Who Lost Russia?

Russia’s political and social evolution has been far less satisfactory. Yeltsin’s family, under the guidance of Boris Berezovsky, have been looking for a successor to Yeltsin who would protect them against prosecution after the elections. They finally found one in the person of Vladimir Putin, the director of the Federal Security Service (FSB). In the summer of 1999 he was made prime minister and appointed as Yeltsin’s candidate for the presidency. There was a flare-up in Chechen terrorist activity. When Shamil Basayev, one of the Chechen terrorist commanders, invaded neighboring Dagestan, Putin reacted vigorously. The security forces attacked the terrorists and Putin issued an ultimatum, announcing that Dagestan would be cleansed of terrorists by August 25. The target date was met. The Russian population responded to Putin’s handling of the situation enthusiastically and his popularity skyrocketed.

Then there was a series of mysterious explosions in Moscow in which entire apartment houses were blown up and some three hundred people killed while they slept. In the panic that followed fear and anger were directed against the Chechens, assisted by a carefully orchestrated campaign in the press and television. Putin invaded Chechnya and the Duma elections were held in an atmosphere of war hysteria. Very few candidates dared to oppose the invasion.

Grigory Yavlinsky was among the few. He supported the antiterrorist campaign in Dagestan but he drew the line at invading Chechnya itself. The popularity of his party, Yabloko, dropped precipitously and barely squeezed past the threshold of 5 percent of the vote required for representation in the Duma. A hastily concocted government party, Unity, without any coherent program, came in second to the Communists, with 23 percent. The Union of Rightist Forces, led by Chubais, Kiriyenko, and other reformers, embraced Putin and scored quite well with 8.6 percent. Primakov, who, with the backing of Moscow’s mayor, Luzhkov, had been considered the favorite candidate for the presidency, was decisively defeated; their party got only 13 percent. Using the momentum generated by the victory in the parliamentary elections, Yeltsin announced his resignation on New Year’s Eve, virtually assuring the election of Putin as his successor. Primakov withdrew from the contest.

The phenomenal rise of Putin out of nowhere had an eerie resemblance to the feat of political engineering which got Yeltsin reelected in 1996. From long experience with Berezovsky I see his hand in both operations. I first met him in connection with his $1.5 million contribution to the International Science Foundation when the executive director of the foundation, Alex Goldfarb, introduced him to me. I have described our by-now-well- known conversation at Davos. Subsequently, Berezovsky claimed that it was this conversation that induced him to form a syndicate for the reelection of Yeltsin. During 1996, we had a number of very frank discussions about the election campaign. I got to know how he operates.

Then we became adversaries in the Svyazinvest auction but we continued to talk to each other. I tried to convert him from robber capitalist to legitimate capitalist. He tried to use me in his campaign for the chairmanship of Gazprom, by far the most powerful commercial entity in Russia. In June 1997 he invited me to Sochi to visit Chernomyrdin, who had been chairman of Gazprom before he became prime minister, and subsequently flew me back to Moscow in his private plane. He told me that both Chubais and Nemtsov supported his candidacy. I did not believe him, so I asked Nemtsov. That was the first he had heard about it. “Over my dead body” was his reaction.

Afterward I had lunch with Berezovsky at his “club,” which was decorated, deliberately or not, in the way Hollywood would present a Mafia hangout. I was the only guest. I did not tell him what Nemtsov said, but I did tell him that I had asked Nemtsov and that he had claimed that he did not know about Berezovsky’s quest for the chairmanship of Gazprom. This made Berezovsky very angry and his anger gave me the chills. I literally felt that he could kill me. He did not say so, but he made me feel that I had betrayed him. It was a turning point in our relationship. We continued to talk to each other — on one occasion Berezovsky flew to New York just to see me — but from then on I tried to keep my distance from him.

As I have said, the falling-out among the oligarchs, and the conflict between Berezovsky and Chubais in particular, was a bizarre episode, although not as bizarre as the promotion of Putin as Yeltsin’s successor. Berezovsky saw the world through the prism of his personal interests. He had no difficulty in subordinating the fate of Russia to his own. He genuinely believed that he and the oligarchs had bought the government by paying for Yeltsin’s reelection, and that the government had reneged on the bargain by allowing a genuine auction for Sviazinvest. He was determined to bring down Chubais for betraying him. When I warned him that he was pulling down the tent around him, he answered that he had no choice; if he showed any weakness he could not survive.

I could not understand this at the time, but in retrospect it makes perfect sense. Berezovsky could not make the transition to legitimacy; his only chance of survival was to keep people entangled in the web of illegitimate relationships that he had established. He had a hold on Yeltsin because of the illegitimate favors he had arranged for Yeltsin’s family. For instance, he had made Yeltsin’s son-in-law a manager of Aeroflot, whose hard-currency revenues were diverted to a Swiss company called Forus, which, it was explained to me, meant “for us.” This gave him power over Yeltsin that none of the other oligarchs had. Berezovsky also had a hold on Chubais, and when the chips were down he did not hesitate to use it. The $90,000 Chubais received in the form of a phony book contract caused his temporary downfall.

This is the perspective I bring to bear on the current situation. Berezovsky and Yeltsin’s family were looking for a way to perpetuate the immunity they enjoyed under Yeltsin’s presidency. They tried a variety of ways, some quite farcical. At one point, at Berezovsky’s instigation, Yeltsin informed the president of the Duma that he was going to nominate Nikolay Aksionenko as prime minister, but Chubais intervened and the official document sent to the Duma nominated Sergei Stepashin. Subsequently Stepashin was pushed out of office. Berezovsky’s situation became desperate when the scandal over the laundering of Russian illegal money in US banks broke in 1999 and he realized that he could not find refuge in the West. One way or another he had to find a successor to Yeltsin who would protect him. That is when the plan to promote Putin’s candidacy was hatched.

On the flight from Sochi to Moscow in 1997, Berezovsky had told me stories about how he had paid off the anti-Russian military commanders in Chechnya and Abkhazia. So when the Chechnya leader Shamil Basayev invaded Dagestan, I smelled a rat. I set up a test: Would Basayev withdraw by the deadline set by Putin? He did. Even so, I could not quite believe that the explosions in the Moscow apartment buildings could be part of a plan to justify war. It was just too diabolical. It would not be unique — Russian history is replete with crimes committed by agents provocateurs, from Azev, the spy during the Tsarist period, to Kirov’s murder, which was used to justify Stalin’s purges — but it would nevertheless be in a class by itself.

Still, I could not rule it out. From Berezovsky’s point of view the bombing made perfect sense. Not only would such attacks help to elect a president who would provide immunity to Yeltsin and his family but it would also give him, Berezovsky, a hold over Putin. So far, no evidence has surfaced which would contradict this theory.

While we may never find out the truth about the Moscow explosions, there can be no doubt that it was the war in Chechnya that propelled Putin to victory. I find this distressing. Between 1994 and 1996, during the previous Chechen war, the Russian population was upset when it saw the devastation and suffering caused by the invasion of Chechnya. The protests by the mothers of enlisted soldiers and by human rights activists like Sergei Kovalev helped to bring about a negotiated settlement. This time the reaction of the Russian population strongly contrasts with its attitude five years ago. Admittedly, the Chechen terrorists must bear a large share of the blame. They captured aid workers and journalists, held them for ransom, and often killed them. Fred Cuny, the hero of Sarajevo, perished in this way. There is hardly anybody left who dares to get involved with helping Chechens or with publicizing the atrocities they have suffered. There has been a masterful manipulation of public sentiment against them. The fact remains that the attitude of the Russian population is very different from what it was a few years ago.

At the beginning of the post- Gorbachev years, Russians had a positive aversion to violence. In fact, very little blood was spilled in the early days and on the rare occasions when people were killed in Tbilisi, in Lithuania, and later in the siege of the Duma in October 1993 public opinion turned against those who used force. Not anymore. By electing Putin president in March, the Russians will become more implicated than ever in the bloodshed in Chechnya.

There is a theory that a victim who has been sufficiently brutalized can become himself drawn to violence. The pattern seems to fit many violent criminals and it also seems to apply to ethnic violence (See Richard Rhodes, Why They Kill: The Discoveries of a Maverick Criminologist {Knopf, 1999}). The Serbs have long considered themselves victims, and Milosevic could exploit this sentiment in pursuing a policy of ethnic cleansing. Something similar seems to have happened in Russia.

Putin will try to reestablish a strong state and he may well succeed. In many ways that would be a desirable development. As the Russian experience has taught us, a weak state can be a threat to liberty. It is indispensable for the functioning of a market economy that there be an authority that can enforce the rules. By accomplishing the transition from robber capitalism to legitimate capitalism Putin may well preside over an economic recovery; my investments in Russia including the one in Svyazinvest may finally pay off.

But Putin’s state is unlikely to be built on the principles of an open society; it is more likely to be based on the demoralization, humiliation, and frustration of the Russian people. It will likely continue to exploit the sense of terror that people felt when the apartment buildings blew up, and seek to establish the authority of the state at home and the glory of Russia in the world. Exact predictions are impossible, but it seems likely that the new government will be authoritarian and nationalistic. It is telling that one of Putin’s first moves was to reject alliances in the Duma with the parties of Yavlinsky, Gaidar, and Chubais, and make a deal for the support of the Communists. One thing is clear to me: we are facing a prospect which could have been avoided if the open societies of the West had been more firmly committed to the principles of the open society themselves.

In his farewell speech, Yeltsin asked for the forgiveness of the Russian people: For the fact that many of our hopes did not materialize. For things which to us seemed simple but turned out arduous. I want to ask forgiveness for the fact that I was not able to justify the hopes of some people who believed that we would be able to move forward in one swoop from a gray totalitarian and stagnant past to a bright, rich, and civilized future. I believed it myself. But it did not work out like that. In some way I was too naive. What Yeltsin did not say is that he and many others put their faith in the West but the West did not live up to their admittedly exaggerated expectations. I can speak only for myself. At first I thought that Western statesmen simply did not understand what was happening. That Gorbachev was willing to change the system was too good to be true, so they wanted to test it. They set hurdles, and when Gorbachev jumped over them, they set higher hurdles. Eventually they had to admit that the change was for real, but in the meantime they lost all respect for Russia as a superpower. They started treating the Russians like beggars. They found money in the Nunn Lugar Act to help them with nuclear disarmament, but not much for anything else. I remember a Russian economist telling me that he spent five hours with Secretary of State James Baker on a plane to Seattle in 1990 begging for assistance, to no avail.

I also remember Alexander Yakovlev, the main driving force behind Gorbachev, telling me, much later, how humiliated he felt in his dealings with the Americans. Regretfully I had to conclude that the West did not care very much for the open society as a universal concept. Had it done so, the process of transition would still have been very painful for Russia, with many dislocations and disappointments, but at least it would have moved in the right direction. Russia could have become a true democracy and a true friend of the United States, just as Germany did after the Second World War and the Marshall Plan. That is not the prospect facing us today.

My foundation remains very active in Russia and it is receiving strong support from Russian society. We have established thirty-two computer centers in Russian provincial universities. This has helped to develop the Internet in Russia, and online information is emerging there as an alternative to the increasingly timid press. In most of our recent programs we insist on matching funds from the local authorities. For instance, we are supplying books to five thousand local libraries and we are asking for 25 percent of the cost in the first year, 50 percent in the second and 75 percent in the third, and we are actually receiving it. When we wanted to introduce an educational reform program in six oblasts, fifteen of them offered to put up the matching funds. I remain committed to supporting the work of the foundation as long as it receives the support of Russian society and is allowed to function. The quest for an open society is a flame that could not be extinguished even by Stalin’s terror. I am sure it will stay alive in Russia whatever its future.