The Oligarchs (82 page)

Dorenko was proud of his work. He created fifteen shows that decimated Luzhkov's hopes of becoming president of Russia. He called them “fifteen silver bullets.”

 

The ruble crash hit all three television channels very hard, but Gusinsky was particularly vulnerable because his ambitions had once soared so high. For ORT, still 51 percent owned by the state but controlled by Berezovsky, the government provided a lifeline, a $100 million loan from a state bank. Kiselyov told me that NTV was anxious for a loan from the state as well. Even though the channel took pride in the fact it was outside control of the state, even though it freely criticized Yeltsin and the government, Kiselyov said NTV would have gladly accepted a government loan too, and went so far in these desperate times as to broach the idea. He believed the government had caused the crisis, so the government should help the television industry as a whole survive. The financial health of Gusinsky's companies began to deteriorate. The Russian television advertising market fell 47.5 percent from 1998, and it was down 77 percent from precrash projections.
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Meanwhile, the cost of servicing his debts was large. The government remained silent about a loan. “So, ORT got a government loan of $100 million, and we got nothing,” Kiselyov said. “That was one of the most worrying things that happened to us.” NTV carried increasingly critical coverage of the Yeltsin circle—including unflattering reports about Voloshin, the chief of staff, who was depicted in one Kiselyov broadcast as Lenin. Viewers were clumsily reminded of Voloshin's past working with Berezovsky on the AVVA scheme. The show was poorly produced and not very persuasive. The deposed prosecutor, Skuratov, who so infuriated the Kremlin, also got a generous amount of airtime on NTV to spread his charges against the Yeltsin family and inner circle.

In midsummer 1999, Gusinsky met with Voloshin. In this period, Gusinsky and Berezovsky were at loggerheads. There may have been other reasons, but the obvious source of tension was politics. Gusinsky was betting on Luzhkov, and Berezovsky was determined to
destroy the mayor. At the time, the Kremlin still did not have a successor to Yeltsin. The problem of “continuity of power” remained. Voloshin had the coming election on his mind when he met Gusinsky.

At this point, Gusinsky might have pulled back and thus avoided a potentially catastrophic collision with Yeltsin and his team. He might have focused on building up his media empire and avoided taking sides in the coming campaign. But he did not take this route. He was an oligarch, and oligarchs played for the big stakes. They ruled the country. Remaining on the sidelines was not an option. Gusinsky pushed ahead—backing Luzhkov—and made a mistake that led to the destruction of all he had built.

At the meeting with Voloshin, Gusinsky later recalled, “Voloshin said, as if he was joking, ‘Let's pay you $100 million so that you won't be in our way while the election is on. You could go on a vacation.'” Gusinsky said he told Voloshin that he could not repeat the experience of 1996, when the news media lined up behind Yeltsin.
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Voloshin was not in the mood to help Gusinsky, and the Kremlin instead began to turn the screws on him. Voloshin accused Gusinsky of running up big debts to Gazprom and “resorting to the tried-andtested method of information racketeering,” pressuring the Kremlin for loans. Voloshin told Gusinsky to forget about any assistance from the government. “Since the management of the holding company and specifically NTV television channel have such an unfriendly attitude toward the authorities, it is not entirely clear why these authorities should be helping Media-Most resolve its problems,” Voloshin said.
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Kiselyov, the popular television anchorman, later recalled the dialog with the Kremlin that summer in blunter terms. The Kremlin demanded NTV support for whoever was handpicked to be Yeltsin's successor; little choice was offered. “Join us or rot in hell,” Kiselyov said they were told.
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When the Chechen war reignited in August 1999, Gusinsky's troubles deepened. A band of Chechen rebels led a cross-border incursion into neighboring Dagestan, an internal Russian republic that is a patchwork of nationalities. The attack came in a remote mountainous zone. The Chechens were led by Shamil Basayev, a bearded, ruthless Chechen warrior who had also, over the years, been on speaking terms with Berezovsky. Berezovsky said he warned the Kremlin that the incursion was coming. Despite the advance signals, the Kremlin did not make a serious attempt to stop it.
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The fresh hostilities propelled Putin to prominence. He wasted no time ordering the Russian military to attack the Chechen rebels. His ratings went through the roof to levels of approval not seen since Yeltsin's early days. As prime minister, he was also in the line of succession should Yeltsin resign or become incapacitated. He came out of nowhere in an atmosphere of fear and uncertainty, a time of hysteria, when thirteen-floor prefabricated concrete buildings in Moscow imploded violently and randomly in the middle of the night; sleeping children, mothers, and fathers were crushed instantly by a nightmare of falling stone, steel, and glass. Without any debate, with nary a critical question asked, the political environment was transformed from a vacuum to a one-man regime. With Putin, the Kremlin had solved the problem of “continuity of power” in one fell swoop. No one knew what Putin stood for or what he had done during his career as a KGB spy. He appeared to be standing up, decisively, to defend them against the Chechens, after Yeltsin's years of weakness and vacillation. Putin embodied and articulated the Russian hatred for the Chechens. Putin vowed to wipe out the Chechens “in the outhouse.”

The onset of new hostilities put NTV outside the Kremlin circle, just as it had in the first war, but this time the circumstances were markedly different. In the first conflict, the Russian military made only lame efforts to control the flow of information, and journalists from NTV made their mark bringing home the gruesome, vivid images of battle that often contradicted the official version. But in late 1999, the Kremlin and the military attempted to bottle up the television channels. The scenes on television were not of combat but of Russian generals reading official statements. Battlefield information was strictly censored. In a major setback for Gusinsky, one of his first partners in NTV, Oleg Dobrodeyev, who championed the groundbreaking coverage of the first war in 1995, left the channel in a disagreement over how to cover the second war. This time Dobrodeyev was sympathetic to the army. “When you see everything with your own eyes,” he told
Krasnaya Zvezda
, the military newspaper, “when in real time the Defense Ministry generals are giving you information, you don't have to ask anyone for anything else.”
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The first Chechen war had become intensely unpopular at home, but the second offensive, carried out in an atmosphere of public fear after the Moscow explosions, was hugely popular. This too put Gusinsky and NTV in a difficult position; the public did not want to hear
criticism of the war. Yet another difference was that NTV journalists did not have as much access to the Chechen side because of the threat of kidnapping. An NTV star correspondent, Yelena Masyuk, and two members of her crew had been ransomed from Chechen kidnappers in 1997. After this, many journalists had less sympathy for the Chechens. Still, NTV correspondents attempted to cover the war as best they could under extremely difficult conditions.

Berezovsky was hospitalized in the fall for hepatitis, but even from his hospital bed, he was in hyperspeed. He organized and bankrolled the creation of a new political party, Unity, which he hoped would later support Putin's agenda in the State Duma, the lower house of parliament. For those who had watched the labored, difficult work of party building in Russia, the rise of Unity in such a short period was nothing short of stupendous, since the party had no discernible ideology, platform, or charismatic leaders—but it had Putin. His popularity, combined with Berezovsky's money, was sufficient to win enough seats to make Unity the second largest bloc in the next parliament.
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Berezovsky simultaneously won his own seat from District 15 in Karachayevo-Cherkessia.
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Berezovsky did more than anyone to set the stage for Putin to become the next leader of Russia, but the final act came from Yeltsin himself. Ailing and isolated, Yeltsin resigned on a snowy New Year's Eve in 1999 and appointed Putin acting president. It was a surprise announcement delivered with a certain inevitability, given Yeltsin's long absences and ill health. “Russia must enter the new millennium with new politicians, new faces, new intelligent, strong, and energetic people,” Yeltsin said in a television address. “And for those of us who have been in power for many years, we must go.”

Yeltsin had informed Putin that he would turn the reins over to him about two weeks earlier. Yeltsin told his family just that afternoon that he was stepping down. Moscow was amazingly calm. There had been weeks of speculation about some kind of techno-catastrophe as computer clocks turned over to the year 2000, and perhaps that was one reason for the quiet. On New Year's Eve, I found people shopping and thinking of themselves and their families, and politics was simply drowned out. The streets were empty and fireworks split the air throughout the night.

What was worrisome that night was the speed and suddenness with which Putin was forced on Russia. When he was appointed acting
president by Yeltsin, he had less than a year's experience in leadership of the grinding, tortured machine that was Russia's protodemocracy and newborn market economy. Former Soviet President Mikhail Gorbachev, who had been close to Primakov, spoke for many when he said, “Putin is holding on, thanks to his mystery. Mysterious appearance, mysterious glance, mysterious phrases. But it so happens the man opens his mouth and has nothing to say.”

Putin had previously thrived in closed worlds, spending seventeen years as a KGB agent and several years after that as a behind-the-scenes deputy to Anatoly Sobchak, the first elected mayor of St. Petersburg. Until handpicked by Yeltsin to be prime minister, Putin had never been a public figure. When he was named acting president, he had no idea what it was like to campaign for office. He had never been forced to deal with angry voters or critical news media. He agonized over giving interviews to the press. He found campaigns distasteful. “You have to be insincere and promise something that you cannot fulfill,” he said. “So you either have to be a fool who does not understand what you are promising or deliberately lie.” Oddly, Putin did not think there was an honest way—to make promises and try to fulfill them.

My own impression is that Putin knew, from his KGB years, that economic modernization was the only way forward for Russia, but he did not understand how to build a democracy, or even how it functioned. His own rapid rise to power offered him few, if any, useful lessons about democracy. He was elevated to the presidency on the updraft of a military campaign, while his chief opponents, Luzhkov and Primakov, were destroyed on television by his backroom team. He never had to go through the experience of being defeated at the polls. He never had to engage in real political competition. He rarely subjected himself to the give-and-take of press conferences and never took part in a debate.

During his five years as a Soviet KGB spy in East Germany, Putin missed the critically important political and economic upheavals in Moscow. He missed the period when journalists were considered beacons of freedom; he missed the triumph of public associations, like the human rights group Memorial, which became powerful forces for change in society; and he missed the early experiments in electoral politics such as the Congress of People's Deputies. Putin simply missed the birth of civil society. When he became acting president, he
was light-years away from the open, rambunctious media that Gusinsky had created. Putin was a closed man who did not see the need, for example, to explain himself to the public. He told journalists that he saw them as belonging to his “command,” an us-or-them, suspicious mentality. He paid lip service to freedom of speech, but his own view was entirely Soviet, that television should be an organ of the state.

Putin told Dorenko once that television shaped reality. “You understand,” Putin said, “there are certain cases when if you don't tell about something, it didn't happen.” Dorenko, who knew as well as anyone in Russia the power of television, said of Putin: “As a politician, he believes himself to be a product of television. And he thinks that only television can destroy him. Not newspapers—he is not afraid of newspapers because people don't read newspapers.”

In Putin's world, Gusinsky was a marked man. His television channel, with its open criticism of the Kremlin and Putin, ran counter to all of Putin's instincts and desires. “He hates Gusinsky,” Dorenko told me. “First of all, he believed Gusinsky was working for Luzhkov and he wanted to take revenge. Second, with Luzhkov defeated, Putin thought Gusinsky had rebuilt himself to serve American political interests. And third, Gusinsky cannot be controlled. He is strong and not a Putin man. That is, Putin cannot stand beside anybody whose opinion differs from his own, especially publicly. You can try and argue with him privately; I have done that. But publicly you cannot.”

Gusinsky was a marked man in another way too. Putin, who was stationed by the KGB in Dresden during the Gorbachev period, not only missed the political upheaval in the late 1980s but also the wild, crazy economic explosion of the final Soviet years, the period of the cooperatives and early banks when Gusinsky, Berezovsky, Smolensky, and Khodorkovsky had all made their leap from the old system to the new one. Throughout most of the Yeltsin period, when the oligarchs were gaining power and influence, Putin's perch was as a second-tier municipal official, then an obscure Kremlin aide, and finally head of the Security Service for one year. Rushed to the seat of power as Yeltsin's successor, he took a suspicious view of the tycoons. When asked in a radio interview what the future held for the oligarchs, Putin said, if one meant “those people who fuse, or help fusion of power and capital—there will be no oligarchs of this kind as a class.”
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