The Putin Mystique: Inside Russia’s Power Cult (11 page)

To raise margins, the company opted to diversify production at its alumina factory in Pikalevo and switch to cement production rather than the more costly alumina. In summer 2008, before the crisis hit, BaselCement Pikalevo – which controlled the Pikalevo Alumina Plant – stopped shipments of nepheline by-products to its sister plant, Pikalevo Cement – forcing the plant to close by October, laying off hundreds of people. The move triggered a domino effect that paralyzed production at all three plants by 2009, with Pikalyovskaya Soda, the soda and potash factory operated by Metakhim, also being forced to close.

BaselCement Pikalevo cut production and put half of its 3000-strong workforce on enforced leave, paying them two thirds of their salary.

By February 2009, with production in Pikalevo at a standstill, the wage arrears began.

The perennial scourge of back wages, well-known to Russians from the 1990s, frequently kicked in at debt-saddled companies as the first signal of impending ruin. When short on cash, an oligarch could always skimp on paying his workers – at least, this was how average Pikalevo residents interpreted the events of spring 2009.

As union leader, it came down to Svetlana Antropova to take action. She began petitioning regional authorities and organizing protests. She wrote repeated letters to Governor Serdyukov – only to be ignored.

“Sooner or later, all requests turn into demands. That’s what the union is about,” she told us in June 2011 as she recalled those events. Nothing worked – she was kept out of meetings with Serdyukov and stonewalled by company management.

“I’ve only met once with Deripaska,” she said. “When I started telling him about the factory’s problems and our questions, he only said, “‘I don’t like labour unions.’ And made it understood that he would not talk to me.”

Then she started taking workers out into the streets, prompting security officers to move in. Both private and undercover agents from the FSB made their persistent presence known both to her and to the locals.

But there seemed to be another aim apart from quelling social tension – security was bent on making sure that their top boss, in
this case Oleg Deripaska, was not displeased.

“His company warned us, ‘you can have protests, rallies, do whatever you want,’” Antropova said. “‘As long as you don’t have the word “Deripaska” anywhere.’ I said I couldn’t promise that.”

The vague statements coming from the governor and the Kremlin only increased the panic. Governor Serdyukov met with President Medvedev in March, but no decisions came out of the meeting. In the coming months, he continued to complain that he had no leverage over the owners.

“We have no law on nationalization or deprivatization,” he was quoted as saying. The government, he said, needed to step in and solve the problem.
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On every level, attempts to put pressure on the owners seemed to be failing.

Sergei Veber, the hapless, soft-spoken mayor, would find himself answering very difficult – often violent – questions from the residents.

“From our position, as local authorities, it was difficult to affect the owner,” Veber told us in June 2011. “We worked with plant managers, with law enforcement, with prosecutors.”

What he didn’t say was that the “work” yielded no results. That was only achieved by the district prosecutor, Fyodor Veretinsky, who told a crowd of angry locals that his agency was “considering launching a criminal probe,” and that they were looking into ways of putting additional pressure on the owners. By June, he would report that prosecutors had filed 4,000 lawsuits on behalf of workers over back wages. In May a court ruled to disqualify the director general of BaselCement Pikalevo, Anatoly Maslikov, from his job.

But key to each of these endeavours was that they were conducted as if in a vacuum – most of the lawsuits went nowhere, and the rulings were not enforced, making negotiation impossible. Each attempt by outsiders to force owners to do something had absolutely zero effect on the owners themselves – for in order for workers to get their jobs and their salaries back, three different owners needed to reach a joint agreement on the cost of the raw materials and by-products that they shipped to one another. But Russia’s muddled legislation had no legal framework that could force them to do that. There was no law on nationalization that they could
be threatened with, and Russia’s largely corrupt courts were only a symbolic mechanism.

With neither side listening to the other, the network of administration – from municipal to local to regional – was left to make feeble signals that some higher force needed to get involved to avert disaster.

That disaster occurred on May 15, 2009, when Pikalevo’s only power station, which was controlled by the alumina factory, was shut down by Gazprom over a $4.5 million debt.
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That last measure left the entire town without hot water, causing the built-up tension to reach a tipping point.

On May 20, about 200 desperate residents stormed Mayor Sergei Veber’s administration building. Yelena Matuzova was one of them.

Andrei Petrov, an electrician at the factory power station, described how word of the meeting had spread spontaneously. “There was no information. Some co-workers called me up, said there was something happening that very day, an unsanctioned rally in front of the mayor’s office or something like that.”

Inside, the mayor was holding a meeting with BaselCement Pikalevo management, as well as the district prosecutor and Federal Security Service officers, on how to get the power station running again.

“I felt this excitement, this fear,” Petrov recalled. “It concerned me personally, I couldn’t have imagined this in a nightmare. The meeting inside – there was no information about it getting out to the people, they were standing there for an hour. Once in a while someone would come out and say something, but it wasn’t very informative. So some of the stronger men started pushing their way in, and they burst through.”

Petrov, like other residents, believed this spontaneous collective action to be organized by Svetlana Antropova. But judging by the random way people congregated, there was very little “organization” to this event or to the march of June 2, when about 400 people went to block the highway between Vologda and St. Petersburg.

On May 20, footage
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showed residents randomly gathering in front of the administration building, huddled around in groups
talking quietly to one another.

Then slowly, almost lazily, the crowd started trickling up to the administration entrance. Mostly women, they filed up slowly and looked on as two men started trying to open the doors. “Break them, break them,” a woman said. Another joined her. “They broke our [factory.]” And another middle-aged woman added, shaking her head in dismay, “This isn’t life.”

When the doors opened, they piled in slowly and crowded through the narrow corridor. By the time they reached the police guard in front of the meeting room, they had worked themselves into a state of frustrated desperation. “You have everything, we have nothing!” the women yelled as they haggled with him to let them in. They didn’t see the guard as one of their own at that moment, although to all intents and purposes he was – but they could not tell the difference. Their unformulated demands targeted the people they perceived as more powerful than themselves, and not necessarily the people who could actually help them solve the conflict.

They started chanting “Water!”, “Work!”, and “Salary!”, behind the closed doors as the tension mounted. Finally the crowd, joined by several men hammering loudly on the doors, broke through and spilled into the meeting room, crying “What is this?” and “Our children are cold and hungry. What have you done?” A security guard was knocked over, and he rushed to pick up his papers from the floor.

“There wasn’t so much fear as panic,” Andrei Petrov, who was in the crowd, said of the officials in the room. “It was an effect of unexpectedness. There, inside, in the crowd there were emotions. They weren’t necessary, but they were there. It was a crowd, after all, it was powerful, and they started trying to use it.”

Two years on, Veber tried to downplay what happened in that room. “They didn’t burst in,” he told us in an interview. “They stood outside listening, because they had some questions to ask. The door couldn’t hold them. But you can’t say they burst in. They came in.”

Did he feel the blame was directed at him?

“At that moment, everyone could be blamed,” he said. “Especially since from the point of view of the worker, any representative of power, any boss, first and foremost has to decide and help.”

Video footage showed that Veber was in no position to answer their questions – nor was the crowd prepared to hear out his “lies.”

“You’re not letting us [talk],” he told the crowd. “Unless you leave the room you won’t let us decide anything. No one is going to turn on the water right now, and no one is going to pay you your salaries right now.”

They tried to figure out who was to blame, but to a room full of women in raincoats, any man wearing a suit or a uniform was the enemy.

“You think I am personally to blame for your salaries not being paid?” Anatoly Maslikov, the factory director general, stood up and said.

“Yes!” the women cried in unison.

The prosecutor, Fyodor Veretinsky, tried to reason with the crowd, telling them he was on their side. “We’re the ones who can defend your rights. If we deem the wage arrears greater than two months, we will consider… launching a criminal case against company directors.”

The people listened quietly, but it was becoming increasingly clear that the prosecutor had no real leverage.

“You understand that the [technical issues] are not within the competency of the municipal authorities.”

It was building inexorably towards a solution that was on everyone’s mind. Finally, a woman interrupted the prosecutor.

“Why not go straight to Medvedev and Putin?”

“Excuse me, please name yourself,” the prosecutor said. But the woman, who could not be seen behind the crowd, remained silent.

On June 2, Petrov, Matuzova, and about 400 others blocked a highway to St. Petersburg – the same road that Vladimir Putin was expected to travel along on his way to Finland, for an official trip.

“It was the people’s despair. They didn’t understand what was happening to them and why,” Petrov recalled two years later. “We couldn’t understand – why had everything been working for so long, and why did everything suddenly stop working? For so long the country has needed aluminium – what’s changed? Aren’t airplanes flying anymore? And I think that’s what people wanted to know.”

Just as before, Veber, Prosecutor Veretinsky, and representatives of the regional administration came out to talk to the people.
But no one was listening to a word of what they said. All was “lies.”

“These four hundred people broke up into groups,” Petrov said. “In one group was Veber, in another was Maslikov. And people surrounded them. They weren’t so much asking questions as making demands. ‘Give us our salaries back and our jobs.’ And the officials were trying to make promises, but the people … were in such a state of emotional excitement that they didn’t hear the answers anymore.”

Their one unformulated demand was an appeal to supreme state power – i.e. that Putin should learn about what was happening on the ground and intervene.

“Our actions were aimed at our government, so that they would finally hear us and see how we live,” Yelena Matuzova recalled.

When Petrov was approached by a journalist during the march, he blurted out the only course of action that seemed likely to help.

“Pass it on to Putin and Medvedev, what is happening here,” he said.

Reports that Putin would change his itinerary to come to Pikalevo began appearing as early as the evening of June 2. The visit itself wasn’t officially announced; instead, scared plant officials were told to prepare, leaking cryptic statements to the press about a pending meeting.

At approximately 8 a.m. on June 4, hundreds began gathering in the rain on the wide, green lawn by the town’s swimming pool, expecting the prime minister to arrive there by helicopter. A helicopter did indeed land at around noon, but Putin was not on it. He would arrive later by train.

Hundreds more surrounded the factory, where Putin finally toured the plant and met with management and owners. They stood in the rain and waited for him for about eight hours, insisting on speaking to him personally and hearing his message before it was distorted and misinterpreted by his underlings.

“First they told us he would not come out [to the people],” Yelena Matuzova recalled. “But when we learned that the meeting was over, we started shouting to him, ‘Putin! Putin!’ And he came out, very quickly, just for five minutes.” Matuzova asked only if the
plants would start running. And he told her and the small circle of people that had surrounded him that they would.

“We wanted to hear it from him, really, we wanted to learn more,” she said when asked why they needed to speak directly to Putin.

Andrei Petrov, who stood in the circle, also wanted to talk to Putin but didn’t get the chance. “I wanted to say something about the regional management. About [Governor] Serdyukov.”

As the people waited for Putin to emerge from the meeting, they got text messages from their banks informing them that their salaries had been deposited. By the end of that day – and for some people, by the end of the visit – thousands of dollars in back wages had been paid in full.

When they went home that evening to their television sets, they were rewarded further. For if the meeting itself yielded thousands of dollars in back wages (Petrov said he bought a car with that single payment), the experience of watching their errant master, Oleg Deripaska, being publicly berated by the only person in Russia who had that right, was priceless.

It was Putin’s most brilliant performance as the angry Tsar, a performance that overshadowed President Dmitry Medvedev’s keynote speech at the St. Petersburg Economic forum, where Western investors gathered later in bars to discuss the latest thrashing of an errant oligarch.