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13/03/2015 Transcript|Putin'sWay|FRONTLINE|PBS

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TranscriptFRONTLINE>ForeignAffairs/Defense>Putin'sWay>

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Putins WayCORRESPONDENT

GillianFindlay

WRITTEN,PRODUCEDANDDIRECTEDBY

NeilDocherty

NARRATOR:Inthespringof2012,VladimirVladimirovichPutinenteredtheKremlintostarthisthirdtermaspresidentofRussia.Ithadbeenaremarkableascentinjustover20years,ajourneyfromunemployedspytomoderndayczar.

LieutenantColonelAndreyZykovhaswatchedthatclimbtopower.AformerpoliceinvestigatorwhooncewantedtoarrestPutin,hesayshisrisehascomeatgreatcost.

ANDREYZYKOV,FormerPoliceInvestigator:[throughinterpreter]Well,ofcourse,therehasalwaysbeencorruptioninRussia,butbuildingitintosuchameticulous

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systemwassomethingonlyMr.Putinhasmanagedtodo.CouldPutinbeheldcriminallyresponsiblebasedontheevidencethathasalreadybeengathered?Absolutely,yes.

NARRATOR:In2010,ZykovlaidoutevidencehehadgatheredfromaninvestigationofPutinsearlyyears,incitygovernmentinSt.Petersburg.HeposteditonYouTube.Mysteriously,therehavebeeneffortstodeleteitfromtheWeb,butnotbeforeitwasdownloadedbyRussiaexpertandauthorKarenDawisha.

GILLIANFINDLAY,Correspondent:Andinitsessence,whatdidthatseriesthathepostedwhatdiditwhatwasthesummation?

KARENDAWISHA,Prof.,MiamiUniversity,Ohio:ThesummationofitwasadetailedaccountofthecriminalactivitiesthathefeelsPutinwasinvolvedinabuseofpower,abuseofhisofficialposition,involvementinrelationswithorganizedcrime,knowledgeaboutmoneylaunderingImean,awholerangeofeconomiccrimes.

NARRATOR:DawishasaysthatZykovschargesarepartofalargercultureofcorruptioninPutinsRussia.ShehasbeengatheringextensivedocumentationforanewbookonwhatshecallsPutinsKleptocracyandhowheandhiscirclehaveshapedthecountry.

KARENDAWISHA:Istartedthinking,insteadofseeingRussiaasademocracyintheprocessoffailing,weneedtoseeitasanauthoritariansystemintheprocessofsucceeding,thattheyarenotactuallyincapableofbeingdemocratic.Theydontwanttobedemocrats.Whataboutthat?Letsworkonthatthesis.Andifthatscorrect,whendidthatstart?Andthatswhattookmetothe90sbecausetheywerestealingfromtheverybeginning.

NARRATOR:In1990,theoldSovietsystemwascollapsing,butwhatexactlywouldreplaceitwasntclear.Theuncertaintyhadawholenationonedge.AmongthemwasayoungKGBofficernamedVladimirPutin.HedreturnedtohishometownofSt.PetersburgfromhispostinginDresden,EastGermany,andhewaslookingforwork.

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HewouldeventuallyeventuallyfinditatSt.Petersburgscityhall.Hisformerlawprofessor,AnatolySobchak,hadjustbeenelectedmayor.Sobchakswidow,LyudmilaNarusova,remembersherhusbandsresponsewhenhisformerstudentinsistedontellinghimthathedbeenworkingfortheKGB.

LYUDMILANARUSOVA,SobchaksWidow:[throughinterpreter]Myhusbandwasshockedbythecandorandaskedwhathisjobwas.AndhesaidhehadworkedintheGermanDemocraticRepublic,inEastGermany.Andhesaid,Well,IjusthappentobelookingforpeoplethatknowEurope,thatknowthelanguages,inordertoworkonforeigneconomicrelations.Theywouldnthavehiredanidiottoworkinreconnaissance,soIhopeyoucanmanageit.Gowork.Anditneedstobesaidthataccordingtomyhusband,heneverregrettedit,

NARRATOR:Putinwouldsoonbedeputymayorofthecity,andcrucially,chairofthecommitteeonforeigneconomicrelations.

KARENDAWISHA:Hewasthelinchpin.Hecontrolledwhichforeigncompaniescouldregistertheirofficesandreceiveoffices.Afterall,remember,allthispropertywasSovietproperty.TheSovietUnionhadntfallenyet.SohowwasacompanygoingtogetaccesstopropertytosetupabranchinSt.Petersburg?Putinwouldhavetoassignit.

NARRATOR:Evenashisstarrose,therewasanearlyexampleofhisambition.Hecommissionedadocumentaryabouthimself.ItwascalledPower,madebyIgorShadkhan.

IGORSHADKHAN,DocumentaryFilmmaker:[throughinterpreter]Putinhadanagenda.HewantedtoadmitthathehadbeenaKGBagentinforeignreconnaissance.

VLADIMIRPUTIN:[Shadkhanfilm][subtitles]Afteruniversity,IgotanoffertoworkfortheCommitteeforStateSecurity.

NARRATOR:ForPutin,itwasaneffectivewaytoouthimselfasaformermemberof

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thereviledKGB.ButforMayorSobchak,Putinspastwouldproveuseful.Afterall,hewasrunningacitywithanotoriouscriminalhistory,andaccordingtoprominentpoliticalanalystStanislavBelkovsky,heneededsomeonewhocouldworkinitsshadows.

STANISLAVBELKOVSKY,NationalStrategyInstitute,Moscow:St.PetersburgcalledthebanditcapitalofRussia,gangstercapitalofRussia,atthatmoment.Andthemayorsofficeshouldcommunicatetothosegroupingssomeway.Butofcourse,AnatolySobchakcouldnotbeinvolvedinsuchcontacts,anditwasVladimirPutinwhowasincharge.

IGORSHADKHAN:[throughinterpreter]WhenIarrivedfortheshoot,hisentirelobbywasfullofforeigners.TheseincludedFinnish,Germans,andtherewassomeagreementtheywereallcomingto.Now,theagreementforthemostpartwasaboutfoodaidforSt.Petersburg.

NARRATOR:Putinhadhisworkcutoutforhim.ThecollapseoftheSovietUnionbroughtterriblefoodshortagestoSt.Petersburg.Theagriculturalsystemwasinchaos,andtherewaslittleforeigncurrencytobuyfoodfromabroad.Tofilltheshelves,aprogramwasdevised.Companieswouldbeallocatedrawmaterials,likeoilandminerals,tobesoldabroad,andthemoneywasthenusedtobuyfood.

Inhisfilm,thedeputymayorassuredhungryresidentsfoodwasonitsway.

VLADIMIRPUTIN:[subtitles]Butter,2,000tons.Drymilk,2,000tons.Sothis,infact,coversourneeds.Thisisveryimpressive,Illbehonestwithyou.

NARRATOR:Thetroublewas,mostofthepromisedfoodneverarrived.Despairturnedtoanger,andthenprotests.AcitycouncilornamedMarinaSalyewaschargedwithinvestigatingwhathadhappened.Salyewouldeventuallyleavepoliticsdisillusionedandretreattothecountryside.Butshekeptallherdocuments.ShesaystheyshowwhatwentwronginSt.Petersburginthe90sandwhoshebelieveswastoblame.



MARINASALYE:[throughinterpreter]Sowithoutgoingintoallthedetails,Illtellyoufromthisdocument,signedbyPutin,all$124milliondisappearedwithoutatrace,withoutatrace,becausefromthislistofmaterialsthatIhavelisted,notasinglegramoffoodcame.

KARENDAWISHA:Andwhathappenedwasflybynightcompaniesweresetup.Manyofhisfriends,whoarestillaroundtoday,werebehindthosecompanies.Thegoodswentout,andincompleteornoshipmentcameback.Somillions,millionsweremadejustinthatepisodealone.

NARRATOR:Intheend,theSt.PetersburgcitycouncilapprovedSalyesrecommendationtoturnthecaseovertotheprosecutors.

MARINASALYE:[reading][throughinterpreter]WeconcludedthatPutinandhisassistantshouldbefired.

NARRATOR:Mrs.Sobchakdismissestheinvestigationasapoliticalvendettaagainstherhusband.

LYUDMILANARUSOVA,SobchaksWidow:[throughinterpreter]Iunderstandthatalloftheinvestigations,quote,unquote,thatwerebeingundertakenbythedeputieswerecompleterubbish.ItwasjustawaytosomehowinfluencemyhusbandtogetridofPutin.

NARRATOR:ButSobchakprotectedhisdeputy.Thecaseofthemissingfoodwouldneverbeprosecuted.AndPutinwoulddenythechargesandblamedthecompaniesandotherbureaucrats.

AsixhourdrivewestofSt.PetersburgistheancientSvyatagorskymonastery.AndreyZykovsayshecomeshereoftentofindpeace.Heishauntedbycase144128.ItwasaninvestigationintoaconstructioncompanycalledTwentiethTrust,whichhadbeenregisteredbyPutinseconomicrelationscommittee.LieutenantColonelZykovwasthe



topfederalinvestigatorinSt.Petersburgandbecameconvincedthatcrimeshadbeencommitted.

ANDREYZYKOV,FormerPoliceInvestigator:[throughinterpreter]So2.5billionrublesweretransferredtothecompanysaccount.Thewayitworkedwasthefundsweresupposedtobeusedforspecificbuildingprojectsbutendedupbeingusedforcompletelydifferentpurposes.

NARRATOR:TheinvestigationtrackedhowthecitypaidTwentiethTrusttodowork,howtheworkwasneverdoneandhowmuchofthemoneydisappeared.Inonecase,accordingtoZykov,moneywassiphonedoffbyPutinandhisfriendstobuildvacationvillasinSpain.

ANDREYZYKOV:[throughinterpreter]Itwastheft.SobchakandPutinshouldhavebeenjailedandwouldbeinjailundoubtedly,Putinprobablyfirstandforemost,asthegreatestnumberofdocumentsandordersweresignedbyhim.

NARRATOR:ButPutindidntgotojail,hewenttoMoscow.By1996,hedbegunhisriseintheKremlinandwassooninapositiontohelphismentor.BackinSt.Petersburg,AnatolySobchakhadaproblem.Hedjustlosttheelectionandwasthesubjectofyetanothercorruptioninvestigation.

LYUDMILANARUSOVA,SobchaksWidow:[throughinterpreter]In1996,whenSobchakstoppedbeingmayor,asisoftenthecaseintheRussianelite,alotofpeopleimmediatelyturnedtheirbacksonhim.VladimirPutinwasnearlytheonlyonethatdidntdothat.

NARRATOR:Thistime,Sobchakwasquestionedbyprosecutors.Butsuddenly,hehadaheartattackandwasrushedtothehospital.

LYUDMILANARUSOVA:[throughinterpreter]Sowhenmyhusbandhadtheheartattack,anditwashardtogethimtreatmentunderthoseconditionsbecausepeople



werecallingthechiefcardiologistofthecitywhowastreatinghim,tellinghim,DonttreatSobchak.LethimdiethatswhenIdecidedtotakehimoverseasfortreatment.

NARRATOR:Itwasanorchestratedescape.SobchaktookoffonanationalholidayweekendaboardaprivateplaneapparentlyarrangedbyVladimirPutin.Weekslater,heshowedupinParis,lookingsurprisinglyhealthy.

LYUDMILANARUSOVA:[throughinterpreter]VladimirPutinhelpedmeorganizethat,riskingeverything.

NARRATOR:BackintheKremlin,PutinsloyaltytoSobchakhadbeendulynoted.By1999,anailingBorisYeltsinwasnearingtheendofhispresidencyandlookingforasaviorhimself.Hisadministrationwasthefocusofamassivecorruptioninvestigation.HavingparceledoutmuchofRussiaswealthtoabandofoligarchsandallowedaidesandfamilymemberstoenrichthemselvesintheprocess,therewasfearintheYeltsincampaboutwhatmighthappenifhissuccessorprovedlessthanunderstanding.HedalreadyhiredandfiredfourprimeministersbeforeanointingVladimirPutin.

KARENDAWISHA,Author,PutinsKleptocracy:Well,IthinkwhattheysawinhimwasthathehadprotectedSobchak.Andastheysaid,HedidntgiveupSobchak,andhesnotgoingtogiveusup.

GILLIANFINDLAY,Correspondent:Howvulnerableweretheyatthetime?

KARENDAWISHA:Veryvulnerable.

NARRATOR:Buttherewasaproblem.Putinwasafacelessbureaucratunknowntothepublic,whowouldhavetowinanelectionifhewastobecomepresidentofthecountryandprotectoroftheYeltsinfamily.AsinSt.Petersburg,aninstantbiographywascommissioned.NataliyaGevorkyanwasonthewritingteam.ShenowlivesinParis.

GILLIANFINDLAY:Whatwasthenarrativethattheywantedout?



NATALIYAGEVORKYAN,PutinBiographer:Justtoeverything.Imean,wherehecomesfrom,whoishe,whyhewasinKGB.Hewas.Thatwasthemainthingabouthim,hestheKGBman.Thatsall.Sowhattheywantedtopresenthimthatheisanormalhumanbeing,hehasparents,hehasabiography.

NARRATOR:HisbiographytellsofanonlychildwhogrewupinapoorquarterofSt.Petersburg,anunusualboywhoatage16,wenttothelocalKGBofficeandaskedtojoinupHewastoldtocomebacklater.Sevenyearslater,hedid,withalawdegree,andafterKGBtrainingwasassignedhispostinEastGermany.

GILLIANFINDLAY:OnceandalwaysKGB.CanyouexplaintoaWesternaudiencewhatdoesthatmean?

NATALIYAGEVORKYAN:Theyarethepeoplewhoprefertooperateinshadow.Theyarethepeoplewhicharelikestateisfirst,andpeoplearesecond.Allthiskindofthingshehasinhim.AndhecannotIdontthinkhecanchangeit,youknow?Itsunchangeable.

NARRATOR:HewassomuchtheKGBman,hewouldtakeaturnasheadofitssuccessoragency,theFSB,intheyearbeforehebecameprimeminister.Thenonemonthintohisnewjob,inthefallof1999,this.BombsobliteratedfourapartmentbuildingsinMoscowandothercities,allblownupatnightwhilepeopleslept.Hundredsdied.ThiswasRussias9/11.

RussianhistorianYuriFelshtinskyhaswrittenabookontheapartmentbombings.

YURIFELSHTINSKY,CoAuthor,BlowingupRussia:Whatwehavetounderstandisthewholecountryisverynervous,thatthefeelingisthateveryseveraldays,orlikeonceaweek,abuildingisgoingtobeblownup.

NARRATOR:Allofasudden,aprimeministerfewRussianshadheardaboutwaseverywhere,swearingrevenge.



VLADIMIRPUTIN,PrimeMinister:[subtitles]Wellbechasingtheterroristseverywhere,attheairportsorinthetoilet.Wellwastetheminanouthouse.Endofstory.

NARRATOR:PutinwouldpointtorebelsinChechnya,whereaseparatistmovementwasholdingground.

DAVIDSATTER,RussiaScholar:TheRussianofficialssaidthattherewasaChechentrailintheapartmentbombingsnotproofofChecheninvolvement,aChechentrail.Itwasntclearwhatthatmeant,butitwasusedinordertojustifyanewinvasionofChechnya.

NARRATOR:AndPutinsinvasionwouldbebrutal.

CHECHENCHILD:[subtitles]Itsmygrandpalyingthere!

NARRATOR:Themanwhowageditwasanewnationalhero.

DAVIDSATTER:HequicklybecamethemostpopularpoliticianinRussia,eventhoughbeforetheapartmentbombings,hewasbelievedtohavehadnochancetosucceedYeltsinaspresident.

KARENDAWISHA:Theyneededasetofsituationsinwhich,iftheycouldpostponetheelectionsentirelyandmakeitmoredifficultfortheoppositiontofocusonunimportantthings,likethecorruptionoftheYeltsinfamily.

YURIFELSHTINSKY:TheironyisthatthiswaspreciselyhowthefirstChechenwarwasstarted.ThefirstChechenwarwasstartedandprovokedin95inordertohaveasituationthatwouldallowthegovernmenttocancelelectionsortopostponeelections,claimingthatyoucannothavethemduringthewartime.Andabsolutelythesamewasdonein99.

KARENDAWISHA:SotherewasarealYeltsininterestinthis.Buttherealsowasa



Putininterestbecausehewantedtobepresident,

NARRATOR:Anditworked.Threemonthsintoanewmillennium,Russiahadanewpresident.Heseemedamodernman,amanforthefuture,afutureallRussianshopedwouldbebetterthanthepast.

But15yearslater,shadowsfromthepasthauntthisplace.Itsamemorialtothosewhodiedinthoseapartmentbombings.Sincethatday,books,newspaperreportsanddocumentarieshaveallraiseddisturbingquestionsaboutwhatreallyhappenedhere,whowasreallyresponsible.

Amongthequestioners,MikhailTrepashkin,whospenttwoyearstryingtoinvestigatethecrimeonbehalfofoneofthefamilies.AformerKGBofficerhimself,andalawyer,Trepashkinwasalwaysdubiousabouttheofficialstory,theChechenconnection.Hisdoubtsonlygrewwhenhisformercolleaguesinthesecurityservicesreactedtohisinvestigation.

MIKHAILTREPASHKIN,FormerKGB/FSBOfficer:[throughinterpreter]Theyweretellingme,Dontdigintoit.Otherwise,youwillgetimprisonedyourself.Andthenspecifically,theyweretellingmeinastraightforwardway,Justleaveitifyoudontwanttohavetrouble.AndIwassayingthat,Well,ImtheformerinvestigatorandIhaveexperienceandIcanhelp.Icanrunmyowninvestigation.

NARRATOR:Buttherewouldbemanyobstaclesplacedinthewayofaninvestigation.

DAVIDSATTER,Author,DarknessatDawn:TheRussiangovernmentdestroyedalltheevidenceinthecaseoftheearlierbombings.Nosoonerhadthebombingstakenplacethanbulldozersshoweduptotoremovetherubble,includinghumanremains.Andinthatcase,theydestroyedthecrimescene.

NARRATOR:Butthetroublingquestionsaboutthebombingswerereallyfueledbywhathappenedhereafewdayslater,inatownoutsideMoscowcalledRyazan.



DAVIDSATTER:AfifthbombwasdiscoveredinthebasementofanapartmentbuildinginRyazanbywatchfulinhabitantsofthatbuilding.Andthatbombwasdefused.AndthepeoplewhohadplacedthatbombinthebasementturnedouttobenotChechnyanterrorists.TheyturnedouttobeagentsoftheFSB,theRussiansecurityservice.

NARRATOR:Testsshowedthatthebagscontainedanexclusivemilitaryexplosivecalledhexagon.Thedetonator,too,wasmilitary.

KARENDAWISHA:IthinkthattheevidencethattherewasanFSBoperationtoplaceexplosivesintheapartmentbuildinginRyazanisincontrovertible.

NARRATOR:Atthetime,theFSBclaimedtheRyazanoperationwaspartofatrainingexercise.Butthebroaderconclusionthatsecurityservicescouldhavekilledtheirownpeopleintheotherapartmentswasdismissedbythegovernment.Inhisbiography,Putincalleditutternonsense,totallyinsane.

NoChechenswereevercharged.Othersarrestedwereconvictedinsecrettrials,andstillothersintrialstaintedbyallegationsofforcedconfessions.Butallalong,itsbeendisturbinglydangeroustoinvestigatetooclosely.

DAVIDSATTER:PeoplewhotriedtoinvestigatetheapartmentbombingsinmanycasesendedupdeadYuriShchekochikhin,SergeiYushenkov,AlexanderLitvinenko,AnnaPolitkovskaya.

NARRATOR:SergeyMarkovisapoliticalanalystandoftenspeaksforVladimirPutin.

INTERVIEWER:TherehavebeenanumberofcredibleinvestigationsthathaveconcludedthatthiswastheworkoftheFSBandcouldnothavehappenedwithouttheknowledgeofMr.Putin.

SERGEYMARKOV,PutinSpokesman:ItwasnocredibleinvestigationwhichshowsthatthathadbeendonebyFSB.Allthispropagandistic,quasiinvestigation,justusing



tricksandsoon.

IalreadyheardaboutthisstoryabouttheFSBexplodedthebuildinginMoscowmaybehundredsoftimes.Andallthesepeoplefree?Nobodysinjail.Dontbecamevictimofpropaganda.Itsverydangerous,also.

DAVIDSATTER:TherewerethreeattemptsintheRussianDumatoinvestigatetheeventsinRyazan.Inallcases,theywerevoteddown,withtherulingpartyunderPutinscontrolvotingunanimouslynottoinvestigateandnottoaskquestions.

NARRATOR:MikhailTrepashkinwasaskedtohelpwithoneofthoseDumainvestigations.Aweekbeforehewasduetoreporthisfindings,hewasstoppedbythepolice.

MIKHAILTREPASHKIN,FormerBombingVictimsLawyer:[throughinterpreter]Sotheystoppedmeatapolicecheckpoint,wheretherewasacrowdofpeople.Theycheckedmyidentificationtwiceandcheckedthecar,andtheydidntfindanything.AndwhenIwasclosingit,oneoftheofficersthrewinabag,andItoldhim,Thatsnotmine.Whyareyouputtingthatinmycar?Heopenedthebagandsaid,Hereisthegun.Heresthegun.AndIwasimmediatelyarrested.

NARRATOR:Trepashkinwassenttoprisonfortwoyears.Hecameoutandagainspokeabouthisinvestigationoftheapartmentbombings,andwasarrestedandjailedforanothertwoyears.

DAVIDSATTER,Author,DarknessatDawn:Well,theapartmentbuildingssavedtheYeltsinsystem.TheysavedthecorruptdivisionofpropertythattookplaceafterthefalloftheSovietUnion.Theycostthousandsofinnocentlives,bothRussianandChechnyan,bystartinganewwar.TheybroughttopowersomeonefromthesecurityservicesandthatsPutinwho,ofcourse,hadnointerestindemocracy.

NARRATOR:Hisfirstactaspresidentwastogranthispredecessor,BorisYeltsin,



immunityfromprosecution.ButPutinsadministrationwouldquicklyensurehisownsafety,too.Casenumber144128,thatcorruptioninvestigationinSt.Petersburg,quietlywentaway.

ANDREYZYKOV,FormerPoliceInvestigator:[throughinterpreter]Theprosecutorgeneralgaveanorderthatthecriminalcaseshouldbeterminated.Itwasexplainedtousthatcriminalinvestigationsarenotpursuedinrelationtothepresident.

NARRATOR:InvestigatorZykovsayshestillwondershowthingsmighthavebeendifferenthadhebeenallowedtocontinuewithhiscase.

ANDREYZYKOV:[throughinterpreter]Thesituationinourcountrywouldbedifferent.Peoplewouldrespectcivillawbecauseeveryonewouldunderstandthatifthepresidentcanbeprosecuted,theninessence,ourofficialswouldunderstandthatthelawhastobeprotected.Asitnowstands,Russiahasnolaw.

NARRATOR:Intheearlyyearsofhispresidency,therewashopethatPutinwouldliveuptohisbillingandtakeRussiaonapathclosertotheWestdemocratic,liberalandcapitalist.In2003,hesummonedthecountrysoligarchstoameetinginSt.CatherinesHallintheKremlin.UnderYeltsin,theydbecomebillionaires.UnderPutin,theyhopedforevenmorebusinessandnewlegitimacy.

Ontheleft,therichestofall,MikhailKhodorkovsky.

MIKHAILKHODORKOVSKY,FormerCEO,YukosOilCompany:[throughinterpreter]Igottheimpressionthathewasourapersonofourgeneration.

GILLIANFINDLAY,Correspondent:Whatdoyoumeanbythat,ourgeneration?

MIKHAILKHODORKOVSKY:[throughinterpreter]Ourparentsgeneration,theyhaveatotalitarianview,eveniftheyreagainstit,asopposedtoourgeneration.WereclosertotheWest.



NARRATOR:KhodorkovskywasconcernedaboutanewU.S.anticorruptionlawthatwouldaffectRussiancompaniesdoingbusinessinAmerica.

MIKHAILKHODORKOVSKY:[throughinterpreter]Thatforcedtheheadsofcompanieswhowantedtolisttheirsharesonthemarkettosignadisclaimerthattheydontallowcorruptionpracticeswithintheircompanies.Atthesametime,by2003,corruptionwasalreadythekeymethodofstategovernanceusedbythebureaucrats,andbureaucratsstartedtodemandthekindofmoneythatwasimpossibletohide.

Onehadtomakeachoice,buildcompaniesthatareopenandlistthem,ordobusinessRussianstyleinotherwords,paybribes,receiveprivileges,butremainwithinaclosedsystem.Wedecidedthequestionwasworthdiscussing.

NARRATOR:KhodorkovskyaskedifhecouldspeakfranklyandmadethecasethatitwastimeforRussiatochangeitsways.

MIKHAILKHODORKOVSKY:[subtitles]ThescaleofcorruptioninRussiaisestimatedbyfourdifferentorganizationsat$30billionayear.Thatis10to12percentofGDP.

GILLIANFINDLAY:AsIunderstandit,whatyouareessentiallydoingwiththetelevisioncamerasrunningwasaccusingthepresidentofRussiaofrunningacorruptstate.

MIKHAILKHODORKOVSKY:[throughinterpreter]Ididnotaccusehimpersonallyofcorruption,andthisisnothowhetookit.Yes,Ididaccusehisinnercircleandhimofcreatingamodelthatusescorruptionasitsbackbone,andhetoldmethatwe,too,tookpartincreatingthatmodel.

NARRATOR:Putinremindedhimthathisoilcompany,Yukos,wasfacingtaxproblems.

VLADIMIRPUTIN:[subtitles]WeshouldgiveYukositsdue.Ithassettleditstaxproblems.Buthowdidthoseproblemsariseinthefirstplace?



NARRATOR:Itwasaveiledthreat.

MIKHAILKHODORKOVSKY:[throughinterpreter]Ididnotarguewithhim.Isaid,Wemayhavestartedthat,butwemustbetheonestoendit.DidIrealizeitwouldprovokePutinsdispleasure?OfcourseIdid.ButIthoughthewouldchoosetheEuropeanmodel.AndIwasnottheonlyonethinkingthatbecauseitwasobviouslymorebeneficialforthecountry.

NARRATOR:Khodorkovskywasalsoperceivedasapoliticalthreat.Hehadbeenfundingoppositionpartiesandspendingmoneytopromotedemocracy.ThemeetingintheKremlinhadsealedhisfate.Hewasarrested,hisoilcompanydismantledanddividedamongPutinloyalists.Russiasrichestmanwouldserve10yearsinaSiberianprisoncamp.

Today,helivesinexileinSwitzerlandandhasnodoubtsaboutthesystemPutinputinplace.

MIKHAILKHODORKOVSKY:[throughinterpreter]Atfirst,hethoughthecouldbuildsortofademocraticmodelthathecouldcontrol.Amodellikethisdoesnotexist,sohestartedtoslidetowardsatfirstmildtotalitarianism,andthenanincreasinglyharshtotalitarianism.Ifthesituationdevelopsfurther,hewillreachafulltotalitarianmodel.Inreality,everyauthoritariansystemisakleptocracy.

NARRATOR:Someearlyevidenceofthatkleptocracyandhowitworkedwasfoundin2003,whenpoliceraidedtheofficesofasmallcompanycalledSPAGinasuburbofFrankfurt,Germany.AuthorandjournalistJurgenRothhaswrittenextensivelyabouttheraid,whichtargetedmoneylaunderinginseveralcountriesallegedlybySt.PetersburgsTambovskayamafiagroup.

JURGENROTH,InvestigativeReporter:Inthisreport,theymentionedtheSPAGasacompanywhohascloselinkstocriminalorganizations,thesocalledTambovskayamafiainSt.Petersburg,andMr.Putin.



GILLIANFINDLAY,Correspondent:AndsotheyitwasmoneythatwasbeingbeinglaunderedinGermany.

JURGENROTH:LaunderedinGermanythroughinvestmentsinrealestate.

NARRATOR:PutinhadbeenonSPAGsadvisoryboardsince1992andhadacloserelationshiptooneofitsprincipals.Heonlysteppedasidewhenhebecamepresident.ButwhenGermanpolicemovedintoraidSPAGsoffices,theydiscoveredtheyhadaproblem.

JURGENROTH:Itwasapoliticalaffair.TheymustinformatthistimeChancellorGerhardSchroeder.Soitsthefirsttime,Ithink,thatinvolvedanormalinvestigationfromaprosecutorinasmalltowninGermany,Mr.Schroedergetinformed,orwouldliketobeinformedaboutthisinvestigation.Whyhewouldliketobeinformed?BecausePutin.Itwassohighlevel.

NARRATOR:Tothisday,GerhardSchroederandVladimirPutinareclosefriendswhocelebratebirthdaystogether.

GILLIANFINDLAY,Correspondent:Whathappenedtotheinvestigationintheend?

JURGENROTH:Itfinishedwithoutanyresult.

NARRATOR:Schroederhasneverpubliclyaddressedthecase,buttheirfriendshipprovokedascandalinGermanyin2005.Justtwoweeksbeforelosingageneralelection,SchroedersignedoffonabillioneuroloanguaranteetoRussiasgaspipelinetoEurope.Afterheretired,Schroederhadanewjob,chairmanofthepipelinesconsortium.

EDWARDLUCAS,SeniorEditor,TheEconomist:GerhardSchroederepitomizesthescandalinGermany.Andtoputitmildly,hedidntseemtobeverybotheredaboutavoidingtheappearanceofimpropriety.



NARRATOR:Inhisearlydaysinoffice,PutinwentonacharmoffensivetowardstheWest.PresidentBushfamouslylookedintoPutinseyesandsawhissoul.Hebelievedhewascommittedtothebestinterestsofhiscountry.

EDWARDLUCAS:PutinwastrainedintheKGBtodeceiveforeigners.Hehasaverysharpeyeforhumanweakness.Hesgoodatpersuadingpeopleandintimidatingthem,andhesbeendoingthiswithWesternleaders,sometimeswithcharm,sometimeswiththreats.Butboy,doeshedoit.

NARRATOR:Earlyon,BritishprimeministerTonyBlairwascharmedbyhim.AndaswithGermany,theirtwoeconomieswouldbecomeevenmoreentangled.LondonsfinancialcenterwasacityenchantedbyRussianmoney.Theseweretheyearsofhighoilprices,andPutinsRussiawasgrowinglikeneverbefore.Itfueledmassivecorruption,andmuchofthatmoneywasflowingintoLondon.

EDWARDLUCAS:TheCityofLondon,whichhasmadeahugeamountofmoneyoutoflaunderingRussianmoneyovertheyears.Thecityisultimately[unintelligible]oftheBritisheconomy,anditrunsonRussianmoney.

NARRATOR:ValeryMorozovisaRussianconstructionmagnatewhonowlivesinexileinLondon.HiscompanyhasdoneprojectsfortheKremlin,mostrecentlyonthescandalriddenSochiOlympics.Butfinally,hesays,thecorruptionunderPutinhadgonebeyondwhathecouldlivewith.

VALERYMOROZOV,ExiledConstructionMagnate:IfyouputthesepeopleintheUnitedStatesorinCanadaandcheckwhattheyvedone,theyrecriminals.Yeltsinwasboughtandsupportedbycriminals.Putinwasbroughtuptopowerinthese90s.Hehadhisowngroup,anditwascalledwhenhecametoMoscowandbecameprimeministerandpresidentitwascalledPetersgroup.Sohechangedimmediatelythewholesystem,butnotchangedhemadeitdifferent.Hemadeitinorder.Itiseverywhere.Itisasystem.



KARENDAWISHA,Author,PutinsKleptocracy:Sothesystemisasystemofmutualsupportandtribute.Itsapaytoplaysystem.IfyouareonalistofpossiblepeoplewhomightbeapproachedtobeamemberoftheDuma,forexample,youhavetopayforyourseat.Onceyoureinthere,thenyoucanturnaroundandchargebusinessmentohavelineitemsinthebudget.Samethingallacrossallsectors.

NARRATOR:SergeiKolesnikovisanotherRussiantycoonwholivesinexile.HefledtoTalinn,Estonia.Hehasintimateknowledgeofhowthesystemworksandhow,hesays,corruptiongoesrighttothetop.

SERGEIKOLESNIKOV,ExiledBusinessman:[throughinterpreter]Russianbusinessentirelydependsonprotection.Youneedprotection.Itiscalledhavingaroof,orinRussian,krysha,andthemorekryshayouhave,themoresuccessfulyourbusinesswillbe.Soeverybusinessmandreamsaboutgivingpresentsandgainingprotection.Andifyougiveapresenttothepresident,itslikehavingGodhimselfwatchingyourback.

NARRATOR:KolesnikovsaysheusedtorunoneofPutinsgiftingschemesandexplainshowitworked.Abusinessputmoneyintoacharityinthiscase,PoleofHope.Kolesnikovscompany,calledPetromed,tookthemoneytobuymedicalequipmentpurchasedfromSiemens.Buttheprofitmarginwashuge,around40percent.Thatmoneywasfunneledthroughamyriadofothercompanies,endingupinsomethingcalledRosinvest.

Kolesnikovowned2percentofRosinvest,buthesays94percentwasownedbyVladimirPutin.

SERGEIKOLESNIKOV:[throughinterpreter]Allinvestments,allprojectsofRosinvest,wereonlyimplementedifPutinsaidyestoit.Sonoactivitywouldhavebeenpossiblewithouthisacknowledgement.

NARRATOR:Kolesnikovsays,inthebeginning,themoneyraisedwasfora$20million



retirementhomeforthepresident.Butthenthepresidentdecidednottoretire.Atthatpoint,Kolesnikovsays,hewastoldtodivertevenmoremoney,andsoontheretirementhomehadblossomedintoapalace.Builtonstateland,itsa$250millionItalianateextravaganzaoverlookingtheBlackSeanearSochi.

SERGEIKOLESNIKOV:[throughinterpreter]IstartedsayingthatImnothappywithallfinancesgoingforthispalace.AndIwastoldthatPutinistheczarandyouarehisserf.

NARRATOR:Putinhasdeniedthathehasanyconnectiontothepalace.Itwasreportedlysoldtoarichbusinessman,butitremainsaheavilyguardedmystery.

KolesnikovbelieveshisschemewasonlyoneofmanywaystohidemoneyforPutinthroughproxies.Howmuchisamatterofspeculationandsomeeducatedguesswork.

STANISLAVBELKOVSKY,FormerPutinAdviser:Istartedsuchinvestigationsmorethansevenyearsago.Andinlate2007,IpublishedmyestimateontheassetsbeingunderPutinspersonalcontrol.Itwasafigureof$40billion.

NARRATOR:Fortybilliondollars.ThatfigurewasreportedlyconfirmedbytheCIAin2014.Iftrue,itwouldmakeRussiaspresidentoneoftherichestmenintheworld.

In2008,asheapproachedtheendofhissecondterm,thatwealthwasaproblem.Undertheconstitution,hewouldhavetoleaveofficeforatleastonetermbeforehecouldrunagain.Diplomaticcablesrevealedhewasworriedabouthowhisrichesmightbeviewedbyanewpresident.Hesolvedtheproblembyswappingplaceswithhishandpickedprimeminister,DmitriMedvedev.Itwasanarrangementthatworkedforawhile.

STANISLAVBELKOVSKY:IthinkitwasprovedbymanysourcesintheKremlinandaroundtheKremlinin2010andfirsthalfof2011,hewantstoletDmitriMedvedevtogoforasecondtermin2012,butthe[unintelligible]oftherevolutionsinArabworldhavemadetoobigimpressionuponVladimirPutin.



NARRATOR:TheArabspringsurgedoutofTunisiaintoTahrirSquareandontoTripoli.ForPutin,thesemassdemonstrationsoverthrowingpowerfuldictatorsmusthavebeenworrying.

STANISLAVBELKOVSKY:ItwasthefirststageofhiscomingtounderstandingthathecouldneverquitthepostbecausethedestinyofGadhaficouldbewaitingforhim.

NARRATOR:In2011,whenVladimirPutinannouncedhewouldrunagainforRussiaspresidency,theresponsewasmassdemonstrationsinMoscowsstreets,protestswhichhadtobeputdownbypolice.

EDWARDLUCAS,SeniorEditor,TheEconomist:TheresneverbeenagoodsuccessionmodelintheSovietUnionorinRussia,andhesveryworriedabouthowhewillleavepower.Hedoesntwanttoleaveinacoffin.Hedoesntwanttogotoajailcell.Hehasgotsomanyguiltysecrets,somuchmoneysbeenstolen,somanypeoplehavebeenkilledthathedoesntreallytrustanyonetokeephimsafeifhestepsdownfrompower.Soinaway,hesboththemasteroftheKremlin,butalsoaprisonerinit.

NARRATOR:In2012,PutinmovedMedvedevasideandtookbackthepresidencyinaKremlincontrolledelection.Bynow,thepresidentialtermhadbeenextendedtotwosixyearterms.VladimirPutincouldremaininpoweruntil2024.

Butthecountryherulesoverisindeepeningtrouble.InRussiascities,thereisaveneerofprosperityleftoverfromtheearlierdaysofhighoilprices,buttheeconomyhasbeenpillaged.Andinthevastreaches,wherethemajorityofRussianslive,deeppovertystubbornlyprevails.

EDWARDLUCAS:PutinsgreatestfearisthattheRussianswillrealizethathismodernizationprojecthasfailed.HecameintopowerpromisingtomakeRussiaintoamodernWesterncountry,anditsstillbasicallyacorrupt,backwardcountry.

KARENDAWISHA,Author,PutinsKleptocracy:Thebottomline,justtoputitwith



twonumberstwonumbersisallweneed.ThemedianorthemidpointwealthfortheaverageRussianis$871,accordingtoCreditSuisse,veryneutralreport.Eighthundredandseventyonedollarsmeanshalfthepopulationhasmorethanthatinwealth,andhalfthepopulationhasless.MedianwealthinIndia,overathousanddollars.SotheaverageRussianispoorerthantheaverageIndian.Sothatsonenumber,871.

Theothernumberis110.Onehundredandtenindividualsown35percentofthewealthofRussia.Theyarethemostunequalcountrybyfarintheworld.

EDWARDLUCAS:Now,todistractfromthat,averypowerfultoolhesgotisantiWesternismblametheWestforeverythingthatsgoingwrong.Andcouplethatwithaverypowerfulpropagandamachine,whereallthemassmediaisunderKremlincontrol,andhesinaverygoodposition.Hehasaverystrongsenseofentitlement,thatRussiahadstufftakenawayfromitduringtheSovietcollapseandRussiahastherighttogetitback.

NARRATOR:PutinhasinvadedCrimeaandredrawnthemapofUkraine,claimingheisprotectingethnicRussians.Accordingtohisspokesman,itisajustifiableresponsetoWesternencroachmentonterritoriestheSovietUniononceheld.

SERGEYMARKOV,PutinSpokesman:LookattheLatviaandEstonia,whichisbecamefullmembersofEuropeanUnionandNATO,buttheyrenotindependent.EthnicRussiansunderthecleardiscriminationinthosecountry.AndlookatwhathappenwhatwithUkraine.UnitedStatesallthisyearsupporteddeRussification.IfyoureRussian,youcanbekilled.IfyoureRussians,yourcivicrightswouldnotbeprotected.

IfyoureUkrainianorultranationalist,OK,youwillbeintheparliament,youwillbethepresident.Everythingwillbetoyou.Buthere,ifyoureRussian,bombs,artilleryandkillingswillbeanswer.Thisiswearesorry,weanswerstronglyno.

NARRATOR:Itisasentimentthathasplayedwellathome.Onthestreetswherethey



demonstratedagainsthimonlytwoyearsearlier,theywerenowsinginghispraises.Meanwhile,theUnitedStateswascallingforstrongsanctionsagainstRussia.ButinthecapitalsofEurope,therewasreluctance.

EDWARDLUCAS:WekeepontryingtobringMr.Putinin.Weinvitehimtooursummitmeetings.WetryandtreatRussiaasanormalcountry.Andwethinkweretryingtocalmthingsdown,butinfact,whatweredoingiswerestokingthings.WeregivingMr.Putintheimpressionthatwerenottobetakenseriously,andhecontinuestopushusharderandharderandharder,andthatsextremelydangerous.

NARRATOR:ButtheninJuly2014,oneviolentactwouldtransformthepoliticallandscape.MalaysianpassengerplaneMH17wasshotdownovereasternUkrainebywhatwaswidelybelievedtohavebeenaRussiansuppliedweapon.Twohundredandninetyeightpeoplewerekilled.Suddenly,theWestwasgalvanized.

TONYABBOTT,PrimeMinisterofAustralia:IdemandthatRussiafullycooperatewiththecriminalinvestigationintothedowningofMH17.

STEPHENHARPER,PrimeMinisterofCanada:Itsnecessarytomakeitclearitwillnotbebusinessasusual.

Pres.BARACKOBAMA:WereopposingRussiaaggressionagainstUkraine,whichisathreattotheworld,aswesawintheappallingshootdownofMH17

NARRATOR:InNovember,PutinarrivedattheG20meetinginAustraliaandfoundhimselfonthemarginsoftheclassphoto.Obamaandotherleaders,whodoncewelcomedhisrubles,hisgasandoil,nowdistancedthemselves.Atlunch,Putinseemedalonelyfigure.Heleftthesummitearly.

Hereturnedtoacountryincrisis,aneconomybesetbyplummetingoilprices,arubleinfreefallandnew,toughsanctions.Thequestionis,whatwillhedonext?



KARENDAWISHA:Ihaventseenanyevidencethatheswillingtobackdown.Anditsnothisstyleatall,ever.Hedoesntbackdown.

NARRATOR:TheresastoryinhisbiographythatPutintellsabouthimself.Ithappenedinthisbuilding,wherehesharedaoneroomapartmentwithhisparents,anditinvolvedacorneredrat.

NATALIYAGEVORKYAN,PutinBiographer:Hesaidthat,Ilearnedverygood.Ilearnedforeverdonttrytopushsomebodyintothecorner.Theywilljump.Becausewhenyoudonthavewhattolose,youjustyouattack.Ithinkitsabsolutelytrueabouthimself.Whenhesinacorner,thatswhyhesdangerous.Hecanjump.Hewillnotsay,OK,letstalk,hewilljump.

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