The Putin Mystique: Inside Russia’s Power Cult (27 page)

Armed with that understanding, Surkov went about forging his “sovereign democracy” doctrine: a curiously cynical, eclectic ideology of empire-building based on money, the exploitation of resources (human and hydrocarbon), and the contemptuous haughtiness that has historically characterized the Russian government.

Through it all, however, he managed his political sphere – the “democratic” façade of Russian power – very much in accordance with how Putin ruled the country: as a patrimonial dominion to be partitioned at the pleasure of the sovereign, and only among those who could be entrusted with “managing” the assets.

“You talk about democracy while [eying] our hydrocarbon resources,”
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he once told journalists in 2006, describing his managed democracy doctrine.

One of the tasks that this modern-day Machiavelli had been charged with by Putin was the successful implementation of a two-party system (managed, albeit, in the only way that Putin could understand “efficient” political parties – from the top). There had been several attempts to create a successful, managed opposition party: prior to the 2003 parliamentary elections, Surkov brought in a clever firebrand nationalist, Dmitry Rogozin, to head the
Rodina
(Motherland) party. When Rogozin grew too outspoken and ambitious, he was quietly removed to the distant, albeit respected post of Russia’s envoy to NATO in Brussels. His party was co-opted and absorbed into the moderately socialist
Spravedlivaya Rossia
(Just Russia) for the 2007 parliamentary elections.

Creating a successful opposition party was still very much on the Kremlin’s agenda during the presidency of Dmitry Mevdevev, when Vladimir Putin nominally moved out of the Kremlin and into the White House, the home of his cabinet.

By 2010, parliament still failed to represent the one group that Putin and Medvedev were increasingly keen on courting: the entrepreneurial middle class, liberal, innovative, and pragmatic.
United Russia – an army of pro-Putin functionaries who made up the constitutional majority – had never managed to live up to Surkov’s vision of an efficient, modern political force and was increasingly failing at adequately representing the coveted middle class. The two nominal opposition parties – Gennady Zyuganov’s Communist Party and Vladimir Zhirinovsky’s nationalist LDPR – were there to absorb the anti-Kremlin sentiment among the working class, provide perfunctory criticism, and then cast a few token dissenting votes. And the increasingly confused Just Russia, serving an important function of drawing votes away from the Communists, was doing too poorly in the regional elections to be taken seriously.

There was another reason why the government was in need of a liberal party. Ever since taking the presidential seat in May 2008, Putin’s anointed successor, Dmitry Medvedev, had exhibited a consistent pro-Western, liberal rhetoric, exhorting law enforcement to “stop scaring business,” promoting innovation, and passing laws easing criminal persecution of economic crimes. The pro-business elites that were now gravitating towards Medvedev included some powerful figures from Yeltsin’s “Family” – such as his daughter Tatyana Yumasheva, and the former chief of staff, Alexander Voloshin, now a businessman on the board of directors of Norilsk Nickel. If they couldn’t have a liberal president to represent their interests, then they at least needed a liberal prime minister, or an influential political party.

What to do?

The Kremlin administration had already co-opted the liberal Union of Right Forces, joining it to two other politically cleansed oppositionist parties – the Democratic Party, which was snatched from under former prime minister turned Kremlin critic Mikhail Kasyanov in 2005 in a similar “takeover,” and the obscure pro-business Civil Force. The party included all the prominent liberals – people who had initially supported Putin in 1999 but turned staunchly against him when their interests diverged. But it also included more pragmatic and powerful members, like the Yeltsinera reformer Anatoly Chubais – the one who apparently brokered the Kremlin-sponsored merger in 2008, and Leonid Gozman, an experienced party functionary.

The key problem, as often in Russian politics, was money. The Union of Right Forces was apparently some $7 million in debt from its previous parliamentary campaign, and this circumstance ultimately convinced the core of its long-time members, including Leonid Gozman, to agree to the forced merger organized by the Kremlin administration.
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But if the party were to pass the 5 percent election threshold to make it into the State Duma, it also needed a leader who was charismatic, rich, and influential enough to get the vote. In other words, given Russia’s realities he had to be a rich boyar well liked in court, and not just a professional politician. And he had to be trustworthy enough to build a successful opposition party without actually opposing Vladimir Putin’s leadership in any real sense.

Who to pick, and how?

For the members of Right Cause, now on regular speaking terms with the Presidential Administration (a fact that that has never been officially confirmed but that no serious politician on either side would dispute), the evident favour from the top was seen as a chance to finally move into Parliament.

“To have any chances of getting into the Duma, the party had to be given to someone who could serve as an alternative to United Russia,” Leonid Gozman told me.

And the targets were ambitious: during the spring of 2011 the party made overtures to Finance Minister Alexei Kudrin, whose power, along with that of fellow cabinet minister Igor Sechin, was seen as rivalling that of Medvedev. When the invitations were declined, another cabinet liberal, Igor Shuvalov, was offered the job. But he too apparently refused.

The choice eventually fell on Mikhail Prokhorov, and it was easy to see why.

By the age of 46, Mikhail Prokhorov was a businessman who always seemed to find himself in the right place at the right time. Born to a high-placed sports official in the Soviet government, he had studied international economics at the Moscow Financial Institute, where he became close friends with Alexander Khloponin, who
would go on to become a regional governor. In 1991, Prokhorov first met Interros founder Vladimir Potanin and went on to become his junior partner as they founded Oneximbank just two years later.
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Potanin would become one of the authors of the loans for shares programme, acquiring controlling shares of Norilsk Nickel in 1995, thanks to the deal.

Throughout Prokhorov’s career, good things seemed to stick with him, while bad things hardly made a dent. He walked out unfazed from a 2007 scandal in the Alpine resort of Courchevel, where he was briefly detained in connection with a prostitution inquiry,
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with no charges pressed and the incident merely cementing his image as a party animal. And in August 2008, just before the global financial crisis crashed Russia’s stock market, he sold his stake in Norilsk Nickel to Potanin for $6.5 billion in cash and $3.5 billion in other shares.
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After the crisis, Prokhorov was reported to be sitting on some $5 billion in cash.
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He even purchased the New Jersey Nets (now renamed the Brooklyn Nets) basketball team in 2010 for $200 million.
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According to some sources, Prokhorov’s candidacy was apparently suggested by two people who had each played decisive roles in the Yeltsin family: Putin’s former chief of staff Alexander Voloshin and Yeltsin’s chief of staff and son-in-law, Valentin Yumashev. Both were reputedly firmly entrenched in a circle of business interests keen to groom Medvedev for the 2012 presidency. Showing that the feelings were mutual, Medvedev had even appointed Voloshin to head a committee to develop the International Financial Centre in Moscow.

Their endorsement – and the fact that Prokhorov was increasingly joining delegations of businessmen travelling abroad with Medvedev – clearly meant that Prokhorov suited Medvedev and his camp as the head of a potentially pro-Medvedev party. There was no question that he suited the career functionaries within Right Cause: with his estimated $18 billion fortune, Prokhorov would reportedly dole out some $26.5 million for the party’s Duma campaign, funds which would not be returned to Prokhorov after he was ousted.
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But there was another reason that Prokhorov presented an ideal choice: whatever his closeness to the liberal camp, he was clearly an oligarch firmly tied to Putin.

“I have heard that Medvedev had been asking for a party for a long time, and Putin would not agree,” a well-informed United Russia member, speaking on conditions of anonymity, told me after the Right Cause debacle in September. “Putin’s resistance played a key role. And that was why he wouldn’t allow [Finance Minister Alexei] Kudrin or [First Deputy Prime Minister Igor] Shuvalov to head it, as Medvedev wanted. Prokhorov is closer to Putin than to Medvedev. He could have played a double agent.”

Mikhail Prokhorov’s favour with the state was evident. In his office, he kept a photograph of himself towering over Vladimir Putin, with the prime minister looking particularly diminutive next to Prokhorov’s six foot eight inch frame.

Like any oligarch, the ties were monetary and pragmatic. But a telling exchange between Putin and Prokhorov in early 2010 demonstrated both their informal friendliness and Prokhorov’s evident loyalty and deference to Putin.

On February 24, 2010, Putin was giving one of his ubiquitous dressing-downs to a whole group of oligarchs for their failure to invest in the country’s energy infrastructure. Under a deal clinched in 2008 during the partial privatization of Russia’s electricity monopoly, United Energy Systems (UES), several businessmen got shares of energy companies that were part of the UES holding. The condition was that they pledged to invest sufficient funds in their renovation. And Putin, remembering the debacle of the loans for shares programme, was ever keen to ensure that promises were kept. During that particular meeting, Putin threatened fines (up to 25 percent of the investment programme) and even criminal prosecution. In particular, he singled out energy companies owned by Prokhorov and his former partner at Norilsk Nickel, Vladimir Potanin.

Putin’s remarks about Prokhorov were not as much scathing as they were humiliating in their revelation of the oligarch’s closeness to power.

“He is not feeling bad economically. As they say, he has ‘cashed out’. He has money. He’s visiting various offices. He dropped by to see me recently, I have very friendly relations with him,” Putin said in an offhand way in the televised remarks. “He’s looking for ways to apply his resources. But the responsibilities he’s taken on earlier, they have to be fulfilled!”
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At that time, Prokhorov happened to be in Paris as part of a business delegation accompanying Medvedev. Asked about Putin’s comments, he offered an unbelievable explanation: “The chairman of the government was evidently given the wrong documents about the investment programme,” Prokhorov was quoted as saying.
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But Prokhorov’s explanation upon his return to Moscow left no doubt about where he stood in relation to the prime minister, and his unwillingness to jeopardize that position. When it was made public that Putin was paying attention – and that he had “all the information” he needed – the businessman, when pressed, literally took his words back. “We are in close contact with the Energy Ministry,” a repentant Prokhorov said. “The prime minister is fully informed.”
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Aside from that awkward incident, the ease with which Prokhorov could apparently “drop by” to see the prime minister continued unchanged.

On April 1, 2011, Putin “sponsored” Prokhorov’s latest business initiative – a hybrid car with the unlikely name of “Yo-Mobile” – by gracing it with his very presence (much as he did with the Lada car in August 2010, when the televised image of Putin driving it through Siberia – despite outrageous ridicule on the internet – did more for its sales than any traditional ad campaign could ever hope to achieve).
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Though Putin chided the car for its name, the fact that he was pictured driving it alongside Prokhorov sent a powerful signal advertising not just Prokhorov’s product, but Prokhorov himself as a grade-A investor by virtue of his sheer closeness to Putin.

It was clear, then, that whatever effort was put into masking the Right Cause party’s dependency on the Kremlin and however much they touted its independence, Prokhorov could not have headed a political party without Putin’s specific approval.

There is even some evidence of when this approval took place. On April 28, just a few weeks after the “Yo-Mobile” stunt (weeks that apparently included several meetings with Putin) Prokhorov reportedly met with President Medvedev, and though the meeting was not recorded officially, Medvedev made no secret of his talks with Prokhorov. “After he formulated the idea, we talked about it with him,” Medvedev said in a June 24 interview, just days before Prokhorov was elected to head the party. “And he said that he really feels the current situation isn’t fair. He believes he has potential.”
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According to various sources, Prokhorov had a private meeting with Putin immediately after his meeting with Medvedev, on the same day. “It’s clear that these meetings took place back to back,” Belkovsky, who maintained close ties with key members both of Right Cause and the Presidential Administration, told me. A source in Right Cause told me he knew the meeting with Putin had taken place and approval had been given by both parties.
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Once approval was obtained from all parties, a process coordinated, as such things normally were, by Vladislav Surkov, Right Cause was given the green light to elect Mikhail Prokhorov.

By the time Prokhorov announced that he would be heading the party on June 16, the rest was a formality. He officially joined Right Cause at a convention on June 25, and just minutes later was voted its leader by 107 out of 110 delegates. Boris Nadezhdin, the party’s former leader, proclaimed Prokhorov “Tsar, God, and military commander” to a general sense of relief that the habitual autocracy necessary to move anything forward in Russian politics had been restored to the party.