‘None of them have the guts’: Why Russia’s oligarchs will remain loyal to Putin, even in the face of crippling sanctions

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  1. Poison is one of the Kremlin’s favorite tools for an assassination. The chemicals leave an obvious trace, sending a clear message from Moscow: “We can get close enough to kill, and there’s nothing you can do about it.” So when the Russian billionaire and oligarch Roman Abramovich claimed in March that his skin had started peeling and that he felt he was going blind, he could not have been too surprised.

    He was in Kyiv, acting as an unofficial negotiator in peace talks (reportedly with Vladimir Putin’s blessing), trying to end the war between Russia and Ukraine. Maybe Abramovich was simply in the wrong place at the wrong time, collateral damage caught alongside Ukrainians who were the actual targets. Maybe it was intentional, a warning to Abramovich not to get too far ahead of Putin’s wishes. According to the New York Times, he asked a scientist examining him: “Are we dying?”

    But in the world of Russia’s oligarchs, things are rarely what they seem. In an interview, the author and Kremlin critic Bill Browder cast doubt on reports that Abramovich was poisoned at all. Browder suggested that Abramovich might have invented the entire episode to show that there’s distance between him and the Kremlin. “It appears to me that he’s desperately trying to stay off the sanctions list in the US,” he said.

    “Oligarchs are wealthy with the permission and at the pleasure of Vladimir Putin,” said Browder, who has lobbied governments around the world to sanction Putin’s inner circle. Oligarchs aren’t businessmen as we understand them within the framework of a democratic capitalist system, and they are definitely not equals to Putin. They serve the Kremlin, and Putin is the Kremlin.

    “At any moment and for any reason he can decide to take away their money, take away their freedom, take away their life,” Browder told me. “He’s done this multiple times with people, and it has sent shockwaves through the oligarch community. None of them have the guts to stand up to him in any way, shape, or form.”

    **Billionaire boys club**

    The Western world is searching for any glimmer of hope that there will be an end to Russia’s attack on Ukraine. Despite the fact that the West has imposed devastating, coordinated sanctions on the Russian economy and its leaders, Putin is digging in his heels. I wish I could tell you that someone in Moscow’s defense establishment, or some oligarch close to Putin could influence his thinking. But experts are clear that isn’t how Russia works. Men like Abramovich might be close to the Kremlin, but that is in part because they live under its thumb.

    Abramovich spent most of his adult life as part of an exclusive Russian billionaire men’s club. Some members were lucky and violent enough to take a piece of the country’s riches for themselves as the USSR was melting away in the 1990s. Others got rich later, as members of Putin’s inner circle, accepting companies from him to rule as fiefs. Being a Russian oligarch is a luxurious occupation, but it is also a dangerous one.

    When Putin took over Russia in 2000, he changed the rules for the oligarchs club. The first wave of oligarchs had been meddling in all sorts of state affairs under President Boris Yeltsin — and Putin wanted them out of politics. They could continue to gobble up the country’s resources (but not too much and not from the wrong people), and they could continue to flaunt their riches on the French Riviera or in Italian villas. But they would serve Putin and his state. They would recognize that all their wealth and security came from that protection. And they would be available to do Putin’s bidding around the world.

    Naturally, it is not easy to tell a group of rich, powerful men that they are no longer able to do as they please. But Putin knew he could tame the oligarchs the way he (mistakenly) thought he could tame Ukraine — by giving them an object lesson in violence. Over the years some of the members of this club have found themselves jailed, exiled, possibly poisoned, or mysteriously dead.

    Those who have made it through, like Abramovich, have done so by carefully avoiding the Kremlin’s ire. For his part, Abramovich has helped prop up the regime, supporting Putin’s earliest measures to make Russia less democratic and owning shares in the propaganda stations that aims to keep the Russian people brainwashed. This allowed Abramovich to accumulate fabulous wealth. He sold Sibneft, an oil company he bought from the government for a mere $200 million, back to the Russian state for $13 billion in 2005. He is loyal to the Kremlin because he has to be.

    **The birth of the Russian oligarchy**

    Oligarch power grew out of the chaos of post-Soviet Russia. In 1995 — in order to show the world that he was privatizing the economy and to raise money for his own election campaign — Yeltsin enacted the loans-for-shares program. Russia’s new bankers and businessmen (at least those friendly to Yeltsin and his inner circle, known as “The Family”) were allowed to buy giant state enterprises for a song and then in some cases sell those assets back to the Russian government at eye-popping prices. Russian oligarchs’ wealth is rooted in relationships and favors.

    Under Yeltsin, Russian politics was a free-for-all with the oligarchs working any and all angles to serve the interests of their businesses. Media titans like Boris Berezovsky, in particular, amassed enormous power, Georgia-based journalist Michael Wasiura told me. They could throw their TV channels behind any candidates they wished.

    “Because you had these independent centers of wealth and power, you actually had competition in the system,” Wasiura said.

    Doing business in Russia in the 1990s was also extremely violent, as Abramovich himself admitted in a London court back in 2011. One needed a connection to The Family in order to survive — and for Abramovich, that connection was Berezovsky. Abramovich said his connection to Berezovsky did “not qualify as friendship or regular business association” but something darker and very much of those lawless times.

    “The Russian word to describe the nature of his relationship with me is ‘krysha,'” the Russian word for roof, he told the court. “A person providing krysha to another man was a person who acted as his protector. Krysha could take the form of political or physical protection.”

    Abramovich testified that in exchange for protection, he had paid for all kinds of Berezovsky’s expenses, from credit cards to private planes. That’s what you do for your krysha. Protection enabled Abramovich to get involved in several businesses, including the dangerous aluminum industry. “Criminal groups” were fighting for control of the profits, he told the court, and “dozens of businessmen” had been killed. But when The Family elevated Putin, the new Russian president made it clear that under him there would be order.

    **A lesson for the oligarchs**

    In 2001, Putin demanded that all of the infighting and political machinations stop. He invited the country’s oligarchs to his summer home in Novo-Ogaryovo and told them they could no longer play in politics. In his book “All the Kremlin’s Men,” the Russian journalist Mikhail Zygar called this gathering the “barbecue meeting.”

    By the time he made his announcement, Putin had already punished a few oligarchs, such as Vladimir Gusinky, who had backed Putin’s political opponents, and Berezovsky, who fled to London after using his media companies to embarrass Putin.

    Putin had also been putting pressure on the oligarchs by using his ties to Russian security services to harass them, Zygar wrote, by searching their offices and launching investigations against them. A former KGB agent, Putin would ultimately elevate his most loyal allies from his time in the security services to oligarch status — they are known as the “siloviki.”

    And so Putin consolidated political power and tied the wealthiest Russian to him while also cleaning up some of the dangerous infighting. This worked out well for the oligarchs who played along. For instance, around the time Putin rose to power, Abramovich (on Putin’s orders) became governor of Chukotka, a desolate province in Russia’s easternmost territory. He left Russia for England shortly after that, eventually buying the legendary Chelsea soccer club and generally being welcomed into the Western business community.

    According to a whistleblower, the story of how Abramovich was able to stay in the Kremlin’s good graces while operating out of the country is very simple: Shortly after Putin became president, Abramovich took up a collection to buy him a yacht. Another whistleblower says Abramovich contributed mightily to building Putin’s palace on the Black Sea coast.

    For those oligarchs who tried to defy Putin, life and business did not work out so well. One oligarch in particular did not receive the message of the barbecue meeting: Mikhail Khodorkovsky, Russia’s richest man by 2003 and CEO of Yukos, its largest private oil company. Even after Putin’s warning, Khodorkovsky still wanted to wield political power.

    In May 2003, a Russian think tank published a report called “State and Oligarchy,” arguing that a group of rogue oligarchs led by Khodorkovsky was plotting against the government. He was arrested less than six months later and was imprisoned until 2014, when he was finally pardoned and allowed to leave Russia in the run-up to the Sochi Olympics.

  2. They are his henchmen not oligarchs. Their wealth comes from their connection with Putin and doing his bidding.

  4. To be honest, with Russian economy speeding up right into shitter, no one with half a brain should want this position.

  6. This person – Mr. Khodorkovsky

    (from the article:) .. a vocal critic of the regime. .. established the Dossier Center, an investigative project, to expose the ties of powerful Russians to the Kremlin and to one another. ..

    (He advocated NATO intervention in Ukraine and pushed for even harsher sanctions on Russia’s oligarchs.)

    Here https://khodorkovsky.com/dossier-center/

    The dossier center. I hope that people know about it, and mine it

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