The same exchange of loyalty for opportunities to get rich even applies to the underworld. Back when he was deputy mayor in St Petersburg, Putin’s job was to act as a ‘liaison’ – essentially, to cut deals with whomever he had to, to keep the city running and the local bigwigs happy. This included powerful crime gangs, especially the Tambovskaya group, an organisation so formidable that its leader, Vladimir Kumarin, became known as the ‘night governor’ – the implication was that by day, the mayor’s office was in charge, but at night, St Petersburg was Tambovskaya’s. He managed to stay ahead of the law until 2007, when he was arrested and sentenced on a range of charges – his continued high-profile status had become a little too embarrassing for Putin. Companies run by the Tambovskaya gang were granted a range of contracts and perks in return for their cooperation, and this same model was applied throughout Russia when Putin became president, in effect offering organised crime a degree of freedom so long as they did not directly challenge the state. In politics, business and crime, three worlds that admittedly do overlap to a depressing degree in Russia, Putin offered wealth in exchange for loyalty. Just as the political entrepreneurs seek to predict and please him with geopolitical mischief abroad, the corrupt entrepreneurs in business shower the boss with gifts, in the hope of winning and keeping his favour.
When Putin wanted to build a lavish palace for himself at Cape Idokopas in the over-the-top, blinged-out style so beloved of the Russian new rich, complete with a private theatre and three helicopter pads, he didn’t pay for it himself. He didn’t even do so out of the state budget. Instead, he demanded that a number of the wealthiest businessmen make ‘voluntary donations’ to fund health care improvements. It was a request you couldn’t refuse. According to a whistle-blower who was involved in the scheme, about a third of the millions collected was diverted into offshore slush funds, with much being used to build the palace. The government denies that it is even an official residence, but this claim became harder to sustain once it was clear that it is garrisoned by Kremlin Guards from the Federal Protection Service, and maintained by the Presidential Property Management Directorate.
After all, those people making fortunes of their own know that they are rich only while they have political power and Putin’s goodwill, which also keeps them suitably anxious and vulnerable to the whims of the Kremlin. The Italian Renaissance politician and philosopher Niccolò Machiavelli once said that while ‘gold by itself will not get you good soldiers, good soldiers will always get you gold’. The corollary for Putin’s Russia is that although money will not necessarily get you power, power will always get you money. Remember that ‘Putin doesn’t go looking for money – money goes looking for him.’ The irony is that these days, when Putin has least need for money, people are most eager to give it to him. The ‘Panama Papers’ revelations reflect that he accumulates money not so much against his will as much as without his working at it and perhaps even – to an extent – without him knowing the details.
In the 1990s, Putin obviously was looking for ways to make the most of his salary, but even then he seems to have been a man with an eye on the main chance, and it is hardly coincidental that the people with whom he forged connections – city officials, gangsters, even his fellow vacationers in the Ozero Dacha Cooperative – could all be useful to him. Now that he has whatever he wants, all Russia as his piggy bank, it is clear that it is power, not money that is his thing – his ever-growing wealth is more a by-product of the corruption and kleptocracy that is at the heart of his system. His gaze is firmly fixed on governing Russia and building his historical legacy. He understands how the promise of wealth – and the fear of losing it – motivates those around him, but it isn’t his drug of choice.
Although some sentimental leftists in the West still cling to the notion that Russia somehow still embodies the egalitarian values of old Soviet ideology, Putin has presided over the transformation of Russia into a hybrid state that is half old-style crony oligarchy and half caricature of the most rapacious form of capitalism. The richest 10 per cent of Russians own almost 90 per cent of the country, more than in any other developed nation. Meanwhile, much of their profits and assets flow out of Russia; they may talk the talk of the new model Putinist nationalist, but they gleefully take advantage of the financial opportunities of globalisation as they plunder the Motherland. This may drive
