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Sidorov and the Czar Narrative

putin_is_not_a_czar.gifDmitry Sidorov, the Washington D.C. Bureau Chief of Kommersant, has a new article in FrontPage Magazine which perpetuates the myth as Putin-as-all-powerful-czar, a depiction that Bob has frequently disagreed with. Rather than the “czar narrative,” which we see as the frequent default in the media on Russia, we see Putin as sitting atop a rapidly shifting political scene characterized by bitter clan infighting – not a king, but a prisoner of circumstance, barely keeping his head above water. Disobedience is rife, and influence is very fragmented. The very fact that they have gone through with the election of Medvedev is not consistent with the czar narrative. Nevertheless, Sidorov offers some interesting stories about how this perception and fear has enabled some strange behavior from Kremlin sycophants, including all manner of “stop lists” and other pandering. His opinions on the motives behind the persecution of Mikhail Khodorkovsky are also worth considering.

The impact of Vladimir Putin’s rules of the game on business has been much graver. In the best-known case, Mikhail Khodorkovsky, the former owner of the oil company YUKOS, is now serving 10-year prison term in the God-forsaken city of Chita in the Russian Far East. There is still disagreement in the West and in Russia about why Mr. Putin and his comrades went after Mr. Khodorkovsky.

A majority of experts presume that the main problem was Khodorkovsky’s active involvement in politics, and his desire for independence from the President’s team. Many have said the mogul financed both the ruling and the opposition parties, endangering the balance created by the Tsar.This sounds right, but I think that greed also played a significant role in the Kremlin’s decision making process. In 2003, when Mr. Khodorkovsky was still the head of Yukos, he was negotiating a merger with Exxon Mobile. If it had happened, the merger would have created the second-largest oil company in the world, something capable of undermining Mr. Putin’s power. Thus, the Kremlin decided to strip Khodorkovsky of his company, at the same time calculating that the proceeds from YUKOS oil exports would be enough for them to share without Exxon Mobil.The path chosen by the Kremlin was painful for the President of YUKOS, but presumably profitable for the Tsar’s inner circle, one Russian source told me few years ago. Although there is no evidence of Putin’s direct involvement in the ensuing scam, it was the King himself who made confusing announcements about the fate of Khodorkovsky and YUKOS at the height of the conflict. His statements sent the company’s shares skittering up and down, presumably enabling knowledgeable people to make tens of millions of dollars.The Russian business community quickly got the message and started to line up to show their support for the Tsar. Earlier this year, one prominent and very pro-Putin mogul managed to have a meeting with the President. After it was over, Mr. Putin’s “servants” told him that the President was very unhappy with his behavior. But why, asked the oligarch as goose bumps rose. He saw an attempt to be independent in your presentation, the answer came, and you should give this serious thought.The Khodorkovsky case was the turning point of Mr. Putin’s presidency, a major victory that enabled him to stave off significant internal obstacles. It set the path for Russia to walk while he assumed the premiership, anointing the weak Medvedev to be the new President of Russia under the watchful eyes of Mr. Putin’s comrades still on the Kremlin team.The Russian anecdote to prove the point has a waiter in a Moscow restaurant asking Putin and Medvedev what they would like to have for dinner. “I’ll have steak,” the Tsar responds. “And the vegetable?” the waiter inquires. “The vegetable will have steak, too,” Putin says quickly, nodding his successor.