Dan Snow's History Hit - Putin's Rise to Power

Episode Date: May 22, 2022

Catherine Belton joins Dan on the podcast to discuss the remarkable story of Vladimir Putin's rise to power. After working from 2007-2013 as the Moscow correspondent for the Financial Times, Catherine's career has offered an exclusive insight into the workings of Putin's Kremlin. Her book 'Putin's People' is packed with interviews with the key inside players, uncovering fascinating details about how Putin subverted Russia’s economy and legal system and extended the Kremlin's reach into the United States and Europe. It's a story of billions of dollars being siphoned out of state enterprises, murky networks of operatives and the suppression of independent voices.If you'd like to learn more, we have hundreds of history documentaries, ad-free podcasts and audiobooks at History Hit - subscribe today! To download the History Hit app please go to the Android or Apple store.

Hi everybody, welcome to Dan Snow's History Hit. Here's a favourite episode from our archive. Enjoy. Hi everyone, welcome to Dan Snow's History Hit. We've got a great podcast for you. We've got the brilliant Catherine Belton. She's a writer, she's a journalist, she is an expert, total expert, in Russia and Vladimir Putin. She goes right back to the start of his career, when in 1985 he was a young KJB officer. He was hanging out in Dresden. She identifies him that he was a senior liaison officer with the Stasi. He was doing all sorts of hellish things then. And his career really has gone from bad to worse. And now he's a globally significant figure.

So that's great news. So this was a brilliant podcast, bit of recent history, but not just Putin. Looking at what happened to Russia after the collapse of the Soviet Union. What do the people around Putin, the man himself, what do they want? Are the gangsters motivated by money? Is there a kind of nationalist element to their plans, their vision for Russia? It's not easy listing this, but it's important. Thank you very much to the brilliant Catherine Belton

for producing such a comprehensive first draft of history. It's remarkable. Enjoy, Catherine Belton. history. It's remarkable. Enjoy, Catherine Belton. Catherine, thank you very much for coming on the podcast. Great. Thanks so much for having me on. I'm really excited to join. Let's go back to Mikhail Gorbachev. There was a coup in August of 1991. It's the end of the Soviet Union. It all falls apart. Where is Vladimir Putin and what is he up to and who's he hanging out with? So Putin then had already attached himself to one of the

country's main democratic leaders. He was in St. Petersburg and he'd already become deputy mayor because St. Petersburg had had democratic elections prior to the hardline coup of August 91. But actually, at least according to one former KGB ally, although he'd sort of allied himself with one of the country's democratic leaders, who was the mayor of St. Petersburg, Anatoly Sobchak, Putin at the same time was actually still a member of the KGB. And he'd in fact been given orders by his former mentor and boss when he was serving in the KGB in East Germany, Dresden. He'd been given the order that rather than sort of hang around at the Moscow center as the Moscow headquarters of the Foreign Intelligence Service was known, that he should head for Leningrad, that he should head for St. Petersburg, his hometown,

where he immediately sort of began to seek to attach himself to kind of the rising wave of democratic leaders. He tried one rousing orator, sort of this very doughty democrat called Galina Starovoytova. She turned him away because she thought, who's this kind of slightly fishy looking chap? And then he attached himself very successfully to his former mentor at the St. Petersburg University where he'd studied law. He was immediately appointed his assistant. And soon after there were elections to the city's council where Sobchak was elected chairman and Putin sort of kept very close to him ever since. But he was essentially serving two masters. He was serving this democratic leader, but in the background, he was still the KGB. And actually, he was part of a

wave of sort of not quite former KGB officers who were shadowing the country's new democratic leaders who were sort of in the background, keeping tabs on them and sort of monitoring the situation. It's kind of a very interesting process because actually there were parts of the KGB who were really pushing and propelling the Perestroika reforms, the reforms which sort of launched Russia's revolution, that it was sort of these progressive elements of the KGB that pushed the whole process from the start. And what does Putin want at that point? Is Putin looking out for himself? Is he looking out for sort of the KGB's vision of what Russia should be? Or is he actually flirting with democracy? And maybe because he's keeping a lot of horses in this race?

Or is he actually flirting with democracy and maybe because he's keeping a lot of horses in this race? Yeah, he's sort of hedging his bets. I mean, the main thing for him at that point is to survive. Obviously, there's a lot of chaos going on. But what's very interesting, if you look at actually what Putin got up to in the early years of his tenure as St. Petersburg deputy mayor, of his tenure as St. Petersburg deputy mayor. He was chairman of the Foreign Relations Committee, and he oversaw these very scandalous barter deals. St. Petersburg's economy then was devastated because, of course, the Soviet system collapsed. This whole kind of planned economy was eradicated overnight. On January the 1st, 1992, the new Russian government had freed prices overnight, which caused food shortages. There wasn't enough food coming into the city and sort of payment

systems were breaking down. So ostensibly to kind of help lift this roadblock, what Putin did was oversee an oil for food barter deal scheme. He was handing out licenses to trade commodities to a tight network of crony firms, to people that he knew. And in return, these people who were getting billions of dollars worth of commodity export contracts were meant to bring in foodstuffs in return. But actually what happened was a lot of the food didn't turn up. And this has always been portrayed as a very kind of big early scandal in Putin's career as sort of an example of the sort of kleptocracy his regime would later engage in. But actually, when you look closer at it, and when I sort of managed to speak to a former KGB operative who'd worked with Putin on the schemes,

what I found that it wasn't just a means through which to kind of enrich themselves, what Putin and his men were doing through these barter deals. They were sort of trying to siphon money to keep intelligence networks going abroad. Sort of what I was told that they were kind of set up for, they were a means to pay so-called friendly firms. And friendly firms, since Soviet times, had been these sort of intermediaries in export deals and import deals in which they would supply sort of much needed equipment for infrastructure to the Soviet Union at really high inflated prices. And they keep the difference and use the difference to fund Communist Party operations abroad or other KGB influence operations. And essentially,

what this KGB operative told me, he said, look, we needed to set up these barter deals to keep paying the friendly firms. The Soviet Union had gone bankrupt. Russia had taken on all the debts of the Soviet Union. It had also pronounced itself bankrupt. There was a moratorium on payments of all foreign debt. But this KGB operative said, in those conditions, we needed to create these sort of black channels through these sort of highly dodgy

and irregular barter schemes in which sort of food never appeared, but sort of hundreds of millions of dollars worth of it would have been immediately frozen because Russia was bankrupt and it had pronounced itself so. of cash in Liechtenstein or in other offshore zones, they could access the cash and use it to sort of pay for the city's basic needs, perhaps dip into these stashes of cash themselves to pay for travel or who knows what else, because there wasn't any oversight. But it was just an example of how some of the siphoning, I mean, we've always seen Russia as this kleptocracy, but that's only partially true because they were keeping money to keep their intelligence networks going as well at the same time. Sorry, that's such a convoluted answer, but it was an interesting thing to see. It's fascinating. At what stage does Putin, if ever, does he break away from that and launch a kind of serious political career? Or is he always hedging right up until he gets the presidency? So I think he's always had one foot in the KGB.

I mean, his background was, I mean, he was in the KGB since the 70s. He served in the KGB in Dresden, in East Germany, where this is where they sort of forged the way they operate sort of through smuggling deals through fronts and intermediaries. This is where he sort of was involved in influence operations of the Soviet era in which they were sort of trying to disrupt Western stability. He kind of learned a lot of lessons while he was in Dresden. Even when he was deputy to the St. Petersburg mayor, he was sort of working with two masters. He was preserving these intelligence networks and he was helping sort of his KGB allies

sort of in many ways dominate the economy. And when he moved to Moscow after the mayor, Anatoly Sobchak lost the election in 96. So Putin had been his campaign manager, Sobchak lost by a whisker. But Putin, even though he stepped down and has been sort of presented as sort of making this great sort of personal sacrifice that he wouldn't serve under the new mayor who had been his former mentor's opponent. In fact, he was only out of work for a couple of weeks before he was moved swiftly to the Kremlin, where he began a very, very rapid rise. And his first job, again, in the Kremlin was as chief of the Foreign Property Department. This was also a great department of the Soviet legacy. It was the Department of the Kremlin that looked after

the Soviet Union's former empire of foreign assets. And this may have been safe houses or, you know, for spies, or it may have been embassies. A lot of it had sort of mysteriously also disappeared off the books. So again, he was sort of serving two masters. And also, we've seen in the Yeltsin era, when Boris Yeltsin was president of Russia, though it always was a period of great reform in Russia, making this transition to the market economy and really trying to bring democracy to the country, always in the background there was this cadre of ex-KGB officers

like Vladimir Putin who were sort were very much in the background and still very much a force to be reckoned with. I mean, in the mid-90s, there was this grand privatization called the Loans for Shares Scheme, in which a new generation of Moscow oligarchs were born and took over most of the country's economy. Moscow oligarchs were born and took over most of the country's economy. And that was in 96. But right up till that point, the foreign intelligence cadre had controlled most of the country's oil exports. And they were sort of waiting and biding their time. And they hated Yeltsin because they thought he'd given away too much freedom that he'd sold out to the West. They hated these oligarchs who they also believed were sort of kowtowing to the West and really posed a danger to the country's security and sort of ability to continue to exist. So they were just kind of biding their time and waiting to pounce on Yeltsin because many crises came.

How does he clamber right to the top rungs of the ladder though? crises came. How does he clamber right to the top rungs of the ladder though? Was that organised by some shady KGB conspiracy or is that his own brilliance, ability, luck? How does he climb the last few rungs? It's a combination of all elements really. There's a lot of luck, there's a lot of chance but there is also a degree of KGB conspiracy unfortunately because these sort of security service elements were always waiting in the wings. They were always sort of biding their time and waiting for their chance. And in August 98, there was this huge financial crisis, which rocked Asia and then hit Russia. And the government devalued the ruble and defaulted on all of its foreign debt. And there

was kind of great economic chaos in which the population savings were again wiped out for the second time of the 90s. So there was a great political backlash against Yeltsin. And in that moment, really, the security services kind of seized the moment. Yeltsin was kind of backed into a corner. He was forced to appoint someone who was very much seen

as a communist dinosaur. He was forced to appoint Yevgeny Primakov as his prime minister. But what was interesting about Primakov was that he was the former head of Russia's foreign intelligence services. And he was from the creme de la creme of the KGB's foreign intelligence service. And so suddenly he had this prime minister. And once Primakov was prime minister, I was told by Yeltsin's son-in-law and his former chief of staff that there was no way back. They couldn't suddenly appoint a Democrat as Yeltsin's successor after they had Primakov in place. They almost had to have somebody else who was a general because the Russians were so fed up of the crises that had sort of rollicked the whole of the 90s. They wanted someone in power who was going to be a strong hand. He said,

Yumash have also said that in the 90s, we swallowed so much freedom, we were almost poisoned by it, that there was this great desire among the Russians for a strong hand. But really, whether it was Primakov, Putin, or another kind of security services general who came to power, who was Sergei Stepashin, who was also at one point, Prime Minister in that time, you know, de Passion, who was also at one point prime minister in that time. You have these three very different type of ex-KGB men, and it was really through sheer luck and charm that in the end it was Putin, because Putin managed to convince the Yeltsin family in their time of trouble that he was the one who could protect them, that he was the one who was young, progressive. He sort of presented himself as a liberal and as a Democrat. And he was very able in sort of showing himself

to have these colors, even though it might not have been quite the case. I mean, I think the Yeltsin family had been very impressed by an incident in 97, in which Putin helped his former mentor and boss, the St. Petersburg mayor, Anatoly Sobchak, escape from Russia because another hardline wing of the security forces was pursuing him over corruption allegations. And Putin basically told Yumashev, who was Yeltsin's chief of staff then, he said, look, this is unfair. I'm going to help Sobchak get out of the country. So he was willing to break the law, essentially, to help his former boss escape the clutches of this hard-wing element. And it really impressed the Yeltsin family how far Putin was willing to go to protect someone he was loyal to. He also kind of

presented himself as someone who was uniquely lacking in ambition. At one point, he'd already become deputy chief of staff. He had a very powerful role. And he went up to Yumashev, the chief of staff, and he said, look, I think I've accomplished everything I can now. Perhaps it's time for me to resign and do something else. And again, that sort of burnished his credentials in the eyes of Umarshev because he just thought, well, this guy, he's not kind of the normal shark in this pool that we swim in here. He's not out to kind of raise himself. And in fact, immediately after that, he was promoted again to first deputy Kremlin chief of staff. It just kind of only

raised his standing in Umarshev's eyes. He was really seen as someone that they could rely on. And the Yeltsin family after the August 98 financial crisis, they really were in a great deal of trouble because not only were the communists rising against Yeltsin, but the Russian prosecutor general was also pursuing the Yeltsin family over some credit cards that the Yeltsin family had been using. And it looked as though they'd been given them in return for handing a multi-billion dollar contract to a Swiss company for reconstructing the Kremlin. And the Swiss company had handed the Yeltsin family these credit cards. And the sums involved then were tiny compared to the corruption scandals of present day. It was a couple of hundred thousand dollars that they'd spent on these credit cards. But in those days, it was just totally dangerous for the Yeltsin family because they were so weak politically. And also, you know, it was against the law of those times for an official

to have a foreign bank account. And that was equivalent to having a foreign bank account. They really feared that they could be jailed if they didn't find the right person to succeed Yeltsin who would protect them. And Putin was very good at presenting himself as being the one to do so. So it's kind of a combination of luck, charm, and coincidence, but also a great deal of political calculation. And some of that, the credit card scandal, was actually dug up by this former KGB operative who, in fact, had worked with Putin on oil for food deals in the 90s. So there was also some element of KGB plotting. So it was really a creeping coup by the security men. The Yeltsin family were sort of backing away and thinking

we have to escape the communists, but they just walked into the arms of the security men instead. You listen to Dan Snow's history. More coming up. and latest groundbreaking research from the greatest millennium in human history. We're talking Vikings, Normans, Kings and Popes, who were rarely the best of friends, murder, rebellions,

and crusades. Find out who we really were by subscribing to Gone Medieval from History Hit wherever you get your podcasts. So he appeared loyal enough to the Yeltsins and he was trusted enough by this security establishment. What did the security establishment and Putin want in late 1990s Russia? I think they believed the Yeltsin family had brought the country to the point of breakup. After the financial crisis of 98, there was such sort of chaos that regional governors were refusing to obey Yeltsin's orders. Some of them were even threatening to kind of print their own currency.

They really saw the country as being on the point of breakup, whether that was sort of, you know, they might have helped stoke that themselves to some degree, but they kind of had really positioned themselves as being the saviors of Russia. And they also kind of believed that sort of Yeltsin's mantra since the early 90s, that sort of like he told the regional governors to take as much freedom as you can swallow. They believe that this was very harmful for the country. And they believe that sort of Yeltsin had kind of fallen to the thrall of the West that most of his main kind of economic advisors who'd led the privatizations, there was a guy called Anatoly Chubais who was in charge of the country's privatization program,

and they believed that he was also dancing to the West's tune, that Russia had become sort of really weakened and that all these sort of independent oligarchs had funneled all this cash into the West and it was out of Russia's control. So really, they were about restoring the Russian state. That's what they wanted to do. And they wanted to restore Russia as a power on the world stage. But in the late 90s, the oil price was about $10 or $12. So, you know you know it was very tall task to be able to do so it was this great moment of luck sort of when as soon as Putin came to power as soon as Yeltsin appointed him his prime minister in August 99 and said look this is the guy I want to be my successor oil prices almost immediately started rising so Putin had this sort of great cushion of

good fortune sort of that helped also propel him into the presidency. And I think pretty much soon after he became president, what the KGB guys around him started doing was first picking off any political challenge to him. They began sort of picking off the tycoons who owned independent TV channels. And then they began taking over the country's strategic cash flows because they realized that once they got hold and control of the oil money, they could sort of begin to deploy it to not only line their own pockets, but also to raise Russia's standing on the global arena. So they really wanted to take control of things. So it is important not just to see the people around Putin and Putin himself as like kleptocrats. They do have an ideology of sorts.

They do have this belief in the maintenance and the strengthening of Russian state power. Yes, they do. But also, it's very sort of conveniently and inextricably linked with their own fortunes. They see themselves as the guardians and the saviors of the Russian state. But along the way, they can also line their own pocket. And I think they believe that they are the great saviors of Russia, and that they deserve to have these sort of enormous palaces and sort of luxury lifestyles because we are the ones who saved Russia from collapse and heard stories from ex-KGB colleagues of Putin that they would sort of raise their glasses to Putin and almost say that he'd been

sent by God to save the country. And they really kind of bought into this idea that they were the ones who had sort of worked saving Russia from the brink of collapse. But I think as well, it's a very short term tactic. And it's not very strategic at all, really, to just think that in taking control of countries, strategic cash flows, First, they went after the oil companies, and then they went after other private businesses that in doing so, they would secure the country's global standing. Because of course, yes, Putin's men now have hundreds of billions of dollars at their command, essentially, because they took over the oil sector and because they took over the country's institutions like the legal system. Once you have control of the legal system, every

businessman in the country is beholden to the Kremlin because if they want to, they can find something against you and make you follow their bidding. But it's a very short term strategy because once you do that, you can have control of all the cash flow God can send, but you're sure as hell not going to create any real investment in the economy because all the businessmen are fearful of investing because they know at any moment the Kremlin can take it from them. So really, you end up with very anemic economic growth. And in the first two terms of Putin's presidency, this really wasn't noticeable because oil prices were kind of surging so fast. So he had this kind of huge cushion in which living standards were rising because oil prices had gone from $12 to nearly $100.

But once that surge ran out, you really started sort of seeing kind of 1% economic growth. And, you know, it's a very short-termist strategy of taking control without kind of actually restoring your country's power by making itself an economic powerhouse. It's more about kind of having control of cash flows so that you can then use them to buy off officials in the West and try and disrupt things there. It's not a normal tactic. It's mischief making. When you look at Putin now in the West,

particularly after his apparently successful meddling in the last US election, there is a tendency to think of Putin as rather a brilliant Machiavellian figure who's sort of pulling all the strings. Do you see him as that, or do you see him as someone who's actually quite insecure? Yeah, I think he's probably quite insecure. And a lot of these tactics come from sort of not being noticed previously. Again, it's this great element of kind of the overriding element in his mindset and how he and the people around him think. It's this legacy of the Soviet collapse, it's the legacy of the Yeltsin years when they sort of feared that the West was trying to take over. It's also a paranoia that's kind of deeply ingrained since the Orange Revolution in Ukraine in 2003 and 2004,

when they really believed that the West was trying to kind of pull in the former Soviet satellite states into its own orbit. I just think that they've been unable to break free of this zero-sum game, thinking that they really believe that there's a Western plot to encircle Russia. It hasn't helped. At the beginning of his presidency, he did make these overtures to the West. The first thing that he did when he met George W. Bush was to offer and close down the Lord's Listening Station, this sort of listening base that the Russians had on Cuba, which they used to sort of tap into conversations in the US. He made this grand gesture to George W. Bush that they were going to close this down, but he immediately

expected the US would offer something in return. And when it didn't come, it was a great disappointment. And then when the US unilaterally walked out of the anti-ballistic missile treaty, also early in his presidency, that was another blow. And then even as he was sort of making overtures to the US and allowing the US to use Central Asia as a transit corridor for its war in Afghanistan after September 11th, NATO kept on encroaching ever eastward. So it's kind of, you almost have this sort of situation. And I think President Obama once described Putin this way, that he's like the naughty schoolboy at the back of the class pulling faces, because I think they just feel that they've been ignored and that the West hasn't taken Russia seriously and that it's sort of believed it's a weak basket case. It hasn't kind of seen the

security services as a force to be reckoned with. So really they're sort of jumping up and down and sort of saying, well, if you're not going to notice us, we'll cause a hell of a lot of trouble for you because look at us we've actually got hundreds of billions of dollars at our command and when you have that much money it's very easy to buy off western politicians because what they have very correctly reckoned on is that sort of the western model of governance leaves a lot of room for corruption, unfortunately, because one, its companies are driven only by profit, and a lot of them sort of hurried to join the Kremlin's takeover of assets, even though it did so sort of riding roughshod over the principles of law.

And so it saw that kind of profit was a kind of a guiding motivation. And it's also been able to watch at close hand how easy it is to kind of buy off Western politicians. I mean, you'll remember the expenses scandal here in the UK where sort of UK politicians got into hot water for declaring sort of buying garden furniture as expenses or something ridiculous and as petty as that. And when you have such petty goings on in Parliament, you can see it's so easy to spend a couple of thousand or perhaps tens of thousands buying a politician because, unfortunately, quite easy for Russians. It's chump change. I mean, one associate of a well-known

Russian oligarch told me, he said, look, you know, for the Russians, it's nothing like in the US, you can spend 3 million building a kindergarten and perhaps a bit more buying an aluminium plant. And all of a sudden, you have influence in a region, you might not have the whole of it in your pocket, but you can have leverage over a governor, it's actually become quite easy. And what's made it harder to trace is that the Russians are very adept at using sort of front companies, these kind of LLCs, whose beneficial ownership is never recorded to move money into the West. And once it's in the financial system, it's very, very difficult to trace.

If Putin had caught corona and had died, what state would Russia be in? And would some of those threats around breakup and collapse, security forces feared in 1990, simply have been postponed? I think, yes, there would be chaos. You would think that they had some kind of succession plan in place because the whole entire system is so dependent on one man. You would think it would be crazy of them not to have some kind of plans in the background. But even if they did, I think they would be accompanied by a great deal of infighting. I mean, amongst even his own men, because even his own men aren't united. They're quite sort of fractious between themselves. And he's been this sort of great arbiter of balancing clans off against each other.

I think probably a successor, if they did have one, would also come from the security services because they can't risk giving up power because they've done so many nefarious things in consolidating it. So it would have to be someone from Putin's inner circle who was taking over, and they would have to have all kinds of guarantees in place to make sure they didn't end up in jail. So I kind of think that they have to have a succession plan because it's too risky for them to not have. And in some ways, Putin getting sick with the coronavirus actually might deal with the biggest problem of Russian politics at the moment, and that is that Putin actually can't step down. He's hostage to the system that he's created

because they did so many kind of nefarious things on the way to sort of consolidating so much power and control over the economy that Putin really can't risk stepping down because he doesn't really trust many people. And he probably doesn't think that he can trust those closest to him in his inner circle either. And he realizes, you know, people can offer him guarantees, but there's no guarantee that anyone will stick to them. So it's very difficult for him to step down. And that's why we've sort of seen all this sort of all these shenanigans around

the constitutional changes that would allow him to stay in power for another 12 years. But if he was down with coronavirus, that would take that issue out of the way. He wouldn't need to seek guarantees, but there would be kind of a lot of infighting as well along the way as to who took over. So yeah, anyone's guess, I guess. Well, just ask Elizabeth Tudor, name me a successor. It's dangerous business when you're a ruler. Thank you so much, Catherine Belton. What is your book called?

It's called Putin's People, How the KGB Took Back Russia and Then Took on the West. Thank you very much. Good luck with it. Thanks. It was really fun talking. Thanks a lot. I feel we have the history on our shoulders. All this tradition of ours,

our school history, our songs, this part of the history of our country, all were gone and finished. Thank you for making it to the end of this episode of Dan Snow's History. I really appreciate listening to this podcast. I love doing these podcasts.

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