Putting the Watch on Putin


Dmitry Astakhov/AFP/Getty Images

Vladimir Putin watching counter-terrorism exercises, Chebarkul, Russia, August 17, 2007. He is wearing a $10,000 Blancpain Leman Flyback watch, not even among his most expensive.

Russia’s democratic opposition gets a lot of criticism from political observers for failing to convey its message to ordinary Russians. No doubt this owes in part to the overwhelming dominance of the country’s political space by Prime Minister Vladimir Putin and his supporters as well as to general political apathy. As authoritarian states in the Middle East erupt in popular uprisings, the Russian public continues, for the most part, to be resigned to its political leadership. In a new poll conducted by the state-owned Russian Public Opinion Research Center (VTsIOM), 61 percent of respondents said they take no interest in politics or public life, up from 39 percent in 2007.

The liberal oppositionists clearly face an uphill struggle in trying to reach beyond the circle of urban educated people who comprise Russia’s small online community of bloggers and activists. But they have by no means given up. On March 28, four leaders of a newly-formed People’s Freedom Party—ex-Deputy Prime Minister Boris Nemtsov, ex-Prime Minister Mikhail Kasyanov and politicians Vladimir Milov and Vladimir Ryzhkov—released a scathing indictment of corruption at the highest levels of the Kremlin called “Putin. Corruption. An Independent Expert Report.” If it can be widely disseminated, as they intend, the 35-page white paper may finally give them a voice in the political process.

This will not be an easy task. The robust repression of even small public protests has placed opposition leaders themselves in the sights of state security. (Nemtsov was arrested on March 31 for the second time in recent months for participating in an unsanctioned demonstration—a gathering that was itself organized to protest the authorities’ denial of the right to assemble, which is guaranteed under Article 31 of the Russian Constitution.)

Moreover, the Kremlin controls Russians’ main source of information—television. And the Internet, while not subject to formal government control, has not been an effective means of bringing about political change. A 34-year-old Russian lawyer and blogger, Alexey Navalny, was profiled in The New Yorker in early April for his remarkable efforts to expose corruption, but only around a third of Russians have regular Internet access and most of them use it for social networking and shopping, rather than for political news. According to a March report by Russian sociologist Denis Volkov of the independent Levada polling center in Moscow:

The Internet’s influence on Russians has been highly exaggerated…Fame in present-day Russia is guaranteed only by television, which more than 80 percent of the population watch on a daily basis. It is in this way that around 94 percent of the people find out the latest news, the overwhelming majority of them from broadcasts by the three state channels. No more than 11 percent of the population follow the latest events through the Internet.

In response to this situation, Russian liberals are adopting a more aggressive strategy, using the Internet to attack Putin and the Kremlin, but also getting out on the streets to reach potential voters with physical copies of their new report, which has now been translated into English by the blog La Russophobe. Although only 11,000 copies of the report were originally printed for reasons of expense, the authors have started an online fund-raising campaign to enable them to produce more copies and distribute them for free at public meetings all over Russia. (How much money they will actually manage to raise and whether such meetings will face harassment from the police is another question.)

Government corruption is of course old news for Russians. And this is not the first time that democrats and the independent news media have gone so far as to point the finger directly at Putin. But allegations of corruption can have a cumulative effect. Recall the public sentiment against the corrupt mayor of Moscow, Yuri Luzhkov, who was finally brought down last autumn after continuous revelations about his illegal dealings and lavish lifestyle. Yeltsin, too, became highly unpopular among the Russian public not only because of his drunkenness and erratic leadership style, but also because of allegations of corruption. And the Communist party leaders lost a great deal of legitimacy at the end of the 1980s because people resented the perks and privileges they awarded to themselves at the expense of ordinary citizens.

But even set against Russia’s long history of such revelations, the new report is unusually hard-hitting:

Corruption has reinforced Putin’s management principle number one: friends can have anything they want and the rest can go to hell. Obedience of the law and delivering any kind of justice do not form part of the deal for the civil servants of the Putin régime. The supreme principle is personal loyalty. The main guideline of the authorities today is: “Stay loyal and you’re free to steal, let the side down and you go to jail.”

Drawing on the investigative reporting of Russia’s few remaining independent (and small circulation) newspapers—Kommersant, Vedomosti, and Novaya Gazeta—and blogs like Navalny’s, as well as on their own research, the authors describe how several of Putin’s cronies helped him to found the Ozero (Lakeside) Dacha Condominium, a large real estate development in the Leningrad Region, in 1996, and later were rewarded with leading posts in the Russian government, where they have enriched themselves by handing out lucrative contracts for government projects with no competition.


Several from the Ozero group became shareholders of the St. Petersburg-based Russia Bank, referred to as the “Bank of Putin’s Friends.” According to the report, Russia Bank’s assets rose from 6.7 billion rubles ($236 million) in early 2004 to 231.7 billion rubles ($8.2 billion) in October 2010 as a result of the fact that it gained control of key liquid assets of the state’s oil company, Gazprom, “for practically nothing—no tenders, no bids, no nothing.” Among Russia Bank’s Board of Directors are several members who have made the Forbes list of Russia’s richest men. This includes Putin’s long-time friend Gennady Timchenko, who owns the energy trading firm Gunvor, and became a billionaire thanks to the Kremlin’s policy of giving his company preferential status in trading oil from Russian state-owned companies.

The report also describes a luxury palace that critics have dubbed “Versailles on the Black Sea”: built for Prime Minister Putin’s personal use by his wealthy friends, it is valued at $350 million. And the authors claim that 15 other villas, estates, and palaces are at the disposal of both Putin and Medvedev, along with a fleet of five yachts worth $110 million that “puts our Russian lords and masters on a par with—not the heads of democratic countries or of the BRIC countries—but with the King of Saudi Arabia.” The value of their expensive watches reportedly exceeds their annual salaries. Among Putin’s favorites is a $60,000 gold Patek Philippe, while Medvedev has been seen with a $32,000 Breguet. (After Kommersant published photographs of the president’s wife, Svetlana, wearing her $30,000 Breguet in early 2009, the editor was fired.)

I asked one of the editors of the report, Olga Shorina, who is also the press secretary of Solidarity, an umbrella organization of different opposition parties and groups, why they make Putin the focus of their indictment; although they mention Medvedev’s extravagance, he is not a primary figure in the revelations. Shorina said they had little evidence of Medvedev’s involvement in corruption scandals and that in any case Nemtsov and his colleagues consider Medvedev to be a “puppet” of Putin, who holds the real power in the Kremlin.

But Medvedev’s political influence in the ruling tandem should not be dismissed out of hand. He has been increasingly outspoken about official malfeasance in the past year and has made a point of stating publicly on more than one occasion that he intends to tackle the problem aggressively. Of course such rhetoric should be seen as part of his effort to position himself for the 2012 presidential elections, and until now he appears to have done little to obstruct the high-level corruption revealed in the report. But just recently Medvedev fired a number of top police officials in the Moscow region because of corruption, and in a much-talked-about speech in Magnitogorsk on March 30 he demanded an end to “the practice when Cabinet members, namely those who set the rules for specific industries, sit on boards of directors in the companies that are supposed to be competing with others.” Among those affected is Putin’s right-hand-man, the powerful Igor Sechin, who resigned as chairman of the board of Rosneft on April 13.

While the full implications of Sechin’s resignation are not yet clear, Russian journalist Evgeniya Albats, writing in the independent Russian news weekly New Times, has called Medvedev’s remarks at Magnitogorsk a declaration of war against the Putinites. If this is the case, then “Putin. Corruption” gives Medvedev an additional political weapon. As for Russian democrats, their ultimate aim is to become a part of the current political process by getting their new party on the ballot for the parliamentary elections in December and the presidential elections in March 2012. This is an ambitious goal. They need to gather 45,000 signatures and they will need to do a great deal more to reach the politically apathetic Russian mainstream. But at the very least they are finally drawing public attention to the extent of corruption in the upper levels of the Russian government. In the dangerous Russian political climate, they deserve tremendous credit for their courage.

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