Strongman (24 page)

Her murder took place not only on Putin’s birthday but two days after Kadyrov’s. (I know this because I happened to be sitting next to Putin’s spokesman, Dmitry Peskov, in a
Moscow restaurant that evening, when he took out his mobile phone and called ‘Ramzan’ to congratulate him fulsomely on turning 30.) Could the murder have been someone’s slightly
belated ‘birthday present’ to the Chechen strongman? Or could it have been Kadyrov’s gift to his ‘idol’, Putin? In Russia’s criminal underworld, such an idea is
not implausible. Or was the murder designed to discredit one or other of them? Or was there some other motive? One thing was clear: the Kremlin was intensely annoyed by Politkovskaya’s work
– particularly some of her more extravagant claims, such as her assertion that the 2002 Moscow theatre siege, which ended with 130 deaths, was stage-managed by one of Russia’s secret
services.

Prosecutors brought three Chechens to trial, but they were acquitted in 2009 for lack of evidence. A retrial was later ordered, and a fourth man, accused of being the actual assassin, was
arrested. In August 2011 a former police officer, Lt. Col. Dmitry Pavlyuchenkov, who had appeared as a witness in the earlier trial, was charged with plotting the murder. As for who might have
commissioned the crime – the courts have not even come close to establishing that.

It’s our oil

Russia faced more criticism during 2006 as Putin and the
siloviki
moved to assert greater control over the country’s energy resources, some of which belonged to
foreign companies. We saw earlier that the prospect of Yukos selling out to an American oil major was one of the factors that prompted the arrest of Khodorkovsky and the nationalisation of his
assets. Now Putin turned his attention to so-called Production Sharing Agreements which Boris Yeltsin had signed with Western oil companies. Under a PSA, the foreign company finances all the
development and exploration, and when the oil or gas comes on stream it is allowed to keep the first revenues to recoup its costs; after that the profits are shared (in agreed proportions) by the
government and the company.

Putin believed these were humiliating agreements, the kind of deal a Third World country enters into because it doesn’t have the skills or knowhow to extract the oil itself. The first PSA,
signed in 1994, was known as Sakhalin-2: a consortium called Sakhalin Energy, comprising Royal Dutch Shell (55 per cent) and two Japanese companies, Mitsui and Mitsubishi, was developing huge oil
and gas fields near the island of Sakhalin in Russia’s far east. The development costs foreseen in the agreement came to $10 billion, so this was the sum that Shell and its partners would be
able to recover from the first sales before any revenues would begin to flow to the Russian state.

In 2005, however, Shell revealed that the development costs had doubled, to $20 billion. On a visit to the Netherlands in November, Putin ‘gave a roasting’ to Shell’s CEO,
Jeroen van der Veer. It meant Russia was going to lose $10 billion. It gave Putin the excuse he needed to overturn the 12-year-old deal, which he did by means of plotting and pressuring over the
course of 2006. Instrumental to the government’s strategy was Oleg Mitvol, a fierce environmental activist who was deputy head of the government’s Service for Supervision of Natural
Resources, Rosprirodnadzor. In May 2006 the service’s representatives from the far east region came to see Mitvol in Moscow and showed him some photographs. ‘It was unbelievable,’
he recalls. ‘There were photos of forests that had been turfed upside down, landslips, total chaos, on a huge scale. I said to them, “What is this?” and they said, it’s
Sakhalin Energy building pipelines.’
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The construction work included almost a thousand pipes laid across spawning rivers, preventing fish from
swimming upstream.

Mitvol made it a personal crusade. He took journalists to Sakhalin to show them the damage. Rosprirodnadzor estimated it would cost $50 billion just to clean up Aniva Bay, where large-scale
dredging had ruined fishing grounds (something denied by Shell).

It was assumed by most observers at the time that Mitvol was simply doing the government’s bidding, digging up dirt to bolster its case against Shell. The press called him the
Kremlin’s ‘attack dog’. But he insists that he was motivated entirely by environmental concerns and worked more closely with Greenpeace and other environmental groups than with
the Kremlin. He even says he had a call at one point from a ‘very high official’ who was concerned he was being too strident in his criticisms, and ‘spoiling the investment
climate’. Other environmentalists I have spoken to say they believe this: they too were appalled by the damage done to the forests and marine life, and they knew Mitvol to be a real
eco-warrior, who, among other achievements, also helped to persuade Putin to ban seal-hunting.

That said, Mitvol could never have waged such a campaign against a major foreign investor without top-level backing, and Shell’s position became impossible. In December Sakhalin Energy
buckled to the pressure and sold 51 per cent of the project to Gazprom. Putin had succeeded in renationalising the world’s biggest combined oil and natural gas project. At the signing
ceremony, the president declared that the environmental problems could now be considered ‘resolved’. The Sakhalin crisis was over, but the Kremlin’s strong-arm tactics caused
long-term damage to Russia’s efforts to woo foreign investors.

For Putin, this was just part of a strategy, aimed at ensuring that Russia’s strategic energy resources remained, or were retaken, under state control. Foreign companies were welcome to
participate in joint projects, but Russia would never again give away its resources as Yeltsin had so recklessly done. New legislation was drafted to limit non-Russian involvement in 42 industries,
including arms and aircraft, fisheries, precious metals and hydrocarbons.

Putin was less squeamish about other countries’ strategic assets. As oil prices rose and the Kremlin’s coffers filled up with petro-dollars, Russia started looking to invest abroad.
Gazprom showed an interest in buying Centrica, Britain’s major gas supplier. Then it began talks on acquiring a 50 per cent stake in the Central European Gas Hub at Baumgarten in Austria
– the main distribution centre for EU gas supplies. The European Commission blocked the move.

In September 2006 it become known that the state-controlled bank VTB had quietly bought a 5 per cent stake in EADS, the world’s biggest aerospace company, producer of Airbus and a great
deal of defence equipment. Putin’s diplomatic adviser Sergei Prikhodko then suggested they would like more – perhaps 25 per cent, enough to block major decisions. When Angela Merkel
heard about it she told President Chirac of France in no uncertain terms that this could not be allowed to happen. Chirac and Merkel met Putin at Compiègne, outside Paris, towards the end of
September and told him this was one investment that was not welcome.

On a visit to Bavaria the following month, Putin mocked the West for its nervousness: ‘Why the hysteria? It’s not the Red Army coming, but Russian businesses with money to
invest.’

A Cold War encounter

It was Saturday 21 October 2006. The last, yellowing leaves were falling from the birch trees outside Putin’s window at his country residence, Novo-Ogaryovo. It was cold
and raining. He was already in a foul mood. The previous day he had attended a summit with 25 European Union leaders in Lahti, Finland. It was supposed to be an ‘informal’ meeting, a
cosy gathering with no set agenda or agreements to be signed, but nonetheless he had had to listen to a litany of complaints – about the murder of Anna Politkovskaya, about his
government’s attempts to squeeze Shell out of the multi-billion-dollar Sakhalin-2 project, about Russia’s unreliability as an energy provider, and about Georgia.

The Europeans explained that they were keen to build a close partnership with Russia’s southern neighbour and deplored the sanctions recently introduced by the Kremlin. But Putin expounded
at some length his view that President Saakashvili was hell-bent on regaining the breakaway regions of Abkhazia and South Ossetia, and warned them that this would lead to bloodshed. Only his friend
Jacques Chirac supported him, telling the others that relations with Russia were more important than Georgia.

It was the middle of the night before Putin got home. On Saturday afternoon he called his 11 most powerful colleagues – his Security Council – to his residence. He told them about
his uncomfortable meeting with the EU leaders, and they considered their options in Georgia. Putin also had an appointment with the US secretary of state, Condoleezza Rice, who was waiting at her
hotel in Moscow, but he was not looking forward to it. ‘He didn’t feel like meeting her,’ one of his close aides recalls, ‘but he knew he had to.’

Rice was wondering why their meeting was so delayed. ‘Usually he saw me right away, unless he wanted to make a point,’ she said later.
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After their working session the members of the Security Council drove to a nearby government lodge – a baronial-style chateau at Barvikha – for a special dinner. Three members,
including the security council secretary, Igor Ivanov, and the future president, Dmitry Medvedev, had recent birthdays to celebrate.

Here, Putin decided to play a ‘joke’ on Rice. According to one of those present, he looked at his watch, and a mischievous smile appeared on his face. ‘Why do we have to wind
things up in a rush? Let’s put on a little show for her. If she wants, tell her I will meet her here, but don’t tell her I’ve got the entire Security Council with me.’

‘It was five o’clock, five-thirty, six o’clock, six-thirty,’ Rice recalls. ‘Finally about seven-thirty they said, he’s ready to see you now.’

She and the American ambassador, Bill Burns, were whisked out into the dark, wet countryside, along the elite Rublyovo-Uspenskoye highway, dotted with ostentatious redbrick mansions, through the
‘Luxury Village of Barvikha’ with its Lamborghini showroom and designer boutiques, and then through the tall iron gates of the government estate.

Rice and Burns had never seen such a building in Russia before – all turrets and dark stairways, like Dracula’s castle. Suddenly the doors of the dining room were flung open and the
Americans were confronted with an unexpected sight – the full Russian Security Council, the very heart of Russian power, around a banquet table. Burns ‘could hardly take breath’,
according to one witness, while Condi was full of composure. ‘Oh,’ she said, ‘it’s the Security Council.’

The Russians appreciated her sang-froid. ‘She wasn’t even an iron woman – much higher,’ said a Putin aide.

Her old friend Sergei Ivanov joked to her: ‘We are discussing top-secret matters. Here’s some top-secret military intelligence documents. Would you like to see them,
Condoleezza?’ There was much laughter – and some raised eyebrows on the American side when the Russians brought out bottles of Georgian wine. This was just after the arrest of the
Russian officers and the embargo on Georgian products. The Russians started telling crude jokes about Georgians – which Rice could understand, despite the interpreter’s attempts to
clean them up.

After a while, Rice said to Putin: ‘You know, we have some work to do.’

Putin took his guests off to a side room, with defence minister Sergei Ivanov and the foreign minister Sergei Lavrov, who acted as interpreter. Here, the talk got serious.

Putin started lecturing Rice about Ukraine, its history and demographics, and why America was wrong to even contemplate bringing it into NATO. Ivanov recalled in an interview: ‘Putin
explained what Ukraine was – at least a third of the population are ethnic Russians – and the negative consequences that could arise, not only for us but for all of Europe if Ukraine
and Georgia were dragged into NATO.’

According to Bill Burns, Rice retorted that sovereign states had the right to make their sovereign choices about which institutions or alliances they wished to belong to, and that this should
not be seen as threatening.

But Putin was not at all persuaded by that. ‘You do not understand what you are doing,’ he said. ‘You are playing with fire.’

Then the ‘lecture’ turned to the recent events in Georgia, and Rice decided to give as good as she got. ‘President Bush has told me to come and say that if Russia does anything
in Georgia, there will be a rupture in US–Russia relations.’

Ambassador Burns recalls that Putin’s answer was unmistakable: if Georgian provocations caused a security problem, Russia would respond. Rice could feel Putin’s tone turning
hard-edged.

All of a sudden Putin stood up, looking angry and intimidating. Reflexively, Rice also stood up, and in her high heels she was now taller than the Russian, looking down at him. She remembers it
as ‘not a nice moment – probably the toughest moment between the two of us’.

Putin decided to tell it straight. ‘If they [the Georgians] provoke any violence,’ he said, ‘there will be consequences! And you tell that to your president.’

Lavrov, interpreting, did not translate the last phrase, but Rice had understood. This was a forceful warning from an angry Putin – one that she would remember clearly two years later when
Russia brought down the might of its armed forces on Georgia after Saakashvili launched an ill-conceived attack on South Ossetia.

A Cold War murder

There is, perhaps, no enemy more hateful to the KGB than one of their own who turns against them. Forgiveness for disloyalty is not something they teach their agents.

Alexander Litvinenko was an officer in the Soviet KGB and its successor, the FSB. In the 1990s he specialised in counter-terrorism and fighting organised crime. After service in Chechnya he was
assigned to a new FSB unit called URPO, the Directorate for the Analysis and Suppression of Criminal Organisations, which in effect consisted of hit squads designed to take out the country’s
top mafia crime bosses. But Litvinenko became aware of corruption and links to organised crime in the organisation itself and began to rebel. In March 1998 he confided to the oligarch Boris
Berezovsky that he and four other agents from his unit had been ordered to kill him. (Berezovsky at the time was the ultimate wheeler-dealer in the Kremlin, who had engineered Boris Yeltsin’s
re-election in 1996 and would soon help to organise his succession.) When Vladimir Putin was appointed director of the FSB in July that year, Berezovsky immediately took Litvinenko to see him and
report on corruption in the organisation. According to the oligarch, Putin did not respond, so on 13 November Berezovsky went public, with an open letter to Putin in the newspaper
Kommersant
. Four days later Litvinenko and his four colleagues from the URPO unit held a press conference at which they made public their claim that they had been ordered to kill
Berezovsky.
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Litvinenko was immediately dismissed from the FSB, apparently on the personal orders of Putin, who told the journalist Yelena Tregubova later:
‘Soon after becoming director of the FSB I fired Litvinenko and liquidated the unit in which he worked.’ His objection was not that FSB agents were carrying out extra-judicial killings
but that Litvinenko and his colleagues dared to go public about it. ‘FSB officers should not stage press conferences. This is not their job. And they should not make internal scandals
public.’
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