Cashing in on Russia’s Woes

I was always dismissed as a ‘Sov symp’ in the days of communism, attracted by the Soviet Union’s great foreign policy: anti-imperialist, ant-zionist, pro-nuclear disarmament, pro-liberation movements, etc, etc. I could never understand why lefties didn’t fall in love with the only real non-capitalist modern society. It worked, however badly. It had to be at the heart of the struggle against capitalism, imperialism.

Now I’m a ‘putinist’ according to my Canadian MP Chrystia Freeland, herself granddaughter of the leading WWII Ukrainian Hitler propagandist as Ukrainian Jews were whisked away to concentration camps and death. She was trying to insult me, as I stood with a friend and a placard ‘Hands off Venezuela’, ‘welcoming’ her constituents at a levy on a frosty but sunny afternoon in 2018. Canada had just signed on to the US conspiracy to overthrow Maduro, par for Canada’s craven course in world affairs. A bit of ‘pot calling the kettle black,’ I wanted to needle her, but refrained, anxious to leave a pro-Bolivarian soundbyte in her haughty mind.

‘Sticks and stones’, I always say. In any case, I am still a supporter of Russian foreign policy, generally following its Soviet parent. Not for any love of Putin, but because it is right. And I still remain a Sov symp, now, more for its egalitarian domestic policy, guaranteeing a first rate, free education, and quite passable universal health care, not to mention cheap housing, cheap public transport, lots of holidays. Russia, sadly, has abandoned much of that in its embrace of capitalism.

Freeland, like Catherine Belton, was Financial Times correspondent in Moscow in the 1990s, a close friend of the Bill Browder whose financial shenanigans in Moscow led to the Magnitsky Act in 2012, banning Russians deemed undesirable from the US. Like Browder, Freeland too cashed in on Russia’s woes, with Sale of the Century (2000) about Russia’s journey from communism to capitalism, and Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else (2012).

Freeland had the curious dilemma of being Canada’s foreign minister (2017-19) while being banned from Canada’s northern Russian neighbour, thanks to her very loud pillorying of Putin. When asked if this wasn’t a problem, she dismissed the ban as ‘something for Moscow to deal with.’ Have I got this right? As Arctic sovereignty rears its contentious head, Canada’s inability to work with its main contender is not a problem? Where the only interaction of leaders is Trudeau and Freeland name-calling Putin at international gatherings?

Communist (sorry, Russian) conspiracies

Belton’s tome, Putin’s People: How the KGB Took Back Russia and Then Took on the West, is being touted as ‘the definitive account of the rise of Putin and Putinism’, according to Anne Applebaum in The Atlantic. All these strident critics of Putin, Catherine, Chrystia and Anne, are, well, women-in-a-man’s-world. Putin’s appeal is definitely not to feminists. His image is of a macho man, silent and serious, crafty and intelligent. The story line is: KGB man appears from nowhere, bashes the Chechens, exiles and/or assassinates his foes, redistributes the country’s resources to his KGB friends, creating a new patriotic elite, meanwhile, spending millions to subvert the West. Vladimir Putin has presided over the country and its resources like a tsar, bolstered by a cadre of friendly oligarchs and secret service agents. ‘Very dangerous’ in the words of Freeland.

Although the writing style, seeing everything through conspiratorial eyes, with Russia always the bad guy, is irksome, there are interesting themes and juicy gossip:

*Under Andropov, the KGB was already working with the black market in anticipation of loosening control, and allowing creation of a genuine market (the ‘luch’ (light) program). Of course, the KGB wanted to keep control of cash flows. If that indeed was Andropov’s plan, was it bad, as Belton implies? It sure beats letting a handful of men steal the nation’s wealth and spirit it abroad, as Yeltsin did in the 1990s.

Andropov died just months after Gorbachev arrived in Moscow, prematurely thrusting him into sole leadership, without Andropov’s skills and knowledge, or his caution. Instead of a Russian transition, Russians got a free-for-all by wannabe westernerizers, Chubais, Khodorkovsky et al, with neoliberal American advisers. By then, there was no authority to rein in the greed. Russia was gutted.

*Putin’s mentor was Leningrader and reformer Anatolii Sobchak. Belton suggests Yeltsin orchestrated Sobchak’s defeat as mayor in 1996, as Sobchak was too charismatic (and intelligent). That brought Putin to Moscow and the KGB orchestrated his rise to keep control. Primakov and Luzhkov, supported by the Communists, were jockeying to take over from Yeltsin.

A telling anecdote Belton relates (if true) is how Putin spirited Sobchak out of the country to avoid investigations which might have landed him in jail. When Yelstin heard of this, he was impressed at his loyalty, clearly with his own family in mind, and promoted Putin to head the FSB and finally prime minister in 1999.

When Sobchak heard this (so the story goes), he said: Don’t frighten me! Sobchak’s only public criticism of the post-Soviet KGB (and Putin) was an article charging them with complicity in murder of an official, Manevich, involving the Petersburg port (where Putin was supposedly involved in drug smuggling). And then he died ‘mysteriously’ a month before Putin’s inauguration as president in 2000.

*The next step in Belton’s conspiratorial take is the explosions that hit four apartment blocks in the Russian cities of Buynaksk, Moscow and Volgodonsk in 1999, culminating in Putin beating out Primakov in an orchestrated coup. (Did the KGB blow up Russians to make a strongman KGB more palatable?)

How much of this scenario is fact is hard to tell, but the upshot is that Russia lives with a West not much different from Soviet days. Yes, the KGB was formed by a Cold War mentality and connections. Whose fault was that? Under Putin, Russia has been rebuilt as the Soviet Union with capitalism, crony capitalism. Andropov’s vision of a controlled transition to a more open economy, with socialism still the guiding force, was not to be. There is not ‘light’ at the end of the tunnel, and it’s not Putin’s fault.

Salvaging something

New banks that popped up overnight had been able to manipulate the ‘loans for shares’ scheme to obtain shares in firms with strong potential as collateral for loans to the state. This was how Khodorkovsky got a 78% share of ownership in Yukos. In a few years, most of Russia’s wealth was funneled into a dozen hands. It was too late to close the barn door, but at least Putin slowed the hemorrhaging and created a functioning state.

With his presidential mandate, Putin immediately went after the oligarchs. He summoned them for regular meetings, warned them of ‘fishing in muddy waters’, that it was ‘no use blaming the mirror’ [because you’re ugly].

We have a category of people who have become billionaires overnight. The state appointed them billionaires. It simply gave out a huge amount of property, practically for free. Then they got the idea that ‘the gods themselves slept on their heads,’ that everything was permitted to them. ((Putin quoted in the New York Times, October 5, 2003.))

‘Privatization didn’t create legitimate property,’ Khodorkovsky’s ex-lawyer told Belton in 2018. You don’t own it, Putin warned them, but merely can use it under the government’s scrutiny. At the same time, Putin promised not to reverse 1990s privatizations. Bad cop, good cop.

Khodorkovsky gets special attention. How from 2003 on, Khodorkovsky started to push a political agenda, aiming for control by financing the Communists, Yabloko and Union of Right forces at the same time, trying to appeal to both left and right against Putin, planning to run for president 2008. Essentially privatizing politics. He started a youth movement and made a public display of charity.

But what Russia needed was not charity from a slick snake-oil salesman, but tax revenue, and to make sure that oil remained in Russian hands. When Khodorkovsky planned to give majority ownership of Yukos to ExxonMobil and/or ChevronTexaco in 2003, that crossed Putin’s red line and Kh lost his ill-gotten wealth, landing in prison in 2005. At the end of 2014 (after a pardon by Putin), he was still worth about $500 million. In 2015, he moved to London.

Khodorkovsky would be the exception that proves the rule about respecting the ’90s fire sale. Belton tsk-tsks that the husband of Kh’s judge was ‘driven to a Subaru salesroom and told to choose a vehicle for himself.’ That Putin was merely creating a new set of oligarchs from among his friends, the siloviki (the ‘powers’). Yes, meet the new boss, same as the old boss. At least the new boss is under the control of the country’s government.


Belton compares Putin’s regime to that of Tsar Nicholas I, who reigned from 1825 to 1855. Putin directly copies the state doctrine of ‘Orthodoxy, Autocracy and Nationality’ of Nicholas I. Khodorovsky was even sent to Krasnokamensk in Siberia, where Decembrists were sent two centuries ago by Nicholas. The tsar suppressed the westernizers of the day, fans of Napoleon, whom, remember Russia had just defeated. Shades of treason. But Russian soldiers liked what they saw in Europe, where there was much greater freedom of speech and no serfdom. Eventually Nicholas’s son Alexander II built on that legacy.

Putin is a big fan of Russian history, and compares his rule to that of all his predecessors. But Tsar Nicholas was not faced with such hostility from Europe, at least till the end of his 30-year reign, with the Crimean War. After it was over, relations went back to normal. The Crimean War was all about asserting Britain as the world empire. In the ‘great game’ of the time, Russia grudgingly accepted that, and soon Tsar Nicholas II and his cousin King George V were leading their nations into WWI together.

To stretch the analogy, the US is the world empire today and expects Russia to toe the line. But there are no monarchs to paper over the cracks. The great game today is not a simple replay, except that the 19th century version ended in world wars, and the current game is already one of economic war and an accelerating arms race. In both cases, Russia was/is trying to develop peacefully, never under anyone’s thumb, making it Belton’s foe not so much for Putin’s ruthlessness and corruption, but for his temerity to defy the US empire.

Putin is more like Stalin in his drive to defend the motherland against very real enemies, his ruthlessness and zeal to modernize Russia and ensure a strong state. In a telling show of force shortly after his election as president in 2000, he first lectured the oligarchs about their fishing in muddy waters, then ‘invited’ them to Stalin’s dacha for an informal party, dressed in jeans and t-shirt.

Khrushchev, Brezhnev and Gorbachev did not have the same fear of the West as Stalin and Putin. But that’s not Putin’s fault. (And they were deceived as it turns out.) Belton’s warped interpretations of things ignore the very real threat posed by the West, not just in Soviet times, but even more so today, eager to further dismember a weakened Russia and force it to accept US hegemony.

As for the oligarchs, Belton even denies they are genuine oligarchs: ‘Russia has no oligarchs, only wealthy servants of Putin and his FSB.’ (But maybe they like the restrictions, as Putin promises them not only security, but a renewed Russia.)

Belton rightly notes the big moment for Putin was the Munich security conference 2007, where Putin shocked—and impressed—the world by telling truth to power, charging that the US imperial project was back in full force. This is a world of one master, one sovereign. And this in the end is ruinous not just for everyone in the system, but for the sovereign itself. For it will destroy the sovereign from the inside. The world is changing rapidly. Belton dismisses this now legendary attack on US pretense, instead, accusing Putin of reviving the Cold War.


And what of the claims of Russian meddling in foreign governments? Belton points to Putin’s ‘suggestion’ to Abramovich to buy the Chelsea football club, that this helped clinch the World Cup in 2018, relying on a corrupt FIFA. All the Russian wealth circulating in Britain allowed Putin to manipulate British politics. Oh really?

Was it Putin’s fault that Trump spent so much time with rich pals and pretty women in Moscow, even hosting the Miss Universe pageant in 2013 in Krasnogorsk? Belton attributes Trump’s isolationism (his pre-election call to withdraw troops from Japan and the Persian Gulf) to Russia. No. Just common sense. Like a broken clock, Trump occasionally gets it right.

And the wikileaks of 2016, even if courtesy of Russia, merely showed Washington as corrupt and cynical. Interesting that both Donald Jr and Biden Jr (to their peril) were also attracted to ‘wild east’.

But no. For Applebaum, ‘in 2016, Putin finally hit the jackpot: His operatives helped elect an American president with long-standing Russian links who would not only sow chaos, but systematically undermine America’s alliances, erode American influence, and even, in the spring of 2020, render the American federal government dysfunctional, damaging the reputation of both the U.S. and democracy more broadly.’ So it’s Putin who is causing all of America’s woes! That explains everything.

And Ukraine. Russia was eyeing Ukraine from the Orange Revolution in 2005 on, encouraging instability in a plan to ‘rebuild the empire’, to dominate Ukraine and seize Crimea. So it was Russia that set off the 2014 Maidan riots, not the many western-backed NGOS and Ukraine’s budding fascist movement (cheered on by the likes of Freeland, Belton and Applebaum)?

And then Russia turned around and blamed the US! ‘Without any proof Russia claimed the US was behind the protests that buffeted Yanukovich’s regime.’ Belton describes the ‘deep paranoia that haunted Putin and his men since the days of the Orange Revolution in 2004.’ At the same time, ‘Russia was seeking to sow division in the West.’

Why would Russia want to cripple neighbour Ukraine? Only the distant US has benefited by the tragedy there, selling more arms, harassing Russia. The US has a long tradition of fighting its battles far away. Out of sight, out of mind.

In Georgia, Putin ‘had long ago laid a trap for Saakashvili’, so when Saakashvili invaded south Ossetia in 2008, Russia was once again the culprit. ‘These aggressions’ are Putin’s doing.

Clamping down on western-backed NGOS from the ‘white revolution’ in 2011 on is condemned as downright unfair. Putin: They do not represent the state. You have many individuals, Soros for example, worth billions, and they are meddling everywhere. He didn’t need to mention US interference to ensure Yeltsin’s re-election in 1996, or Clinton’s work with dissidents in 2011 (‘Human rights is part of who we are’) to undermine the Russian presidential election in 2012.

Belton grudgingly admits Putin was blessed by high oil prices in the 2000s, and that he used his new control over oil to revive the state and amass foreign reserves to prevent another 1997 meltdown. Then reasserted Russia’s traditional regional hegemony. That accounts for his renewed popularity. But she sees this all negatively. Tell that to the Russians (wherever they find themselves).

For Belton, Russia is everything bad, and it’s Putin’s fault. At best a throw-back to autocrat Nicholas I. Where are Peter the Great or Catherine the Great as inspirations for Putin? Belton portrays Russia as a dictatorship riddled with corruption. But isn’t that the US too? Oh, I forgot, they have elections every 4 year and change the puppet on top. At least Putin more or less controls things, without needing to look over his shoulder for the puppet master.

All Belton’s umbrage merely confirms my impression of Putin — he is a tsar, a ‘great’ one but like all tsars, he takes a big chunk for himself and his circle. That’s what tsars do. And his critics generally have a hard life, though smart ones prosper.

As for alt history, Belton makes two telling points, quoting first a once-close aide to Putin, Sergei Pugachev: Yes, Primakov and the communists ‘would have been better.’ And Berezovsky: It is dangerous to give the KGB the reins of power. They ‘enter a vicious circle,’ doomed to repeat the mistakes of the past. In short, Putin’s legacy may end up as a repeat of the Soviet decline due to a rigid autocracy.

The West royally screwed Russia when it was down in the ‘80s and ‘90s. If they’d played along with Gorby, everyone would be better off, maybe realizing a bit of Andropov’s vision. The bottom line: Putin saved Russia. It’s that simple.

Now if only he can prepare a successor. So far he’s not in the mood. But then Ivan the Terrible and Peter the Great (not to mention Lenin and Stalin) were not much better at that. If Putin rests on his laurels, then he (or a weak successor) could end up in the same corner that Lukashenko has painted himself into.

Eric Walberg is a journalist who worked in Uzbekistan and is now writing for Al-Ahram Weekly in Cairo. He is the author of From Postmodernism to Postsecularism and Postmodern Imperialism. His most recent book is Islamic Resistance to Imperialism. Read other articles by Eric, or visit Eric's website.