The Putin Mystique: Inside Russia’s Power Cult (16 page)

Zaitsev went to the FSB’s internal affairs department, where he had close contacts. But they told him only that they knew about the case all along – and hadn’t bothered informing him because they knew he “wouldn’t agree to reach a deal.”

But having started the investigation, Zaitsev was determined to move it further. In April 2005 he had police intercept 130 wagons of the shipment and hold it at a sorting station just outside of Moscow, deploying an armed Rapid Response Unit (SORB) to guard the wagons. That was when the trouble began.

Learning of the interception, the Federal Customs Service, which had close ties with the FSB, launched its own criminal investigation and sent its own Rapid Response Unit to take custody of the shipment.

“They tried to take the shipment from us by force. The police Rapid Response Unit against the Customs Rapid Response Unit,” Zaitsev explained. When I asked why, he was incredulous: no one was concealing the commercial interest that the shipment presented.

“That was money standing there! I was glad that a war didn’t break out. They could have started shooting.”

It was due to an amazing coincidence that the standoff between two armed units representing the same government didn’t lead to bloodshed: as the officers pointed their rifles at each other, they recognized their comrades from the battles they had fought side by side trying to quell separatist unrest in Chechnya. But in the murky world where they operated, the vassal of your vassal was not your vassal. Your well-being and your success depended solely on the strength of your
krysha
, or protection – and whether that particular protection was favoured at court at that particular moment.

The totality of what was happening made little sense – as though Zaitsev and the officers he was investigating lived in two parallel worlds, and the world of law and order he had sworn to uphold was negligible by comparison. One had to simply mention the FSB to any law enforcement officer who stopped you – and, if your connection was convincing enough, the officer would suddenly behave differently, either negotiating for a piece of the action or quietly turning away as he swallowed his pride.

In other words, it wasn’t that some unsavoury importer was using the name of the FSB to intimidate customs and police – it was
the FSB itself leasing out its very mystique for a large share of the retail profits. The distinction between that share of profits going to the state as customs duties or as kickbacks to individual FSB officers didn’t seem to matter. The FSB officers were the government as much as the treasury was.

No, there was no use in going against the FSB, and Zaitsev, who had already nearly gone to jail for doing just that, was taken off the case.

In what would become Vladimir Putin’s largest purge of his security agencies, some nineteen officials – including senior generals of the FSB and the Interior Ministry – were sacked in the course of a week in September 2006.
⁸¹
Outwardly, the purge was said to be tied to the so-called
Tri Kita
(Three Whales) scandal – an earlier FSB-linked furniture contraband fiasco that went public in 2000 thanks to Pavel Zaitsev’s ill-fated investigation.

But according to Pavel Zaitsev, something else had to have caused heads to roll in the fall of 2006. That something appeared to be the far larger contraband racket being run right out of the FSB’s Moscow headquarters: the real trigger for the purge, Zaitsev and several government officials alleged, was the disgrace of a near-shoot-out between police and customs Rapid Response Units over the shipment of Chinese shoes and underwear. The subsequent purge opened the door for Putin’s hand-picked investigator, Vladimir Loskutov to eventually solve
Tri Kita
, one of the longest running criminal investigations in Russia’s recent history, and lead to the accused being brought to justice.

But for nearly six years, there was a standoff over
Tri Kita
– a case where a furniture store was alleged to be protected by no less than the deputy head of the FSB. The case would involve a tangle of counter-allegations from three different law enforcement agencies deliberating whether one Pavel Zaitsev could be permitted to investigate a well-connected businessman. In that turf war, Zaitsev, who didn’t have many patrons other than the law, clearly lost out. Two people connected to the case would die – one of them a journalist and a parliamentarian.

Why it took Vladimir Putin’s personal involvement and a high-profile purge to untangle the knot can be explained by a winding chain of personal connections that went up to the very top – for the case involved the interests of those in direct proximity to Putin.

The case that would fundamentally shake up Putin’s court – and perhaps even sway his very decision about a successor – started small, and it started just a few months after Putin himself was inaugurated as president in 2000.

Two customs officials – Alexander Volkov and Marat Faizulin – first noticed that something was amiss at a string of Moscow furniture stores in the summer of 2000. Some 400 tons of high-quality Italian furniture was bypassing customs and arriving – via a shady firm called Liga Mars – at a chain of high-end furniture stores called
Tri Kita
. The chain and the firm were owned and operated by furniture magnate Sergei Zuyev. The amount of money was small – just $2 million worth of contraband furniture, costing the Russian budget about $600,000 in unpaid customs duties.
⁸²
But Volkov and Faizulin – whether out of ambition or commercial interest of their own – were intent on doing their job, and on August 25 they led a raid of fifteen armed men on the furniture centre.
⁸³
On September 7 they launched a criminal case.

The investigation landed on Zaitsev’s desk in October 2000, and his routine checks started unearthing what amounted to a whole conspiracy – judging by the colossal pressure to put a stop to the case, Zuyev was an untouchable.

“On November 22, one of the investigators in [my unit] questioned a witness who testified that resistance to the investigation was coming from someone by the name of Zhukov – an officer of the FSB’s central apparatus,” Zaitsev later said.
⁸⁴

Just hours after the witness was questioned, an officer from the Prosecutor General’s Office – an agency that rivalled the Investigative Committee – arrived demanding that the case be transferred to his agency. Zaitsev and his unit were taken off the case, and the investigation was taken up by the Prosecutor General’s Office. After letting it sit for a few months, it closed the case in May 2001, absolving Sergei Zuyev of any crime.

And in another indication that Volkov, Faizulin and Zaitsev had clearly messed with the wrong man – a man protected by no
ordinary superior – the officers were to face retribution. Faizulin and Volkov would be charged with abuse of authority, while Zaitsev would face two years in prison for an unauthorized search and arrest. All three would manage to avoid jail time, but the defence witness for Faizulin and Volkov, would be murdered. The murder has not been solved.

Who was Sergei Zuyev, and who, most of all, were his patrons, that the men who investigated his alleged crimes would be hounded for the next half a decade?

On November 22, 2000, just hours after prosecutors had removed the
Tri Kita
case from Pavel Zaitsev’s jurisdiction, he continued digging into the origins of the pressure. Who, exactly, were the FSB officers that figured in the witness’s testimony, and why were they resisting the investigation?

Having a name, it was easy to connect the dots. The Zhukov who figured in the testimony turned out to be Colonel Yevgeny Zhukov, who served as an aide to the chief of the FSB’s economic crimes department, Yuri Zaostrovstev. Zaostrovtsev was the deputy chief of the FSB.

There was more, however.

Zaitsev learned that Zaostrovtsev’s father, Yevgeny Zaostrovtsev, was closely connected to Zuyev’s furniture empire. By some accounts, he owned firms that were among the official founders of
Tri Kita
. By other accounts, Yevgeny Zaostrovtsev ran a private security agency that worked for
Tri Kita
.
⁸⁵
The formal association, however, meant little: what really mattered was that Zaostrovtsev Sr., himself reportedly a former KGB officer, was a direct associate of Sergei Zuyev.

“With a
krysha
like that,” Zaitsev told me years later, “why pay anyone?”

Nor was Sergei Zuyev a small fish. While not exactly an oligarch, he had quickly managed to amass a fortune after opening the Soviet Union’s first furniture cooperative in 1988. By 1995, he used that money to build
Grant
, one of Russia’s first large shopping malls. By 2000, he had expanded his empire to include
Tri Kita
, which the Guinness Book of World Records listed as the largest furniture store in Europe. There was a reason for that: according to Zuyev himself, 99 percent of
Tri Kita
’s investment capital came from
foreign companies including a number of German firms.
⁸⁶
It would be alleged later that those firms were distantly connected to Vladimir Putin, and his pre-presidential business interests.
⁸⁷

All this could not have failed to play a role in another tantalizing detail that Zaitsev unearthed while he was investigating Zuyev: with his furniture empire under investigation, Zuyev was promised an audience with Vladimir Putin. According to telephone taps conducted by Zaitsev’s unit, in one conversation in November of 2000 Zuyev was told that such a meeting had already been arranged.

“I know that he was promised such a meeting over the telephone,” Zaitsev told me. “Whether it took place or not, whether they lied to him, or whether the meeting indeed happened and what was discussed, I do not know.”

There was no way to verify where those promises led, for the audio recording was among the evidence confiscated from the police by the FSB in February 2001. But it is not difficult to imagine that Zuyev’s higher-placed patrons were indeed in a position to organize such an audience: FSB deputy chief Yuri Zaostrovtsev had been acquainted with Putin during their days in the KGB directorate in St. Petersburg in the early 1990s.
⁸⁸

For someone facing investigation, an audience with the president would solve all his problems, and judging by the number of such promised audiences, Zuyev was not the only businessman who saw them as a panacea.

“I’ve come across so many promises that you could fill a book,” Zaitsev told me with dismay. “There’s lots of swindlers in Moscow. They can say, ‘We’ve arranged a meeting,’ and take money. This is a common occurrence – whether among law enforcement authorities or people with family connections.”

Where there is a market, there is a demand. That businessmen would seek a personal meeting with a high-placed official – or better yet with Putin himself – suggests that they themselves recognize the utter powerlessness of the law to solve their problems. In the world of Russian business, where entrepreneurs could not trust legislative protection or institutional mechanisms of conducting business, who you knew wasn’t just a valuable asset, it was your chief capital.
⁸⁹
And a connection to Vladimir Putin was priceless.

As a teenager, years before he would go on to start a successful company in the financial services sector, Ivan Narinsky
⁹⁰
once found himself approached by a gang of neighbourhood thugs who tried to take his money. Being a bit of a nerd, a good student and coming from a “good family,” as he said, Ivan knew he was no match for them. So he tried something he’d seen in the movies, and it saved him from a beating. “I know Kostyan,” he told the thugs. Kostyan, of course, did not exist, but the confidence with which Ivan mentioned his name had its effect. “The guys whispered something among themselves and gave me my money back.”

Ivan recalled this anecdote after I had asked him about his attitude towards Vladimir Putin. It was December 2011, and the ancient idea that security organs in Russia existed first for their own enrichment and only afterwards for your protection was so ingrained that even arguing about it had become useless. The primary job of the security services, journalists openly wrote by that time, was protecting the sovereign and his interests.
⁹¹

Ten years after starting his own business, weary of the perpetual FSB officers he had to deal with, the meetings in Lubyanka, the sweet-talk with the investigators to ensure that they didn’t go after him, and the dismay of watching two of his friends wind up in the dreaded pretrial detention centres for vague economic crimes, Ivan Narinsky had sold part of his business and was trying to move what remained of it to Europe. He was in his early 30s, and he was already exhausted.

“Putin is just another Kostyan,” he concluded. An imaginary force to be used as a talisman to ward off those who were in his service and after your money.

Ivan had tried to model his business on what he imagined an ideal American start-up should look like. Instead, he found himself adopting habits similar to those of the corrupt law enforcement officers trying to feed off his profits.

“No one knows the law because it does not apply to anything,” he told me. “There is only the law of the criminal world, which has replaced the non-existent state law.” The law of the real world – the street-wise law, the law of
ponyatiya
, or, literally, “that which is
understood” – was more “ethical,” Ivan said, than the non-existent law of the state.

“That which is understood” governed his relations with his business partners and with the state officials whom he inevitably had to deal with. “When I go to an official, he will judge me based on whether I am right by
ponyatiya
or not.”

What, after all, was the alternative? It wasn’t that Ivan had adhered to every letter of the law in starting his business – because the law was impossible to adhere to in the first place, it had become irrelevant. Business structures were not determined by who owned what stock, but by personal relations, power plays, and trust.