the Soviet system. But nobody bothered to ensure that the key laws and institutions of a market were established first, or to assess whether the Russian population was ready for the onslaught of red-blooded capitalism.
Who cared about the impact on society? Who cared if it would lead to a stark rise in criminality? Who cared about the disenfranchisement of the vast majority of the people who knew, in the marrow of their bones, that they were being excluded from this process? An invisible hand would look after us all, or at least that is what we were informed by the Western advisers who had flooded into the country to tell us how to run our lives.
I saw men who claimed to be democrats coming to power, and saw too how they spent their time trying to acquire as many assets as possible, and by whatever means necessary. I remember one case in which someone who was very highly placed in Yeltsin’s administration visited the director of a former state enterprise and demanded, in no uncertain terms, that he should give up the shares he held in the company (it should be said that the means by which the director himself had come by them were also open to question). When the director refused, he was simply thrown into jail on trumped-up charges. One of his first visitors was the very same person who had tried to persuade him to part with his shares in the first place. Perhaps he would like to reconsider his position? They were relentless in their pursuit of personal gain. Relentless.
It was made worse by the fact that crooks infested every layer of the bureaucracy, operating behind a façade of legality. They occupied administrative positions, which they swiftly discovered they could turn into fiefdoms of their own in which they could exist untouched, like miniature emperors. Moscow was so feeble, so remote, that orders or instructions emanating from government representatives appeared to those in the provinces like tiny blips on a radar that had no impact on their business. For that kind of man, the only authority that counted was the pistol they kept in their drawers.
During the early ’90s, I had been nominated by the then mayor of St Petersburg Anatoly Sobchak to join the board of the Baltic Shipping Company, which had formerly been the engine of the Soviet Union’s ‘window to the West’ – transporting Soviet goods and passengers to capitalist countries – but was now facing huge, overwhelming problems. Organised crime, representatives of the federal government and regional politicians were all fighting over its wounded body, and somehow I was supposed to try and protect the interests of the city. Two years after I became involved, the chairman of the board was shot dead in broad daylight by bandits who wanted to seize control.
Since I was still then an officer in the secret services and had the right to carry arms (there were plenty of people who did not have that privilege, but who swaggered around with one anyway), I hid my pistol in a holster under my jacket. I developed a habit when I was out and about with my wife, for instance coming back from the theatre: I would instinctively move my right hand to hover over where the weapon was concealed. After a while, Natalia noticed that I seemed always to be clutching the left-hand side of my chest. Disturbed, she looked me in the eye and told me in no uncertain terms that if I had any problems with my heart I should visit the doctor immediately. It is funny now, but that was not a normal way to live; life in Russia had become pathological.
Of course, the criminals were clever enough to realise that there were better ways for them to do business than just gunning men down in the street. They seemed to have an almost boundless ability to corrupt people, and an almost limitless number of men who were willing to be corrupted. And if you are going to try and weasel your way into the system, why not go straight to the top?
Around that time, I became acquainted with Dmitry Shakhanov, a bright young officer who was the deputy head of a special police division dedicated to fighting organised crime. In the normal course of his work, he detained a number of crooks who happened to have close links with a senior St Petersburg official. The official was incandescent. He demanded that his friends should be released, and when Shakhanov refused to comply, the official resolved instead to destroy his career. Within two, at most three, months, Shakhanov had been fired from the police on entirely spurious charges, and the official was not finished there; it was clear that he would not stop until he had ensured that the only job Shakhanov would ever be able to do again would be one cleaning the streets. Instead, I invited him to work for me at the Directorate. I knew it would do nothing for my popularity with the official, but I knew too that because I was absolutely independent from the local authorities, there was nothing he could say or do to prevent me. Still, to see how the lowest elements of society had embroidered themselves into the fabric of government, where they could operate with impunity, left a sour taste in my mouth.