Russia has a dictator problem that probably can't be fixed.

Wall Street Journal

OPINION

COMMENTARY

Putin Can’t Afford to Leave Office When His Term Ends

Surrendering power would endanger his cronies and subject him to a grim historical reckoning.

By David Satter

March 13, 2020

Vladimir Putin is prepared to run for a fifth term as Russian president. “What’s the point of being subtle?” asked close Putin ally and parliamentary deputy Valentina Tereshkova, the first woman in space, in proposing to abolish term limits. “This is about us and the future of the country.”

But Mr. Putin left himself with little alternative. If he wants to protect his cronies and avoid a grim historical reckoning, he cannot surrender power.

According to Karen Dawisha, author of “Putin’s Kleptocracy,” 110 individuals control 35% of Russia’s assets, one of the highest levels of wealth inequality in the world. Many of Russia’s billionaires worked with Mr. Putin in the St. Petersburg city government, practiced judo with him, were members with him in the Ozero dacha cooperative, or served with him in the KGB. With no visible previous experience, they began amassing riches after Mr. Putin became president in 2000 and promised support to those guided by “government interests.”

What this meant quickly became clear. Gazprom, the Russian natural-gas monopoly, was put under the control of Dmitry Medvedev and Alexei Miller, Putin colleagues from St. Petersburg. Under their leadership, the transfer of skimmed profits to company insiders cost Gazprom at least $60 billion, according to a report by Boris Nemtsov, a former deputy prime minister who was assassinated in February 2015 and Vladimir Milov, a former deputy energy minister. At the same time, 6.4% of Gazprom’s shares, with an estimated value of $20 billion, disappeared from the company’s books.

Another Putin friend, Leonid Reiman, the minister of telecommunications, was found by a Zurich tribunal in 2007 to have used his position as chairman of the state-run telecommunications holding company to acquire assets worth $6 billion. Brothers Boris and Arkady Rotenberg were Mr. Putin’s judo partners as teenagers. They received approximately $7 billion in contracts to build infrastructure for the 2014 Sochi Olympics.

At the same time, the Putin leadership ravaged private industry. The first round of privatization in the 1990s under Boris Yeltsin was won by Soviet-era managers, criminals and former party officials. The second round involved finding flaws in the first round so that an asset could be returned for redistribution by the state. When Mikhail Khodorkovsky, head of the Yukos oil company, showed political independence, he was accused of fraud and tax evasion and sentenced to a long labor-camp term. Yukos was dismembered and sold off cheaply to Mr. Putin’s cronies.

In the third stage, local officials, inspired by what happened to Mr. Khodorkovsky, began seizing property all over the country. Typically, a businessman would be charged with a crime at the behest of competitors who used money and connections to suborn law enforcement. The businessman then was held in pretrial detention until he was ready to accept a below-market offer for his property.

Ownership became highly monopolized, stifling competition and guaranteeing huge profits for those with connections. Mr. Putin was the ultimate arbiter of disputes, and his departure from office would set off a struggle for power throughout a pyramid of lawlessly acquired wealth.

He would also be personally vulnerable. At the time he became president, Mr. Putin was the subject of two active criminal investigations in connection with his work as deputy mayor of St. Petersburg. One case involved the barter of raw materials in 1992 for badly needed food supplies, which never arrived. The other concerned the use of city funds to build private residences in Spain. In August 2000, four months after his election, both cases were quietly dropped.

At the same time, there is considerable evidence that Mr. Putin himself profited from corruption. In 2007 Russian political analyst Stanislav Belkovsky told the German newspaper Die Welt that Mr. Putin’s secret assets were worth $40 billion and that the president was in effect the beneficial owner of 75% of Gunvor, a private trading company responsible for a large share of the export of Russian oil. Mr. Putin and Gunvor denied the claim three months later. But Mr. Belkovsky’s estimates tracked closely with those of Western intelligence.

More serious than his vulnerability for economic crimes, however, is the possibility that, if he is no longer president, Mr. Putin will be held responsible for political crimes, including assassinations and acts of terror. His decades in power have been marked by numerous crimes, including the 1999 apartment bombings that brought him to power, the 2006 murder of Alexander Litvinenko in London, the assassination of Nemtsov, and the shooting down in 2014 of Malaysian Airlines Flight 17 over Eastern Ukraine.

In every case, there is evidence that the crimes were ordered by Mr. Putin but in each instance, the regime organized massive disinformation campaigns to confuse world opinion and intimidate those trying to establish the truth.

In the Litvinenko murder case, however, an independent British inquiry, taking advantage of Western investigative resources, concluded that Litvinenko was murdered at the direction of the KGB’s successor agency, the Federal Security Service (FSB), and the killing was “probably” approved by Mr. Putin. On Monday the trial of four defendants implicated in the shooting down of MH17 opened in The Netherlands. The court heard testimony Tuesday indicating that the crew of the Buk antiaircraft battery that shot down MH17 was Russian and that the operation was carried out in the presence of agents of the FSB.

If Mr. Putin were to lose power, new leadership could reveal vast amounts of information about the crimes of the past two decades, with devastating consequences for him and all who supported him.

Ms. Tereshkova said that allowing Mr. Putin to run again will have a stabilizing effect on Russian society. She is right in one sense. It will certainly prolong the present stagnation. The only question is for how long.

Mr. Satter is author, most recently of, “Never Speak to Strangers and Other Writing From Russia and the Soviet Union.”