PDF Summary:Putin's People, by Catherine Belton

Russia's tumultuous transition from Soviet power to the modern era is a complex tale of former KGB agents preserving their influence. In Putin's People, Catherine Belton unveils how Putin's inner circle emerged from the Soviet collapse with a plan to restore Russia's strength through authoritative control of its economy and state institutions.

Belton exposes how KGB operatives, including Putin, systematically amassed wealth overseas and built a new oligarchy dependent on loyalty to the Kremlin. She unravels Russia's exploitation of the legal system, co-optation of oligarchs, and meddling in international affairs through financial networks. Belton's account sheds light on Putin's agenda to elevate Russia as a formidable global power.

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The intelligence agency's intentional maneuvers, which enhanced Putin's reputation as a resolute leader through his connections with the Chechen leader and potentially planned bombings in Moscow, hastened his rise to power.

The book advances the notion that Putin's rise to power was part of a broader strategy orchestrated by the KGB, which was designed to elevate a fresh group of security personnel into influential roles. She describes how individuals who once backed Yeltsin's administration and subsequently endorsed the Kremlin, endeavored to transform the seemingly coincidental prime minister and modest person into a symbol of decisive governance.

They capitalized on the swell of public support to craft a situation that allowed Yeltsin's premature departure to facilitate the ascension of KGB associates to positions of power within the Kremlin.

The author explains how, in the final weeks of 1999, Yeltsin and his allies were mired in political turmoil, besieged by corruption probes that had become ever more menacing. The possible repercussions of the Mabetex contracts could have entangled them. The faction associated with Yeltsin, fearing potential incarceration, agreed to a deal that would hand over power to a successor with KGB ties, guaranteeing their safety and immunity from future prosecution.

Other Perspectives

• The rise of Putin and his associates from the security services could be seen as a natural progression of power rather than a calculated takeover, reflecting the need for a strong leadership after the tumultuous Yeltsin years.
• The Mabetex scandal's impact on Yeltsin's influence might be overstated, as other factors such as economic turmoil and health issues could have played a more significant role in his declining authority.
• The strategy to appoint a prime minister with security agency connections could be interpreted as a move to ensure national stability and continuity of governance, rather than purely a maneuver to avoid legal consequences.
• The Yeltsin family's search for a successor might have been driven by a genuine concern for the country's future and the desire to maintain the reforms initiated during Yeltsin's presidency, not just to protect their own interests.
• Putin's selection could be argued as based on his administrative competence and political acumen, rather than solely on his willingness to push legal boundaries.
• The intelligence agency's actions to enhance Putin's reputation could be viewed as part of a broader effort to restore order and national pride, rather than a calculated plot to seize power.
• The transition of power to KGB associates could be seen as an unintended consequence of the political dynamics of the time, rather than a premeditated scheme.

Putin aimed to restore Russia's influential position and control.

Following his rise to power, Belton outlines how Putin and his colleagues with KGB backgrounds increasingly centralized control. She outlines how, during Yeltsin's tenure, freedoms were progressively undermined, starting with the stifling of independent media, moving on to the purging of opposition in the legislature, and eventually leading to the halt of elections for regional governors. Throughout her disclosures, she unveils the commencement of measures designed to reestablish stringent state control reminiscent of the Soviet era.

The Russian government created a structure reminiscent of medieval times, where the tycoons of the Yeltsin era could preserve their fortunes solely by showing unwavering loyalty to the Russian federation.

Belton contends that Putin and his KGB colleagues effectively diminished the influence of the independent oligarchs who had been influential in the 1990s, thereby asserting control over the media tycoons. Upon taking office, Putin's goal was explicitly not to merely diminish the oligarchs' power but to completely eliminate their societal layer. Meanwhile, the intelligence veterans within his inner circle harbored deep resentment from the post-Soviet transition, particularly because the young Komsomol proteges they had once mentored in the intricacies of international trade had amassed significant control over the economy for personal profit. The widely held belief was that Russia's state and its military-industrial complex were being driven to the brink of collapse due to the significant transfer of wealth to Western nations via the oligarchs' overseas bank accounts.

The assets were confiscated and reallocated to a newly established oligarchy, a group of individuals linked to the former Soviet security agency, who pledged allegiance to Putin and employed tactics such as fabricated tax accusations, threats of imprisonment, and occasionally direct aggression to quell political opponents.

Upon taking control, Putin's allies launched a systematic campaign against prominent businesses established during Yeltsin's era, using politically motivated investigations, concocted charges of tax fraud, threats of jail time, and sometimes, covert acts of violence to compel compliance from the magnates. The KGB appeared to be regaining its dominant status following a period of enforced subjugation.

The considerable income from hydrocarbon exports was amassed by state-run enterprises and conglomerates associated with ex-KGB agents, leading to tighter regulation of the energy industry.

Belton portrays the battle for dominance in Russia's oil industry as a key element in the government's plan to rebuild a stronger country under Putin's rule. Putin and his associates saw controlling the country's energy resources as a strategy to strengthen their power within the country against rival factions and to elevate their country's role as a major force in global security, as depicted in her account.

In the document "Russia at the Turn of the Millennium," a strategic plan was outlined for an economic model driven by the state, designed to benefit the Russian leader and his inner circle.

Belton delves into the ambitions of ex-KGB agents who yearned to see Russia's influence restored, as exemplified in the piece authored by Putin shortly before he took office as president. In December 1999, the document titled "Russia at the Turn of the Millennium" signified the first time Putin unveiled his strategic plan for the country's forthcoming direction. The piece suggested that Putin aimed to embrace capitalist tenets with the goal of bolstering Russia's sovereign authority and enhancing its global stature.

Political alliances were established, and fringe European political factions were financed through obscure gas trade deals, which facilitated the movement of untraceable funds through intricate financial purification operations.

Upon taking charge of Russia's financial framework, Putin broadened his sphere of influence, employing non-transparent fiscal methods similar to those he had used in St. Petersburg, now adapted for the natural gas sector. Gazprom's vast financial resources were utilized to support intermediary entrepreneurs and to establish a network of discretionary funds used for bribing officials in neighboring countries or within the European Union, in addition to facilitating the illicit financial gain of individuals with strong ties to Putin, such as his KGB colleagues and reliable confidants.

The ascension of the Russian Orthodox Church to a position of influence, coupled with the support for conventional values and the idea of Eurasian unity, aims to sow division within Western alliances and bolster Putin's stance in the face of internal opposition and external pressures.

Belton demonstrates that while Putin's closest associates initially seemed to support a move towards liberalization, embracing open markets and Western integration, they eventually redirected their efforts towards reviving the nation's illustrious history and reinforcing its stance as a significant challenger to the Western-dominated global order. They began to embrace a new ideological position aimed at offsetting the dominance of the United States while also nurturing ties with rising allies in the West, particularly European far-right nationalist groups that were advancing because of anti-immigration and anti-globalization sentiments, and with conservative groups in the United States. KGB agents were reviving strategies from the Soviet period, which were designed to destabilize Western nations by funding proxy groups to provoke unrest and intensify discord and discontent.

Practical Tips

• You can enhance your critical thinking by analyzing the power dynamics in your workplace or community. Observe how decisions are made and who benefits from them, drawing parallels to the centralization of control and the creation of influential networks. For example, if you notice a particular group consistently influencing decisions, consider the mechanisms they use, such as controlling information or forming strategic alliances, and reflect on the impact this has on the broader group dynamics.
• Develop a habit of questioning the sources and intentions behind the media you consume. When reading news articles or watching reports, actively seek out who owns the media outlet and what their potential biases or affiliations might be. This practice will help you discern the independence of the media and understand the potential influence on public opinion, similar to the way independent media was stifled in the assertions.
• Engage in discussions about the role of cultural institutions in shaping societal values, using the example of the Russian Orthodox Church's influence. Start conversations with friends or in online forums about how different institutions in your own society might be used to promote certain values and whether this leads to unity or division. This will help you better understand the societal impact of such institutions and the importance of diverse perspectives in maintaining a balanced societal view.

The administration's intentional sabotage of legal principles and independent entities.

Belton portrays Putin's reshaping of Russia as a process where his former KGB colleagues endowed the country with an outward appearance of modernity. The oligarchs, judiciary, and parliament underwent a transformation into nominal bodies whose primary role was to further the objectives set forth by the Russian leadership. KGB agents wielded their influence subtly, managing events from behind the scenes in a manner that remained undetected by Western intelligence agencies for a considerable amount of time.

The lasting impact of the Khodorkovsky case on Russia's judicial framework and its economic environment.

Catherine Belton's in-depth analysis uncovers how the Khodorkovsky trial considerably undermined the democratic frameworks of Russia, particularly impacting its legal institutions, and strengthened the influence of security agencies, which subsequently increased their secretive financial activities. The lawsuit was a critical moment where the government overtly demonstrated its exploitation of judicial procedures and the erosion of democratic principles to benefit the tight circle at its core. The case became a blueprint for how Putin's men would use their power to attack critics and rivals, taking over their property, and using the proceeds to shore up the rule of their KGB clan.

The government facilitated the acquisition of Russia's leading oil corporation by imposing backdated tax claims, fabricating charges, and exerting control over the legal system, paving the way for the decline of independent media and state institutions.

The approach taken by the Putin government in the matter involving Yukos, initially intended to secure economic steadiness and reliable tax revenue, ultimately turned into a notable example of state appropriation, defying their early claims. After levying tens of billions of dollars in back taxes against Yukos to which the company had no means of defending itself, the Kremlin seized Khodorkovsky's stake in the company and then forced its sale through the court system at a knockdown price to the state oil firm, Rosneft, chaired and run by Putin’s closest KGB ally, Igor Sechin, while the remaining Yukos assets were split between Rosneft and other Kremlin-controlled institutions such as the state-controlled gas giant, Gazprom. The author portrays how a resentment harbored by Putin's inner circle evolved into an extensive crusade to seize command of Russia's principal private sector companies in numerous fields such as energy, metallurgy, agriculture, telecommunications, and finance. This forceful action also served as an unmistakable warning to regional leaders that defiance of Kremlin orders might lead to incarceration, irrespective of their status.

Institutions responsible for maintaining legal standards were repurposed as mechanisms for seizing assets and quelling opposition.

Belton portrays the strategy that began the offensive against Khodorkovsky and Yukos, which established a new standard for a more nuanced method of consolidating power within Russia's economic domain. This indicated a revival of a type of influence harking back to the KGB days, with Putin's security apparatus using various strategies to keep up the appearance of a market economy while mimicking legitimate legal processes.

The tactics utilized echo those of the Soviet period, yet have been modified to align with today's capitalist framework.

Under the new regime, there was an ever-present risk of imprisonment for individuals. The judiciary's decisions and the conduct of law enforcement were influenced not by fairness or neutrality, but by directives from Putin and his tight circle of security service loyalists, who were perpetually competing to dominate the nation's substantial assets and economic flows. They aimed to create a framework defined by immediate personal supervision.

A complex network of secretive financial activities, organized crime syndicates, and offshore-based organizations enabled the movement of significant funds out of the nation.

Belton explores the intricate unofficial financial systems of Russia, which she believes have evolved to be more complex than the frameworks that existed during the final period of the Soviet Union. She unveils the methods by which Putin's former KGB colleagues, utilizing tactics from the Soviet Union's twilight, created a hidden economic network. They orchestrated the transfer of funds to accounts in Western nations through collaborative firms and dependable custodians, leveraging their market acumen and willingness to manipulate regulations, thus exacerbating corruption both within Russia and across Western states.

The creation of intricate financial schemes, including the Moldovan Laundromat and the Deutsche Bank mirror trades, resulted in the gathering of a significant quantity of illicit funds, which were subsequently used to influence officials both in Russia and abroad through bribery.

The author highlights a number of legal proceedings that began to reveal the profound integration of Russian criminal networks with the nation's security services. These include the massive $20 billion Moldovan Laundromat, which channeled illicit cash out of Russia through a network of Moldovan, Latvian and Estonian banks, using rigged court judgments in Moldova as a facade, and the involvement of Deutsche Bank's Moscow branch in processing transactions exceeding $10 billion from Russia, which enabled Russian investors to skirt foreign money transfer regulations by purchasing stocks in rubles, while corresponding sales in dollars and euros took place in London.

The web of malfeasance and influence extended into Western regions, infiltrating economic and political structures through ties with groups and persons linked to the KGB, collaborative enterprises, and magnates dedicated to the mission, including those linked to Donald Trump.

Belton argues that oligarchs, including Yakunin, along with religious organizations such as the Russian Orthodox Church, have supported the emergence of ultra-conservative factions throughout Europe, with financial backing originating from the KGB and associated criminal groups. In some cases, the goal was to sow disorder in countries whose leaders might oppose Moscow's territorial aspirations. In others it was to win support for ending the sanctions that were imposed on Russia following its 2014 annexation of Crimea.

Supporting right-leaning organizations in the United States with the intent to create discord and undermine the foundations of democratic governance.

The writer draws a connection between a collective of former Soviet businessmen who began moving wealth out of the Soviet Union during its decline in the late 1980s and several people who subsequently developed important relationships with both the Russian leader and the former US President. They chronicle the involvement of various figures, including a Georgian businessman entangled in the illegal trade of ancient artifacts, an Azerbaijani business figure, and a former Soviet citizen who grew up in Brighton Beach, who presented Trump with profitable real estate opportunities and proposed the construction of a high-rise bearing Trump's name in Moscow beginning in 2001, a period when Trump's ventures were facing economic hardships, frequently resulting in these individuals injecting essential funds despite the projects not materializing. The writer depicts how Trump's commercial endeavors signify the infiltration of Western financial networks by organizations under KGB surveillance, potentially utilized for political interference.

Practical Tips

• You can enhance your media literacy by researching the ownership and funding sources of the news outlets you consume to understand potential biases and influences. By doing this, you'll be better equipped to critically evaluate the information presented to you, especially in light of how media can be influenced by powerful entities. For example, if you find that a particular news source is owned by a company with significant investments in Russia, you might consider cross-referencing reports with other sources to get a more balanced view.
• Develop a habit of checking the background of political candidates and their financial supporters to make informed voting decisions. This means going beyond campaign rhetoric and looking into who is funding their campaigns and any potential connections they might have to groups or individuals with vested interests. For instance, if a candidate receives significant contributions from individuals with ties to foreign entities, you might question how this could affect their policy positions.
• Encourage transparency in your community by starting a discussion group focused on the importance of clear and open financial practices in local institutions. This could involve meeting with neighbors to talk about the financial health of community organizations, such as schools or local charities, and advocating for the disclosure of financial statements and funding sources. By doing so, you're fostering a culture of accountability that can serve as a grassroots countermeasure to the secretive financial activities highlighted in the assertions.