Читать книгу Putin’s People - Catherine Belton - Страница 14

ST PETERSBURG – On the south-western edge of St Petersburg, where the Gulf of Finland starts to join the Baltic Sea, a tangle of cranes and containers juts out across the elegant façades of the pre-Revolutionary palaces across the bay. On one small island, twisted heaps of scrap metal and piles of timber lie in wait for tankers, while across a channel the red-brick buildings that were once the customs house and the warehouses for the city’s finest pre-Revolutionary merchants somehow still stand, half-abandoned among the heavy machinery. Far out on the western edge, a concrete jetty leads to the place sometimes called the ‘Golden Gates’, a concrete sprawl of oil-storage facilities that mark St Petersburg’s most strategic outpost, the oil terminal that was the battleground for some of the 1990s’ most vicious bandit wars.

The archipelago of islands is home to St Petersburg’s sea port, and through its channels Russia’s tumultuous history has always run deep. When Peter the Great founded St Petersburg in the early eighteenth century, he did so in the hope that it would become Russia’s greatest sea port, a vital link between the vast country’s Eurasian land mass and the markets of the West. Thousands of serfs toiled and died to realise his vision of stately Baroque mansions and elegant canals rising out of the freezing and muddy marshes. St Petersburg was always intended as Russia’s ‘window on the West’, a port city that would drag the country kicking and screaming out of its medieval and Asiatic past, no matter what the cost.

Ships carrying cargoes of cloth, tea, silk and spices began to arrive in ever greater numbers from the colonial empires of the West, while Russia’s imperial riches of timber, furs, hemp and potash steamed out. St Petersburg’s merchants and noblemen thrived, but as the city’s population exploded, its workers were among the world’s most downtrodden. Dockers hauled cargoes on and off the ships on their backs, unprotected from the ice and bitter winds that gripped the port for half of the year. When Vladimir Lenin gathered the city’s workers to overthrow the rule of the provisional government in 1917, the dockers were foremost among them. When the city, by then named Leningrad, came under blockade by the Nazis during the Second World War, the sea port was on the front line of the heart-rending struggles to survive starvation and bombs.

And when Russia juddered out of its third revolution of the twentieth century, the St Petersburg sea port again had a defining role to play. It became the ground zero for an alliance between the KGB and organised crime that was to expand its influence across Russia, and later into Western markets and institutions too. It was the starting point for the business alliances of the city’s deputy mayor, Vladimir Putin, who worked closely with the organised-crime leader who ran it, and the oil trader who gained a monopoly on exports through its oil terminal. The relationships forged then, through an elaborate web of barter and export deals, became a model for how Putin’s Russia would be run.

In the early nineties, the port was one of the darkest places in a city riven by gangland shootings and violent battles for cash. ‘The story of the sea port is a very criminal and dirty story,’ said one former senior official in the St Petersburg city council.[1] ‘The port was totally criminalised. There was a lot of shooting,’ according to a former member of the biggest local crime gang, the Tambov group.[2]

The group who eventually took it over were part of a nexus of organised-crime and KGB men that came to rule the roost in St Petersburg in the nineties, and Vladimir Putin was at the centre of it. If in Moscow the forces of the KGB had stayed largely in the shadows, in St Petersburg they were much more visible. St Petersburg’s economy was far smaller than Moscow’s, the battle for cash much more vicious, and the mayor’s office had tentacles extending into most businesses. The main reason for the potency of the KGB’s reach in St Petersburg was that mayor Anatoly Sobchak had little interest in the day-to-day running of the city. He left it to Putin, who ran the foreign-relations committee, which oversaw all trade and much of the rest of the city’s business, and to his other deputy, Vladimir Yakovlev, who was in charge of the city’s economic affairs.

Sobchak and his deputies moved the mayor’s office from the Marinsky Palace, where St Petersburg’s democrat-run city council had its seat, to the warren-like offices of the Smolny Institute, from which the Communist Party had run the city since the days of Lenin’s takeover. The legacy they inherited was desperate. The city’s coffers were empty. There was no cash to pay for imports, and the shop shelves were fast emptying. Domestic food production was in a parlous state. Grain was left to rot at the roadside by inefficient state collective farms, while a series of bad harvests made things even worse. They not only had to deal with the food crisis, but also with an explosion of crime. In the chaos of the Soviet collapse, the institutions of power appeared to be melting away. Organised-crime groups moved in to fill the vacuum, running protection rackets extorting local businesses and taking over trade.

From his office behind the stately columns and fading façade of the Smolny Institute, Sobchak seemed incapable of dealing with the deteriorating situation. He was a convincing and powerful orator who prided himself on his appearance, but his relations with what remained of the city’s law enforcement were fraught. ‘Sobchak was a moron,’ said one former senior KGB officer who worked for a time with Putin in St Petersburg. ‘He wanted to wear the sharpest suits, and he could give speeches for hours on end. He loved all the attributes of power, and his wife wanted to live like an aristocrat. He liked to travel in limousines, but someone needed to work. Who was going to clean the shit from the streets and deal with the bandits?’

Few in law enforcement would even take Sobchak’s calls. ‘The former chairman of the St Petersburg KGB would not even go into a room with him,’ the former KGB officer said. ‘If you tried to explain to him how security worked, it would be the same as explaining nuclear physics. But with Putin, you could explain. You could say, “Volodya, there is this situation and there is this one.” And when he had to phone up the police to sort out situations, for him they would not put down the phone.’

So Sobchak came to rely on Putin, who had maintained a network of connections with the top of the city’s KGB: his former mentor in the Leningrad KGB’s feared dissident-fighting Fifth Directorate, Viktor Cherkesov, was the new head of St Petersburg’s FSB, the KGB’s successor agency. Putin became the point man for dealing with law enforcement. He ‘was someone who could phone someone and say, “We have to do something, otherwise there’s going to be a nightmare,”’ the former KGB officer said. ‘He could agree with a general who before had handled special forces, who could tell him how to handle something and maybe provide back-up. They were people with connections. The system had collapsed, but part of it had remained.’[3]

What emerged out of the chaos and collapse – and Sobchak’s ineffectiveness – was an alliance between Putin, his KGB allies and organised crime that sought to run much of the city’s economy for their own benefit. Instead of seeking to impose order for the good of the city’s population, the only order they imposed was mostly for themselves. Above all, the collapse meant opportunity for their own enrichment – and, in particular for Putin and his allies in the KGB, for the creation of a strategic slush fund that was to preserve their networks and secure their position for years to come. The slush fund had its roots in the barter schemes of KGB-run friendly firms. Later they extended to the sea port, and then to the oil terminal itself. Running through it all was St Petersburg’s Tambov organised-crime group. It was a business, according to one former local FSB officer, that consisted of ‘murder and raiding’: ‘The arms of the Tambov group were covered in blood.’[4]

*

It was near the end of 1991 when Marina Salye first noticed something was wrong. The firebrand democrat, who at one point had rivalled Sobchak as St Petersburg’s democratic leader, had been tasked by the head of the city council to find ways out of the food crisis. A doughty geologist in her mid-fifties with soft greying hair and shadows sunk deep under determined eyes, Salye was relentless. That autumn, she’d successfully pushed for the city to introduce a system of ration cards. It was the first time food had been rationed since the terrible days of starvation of the Leningrad blockade.[5] She’d now decided to push for a barter scheme that would allow the city to exchange raw materials for imports of food. It seemed the only way out of the impasse. A system had already been set up on a federal level to deal with the crisis that was facing the entire country. The Moscow government had begun issuing quotas that allowed the export of set quantities of natural resources held by state-owned enterprises, such as oil products, metals and timber, in exchange for food. But as Salye began to push the mayor’s office to apply for the export quotas for St Petersburg, she got wind of rumours that Putin’s foreign-relations committee had already been granted them. ‘What quotas? Where are the quotas? Officially no one knew anything,’ she later told an interviewer.[6] When she tried to extract more information from the mayor’s office, no one answered her letters. The scheme, she found out, had been under way since at least the beginning of December, and no one had been informed.[7] The biggest problem of all was that the expected food imports were nowhere to be found. As the city entered the new year, it had only one month’s worth of food reserves left.[8]

Salye launched a parliamentary inquiry demanding information on the deals.[9] When Putin eventually bowed to demands and addressed the city council, pale-eyed and defiant, he turned up with just two pages of notes, and told the MPs that everything else was a commercial secret.[10] What he told parliament differed greatly from the documents Salye was eventually able to retrieve from the State Customs Committee and other officials as she ramped up her investigation.[11]

By the time she’d pieced everything together, it had become clear that Putin’s committee had handed out more than $95 million in export licences to an obscure web of front companies, while virtually none of the food imports expected in return had arrived.[12] A further $900 million worth of export quotas had been granted by the federal government, including one for $717 million worth of aluminium.[13] It was impossible to tell whether Putin had gone ahead and handed out the additional $900 million in quotas to other firms which also disappeared with the proceeds, as Salye had been unable to access any further documentation. But she suspected that he had.[14]

As Salye and her deputies dug through the paperwork, the scandal seemed to grow. State customs officials and St Petersburg’s representative from the foreign trade ministry had written to Putin complaining that he’d issued the export licences in violation of laws governing such barter deals.[15] An expert opinion commissioned by Salye’s committee warned that the companies involved were so obscure they could disappear with the proceeds from the sales overnight.[16] Most of them were to receive mind-blowing commissions for their services: 25 to 50 per cent of the value of the deals, instead of the usual 3 or 4 per cent.[17] A handful of the contracts appeared to allow the companies to purchase raw materials for far less than the market price. One quota awarded by Putin allowed for an outfit created just two months before the scheme took off to acquire 13,997 kilograms of rare-earth metals for two thousand times less than the global market price, enabling it to reap vast profits when it sold it all on world markets.[18]

The scheme Salye had uncovered was almost identical to the practices deployed by KGB joint ventures in the dying days of the Soviet Union, which had led to a flood of raw materials being siphoned out of the country from state-owned enterprises at the low internal Soviet price, while the profits from the subsequent sales at much higher world prices remained in bank accounts abroad. In those days, any outfit that wanted to export raw materials had to receive a special licence to do so from the ministry of foreign trade, whose ranks were mostly manned by associates of the KGB. When the Russian government launched a series of barter schemes intended to staunch the looming humanitarian crisis following the Soviet collapse, the deals followed a similar route. But Putin had special permission to award his own quotas, licences and contracts for the city’s so-called oil-for-food deals, bypassing the need to agree each one with the ministry.[19] He’d been granted this by the minister for foreign trade himself, Pyotr Aven, the same bespectacled economist who’d worked closely on reforms with Gaidar in the early eighties, and who then protected Putin when the oil-for-food deals came under scrutiny.

One of the contracts Putin handed out was to a Soviet-Finnish joint venture called Sfinks, which at the end of December 1991 was awarded a quota to trade diesel fuel, cement and fertiliser in exchange for 200,000 tonnes of livestock grain.[20] Another was a Soviet-German entity named Tamigo, given a licence to trade five hundred tonnes of copper in return for supplies of sugar and cooking oil.[21] Dzhikop, the outfit that was awarded the contract to acquire 13,997 kilograms of rare-earth metals for two thousand times below the market price,[22] was co-run by the brother of one of Putin’s university classmates who shared Putin’s love for martial arts.[23] Another recipient of diesel oil quotas was a firm called Interkommerts, run by Gennady Miroshnik, a convicted criminal who’d participated in a scheme that siphoned 20 million Deutschmarks from funds earmarked for the relocation of the Soviet Union’s armed forces from East Germany.[24] Later, Putin’s wife Lyudmilla told a friend that Interkommerts was linked to East Germans her husband met in Dresden.[25]

The barter deals ‘were handed out to his friends,’ said Alexander Belyayev, the then head of the St Petersburg city council who oversaw Salye’s investigation.[26] ‘They had to be given to people Putin trusted. There was no legal tender process then, so it was clear they would be given to people he knew personally, to people he could control. For the oil-product sales, this was mostly connected to Kirishi. They were near monopolists. This was Timchenko, Katkov, Malov.’[27]

The men Putin was apparently handing the deals to appeared to represent far more than a network of friends. One of them, Gennady Timchenko, was a spry man with a charming smile who was fluent in German and English, with a smattering of French. He and his partners, Andrei Katkov and Yevgeny Malov, had set up the Kirishineftekhimexport oil trader when Gorbachev first loosened trade in 1987, granting seventy organisations, including the Kirishi oil refinery near Leningrad, the right to trade outside the Soviet monopoly.[28] All Katkov and Malov had done at their previous posts in the Soviet foreign trade ministry was stamp and file papers for export deals, and they leapt at the chance to enter into their own business. Timchenko appeared to be a different matter. His official biography said he’d worked as a senior engineer at the foreign trade ministry. But according to three people familiar with the matter, he’d taken a very different route. He’d studied German together with Putin at the KGB’s Red Banner Academy before Putin was sent to Dresden and Timchenko to Vienna and Zürich,[29] where, two former senior officers for the Russian foreign-intelligence service said, he had worked as an undercover agent in Soviet trade organisations.[30] It’s possible, according to a third former officer speaking to Russian newspaper Vedomosti, that he was sent there to handle bank accounts funding the KGB’s networks of illegals.[31] ‘I don’t rule out that Timchenko knew Putin then,’ one of the former officers archly told me.[32] Timchenko has repeatedly denied any connection to the KGB, saying any such connection is untrue. A senior Russian banker with ties to the security services also indicated he had links to Putin during his Dresden days.[33]

While Timchenko has also previously denied that his Kirishineftekhimexport had ever been involved in the scandal-racked oil-for-food deals, adding later that all his firm’s activities were ‘transparent and legitimate’, one of Timchenko’s former partners told me his firm had participated, as did two other associates. They insisted that all the food they’d been tasked with importing had been delivered to St Petersburg.[34] But overall, the scheme ended disastrously: only a tiny fraction of the food due to be imported had ever turned up. Instead, Salye suspected, KGB networks were being preserved. Salye told a friend she felt her inquiry had uncovered ‘the tip of an iceberg’.[35] What lay beneath, she believed, was a huge structure that had its origins in the foreign slush funds of the KGB, the networks of which the scheme was designed to maintain.

Salye, it turns out, was probably right.

*

‘Salye was a fool! This all happened. But this is absolutely normal trading operations. How can you explain this to a menopausal woman like that!’[36] It was May 2013, more than twenty years since the scheme was set up, and Felipe Turover, a former senior officer for the foreign-intelligence directorate of the KGB, was telling for the first time the story of how he helped Putin set up the St Petersburg oil-for-food scheme.

We were sitting in the sun on the terrace of a café in Boadillo del Monte, a sleepy market town in the hills near Madrid. The scheme that had been publicly presented in the early nineties as a mechanism to bring in vitally needed imports of food, Turover claimed, actually had a different purpose. It was never really intended that the food would arrive. There were much bigger problems to deal with: ‘All this bullshit about the report of Marina Salye. This was absolutely beside the point. The situation was one of total collapse. There was an absolute lack of federal finance for projects, and Moscow only drank and stole. In order for everything not to collapse, we had to do something. It was like a ship without a captain, and when you try to turn the wheel it falls off. This was what it was like. If we had not started work, then St Petersburg would have drowned in shit.’

Built like a bodybuilder, with a shaved head and dark glasses, Turover had a demonic laugh and a treasure trove of stories about the Soviet collapse. He was from the elite of the Soviet foreign-intelligence service. His father had taught languages at the KGB Red Banner Academy, and served as a translator to Leonid Brezhnev; Giulio Andreotti, the long-serving Italian prime minister, was among his friends. In Soviet times Turover had worked closely with Vladimir Osintsev, the legendary komitetchik who headed the so-called ‘Party Technology’ division of the Central Committee’s International Department, running black operations and illegals deep into countries where the Communist Party was banned. In the chaos that followed the Soviet collapse, Turover had been charged with finding ways to pay debts owed to the ‘friendly firms’ at the heart of the clandestine financing schemes of the KGB and Party influence operations abroad – many of which also supplied crucial equipment, including for energy infrastructure, to the Soviet Union at a marked-up price.

The problem was that when the USSR collapsed, Russia had agreed to take on all the foreign debts of the former Soviet republics in exchange for their foreign property, and had then promptly pronounced itself bankrupt. An international moratorium had been announced on all Russia’s foreign debts. Turover, who needed to bypass this in order to pay the friendly firms without anyone finding out, claimed that the barter schemes were in fact set up as a way to do so. Eventually he’d set up a channel for payments through a small Swiss bank in Lugano, documents show. ‘We could not say we paid someone and did not pay Philip Morris,’ he said. ‘This was not a small matter. For some things we needed to pay right away. If we did not pay for equipment for nuclear power plants, then we would have a catastrophe. When the country stopped existing, everyone had stopped supplies.’

Turover had been sent to St Petersburg, he said, to help Putin set up his own scheme to pay off debts to some of the friendly firms. One of them, he claimed, was an Italian outfit called Casa Grande del Favore, which he said was one of a handful of engineering firms capable of the delicate operations required for repairs of the sewerage system that criss-crossed St Petersburg’s myriad of canals: ‘We had to pay, because without completion of the work St Petersburg would be covered to the tops of its cupolas in crap.’ He’d advised Putin to set up the oil-for-food scheme, he said, because ‘We needed to have operative instruments to be able to pay someone off fast.’[37]

Turover was essentially admitting that from the start the scheme had been intended not to bring in imports of food, but to create a hard-currency slush fund for the city. But without any oversight, there was no way of telling whether any of the funds were actually used to pay off the debts to the friendly firms, or whether they were in fact funnelled to networks of KGB agents still operating abroad. Turover claimed that there was no other way to operate, because the Russian state bank in charge of foreign operations, Vneshekonombank, was in a state of collapse. All of its accounts had been frozen January 1 1992, when the Russian government announced it had run out of funds. ‘It was a pure necessity,’ said Turover. ‘It was not possible to pay the expenditures of the city any other way.’[38] Any hard-currency accounts officially connected to City Hall would be frozen, along with the other accounts impounded under the Soviet bankruptcy: ‘If they’d kept it on the accounts of the city, it would mean the same thing as keeping the cash in VEB. But if you had funds somewhere in foreign accounts, in Liechtenstein, then you could pay immediately.’[39]

Russia’s central bank had used the same reasoning when it tried to explain away a scandal that emerged later in the nineties, when it emerged that it had transferred tens of billions of the country’s hard-currency reserves through a small offshore firm in Jersey named Fimaco, which had been established in November 1990, shortly after Ivashko ordered the creation of the ‘invisible Party economy’. The secret transfers through Fimaco, the Russian central bank chief later argued, had been necessary to protect the funds from being seized after the Soviet Union pronounced itself bankrupt, and to pay off the foreign debts of the Soviet international banking network.[40]

But there was zero oversight over any of the transactions, and rather than paying down debts, many suspected most of the money was used to fund the foreign networks of the KGB. In many ways, the central bank’s Fimaco operations and Putin’s oil-for-food scheme were cut from the same cloth. They looked to be part of the black cash of the Russian regime, and were so lacking in transparency that they could just as easily be used as the personal slush funds of the officials running Russia. Turover insisted that Putin never stole from the slush funds he helped create through the oil-for-food scheme. ‘But he spent money, of course. Of course he spent some of the money, and somehow managed this money, because he needed to travel, to pay for hotels, and he probably needed to eat as well.’[41]

In essence, what had been created was what in Russian criminal parlance is called an ‘obschak’, a common cash pot or slush fund for a criminal gang. It was a model based on handing out riches to a tightly controlled network of close allies, where the lines between what was to be used for strategic operations and what was for personal use were always conveniently blurred. This model became the basis for the kleptocracy of the Putin regime, and later its influence operations too – and it was based on the clandestine networks and payments systems of the KGB.

As for Salye, she was sidelined as a political figure. Sobchak blocked any further investigation of his young protégé’s oil-for-food deals. In the mid-nineties she moved to Moscow, where her voice was drowned out in the capital’s political din. On the eve of Putin’s election as president, however, she resurfaced to publish the first in-depth investigative article on the deals, titling it ‘V. Putin – The President of a Corrupt Oligarchy!’ Although her findings created a furore among liberals, they had little impact nationwide. Soon after the election she withdrew to the depths of the countryside near the border with Finland, miles down a boneshaking road from the nearest town. Only a handful of journalists made the journey to interview her there. But the scheme, and her investigation of it, remained her abiding obsession till the day she died, just weeks after Putin began his third term in 2012. She knew she’d glimpsed the true nature of his regime in those deals.[42]