From Russia with Blood

Boris Yeltsin was preparing to stand for reelection at the end of his first term, and he was already careening drunkenly toward a humiliating defeat. The national misery caused by his economic shock therapy program, coupled with his increasingly shambolic public appearances, had made the president a figure of contempt among ordinary Russians, and his approval ratings were bumping along below 10 percent. To Berezovsky’s deepening alarm, the Communists had swept the board in the parliamentary elections the previous month and established a commanding lead in the early presidential polls. Berezovsky knew what would happen if the Reds retook the Kremlin: the oligarchs would be destroyed. The former state assets they had accumulated would be confiscated, their wealth would be clawed back, and spells in Siberian prison would be all they had to look forward to. The full horror hit home when the Communist Party leader arrived at Davos to be greeted by a succession of world leaders and the international media as the future president of Russia. Berezovsky was not about to stand idly by and let Russia backslide. He simply had too much at stake.

The godfather had gathered his fellow oligarchs on the sidelines of the Davos summit to propose a plan to save the motherland. The men around the table must ensure Yeltsin’s reelection at all costs—and when the battle was won, they would make the president pay. Berezovsky’s persuasive powers did not fail him, and the group formed a secret pact to pump tens of millions into a war chest devoted to defeating the Communist threat. Altogether, the “big seven” oligarchs controlled around 50 percent of Russia’s wealth and all its mass-media outlets: they would use the money, as well as their TV stations and newspapers, to wage an all-out information war on Yeltsin’s behalf. Russian electoral rules forbade campaign spending of more than $3 million per candidate—but when had the robber barons ever let a little matter like the law stand in their way?

Back in Moscow, Berezovsky poured the Davos fighting fund into a slick Western-style election campaign, complete with rock concerts, celebrity endorsements, and glossy advertising, and dedicated the airwaves of Channel One and the column inches of Kommersant to coverage vaunting Yeltsin and painting the Communist Party as blood-crazed Stalinists. The plan worked. Yeltsin climbed steadily back from oblivion in the polls, and when the election came around that summer, he won. But the backing of the oligarchs did not come cheap.

In exchange for the money they had put into Yeltsin’s reelection, the big seven acquired controlling stakes in yet more of the prized assets still under state control. As soon as Yeltsin was safely back in the Kremlin, the assets were put up for sale in rigged auctions, a move that cemented the hatred of the Russian people toward the band of kleptocrats now all but ruling the country. In 1997, the year after what became known as the Davos Pact and the windfall that followed, Forbes magazine named Berezovsky the world’s ninth-richest entrepreneur, with a personal fortune of $3 billion. And the rewards he reaped for shoring up Yeltsin’s second term were not purely financial.

The godfather wielded ever more influence after the election. Yeltsin gifted him a prized job as deputy director of the Kremlin’s national security council and made him Russia’s point man in the breakaway republic of Chechnya. Berezovsky reveled in his new roles, which afforded him all the limelight he could wish for and plentiful chances for further self-enrichment.

But Yeltsin’s health was failing fast, and his increasingly drink-sodden public appearances were making Russia a laughingstock on the world stage. Berezovsky and his fellow oligarchs knew it was time to find a successor. What they needed was a man they could manipulate—a gray, malleable functionary who would stay loyal and run Russia like a puppet chief executive while they sat above as a controlling board pulling the strings. Berezovsky thought he knew the perfect man for the job—and he had just arrived in Moscow.

Mayor Sobchak had not enjoyed the same luck as Yeltsin did in the 1996 St. Petersburg elections. Without as many rich backers to tilt the ballot in his favor, the mayor had been toppled by a former ally—and that had been just the push Putin needed to leave his hometown behind and set out for the capital. In doing so, he had declined a role in the new mayoral administration, a move that impressed his virtues on Berezovsky still further. Loyalty to one’s patron: that was the quality Yeltsin most fervently desired in his successor. This would make Putin an easy sell.

What the president feared most, after nearly a decade of looting, was prosecution. He knew he and his close circle had become hated figures among the population they had cheated, so he needed to find a candidate who could be trusted to forgo the easy populist points to be gained by going after the old regime.

Putin began spending time with Berezovsky—visiting him at the Logovaz Club, skiing with him in Switzerland, staying at his villa in Spain. He soon secured a junior government job with the oligarch’s help, quickly winning favor through his well-honed appearance of quiet conscientiousness. And then Berezovsky helped smooth his path to a position of real power: in 1997, Putin became the chief of Yeltsin’s presidential staff. He had made it inside the Kremlin.

Moscow—1998

Berezovsky was in the hospital recuperating from a snowmobile accident when his phone began ringing off the hook. The caller was the eager young state security official who had quizzed him about the car bomb four years before. Alexander Litvinenko had since been transferred to a highly secretive department of the FSB—Russia’s newly revamped security agency—and he insisted he needed a private audience with Berezovsky. There was no time to lose: it was urgent.

When the two men met, Litvinenko got straight to the point. He had received orders to kill the oligarch. The new specialist organized crime unit to which Litvinenko had been transferred, the URPO, was so secretive that it was based in an unmarked bunker outside the FSB’s Lubyanka Square headquarters, and orders were given only verbally. Litvinenko had hoped his transfer augured new and exciting cases investigating matters of the utmost sensitivity, but he had quickly come to realize with dismay what the new unit was really all about. The URPO was the FSB’s secret hit squad.

As Yeltsin’s grip on power weakened and the mob tightened its grip, the president had poured more money into the retooled FSB. The new agency was meant to represent a departure from the barbarous old ways of the KGB, but in reality it was staffed by the same men, and there was nothing about the new Russia that they liked. The URPO had been tasked with taking out organized crime kingpins whose activities were considered a threat to the state, but it wasn’t long before its top brass strayed beyond their brief and began using the unit for specialist assignments of a more political nature. That was how Litvinenko and four of his fellow officers had been called into a meeting one morning and ordered to kill Russia’s most influential oligarch.

The bosses at URPO never felt the need to explain their instructions, and Litvinenko had no idea what Berezovsky had done to wind up on the hit list, but there was one thing he did know for certain. Killing a senior Kremlin adviser was an act of madness—not to mention treason. To make matters worse, that order was followed by an equally unthinkable instruction. A well-liked fellow FSB officer named Mikhail Trepashkin had uncovered a network of corrupt officers within the agency, and now the URPO bosses wanted him dead, too. Trepashkin, who had cut his teeth investigating Moscow’s underground trade in stolen art and antiques before being redeployed to probe Chechen mafia groups in Moscow, was a rare comrade after Litvinenko’s own heart: dogged, idealistic, and single-minded in his pursuit of the bad guys. Litvinenko and his team could no more contemplate murdering one of their own than they could countenance committing treason by going after a member of the government. They resolved to blow the whistle on both plots.

At first, Berezovsky refused to believe what he was hearing. He, too, felt sure that his place inside the Kremlin would protect him from the state’s own assassins. But when Litvinenko brought the other officers from his unit to a meeting and they all confirmed the story, Berezovsky was forced to believe the unbelievable. It was time to warn Trepashkin that he, too, was a target. Over the months that followed, the unwilling assassins met secretly with their two targets as they gamed out how to blow the lid off the plot.

Their plan got under way on a cool April night at Berezovsky’s sprawling dacha, in the countryside outside Moscow. Under cover of darkness, Litvinenko and his colleagues gathered to make a comprehensive video record of the orders they had been given. With that evidence safely in the bag, to be released in the event that any of them was arrested or killed after exposing the plot, the whistle-blowers filed a complaint with Russia’s military prosecution service. A top-secret investigation got under way, and while they waited for the results, Berezovsky ran his own interference inside the Kremlin.

The FSB had clearly spun out of control, and it was time for a changing of the guard. In June of 1998, acting on the advice of Berezovsky and other aides, Yeltsin fired the agency’s director and replaced him with a man who could be trusted to do as he was asked. Vladimir Putin’s boyhood dream had come true: he had made it to the top of the Lubyanka HQ.

Berezovsky was thrilled that Putin was in charge. With his protégé at the helm, he would not only be able to foil the assassination plot but also sweep out his enemies from the FSB. He told Litvinenko to visit the new director and tell him everything. Litvinenko was uncomfortable about that instruction: he was still sitting on the evidence he had started to gather a few years earlier charting Putin’s connections with the Tambov gang in St. Petersburg. But the oligarch was having none of it—he had seen the evidence of Putin’s probity for himself, and they could not afford to pass up such a crucial ally—so Litvinenko reluctantly did what he was told.

The director’s office inside the Lubyanka building was as gray and functional as its occupant. Putin put on his best appearance of cordiality as he came out from behind his desk to greet the visitor, but Litvinenko sized up the small man in an instant. He’s doing everything he can to seem open and likable, he thought to himself, but it’s all for show. Still, hewing to Berezovsky’s instructions, Litvinenko sat down and spilled the beans about the goings-on inside the URPO. Putin listened attentively and thanked him for sharing his information. But Litvinenko could not shake the impression that the man behind the desk was eyeing him with cold hatred.

Soon after that meeting, Putin shut down the URPO and redeployed all its officers unceremoniously. Berezovsky claimed it as a vindication, but the truth was the new director hadn’t had much choice, since the order to disband the unit had come directly from the Kremlin. When autumn came and news reached the whistle-blowers that the military prosecution service had thrown out their complaint, Berezovsky did not flinch. Certain they had the backing of the man at the top of the FSB, he declared it was time to go public.

The oligarch used the pages of his newspaper, Kommersant, to publish an open letter to Putin calling on him to root out corruption in the FSB. Then journalists from every paper and TV station in Moscow were called to a press conference to witness the big crescendo. Out walked four men in ski masks and sunglasses alongside a bare-faced Litvinenko to blow the whistle live on television. The broadcast riveted the nation and was beamed around the world, making it a major success in the eyes of Berezovsky. From that day forward, the oligarch never lost his love for the thrill of a dramatic press conference. But watching it up in his Lubyanka office, the new FSB director was seething. The whistle-blowers had betrayed the agency by revealing its secrets and, in the code of honor among spies that Putin cherished, there was no more cardinal sin. Litvinenko and the masked cowards who appeared alongside him must be made to pay, but Putin had to bide his time. He had a distance still to climb before it was safe to let his own mask slip.

Putin had been picked to run the FSB for reasons much bigger than just the plot to kill Berezovsky. The increasingly harried aides to the ill and embattled Yeltsin were looking for a very particular sort of candidate, someone who would protect his boss at all costs, and there was one recent episode in Putin’s history that had convinced them that he was just the man they needed to take care of some unpleasant business.

Back in St. Petersburg the previous year, the old mayor, Anatoly Sobchak, had found himself under investigation for corruption by Russia’s vigorous new prosecutor general, Yuri Skuratov, and Putin had ridden in to the rescue. In November of 1997, when Sobchak suffered a heart attack while under interrogation, Putin arranged for his former boss to be spirited out of the hospital on a stretcher, past his police guard, and onto a waiting private jet, which whisked him away to Paris. Sobchak was now enjoying a happy exile in la belle France—and those optics were pleasing to the team of advisers worrying about how life after power would look for Yeltsin. Not least because the president and his close circle were having their own spot of bother with Skuratov.

The paunchy prosecutor general was a Communist sympathizer who had publicly declared war on Yeltsin in the aftermath of the 1996 election, vowing to use his role to root out corruption in the Kremlin. He had then mounted an investigation into the president’s administration for taking bribes in exchange for lucrative Kremlin contracts. Yeltsin’s team wanted an FSB chief willing to do whatever it took to get the president out of a corner. So when Putin arrived at the Lubyanka, getting rid of Skuratov was high on his agenda.

It wasn’t just Yeltsin in the frame: Skuratov was going after Berezovsky with equal vigor. On a February morning in 1999, dozens of camouflaged men burst through the doors of the oligarch’s Moscow offices brandishing automatic rifles. They were there on Skuratov’s orders. The problems had arisen after Berezovsky installed a new chief financial officer, Nikolai Glushkov, at Aeroflot three years earlier. Glushkov was a persnickety numbers man who liked to mellow his austere appearance with a jaunty bow tie, and he soon made a dangerous discovery. The state airline had for years been operating as a front for international espionage, Glushkov told Berezovsky. Around three thousand of its staff of fourteen thousand were spies, and proceeds from its ticket sales were being diverted into a vast network of foreign slush funds to bankroll their clandestine operations. Glushkov was not prepared to give the spooks a free ride, so he fired the spies and shut down their slush funds. Then he diverted the money to Swiss companies of which he and Berezovsky were the principal shareholders and wrote to Russia’s spy chiefs telling them to pick up their own tab from now on. Skuratov was now going after Berezovsky and Glushkov on suspicion of embezzling hundreds of millions of dollars, and the raids on the oligarch’s offices caused a sensation in Moscow. Might the king of the robber barons finally be getting his comeuppance?

Not on Vladimir Putin’s watch.

Days after the raids, the FSB director showed up at a private party for Berezovsky’s wife wielding a huge bunch of roses to make it clear exactly whose side he was on. Then, the following month, the FSB struck against Skuratov. The state-controlled Russian TV channel used its prime-time slot to air grainy footage of a rotund man bearing a striking resemblance to the prosecutor general rolling around in bed with two prostitutes. It was a classic honey-trap operation straight out of the KGB playbook, and in case anyone missed the message, Putin personally held a press conference to tell the world that the man in the video was none other than Skuratov.

The lurid footage forced the prosecutor’s resignation. When the largely Communist parliament rallied to reinstate him, Yeltsin opened a criminal investigation into Skuratov’s use of prostitutes and used it as a pretext to sack him for good.

Yeltsin doubled down on Skuratov’s dismissal by sacking Russia’s prime minister, a potential presidential challenger who had been a staunch ally of the prosecutor general. The threat of prosecution thus averted, the Kremlin Family turned their attention to succession planning. They knew Yeltsin could not go on much longer, so they needed to find a replacement prime minister who had what it took to become president—and sooner rather than later. They did not have to look far. Putin had demonstrated his loyalty, his pliability, and his willingness to play dirty to protect his patrons.

Berezovsky was dispatched to Biarritz, where the FSB director was holidaying with his young family, to make the proposal. On August 9, 1999, the people of Russia woke to the news that not only was Vladimir Putin their new prime minister, he was also Yeltsin’s chosen successor.

Putin had not been in his post for a month when the bombings began. One by one, in early September of 1999, a series of massive explosions in Moscow and two other major Russian cities reduced four apartment buildings to smoldering rubble in the depths of night, blowing residents to shreds as they slept. Firefighters pulled a thousand people free from the ruins with terrible injuries, but almost three hundred were killed. Many of the blackened bodies they found buried in the wreckage were those of children.

The wave of terror attacks, some of the most deadly the world had known until the September 11 attacks in New York, two years later, were quickly blamed on rebels in the breakaway region of Chechnya, spreading fear and alarm throughout the land. And that was exactly what the new prime minister needed to make good the next stage in his ascent.

Putin’s gray-man image had served him well in convincing his various patrons that he was no more than the dour and dutiful stuffed shirt they needed to do their bidding. But what had gotten him this far was the very thing that would hold him back. It was no good just being anointed Yeltsin’s heir by the hated kleptocrats in the Kremlin; he also needed to win over a deeply disillusioned electorate. That meant striking a new and more powerful pose.

The Russian people were in a state of collective identity crisis after the capitalist dream they had been sold gave way to years of poverty and rank inequality. They didn’t miss the drab authoritarianism of the Soviet era, but the orgy of looting and cronyism under Yeltsin had instilled a fundamental distrust of the alternative. All that was left behind was a longing for a lost sense of greatness—a nostalgia for the time when Russia could really call itself a superpower. What they needed in a leader, Putin intuited, was a man of action to satisfy the national yearning for a strong and sure-footed Russia. That was the new posture he needed to pull off, and the apartment bombings provided the perfect opportunity.

In the wake of the attacks, Putin leaped into action, ordering air raids that reduced swaths of the Chechen capital to rubble and triggering the outbreak of a war that killed tens of thousands of civilians. What really stuck in the national consciousness was the television address in which Putin issued a blunt warning to the region’s rebels. “Wherever we find them, we will destroy them,” he vowed. “Even if we find them in the toilet, we will rub them out.” It played perfectly with the people, and Putin’s popularity ratings soared.

But critical observers of the apartment bombings and their aftermath noticed several things about the official picture that looked all wrong. The first sign was a strange declaration by the speaker of the Russian parliament, who announced soon after the third attack that a bomb had destroyed an apartment block in the city of Volgodonsk, a thousand kilometers south of Moscow. The problem was that there hadn’t been an explosion in Volgodonsk—not yet at least. That fourth bomb went off three days after his announcement, killing another seventeen people. Then, the following week, residents of an apartment building in another city spotted men planting explosives in the basement and raised the alarm, sparking a national manhunt by the local police. The issue this time was that, when the cops caught up with the culprits, they turned out to work for the FSB. The agency’s new director had to claim hurriedly that the bomb had only been a dummy and the agents had been involved in a training exercise to test local vigilance. But in some skeptical quarters, that story just didn’t wash.

Litvinenko had by then been fired from the FSB for revealing agency secrets, but he had gone to work as a private security consultant for Berezovsky, and he was still tapping into his old informant networks. Based on the intelligence he was gathering, he was convinced that the bombings were an FSB plot set in motion by Putin before his departure from the agency as an excuse for bombing Chechnya to get a boost in the polls. If that was true, Russia’s new prime minister was not only a gangster but also a monster who had butchered almost three hundred of his own people to get ahead in the election. But Berezovsky would not hear a word of it. He was far too busy clearing his protégé’s path to power.

Just as he had done for Yeltsin, Berezovsky backed Putin by funding the publication of a flattering book. The biography—first published in the pages of Kommersant—was carefully designed to bolster Putin’s strong-man image, while Channel One aired blistering attacks on his rival candidates. The oligarch also created and bankrolled a new pro-Putin political party, Unity, which won big in the December parliamentary elections. And he enlisted the help of Moscow’s premier adman—a fast-living, florid-faced media guru named Mikhail Lesin—to run a slick advertising campaign painting Putin as the powerful president required to lead Russia into the new century.

With Putin surging ahead in the polls, Berezovsky persuaded the sitting president that the time had come to pick up and clear out. On New Year’s Eve in 1999, Yeltsin announced his resignation, making the prime minister acting president, effective immediately. There was a quid pro quo: Putin’s first decree, signed on December 31, 1999, granted the Yeltsin family immunity from prosecution. Having thus delivered his side of the bargain, Putin could fight the upcoming presidential elections from pole position inside the Kremlin.

Putin hardly had to lift a finger. Beyond a well-televised victory lap around the devastated Chechen capital of Grozny, he barely set foot on the campaign trail. The people of Russia were behind him—and the rulers of the West were cheerleading him, too. Britain’s fashionable new Labour prime minister even jetted over to St. Petersburg to meet the presidential hopeful amid much fanfare a fortnight before polling day. Tony Blair caught stinging criticism from human rights groups for feting Putin amid harrowing reports of looting, rape, mass execution, and torture by Russian troops in Chechnya and for shunning all the other candidates before the election was decided. But as the two vigorous young politicians shared an evening at the opera in St. Petersburg, both had their eyes on a glittering prize.

“He was highly intelligent and with a focused view of what he wants to achieve in Russia,” Blair told the BBC afterward with a classic Cheshire cat grin, praising Putin’s desire to modernize the Russian economy and open the country to foreign investment. Putin did his bit, too, promising to welcome British involvement in the development of Russian oil and gas resources. So when Blair caught awkward questions about human rights violations in Chechnya, he leapt to the defense of his new ally. “The Russians have been subjected to really severe terrorist attacks,” he said, referring to the Moscow apartment bombings Putin had blamed on the region’s rebels.