Russia’s Dark Master: Vladimir Putin

Vanity Fair – October, 2000

The muddy lot in a working-class section of St. Petersburg is filled with debris and gives no hint of the city’s shabby grandeur. But housed there in a beat-up building behind a turbine factory is the sports club that helped form so much of Vladimir Putin’s discipline and character. For 15 years Anatoly Rakhlin, a slight, tautly muscled man with Bozo-the-Clown white hair and penetrating blue eyes, trained “Volodya” to become a champion in sombo and judo; Putin and his team traveled all over the Soviet Union. Sombo, a Russian acronym for “self-defense without weapons,” is a mix of judo and wrestling that caught on when Putin was growing up in the mid-60s. It places a premium on quick moves, calm demeanor, and the ability to keep from showing emotion or uttering a sound, no matter how intense the struggle or the pain. Putin, a laconic, inscrutable introvert to the world and a wry charmer to his intimates, seems to have learned sombo’s lessons well. On one wall of the sports club, Putin’s sad teenage face stares out from an old lineup of the club’s “Masters of Sport,” the Russian equivalent of all-stars.

Clearly, Putin, then as now, was not only calculating but also a risktaker. Although he was barely five feet seven and competed in the lightweight, 135-pound category, he was Leningrad’s judo champion in 1976, and he would take on teammates twice his size. “He could always fight against me,” says 316-pound Slava Okumen, “even if we were in different categories.” (Okumen was only 246 pounds back then.) “He could throw me. His will to win was superstrong.” Some of Putin’s contemporaries still come back to the gym at night to wrestle, sweat in the sauna, and tell stories in the coach’s office, which is filled with rags, old tires, and decrepit athletic equipment. Coach Rakhlin explains, “Volodya was not a wrestler of physicality, but more of intellect—a smart wrestler. He always did the unexpected, because he was versatile, very strong, so the speed of the fight was intense.”

The quality the coach most remembers Putin for, however, was his loyalty. And loyalty is what has catapulted Vladimir Putin through the ranks, from an obscure, disillusioned K.G.B. lieutenant colonel home from Germany in 1990 to deputy mayor of St. Petersburg, to a series of increasingly powerful posts in the corrupt Kremlin of Boris Yeltsin. (Think Robert Duvall as the consigliere in The Godfather.)

During Putin’s first four years of training, Rakhlin had to change the club’s location five times in the sprawling city. Other kids dropped out, but not Volodya, who had to travel long distances on the trolley. The only child of what Rakhlin calls poor working-class parents, Putin stuck with the coach, even when he was studying at Leningrad State University, where he was pressured to be on the university teams, and later as a young K.G.B. officer, when he was practically ordered by university authorities to join the police club. According to Rakhlin, “The best wrestlers come not from talent but from dedication to sport. Volodya was dedicated to sport and loyal to his coach.”

Last December 31, Boris Yeltsin—in a brilliant tactical move—resigned unexpectedly and made Putin, who was then prime minister, his successor, thereby forcing early elections in March. Putin, one of whose first decrees as acting president was to absolve the vulnerable Yeltsin of any prosecution after he left office, got 52 percent of the vote. The campaign was designed as a clever series of macho photo ops in which Putin said almost nothing but proclaimed a “dictatorship of the law,” while the state-owned media mercilessly slandered his opponents.

On May 7, the day of Putin’s inauguration, Anatoly Rakhlin was outside Moscow at a tournament, but the next day the Kremlin tracked him down the moment he registered at a hotel in the capital. Rakhlin was picked up in an official car and whisked in his sweats to the inner sanctum of the Kremlin, to have lunch alone with the exhausted new president of Russia in his private dining room. “I was with him 15 years. His mother died, his father died. I am a second father.”

Rakhlin tried to relax Putin by “speaking of nothing. I told him how to take care of his knees.” Then, because Rakhlin wanted a signed picture and the president didn’t have one, they drove over to Putin’s old prime minister’s office, which he had not yet vacated. Rakhlin got his picture, of Putin in judo clothes, and it now hangs in his gym. Later, Rakhlin was told to inform the president’s secretary anytime he got a request for an interview. By then Rakhlin and I had already met.

He tells me that Putin confided to him that the hardest part of his job was meeting so many “simple” people during his travels outside Moscow. “He told me they just complain or cry because they live so badly,” Rakhlin says. “They can’t believe they are seeing the president, and they hope he can make their lives better, because they are so miserable. It’s getting to him.”

At the Okinawa G8 summit in July, Putin capped an impressive first appearance with the heads of state of the world’s leading industrial nations—one of his suggestions was that they should start E-mailing one another—by visiting a Japanese judo club and pinning a young opponent, whom he then invited to throw him. He told reporters that his favorite judo move is the deashibari, a swift attack which knocks the opponent off his feet.

Putin’s instant popularity took Kremlin image-makers totally by surprise last fall, when, as the third prime minister Yeltsin had appointed in two years, he took full responsibility for waging a bloody, brutal war on Chechnya, which has leveled Grozny, the capital, and left untold thousands of civilian casualties. Putin considers the conflict in Chechnya a terrorist civil insurrection and says that “Chechen bandits” are the shock troops of a fundamentalist Muslim drive to deprive the Russian Federation of vast stretches of territory. His efforts to demonize Chechens were aided by the fact that many Muscovites believe downtown Moscow is controlled by the Chechen Mob. After highly suspicious “Chechen terrorist” apartment bombings in three Russian cities last fall, in which about 300 civilians were killed, Putin’s ratings soared, though there’s little evidence that Chechen terrorists actually carried out the bombings. “Military activities in the Caucasus always bring down popularity ratings,” says Kremlin political consultant and manipulator Gleb Pavlovsky. “It was the miracle that Putin brought into reality. We didn’t expect that at all!”

Putin, who Pavlovsky says was being “tested by Yeltsin,” was a revelation. Yeltsin’s “Family,” or inner circle, intent on managing the succession and maintaining its tainted power, had been plotting the post-Yeltsin era almost from the day of Yeltsin’s 1996 election (Pavlovsky calls it “a sort of Manhattan Project”). They secretly polled to find out what kind of person the Russian people considered heroic. Suddenly, right under their noses, they realized that in Putin they had a Stirlitz, the dashing fictional K.G.B. officer who is the hero of a popular old film, an undercover agent in the SS in Germany in World War II, who embodies Russian ideals. They immediately launched a campaign to turn Vladimir Putin into another Stirlitz. They created an ideology-free political party called Unity, and came in second to the Communists with 24 percent of the parliamentary electoral vote.

The Stirlitz campaign revealed to Pavlovsky how Putin could overcome the dual handicaps of coming from the K.G.B. (not exactly consonant with democratic reform) and being handpicked by the despised Yeltsin. “For an intelligence officer it was easy. He had the alibi: he’s hiding and in secrecy awaiting orders.… Did he take part in reforms? Yes, but he was Stirlitz, seen in the movie as working under SS cover, but he’s not SS. Was he seen at demonstrations? Of course not! He is Stirlitz and not supposed to be seen there. And here we are reaching the paradox,” Pavlovsky continues. “But Yeltsin named him as successor, and Yeltsin was hated by the whole country. Yes, but he is Stirlitz, and he earned Yeltsin’s trust so well that even Yeltsin counts on him! That was a very deep mechanism.” Pavlovsky adds, “Of course, power should be in a way mysterious and magic. Especially in Russia. Putin answers that need perfectly.”

Meanwhile, the opposition did its part. According to Pavlovsky, “They were conducting an anti-Yeltsin campaign only. They started to truly believe their propaganda, that Yeltsin is some sort of maniac who is entertaining himself by changing prime ministers, that he is not solving a rational task of searching for a successor. Our hope was that they would be thinking of Putin as another fatal mistake of Yeltsin.” They were. “When Putin was superpopular, they called themselves his enemy—total stupidity!” The strategy played out perfectly. “When we understood everyone was thinking the way we wanted them to, psychologically we began to drink champagne,” Pavlovsky crows.

After the parliamentary elections on December 19, “which were really presidential elections, because people came to vote for Putin, we understood we couldn’t hide Putin anymore.” Had Yeltsin not taken himself out early, “that would have forced Putin to position himself regarding Yeltsin and Yeltsin’s past.” But after Yeltsin resigned on December 31, “we understood that we had one or two months for Putin to become stronger and stronger as the head of executive power.”

The image-makers poured it on: Russians saw Putin distributing hunting knives to Russian troops at the Chechen front on New Year’s Day, Putin using crude prison slang to say how he’d deal with Chechen guerrillas (“We’ll ice them while they’re shitting in the outhouse”), Putin flying a two-seat military jet. “Putin demonstrated all the time he can do things,” says Pavlovsky. “He showed that as a secret intelligence officer he is able to handle weapons, the jet.” The Russian populace, humiliated by the loss of the first Chechen war in 1996 and the loss of their status as a superpower, and weary of the ubiquitous corruption in the government and the downturn of their economy, yearned for a young, vigorous leader they could be proud of—someone who would restore law and order and show who was boss. Democracy was almost a secondary concern.

Until the tragic sinking of the Kursk nuclear submarine in August, when 118 men perished and Putin failed to come home from his Black Sea vacation to provide leadership in the crisis, the new president had been consolidating his power at a dizzying rate. He had managed to scare and offend many of the elite while keeping his approval ratings high. He had cut a deal with the Communists in the Duma, the Parliament’s lower house, to share power with his Unity Party, and he seemed to be getting almost everything he wanted. Even now he is moving toward a two-party system of Unity and the Communists. More important, he has divided Russia into seven federal zones, each with its own administrator, a move designed to rein in Russia’s 89 elected regional governors, many of whom are corrupt in forging deals which bypass the national government. What is alarming to many observers both inside and outside of Russia is that five of the seven administrators are former generals from the military or security forces. Echoing fears that the security forces are in the ascendant, human-rights activist Yelena Bonner, widow of the famed dissident Andrei Sakharov, says, “I believe [the K.G.B.] would never allow anyone to leave the zone of its influence. Physically you can resign from this organization, but mentally and professionally Putin will never get out from under their influence.”

Putin has gotten legislation passed to expel the governors from automatic membership in the upper house of Parliament and to strip them of their office if they have been found to break the law. They now have to return much more tax revenue to the federal government. The Parliament will be further weakened by the establishment of a new “state council,” predicted to take over many key parliamentary powers traditionally held by the upper house.

With a team of liberal economists, Putin has also introduced a new supply-side economic plan for Russia, featuring a radical tax-reform package to attract Western investment, the cornerstone of which is a simplified flat tax of 13 percent to encourage the wealthy to pay at least something. But there are also more punishing tax hikes on gas, vodka, and cigarettes, and the worst is supposedly yet to come this fall when the government reduces utility and housing subsidies. But with the sinking of the Kursk, and the bomb that exploded in a crowded downtown-Moscow underground passageway a week earlier, the perilous nature of Russia’s security and military preparedness was brought into stark relief.

While the Russian press responded with more vigor than it ever had in the past, and when public opinion suddenly demanded to be taken into account, Putin—instead of displaying the reflexive instincts of an experienced politician rallying his country at a crucial moment—behaved like a timid, secretive Soviet bureaucrat out of the past: distancing himself, refusing foreign aid for four days, allowing disinformation fed by the Russian Navy about the fate of the sub to flourish. The long-term effect of the Kursk on Putin’s ability to govern will take months to assess.

Before the Kursk crisis, however, Putin’s most controversial move had been a clampdown on the opposition media with the arrest of one of the new Russia’s powerful oligarchs, Vladimir Gusinsky, chairman of the Media-Most empire, which includes NTV, the influential television network, for alleged fraud. Gusinsky says the charges are baseless, though Russia analyst Dimitri Simes cautioned on The NewsHour with Jim Lehrer that Gusinsky is “closer to Meyer Lansky than a real democrat.” The government says he acquired a controlling stake in a lucrative TV station for $5,000 after the official in charge of the sale allegedly received a payment of $1 million.

In July, after strong negative reaction at home and abroad, the charges were suddenly dropped, and rumors abound that a deal was struck to have Media-Most sold and put under state supervision, but NTV officials deny it. Igor Malashenko, the number-two man at Media-Most, warns, “Putin’s consolidation of power is very simple: it’s to put everything under his control. He doesn’t believe in a system of checks and balances. Any checks and balances are a nuisance.” Putin’s government appears to be serving notice that rogue elements will be forced into compliance.

Gusinsky’s case was extreme but not isolated. Freedom of the press remains a very sensitive issue. Last winter, Putin was widely criticized for defending the Russian troops who kidnapped Radio Liberty correspondent Andrei Babitsky, a vocal opponent of the Chechen war. Pavel Felgenhauer, Moscow Times columnist and Radio Moscow commentator, says, “I know from the inside there is no free press. The press here is either distorted, not published, or told what to write.”

The Russian press and Internet thrive on kompromat, “compromised material,” which is usually bought from underpaid government security-force employees or former security agents who wiretap, intercept E-mail, and tail. Phone tapping is believed to be more widespread today than in Soviet times. In fact, Gusinsky was accused of having a private security force—all the oligarchs do— which engaged in massive wiretapping, and indeed a former K.G.B. general, Philip Bobkov, now gathers and analyzes information for Media-Most.

Most oligarchs don’t even bother to deny how ill-gotten their fabulous fortunes are, and Putin has begun to move against several of them, declaring, “All should be equally distanced from power.” Whether he will carry out his threats, merely use them as leverage, or is staging a P.R. stunt for the benefit of the masses remains to be seen. Last July, Putin assured a group of nervous big-business men that he was not going to overturn their unscrupulous privatizations of state-owned companies. “You built this state yourself to a great degree through political or semi-political structures under your control,” Putin said bluntly, “so there’s no point in blaming the reflection in the mirror.”

“Imagine a prison,” Alexander Starkov, one of the major real-estate developers in Moscow, tells me. “You cannot live in prison with the laws of a free life—you have to live with the laws of the prison. We in Russia all live in one big prison.”

Putin has also launched into a frenzy of diplomacy with the Vatican, China, and North Korea, and his highly publicized visits with Tony Blair in Britain and Gerhard Schroeder in Germany pointedly indicate that he is seeking to ally Russia with Europe rather than with the United States. Since his inauguration, Putin has met twice with President Clinton, at the U.S.-Russia summit in Moscow in June, and in Okinawa at the G8 meeting in July. This month the two men will meet again for the United Nations Millennium Summit in New York.

I was sitting in the front row during the signing ceremony at the Moscow summit, watching Putin, who is all one color, a kind of yellowy beige, slump in his seat in the newly restored St. Georges Hall in the Kremlin and absently drum his fingers on the table while a tired-looking Clinton read his notes about the summit’s “successful” conclusion with a joint agreement for each to destroy 34 tons of plutonium intended for nuclear warheads. Several hundred journalists present were confined to four questions and sat like props at a photo op. Putin had spoken without notes, yet unlike Clinton or Yeltsin or Gorbachev, with their obvious charisma, he would never have been the one picked out by an observer as the group’s natural leader.

A few hours earlier I had witnessed Putin greet the U.S. delegation before sitting down to negotiate—he presented a bouquet to U.S. ambassador James Collins for his birthday and greeted Clinton in English. Deputy Secretary of State Strobe Talbott, who was a Rhodes scholar at the same time as Clinton and has had wide latitude over U.S.-Russian relations since his friend’s election, hobbled in with a cane, a result of knee surgery. Clinton playfully pointed to three little monkeys Secretary of State Madeleine Albright had pinned to her lapel, and said, “ ‘See no evil, hear no evil, speak no evil’—that’s Madeleine’s entire foreign policy.” Putin smiled politely. This was definitely not Boris and Bill poking each other in the ribs to share yet another joke.

St. Catherine’s Hall, where the meeting took place, was a vision of imperial opulence. These luxurious rooms were also a testament to the Mabetex scandal, named for the Swiss contractor responsible for the restoration, who stands accused of bribing Yeltsin’s Family with, among other things, credit cards. Yuri Skuratov, Russia’s general prosecutor (attorney general) from 1995 to 1999 and a candidate for the presidency, had urged Swiss authorities to search the contractor’s office, and for that, he told me, he was removed from office. The Family panicked, fearing that the Swiss—who were building a substantial case—would uncover their secret bank accounts. Soon after, a videotape of a cavorting threesome alleged to be Skuratov and two prostitutes was aired on state television. Skuratov denied it was he.

Putin, then head of the Federal Security Service (F.S.B.), successor to the K.G.B., had already crossed swords with Skuratov in 1996, when he went after Putin’s former boss Anatoly Sobchak, then St. Petersburg’s mayor, for corruption. Sobchak fled to Paris. Skuratov says Putin was present in the hospital room when an ailing Yeltsin demanded Skuratov’s resignation, which he at first refused to give. Skuratov tells me, “I am very pessimistic for the rule of law in Russia—because I know the real situation. Respect for the law was never a requisite for Russia.” Skuratov found it “a very powerful symbol” that one of the first presidential decrees Putin signed, to pardon Yeltsin, “contradicted existing federal laws and the Constitution.”

At the Moscow summit, Putin declared that “the United States is one of our main partners.” He said, “One would hope that the very worst of our relations is far, far behind us.” Nevertheless, Putin is currently exploiting a wedge issue, the United States’ proposed recasting of the failed Star Wars project—breaking the 1972 Anti-Ballistic Missile Treaty to build a new nuclear shield in order to guard against missiles from so-called “rogue states.” George W. Bush favors such a plan; Clinton said he would decide this fall if testing to construct such a system should continue. After being ignored by the United States for proposing that the two countries join forces in such a plan, Putin, who pleased U.S. officials by finally getting the Start II Treaty ratified in the Duma, is now the leader of the opposition. His analysis at the G8 of his visit to North Korea’s leader, Kim Jong-il, in which Kim told him he would give up his plans to build missiles with warheads if others would help North Korea launch its satellites, was pronounced “brilliant” and “impressive” by several heads of state, who think that if the U.S. plan goes forward a new arms race will start. A month later, however, the mercurial Kim told South Korean media that the idea was “a joke.”

Ordinary Russians, who aren’t used to a sober leader who works out every day and drinks Diet Coke, much less one who gets heady praise from other world leaders, have mostly applauded Putin. Nevertheless, with his swift, unexpected moves, the president has been keeping friend and foe alike guessing as to what his real motives are. Will the mysterious Mr. Putin ultimately save a weak Russian state by becoming a latter-day Pinochet? To what extent will he remain the captive of the evil Kremlin Family, which put him in power, the very people who had made a Faustian pact with the oligarchs, handing them vast parts of the country’s resources in exchange for the means to re-elect Yeltsin in 1996? Will he wake up all of Stalin’s ghosts with the siren call of the newly energized state security services?

If Putin doesn’t succeed, Russia, already off its feet ethically, economically, and demographically, will be in real danger of being decisively knocked out. “The real threat to Russia is to implode,” Malashenko told me. “The government cannot collect taxes or maintain the armed forces—it’s all falling apart.” At the same time, nationalistic fervor is being reasserted. According to Malashenko, “They want to restore Russian grandeur militarily; they don’t understand how bad the situation is. They don’t understand Russia may be disappearing as a viable nation.”

To save her, Putin will need more than judo. He’ll need voodoo.

Two out of three Russian men die drunk. It doesn’t matter if they die of a heart attack or in an accident or as a murder victim or a suicide; they are drunk when they die, mostly on a Monday after a binge weekend. The life expectancy for Russian men is 58.8; for women it’s 71.7. (In this country, it’s 72.9 for men and 79.6 for women.) Only 10 to 15 percent of Russian babies are born healthy. Approximately two-thirds of Russian pregnancies end in abortion; at least 75 percent of pregnant women have serious pathologies. “It’s horrendous,” says Murray Feshbach, Emeritus Research Professor at Georgetown University, who is the leading U.S. authority on Russian demography. “Anemia during pregnancy has quintupled during the last decade. The syphilis rate among young females from 10 to 14 has gone up roughly 40 times since 1990—that really means 10- to 14-year-olds who are doing drugs and having intercourse. Among 15- to 17-year-old males, only 10 to 30 percent are healthy.” Feshbach also has shocking statistics on the environment in Russia today. One recent health minister, he says, “issued a list of 13 Russian cities where he advised the population, ‘It doesn’t pay to go outside.’ ” Meanwhile, in May, Putin abolished the State Committee on the Environment.

Heroin addiction has exploded in Russia in the last two years. Heroin from Afghanistan is cheaper than marijuana. As a result, Russia has one of the fastest growth rates of H.I.V. infection in the world, up more than 350 percent between 1998 and 1999, spread mostly by dirty needles. An estimated 300,000 to 500,000 are infected with H.I.V., and there is no way the collapsed health-care system can provide for them. In England, The Guardian reported in May that only 13 percent of the youths conscripted for the Russian Army actually show up, and of those, according to the Committee of Soldiers’ Mothers of Russia, an advocacy group, about 1,000 commit suicide. Their pay is less than $2 a month. More than half of the Russian people live below the poverty line, with incomes that are 40 percent lower than in 1991. “For Russia, to restore a sense of national pride, you must think about things as mundane as living like a human being,” former prime minister Sergei Stepashin, who is now head of the State Audit Chamber, told me. “The average Russian pension is $25 a month.”

“We are in danger of becoming a senile nation,” Putin told the country in a forceful first State of the Nation speech in July. “It is difficult to live. Year by year, we, the citizens of Russia, are getting fewer and fewer. If this continues, the very survival of the nation will be under threat.” That was the first time a top Russian leader had spoken publicly about this issue. The fact is, some 800,000 more Russians are dying per year than are being born. One member of the Duma’s Parliamentary Committee on Health glumly predicted that by 2025 the population, currently at 146 million, will be down to 100 million. “The situation is apocalyptic,” says Feshbach.

Meanwhile, filthy-rich Russians have replaced Arabs as the most conspicuous consumers in the chic watering holes of Europe. In the last decade, an estimated $300 to $500 billion has been siphoned out of Russia into offshore companies and foreign banks. In the summer of 1999, for example, Vladimir Posner, the Russian broadcaster, witnessed the “baby billionaire” Vladimir Potanin, who was 36, sailing a 250-foot yacht into Nice “with a bevy of Russia’s most stunning models, and the money flowed like the champagne.” He added, “The Russian people would love people to go after these guys.” And the oligarchs know it. After Putin’s tax police arrested Gusinsky, 18 of the country’s top tycoons wrote an open letter to the president: “We have no doubts that the law-enforcement authorities could have serious questions concerning his activities, as can be applied to any substantial and successful businessman in Russia.” Indeed, Potanin, the founder of Oneximbank, now stands accused by the government of underpaying $140 million in the privatization of the gigantic Norilsk Nickel.

“How shall I explain to my readers,” I asked a leading Russian oligarch, billionaire Mikhail Khodorkovsky, 36, the chairman of Russia’s second-largest oil company, Yukos, “how a handful of men in your country ended up with 30 percent of one-seventh of the entire world’s resources?” Khodorkovsky is also the former chairman of a failed bank, Menatep, whose depositors lost hundreds of millions of dollars when the ruble crashed in August 1998. He is featured in Robert I. Friedman’s recent book, Red Mafiya, because in 1995 the C.I.A. claimed that he was “controlled by one of the most powerful crime clans in Moscow,” and that Menatep “had set up an illegal banking operation in Washington,” a vast money-laundering scheme connected to offshore companies in the Caribbean. Khodorkovsky denies the charges.

With a straight face, Khodorkovsky likens the situation in Russia to the need in Silicon Valley to import skilled managers from India. “Chances are you will not find personnel for a justifiable wage. It’s a seller’s market.” He explains that in Russia “there’s a total absence of managers, so somebody who was a skilled manager could pick and choose his company.” He makes it sound as if he had done the government a favor by taking a two-million-barrels-a-day oil enterprise off its hands. Yet it has been reported that the state accounting chamber charged Menatep with using government money being held for other purposes, such as paying workers’ salaries, to make a sweetheart bid for Yukos in a less-than-transparent auction.

Such auctions were part of the infamous loans-for-shares scheme designed to help the cash-strapped Russian government pay its debts and speed privatization. In the mid-90s, private Russian banks were given shares in state enterprises in return for loans. These shares were to be held in trust, and if and when they were turned into equity, the banks could bid for them at auction. Many of the auctions were outrageously rigged.

“The loans-for-shares auctions were conducted according to the same principle of clan tribute and cronyism that had reigned in Russia during Soviet years,” Matt Taibbi wrote in The eXile, a scathing expat alternative newspaper published in Moscow. “The only difference was the scheme punished the average Russian economically in a way that was much worse than the Soviet system had.… By 1997, it was no longer unusual for employees of companies like Norilsk to go six months to a year, if not longer, without receiving their meager salaries. Russian newspapers even reported scenes of people collapsing from hunger in the streets in the towns surrounding the industrial centers.” The beneficiaries of the auctions, naturally, were the oligarchs’ banks, says Taibbi.

Last February, while Putin was acting president, three Family-friendly oligarchs—Roman Abramovich, a principal owner of Sibneft Oil, media mogul Boris Berezovsky, acting through his company Logovaz, and a Siberian magnate—ended up with more than 60 percent of Russia’s multibillion-dollar aluminum reserve in a questionable takeover that was found not to violate the country’s anti-monopoly laws. Berezovsky has been the pet Tyrannosaurus rex oligarch of the Yeltsin Family, dark, voluble, cunning, a thoroughly political animal who takes credit for getting Yeltsin elected in 1996, by rallying other oligarchs to pony up millions to keep the Communist candidate, Gennady Zyuganov, from winning, and also for getting Putin elected in 2000, by discrediting Putin’s opponents on the state channel ORT, of which he owns a minority share. His rival, Igor Malashenko, claims Berezovsky has a very simple principle: “If we have complete control of TV and unlimited financial resources, we can elect anybody president.” Yuri Luzhkov, the mayor of Moscow and a presidential candidate, for example, was eliminated from serious contention after being portrayed on state TV as a corrupt murderer, which caused him to erupt at one point and cry, “Berezovsky is Satan!”

Yevgeny Primakov, 71, the other leading candidate, who as prime minister in 1998 had wanted to put Berezovsky in jail, was depicted in the media as being on his last legs. “You have to separate politics from human-rights activities,” says Berezovsky, who readily admits to me that the way Primakov was treated was “immoral but legal. Human-rights protection doesn’t allow for immoral acts; politics does allow immoral acts.” He adds, “The actions of the team of which I was a part were totally rational within the conditions and forms of law.” “So the ends justify the means?,” I ask. “If legal, yes,” Berezovsky replies.

Swiss prosecutors have frozen Berezovsky’s assets in Swiss banks, and accuse him of having misappropriated an estimated $700 million from Aeroflot, Russia’s national airline. At first, few believed that Russian prosecutors would pursue him, but lately things have soured. Putin thinks Berezovsky talks too much, and Berezovsky split with Putin over the president’s plan to strengthen the federal government’s grip on the governors, some of whom, according to Vladimir Posner, “sit deep in his pocket.” The government now appears to be going after Berezovsky’s stake in ORT TV, and it might use its leverage in the Aeroflot case to strike a deal. Berezovsky, 54, a onetime mathematician, resigned his seat in the Duma, which provided him with immunity from prosecution, and has spoken of forming a party in opposition to Putin.

‘We oligarchs believe in Russia,” Berezovsky assures me in his “club,” a heavily guarded town house in Moscow, where he is surrounded by a white grand piano, faux French furniture, a bar, and surveillance cameras. “Then how come so many billions have gone out of Russia?,” I ask. “Because in Russia today there are no laws to protect capital.” “Will Putin establish those laws?” “I think so.” Then he smiles. “It’s not a fairy tale that Primakov wanted to put me in jail, but it is a fairy tale that Putin does.”

In many ways Berezovsky echoes Khodorkovsky in declaring that he deserves his riches because, unlike his colleagues during the early perestroika days, he was willing to take a risk. “The Russian people have a slave mentality,” Berezovsky declares. “They didn’t believe in new developments. We [oligarchs] are rational to spend less energy and get more profit, and if the state would have formulated other rules, we’d fulfill those.… [But] the legal system is inadequate and incomplete for business reality.”

I am curious to know to what extent Berezovsky understands how he is viewed. “In the West you are perceived as a caricature of an oligarch, a crook and a clown,” I inform him. “Why would you want that reputation for yourself?”

“There are two reasons why not only me but Russian business has a bad reputation,” Berezovsky replies. “First, the revolutionary transition Russian business has undergone gave birth to colossal corruption, and the cause is the historically unprecedented redistribution of wealth. In 1990 everything belonged to the state. By 1997 almost 75 percent of the property was held privately. The redistribution of property was in the hands of bureaucrats who made salaries of $100, $200 a month. And with a single signature … ” He trails off, then adds, “I am sure there are no corrupt American bureaucrats. There wouldn’t be many bureaucrats who in the same situation would refuse bribes.”

“So many millions of people have suffered because of policies you’ve perpetrated,” I say. “Don’t you feel bad about that?”

“I don’t feel bad about it, though I can’t say I feel comfortable,” Berezovsky replies. “Russia was grappling with the problem of transforming itself into a new economic and political system. By any measure this would be called a revolution, and the basis of such a transformation is always the redistribution of property.… This was done without a civil war. The way to judge whether a transformation was successful or not was that there was no civil war.”

Obviously, there is no love lost between Berezovsky and the second-most-hated man in Russia, St. Petersburg economist Anatoly Chubais, the chief architect of the loans-for-shares program. Before I met Chubais in Washington, I spoke in Moscow to one of his top aides, Leonid Gozman, who told me that massive privatization had been the only way to rescue a floundering state that was in danger of going back to Communism. “Yegor Gaidar [the prominent economist and former prime minister] and Chubais saved the country. We had no bread or sausages. We were in the process of losing everything.” Premier Russia-watcher David Johnson, publisher of an extensive daily E-mail digest of Russian news called Johnson’s Russia List, disagrees. “The Soviet Union was dead, the population had moved on, but they wanted a bogeyman to legitimize their claim to power.” Gozman told me that, “certainly, we’re a fantastically corruptible system,” but that America in its early capitalist days had its robber barons, too—“Carnegie, the first Mayor Daley.”

Whenever I hear that argument I think of the testimony that former C.I.A. Russia chief of station Richard Palmer, who after retiring served as a consultant to Russian banks, gave to the House Committee on Banking and Financial Services in 1999. Palmer, who runs Cachet, an international due-diligence-and-asset-recovery business, has spent a decade studying Russian financial and organized crime. This is his chilling analysis of what Putin faces in attempts to impose a “dictatorship of law.”

For the United States to be like Russia is today, it would be necessary to have massive corruption by the majority of the members of Congress as well as by the Departments of Justice and Treasury, and agents of the F.B.I., C.I.A., D.I.A., I.R.S., Marshal Service, Border Patrol, state and local police officers, the Federal Reserve Bank, Supreme Court justices, U.S. District court judges, support of the varied Organized Crime families, the leadership of the Fortune 500 companies, at least half of the banks in the U.S., and the New York Stock Exchange. This cabal would then have to seize the gold at Fort Knox and the Federal assets deposited in the entire banking system. It would have to take control of the key industries such as oil, natural gas, mining, precious and semi-precious metals, forestry, cotton, construction, insurance and banking industries—and then claim these items to be their private property. The legal system would have to nullify most of the key provisions against corruption, conflict of interest, criminal conspiracy, money laundering, economic fraud, and weaken tax evasion laws. This unholy alliance would then have to spend about 50 percent of its billions in profits to bribe officials that remained in government and be the primary supporters of all of the political candidates. Then, most of the stolen funds, excess profits and bribes would have to be sent to off-shore banks for safekeeping.

Yet even today, as Russia suffers with a mostly barter economy, where the average wage has recently risen to $82 a month, Anatoly Chubais remains Washington and Harvard’s golden boy. Chubais, who accrued oligarch status if not wealth in Russia for becoming synonymous with the manipulation of U.S. aid and billions from the International Monetary Fund (I.M.F.), is husky and genial and speaks good English. He is now head of United Energy System of Russia, a vast electrical utility with more than 700,000 employees which is 34 percent owned by foreign shareholders, who have recently challenged his leadership. Chubais, along with Yegor Gaidar, Harvard professors Jeffrey Sachs and Andrei Schleifer, and Sachs’s aide Anders Aslund, is known for having been the driving force behind the Russian-American aid program which advocated “shock therapy” to push a market economy in Russia. Chubais had the run of both the Kremlin and the Clinton White House, where Harvard graduate Vice President Al Gore was the point man on Russian policy. The group’s mentor was Treasury Secretary Larry Summers, who had been an economics professor at Harvard and chief economist of the World Bank. “The whole ideology for the privatization of Russia was worked on American calculations,” Yuri Skuratov told me.

Chubais’s role in the U.S.-aid-to-Russia program has been incisively dissected in a controversial paper by University of Pittsburgh professor Janine Wedel, published in The National Interest: “The ideology, that of radical privatization and marketization, applied in this instance in a cold-turkey manner to a society with no recent experience of either, is well known. The way in which advice and aid were given is much less familiar.” In June 1997, the U.S. Agency for International Development suspended funding to the chief funnel for U.S. assistance, the Harvard Institute for International Development, because two of its chief executives, Jonathan Hay and Andrei Schleifer, were accused of using inside knowledge and speculating in the Russian stock market through Hay’s girlfriend and Schleifer’s wife. Until that point, Wedel charges, U.S. aid to Russia was managed by a small cabal of Harvardites and a handful of Russians—namely Chubais—whom they felt comfortable with. Approximately $350 million was managed by the Harvard Institute for International Development, which, as Wedel says, left “it in the unique position of recommending U.S. aid policies while being itself a chief recipient of that aid.” Members of the clique would often switch sides, with Americans helping to write Russian proposals and vice versa, the result of which was exploitation and embarrassment.

“A very small group of people acting as one were able to use the institutions at their disposal—the U.S. government, the Russian government, even the I.M.F.—to further their own agendas,” Wedel tells me. “The [U.S.] economic-aid program has been a disaster largely because of this strategy.” Wedel’s critics charge that her judgment is too harsh, that shock therapy has in fact worked in Poland. Not in Russia, however.

“Don’t give us any more economic advice,” Sergei Karaganov, chairman of the Moscow-based Council on Foreign and Defense Policy, said at a Harvard-sponsored Washington seminar shortly before Putin’s election. “It will be D.O.A.”

“I know the common understanding here in the U.S. of what Russia is,” Chubais told me at a Carnegie Endowment lunch arranged by Stanford professor and Carnegie senior fellow Michael McFaul. “Russia is corruption, bribes, oligarchs, Mafia, murder. I disagree with that completely. This is an extremely superficial understanding of the forces of change which are fundamental to the revolution. If you go deeper, you need to see that the absolutely fundamental institutions, which never existed previously in my country, are now accepted.” He listed freedom of speech, division of power, democratic elections, private property, and the Russian Constitution. “The fact that wages and pensions are being paid is a visible positive tendency to the Russian economy and political life.” In Putin’s pre-election manifesto, Russia at the Turn of the Millennium, he said that if the Russian economy grew 8 percent a year (a fairly Utopian notion) for the next 15 years it would reach the per capita gross domestic product of Portugal.

When Volodya Putin was studying chemistry in a technical high school in Leningrad in 1970, he already knew that he wanted to be a spy. He set his sights on the law school of Leningrad State University, which would put him on the path to the K.G.B., and he took extra courses in Communist ideology. When one of his teachers announced that a pure Communist state would be achieved by 1980, Volodya jumped up. “It’s not possible. This is a lie. Nobody believes this. Let’s vote, guys. Who believes this?” “No one put his hand up,” says Raisa Sergeevna, another of his teachers. A lively woman living on a $20-a-month pension in a tiny apartment not far from the school, she pulls out a tattered file and shows that Volodya came in second in the school paper drive for being “the hardest-working person.”

“Volodya’s father was very tough on him, but Volodya never challenged him,” says Sergei Roldugin, Putin’s close friend and the godfather of his older daughter. A cellist with the Mariinsky Theater Symphony Orchestra, Roldugin taught Putin about classical music and got his two daughters started on the piano and violin. Putin’s father, a factory worker and the son of one of Stalin’s cooks, had gone through a tough time in the war and was, says Roldugin, “a member of the party, a strong believer. He hated democracy.” Volodya came to his parents late in life, after two other young sons died, and so, says a classmate, Aleksandr Matveev, “he was like a light in the window to them.” When they won a car in a state lottery, they could have sold it and lived off the proceeds for several years. Instead, Putin became the only student at the university with a car.

At Leningrad State University, Putin, at 18, was younger than many of his classmates, who had served in the army. Sports occupied a lot of his time, and he passed up privileges by sticking with Coach Rakhlin and not joining the university team. He was focused on his goals, disciplined, quiet, but with a good sense of humor. His friend Leonid Polokhov, the outspoken, piano-playing son of a Soviet general, recalls, “He told me he wanted to be a spy, and of course I tried to talk him out of it.” But Putin was determined. “We had a pretty closed society,” says Nikolai Egorov, of the law firm Egorov, Pughinsky, Afanasiev & Marks, another close friend and former deputy prime minister, “so in the opinion of many Russian people at that time, the K.G.B. was seen as a highly respected organization, very difficult to get into, an honor.” Pavel Koschelev, a classmate and later a colleague, says, “We came to the K.G.B. to serve the state.”

According to his K.G.B. officemate, Valery Golubev, Putin’s work in Leningrad was “gathering information from Russians with contact with foreigners.” “We were taught to be secretive,” says Koschelev. “You could not show your real emotion.” Sergei Roldugin once asked Putin what he actually did. “I’m a specialist in human relations—people, that’s my profession,” Putin told him. “He never spoke of the K.G.B.,” says Roldugin. “The goal is to establish connections with people when they come to Russian cities,” says Golubev, who told me Putin’s K.G.B. class studied Dale Carnegie’s How to Win Friends & Influence People.

According to Polokhov, after a few years in the K.G.B., Putin became restless and wanted to go abroad. By 1985, when he was assigned to Dresden, East Germany, where he recruited Stasi (East German secret police) and kept tabs on German Communist political figures, Putin had spent considerable time in training in Moscow. He had also married Lyudmila Aleksandrovna, a stewardess from Kaliningrad, Russia’s westernmost city. In 1985, they had their first child, Masha, and in 1986, Katya was born in Dresden, East Germany. German is their daughters’ first language.

Lyudmila would fly to their dates in Leningrad. Outspoken and energetic, she has devoted herself to providing a comfortable home for a husband who often appears oblivious to time and place. Putin has always worked long hours. Egorov told me he was once in their home when Putin came in and Lyudmila asked him, “Did you eat lunch?” “I can’t remember,” he said. “Do you want food?” “I don’t know.” “Do you need food?” “Yes, probably I do.”

“Women like him,” says Roldugin. “He has some kind of mystery. He knows how to treat and take care of women.”

When the Berlin Wall fell in 1989 and Russia did nothing to stop it, Putin, like many of his colleagues, was stunned to see everything they had worked so diligently for come crashing down around them. “Every morning, to go to work and hear yourself be described as traitors,” says Pavel Koschelev. “It was worse than the collapse of your ideas and values. We had the feeling we had been betrayed personally.” Putin had been relatively nondescript in his job, but the European press reports that shortly after Putin returned to Leningrad, one of his recruits, a former Stasi police detective, gave information to German domestic intelligence unmasking 15 East German spies, thereby nullifying much of Putin’s work and casting a shadow over him. Putin says in his book First Person, a campaign biography, that he turned down a more prestigious position in Moscow and opted to go to Leningrad, where, as a K.G.B. lieutenant colonel on “active reserve,” he took a job as an assistant to the president of the university, responsible for international liaison. He also pursued a Ph.D. in international law.

Through Egorov, Putin became reacquainted with Anatoly Sobchak, his flamboyant former law professor at Leningrad State University, an early conspicuous democrat, and the leader of the Leningrad city council. Sobchak became the city’s first mayor of the post-Communist era. When Sobchak asked Putin to work for him in 1990, Putin disclosed that he was in the K.G.B. “At first my husband was taken aback,” says Sobchak’s widow, Lyudmila. But intelligence officers were considered “very reliable. So he said, ‘Damn it, it’s O.K.’ ”

The risk more than paid off. As head of the Committee for Foreign Economic Relations for the city, Putin soon made himself indispensable as a shrewd detail man. According to former city-council chairman Alexei Belyaev, “He became a real shadow mayor, because he signed all the decrees when Sobchak was absent, and Sobchak was gone a lot.” Though Putin shunned the media, he soon became known as the “Gray Cardinal.” Nothing got done without his knowledge. “St. Petersburg was very open to American business entrepreneurs who came to visit,” says Philadelphia lawyer Jerome Shestack, who once held the account for the city of Leningrad. “Basically they were all screened by Putin in advance. His K.G.B. training came in handy.” Other visitors greeted by Putin ranged from Queen Elizabeth II to Ted Turner and Jane Fonda, and more than once he translated when Boris Yeltsin met high-ranking Germans in St. Petersburg. In 1996 he campaigned for Yeltsin.

One of Putin’s duties was to look after Sobchak’s feisty wife, whom he accompanied to the U.S. twice. Once, they were in a small elevator in Monaco with an elderly relative of Prince Rainier’s. Mrs. Sobchak was shivering in her backless gown. “ ‘I know the points of the body to touch to make it warm,’ ” the randy old nobleman said. “Then he bit me on my neck,” Lyudmila Sobchak recalls. In Russian, Putin whispered, “You know, Lyudmila, I’m lost. I have to defend your honor, but I can’t take him and beat him up, because he’s the prince’s relative.” Just then, Lyudmila Sobchak says, “the elevator door opened, thank God.”

Putin got into politics at an auspicious moment. People were giddy with the idea of democracy and capitalism, but most Russians were dancing in the dark. Roldugin says that at one point Putin wanted to bring Augusto Pinochet to St. Petersburg to question him about how he had achieved the “economic miracle” in Chile, but the idea was dropped. Sobchak and Putin had to feed a hungry city without the backup of the old Soviet Union, which collapsed in 1991. “Sometimes he made mistakes about judgments of people,” says Vatanyar Yagya, a chief adviser to Sobchak and a deputy in the St. Petersburg legislative assembly who admires Putin. “Along with honest, talented, and creative people came people with low, immoral interests.… There were newfound opportunities to take bribes and be corrupt.”

The most publicized scandal Putin was involved in was a barter deal to sell oil, wood, and metals for food in early 1992. Some $92 million worth of materials left St. Petersburg, and just a few bottles of cooking oil came back. Not only that, the contracts were made out for a fraction of what the resources would bring on the world market—a scam used earlier by the K.G.B. to spirit money out of the country for Communist Party chieftains in the early days of perestroika. Putin became a target of investigation. Marina Salye, the city councilwoman investigating him at the time, has documents which show that Putin signed two irregular contracts. He was called as a witness before the council and accused, according to the investigative report, of “complete incompetence,” but he was not accused of benefiting personally. The council wanted him fired, but Sobchak refused. One problem, says Belyaev, was that “there were no competitive bids.… He played like a K.G.B. man in this situation—one face to one person, another to another.” Belyaev does not believe Putin took bribes, but he admits, “That was the very beginning of the corrupt system.” Today, St. Petersburg is considered the most criminally infiltrated city in all Russia.

In 1996, Sobchak failed to be re-elected. Putin refused to work for Sobchak’s successor, Vladimir Yaklovev, a former deputy of Sobchak’s. “He said it would be better to be hanged as a traitor than to betray [my husband],” says Lyudmila Sobchak. For three months Putin and Sobchak spent their days together in Sobchak’s dacha, grieving. Then, through his St. Petersburg connections, Putin got a job in Moscow in the Presidential Administration office. He was put in charge of the General Affairs legal department and the privatizing of hundreds of millions of dollars’ worth of Russian property abroad.

Meanwhile, Sobchak got into serious trouble for the irregular privatization of apartments in St. Petersburg—charges his wife calls “a smear.” As federal prosecutors were interrogating her husband on videotape, she burst into the room, saying, “Anatoly, you have a bad heart.” Sobchak immediately announced that he felt sick and called for an ambulance. After being shielded in a clinic for several weeks, he escaped to Paris in a private jet. Putin called him regularly. Once Putin was installed as prime minister by Yeltsin, he saw to it that Sobchak could return to Russia without facing charges, and he wept openly at Sobchak’s funeral last February. None of these gestures of loyalty was lost on the Yeltsin Family.

Russian reporters have come up with other scandals that appear to have involved Putin, but they are ignored by the presidential press office. If these things are not on TV, they don’t count. The most intriguing alleged illegality had Putin giving money for the restoration of an Orthodox nunnery in Israel from the mayor of St. Petersburg’s “unforeseen expenses fund.” Journalist Vladimir Ivanidze, who with his wife, Agathe Duparc, uncovered the Mabetex scandal, was vilified in a local St. Petersburg paper for merely asking standard questions about a bank he found operating out of the St. Petersburg mayor’s office and a real-estate development company to which Putin was attached.

At one point Sergei Roldugin asked Putin point-blank, “Don’t you have a little candle factory somewhere?” Putin, he says, answered, “You know I don’t have anything.” Roldugin pressed again. “Bureaucrats exist to take bribes, and it cannot be that you don’t take anything.” Roldugin says that Putin then answered more firmly. “ ‘You know, Sergei, I can survive without that.’ But he knows the prices, the amounts being taken around him. He told me, ‘If I would take bribes, I’d be extremely rich by now.… I could do nothing but pass information, and people would offer me good money for that. But I didn’t take that, and that’s why I’m worth a lot now.’ ”

In the Kremlin, Putin worked for Pavel Borodin, the Kremlin property manager who has been indicted by the Swiss for his role in the Mabetex scandal. Each year from 1996 on, Putin was promoted, from overseeing the regions to heading the F.S.B., to being secretary of the Security Council and, in August 1999, to prime minister. The question naturally arises: How can you work for so many people directly implicated in scandal and not be implicated yourself?

“There are no clean politicians in Russia,” political analyst Vyacheslav Nikonov tells me. Putin may not have become rich, but he got ahead. “Yeltsin used him as an enforcer,” Nikonov says, and time and again he proved his loyalty, especially in 1998 and 1999, when the Duma wanted to impeach Yeltsin. An American who is a close observer in Moscow told me, “Every time Yeltsin had serious trouble in the Duma, Putin and the F.S.B. intervened. They made sure the F.S.B. had information on [Yeltsin’s enemies] and would use it.”

Now that he’s in power himself, Putin supposedly feels different. Explaining what Putin meant by “dictatorship of the law,” Egorov says his friend is convinced that “officials never have the right to spin the law in their own favor.” “He is extremely intelligent, part of a new breed we hadn’t seen before,” says James Wolfenson, head of the World Bank, who at the time of Putin’s election spent nine hours with him in his Kremlin apartment. “For a Russian leader, he’s as clean as you’re going to get. … Everybody I’ve met feels he’s the best chance we’re going to have.”

“Spies must be charming,” Ednan Agaev, a former arms negotiator for the Soviet Union, tells me. But even more important than wooing Western investors and negotiating for debt relief, Putin must convince Russians that they can once again believe in the motherland. They have to obey the law, pay taxes, and trust the state. “The historic mission of Yeltsin was to destroy Communism without violence, to put Russia on a new track and then open a door to the future,” says Agaev. “Putin’s mission is to go through the door.”

‘Lots of people surrounding Putin are very anti-American, maybe as a result of [the nato bombing of] Kosovo. It looks like a very different moment between Russia and the U.S.,” says Kommersant Daily correspondent Nataliya Gevorkyan. “It’s not nice at all.” Gevorkyan was the senior correspondent of three chosen to interview Putin for First Person. She feels that Putin likes Bill Clinton personally; however, Putin’s election and the U.S. presidential contest in November signify a new era in U.S.-Russian relations. In a Special Congressional Task Force Report to be issued this month, Republicans are expected to criticize Al Gore for his significant role in U.S.-Russia policy over the last eight years. In addition, Richard Cheney used his clout as C.E.O. of Halliburton, an energy-services company, to lobby Congress and the State Department to countermand the State Department’s prohibition against releasing to a shady Russian oil company a loan of $490 million, of which almost $300 million would go to Halliburton.

“There’s a very strong backlash after a decade of being the laughingstock of the world—that we can’t produce anything or get anything right,” says Pavel Felgenhauer. “And the U.S. expects some liberal to come to power, polished and pro-Western? Hardly!”

“Putin is not a democrat!” says Valery Golubev, who spent several years in a four-man office with him. “What does ‘democrat’ mean? In Russian terms, it’s a bit of a curse word.”

“Democracy in Russia has become a dirty word,” Vladimir Posner told me. “If you write ‘dermocrat,’ that’s a play on words in Russia. Dermo means crap—it’s a crapocracy. Over the last 10 years, because of what’s happened, for a lot of people democracy has become crap, because it has destroyed their livelihood, their culture. Also, that specific anti-Western, particularly anti-American sentiment, that’s where the real problem lies. At first, democracy dazzled them. What it’s turned out to be for many Russian people is misery.” Moscow-based Swedish journalist Jan Blomgren told me, “I’m sure Putin’s not good for democracy, but he might be good for Russia. Democracy is not the highest ideal now.”

“Even the most anti-Russia Washington administration cannot inflict more harm on our country than the true ‘friends of Russia’ of Clinton’s team,” says one Russian political commentator. “An increase of isolationist tendencies in the U.S. would be a boon.”

“The real issue is, can you establish law and order and respect the Constitution as written?” says Posner. “Putin has the majority support of the population, who support the idea: let’s curtail democracy and then we’ll come back [to it].” Moreover, Posner says, “Putin is under a lot of pressure from different groups. He feels a moral obligation to the oligarchs who put him in. I don’t think he feels pressure from liberals—they don’t have any power. I do think he’s under pressure from the military and the more nationalistic elements of the country—those who believe Russia … has to be a superpower again.” In the words of Constantin Borovoy, an early business tycoon, “Russia is only important if it’s scary. If you can’t solve old problems, you create new ones.”

nato expansion was an incredible slap in the face—at least a wake-up call [that Russia] had to start paying attention to its own security needs again,” says Clifford Gaddy of the Brookings Institution, who has an excellent track record for calling Putin’s moves. Poland, the Czech Republic, and Hungary all got in, but Russia was pointedly excluded.

Now Putin’s dreams of reviving his country as a superpower will most certainly have to be curtailed. After the Kursk sank, Kursk’s regional governor, Aleksandr Rutskoy, said that Russia was “losing not a submarine—it was losing a national idea.” Vladimir Putin’s formidable challenge is to keep hope alive not just for the motherland but for himself.

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