Tuesday, July 05, 2022
  Putin’s People:  How the KGB Took Back Russia and Then Took on the West     Source
cover

In Putin’s People, the investigative journalist and former Moscow correspondent Catherine Belton reveals the untold story of how Vladimir Putin and the small group of KGB men surrounding him rose to power and looted their country. Delving deep into the workings of Putin’s Kremlin, Belton accesses key inside players to reveal how Putin replaced the freewheeling tycoons of the Yeltsin era with a new generation of loyal oligarchs, who in turn subverted Russia’s economy and legal system and extended the Kremlin's reach into the United States and Europe. The result is a chilling and revelatory exposé of the KGB’s revanche—a story that begins in the murk of the Soviet collapse, when networks of operatives were able to siphon billions of dollars out of state enterprises and move their spoils into the West. Putin and his allies subsequently completed the agenda, reasserting Russian power while taking control of the economy for themselves, suppressing independent voices, and launching covert influence operations abroad.

Ranging from Moscow and London to Switzerland and Brooklyn’s Brighton Beach—and assembling a colorful cast of characters to match—Putin’s People is the definitive account of how hopes for the new Russia went astray, with stark consequences for its inhabitants and, increasingly, the world.

Dedication


To my parents, Marjorie and Derek,

as well as to Richard and to Catherine Birkett

Epigraph


‘Russian organised-crime leaders, their members, their associates, are moving into Western Europe, they are purchasing property, they are establishing bank accounts, they’re establishing companies, they’re weaving themselves into the fabric of society, and by the time that Europe develops an awareness it’s going to be too late.’

— Former FBI special agent Bob Levinson

‘I want to warn Americans. As a people, you are very naïve about Russia and its intentions. You believe because the Soviet Union no longer exists, Russia now is your friend. It isn’t, and I can show you how the SVR is trying to destroy the US even today and even more than the KGB did during the Cold War.’

— Sergei Tretyakov, former colonel in Russian Foreign Intelligence, the SVR, stationed in New York
 
 
 
1.
2.
3.
4.
5.
 
6.
7.
8.
9.
 
10.
11.
12.
13.
14.
15.
 
 
  Prologue
Dramatis Personae
PART ONE
‘Operation Luch’
Inside Job
‘The Tip of an Iceberg’
Operation Successor: ‘It Was Already After Midnight’
‘Children’s Toys in Pools of Mud’
PART TWO
‘The Inner Circle Made Him’
‘Operation Energy’
Out of Terror, an Imperial Awakening
‘Appetite Comes During Eating’
PART THREE
Obschak
Londongrad
The Battle Begins
Black Cash
Soft Power in an Iron Fist - ‘I Call Them the Orthodox Taliban’
The Network and Donald Trump
Epilogue
Picture Section
  v
xiii
 
1
11
23
32
43
 
49
57
64
72
 
80
89
94
101
107
114
124
127
Prologue
Moscow Rules


It was late in the evening in May 2015, and Sergei Pugachev was flicking through an old family photo album he’d found from thirteen years ago or more. In one photo from a birthday party at his Moscow dacha, his son Viktor keeps his eyes downcast as Vladimir Putin’s daughter Maria smiles and whispers in his ear. In another, Viktor and his other son, Alexander, are posing on a wooden spiral staircase in the Kremlin presidential library with Putin’s two daughters. At the edge of the photo, Lyudmilla Putina, then still the Russian president’s wife, smiles.

We were sitting in the kitchen of Pugachev’s latest residence, a three-storey townhouse in the well-heeled London area of Chelsea. The late-evening light glanced in through the cathedral-sized windows, and birds chirped in the trees outside, the traffic from the nearby King’s Road a faint hum. The high-powered life Pugachev had once enjoyed in Moscow - the dealmaking, the endless behind-the-scenes agreements, the ‘understandings’ between friends in the Kremlin corridors of power - seemed a world away. But Moscow’s influence was in fact still lurking like a shadow outside his door.

The day before, Pugachev had been forced to seek the protection of the UK counter-terrorism squad. His bodyguards had found suspicious-looking boxes with protruding wires taped to the undercarriage of his Rolls-Royce, as well as on the car used to transport his three youngest children, aged seven, five and three, to school. Now, on the wall of the Pugachevs’ sitting room, behind the rocking horse and across from the family portraits, the SO15 counter-terrorism squad had installed a grey box containing an alarm that could be activated in the event of attack.

Fifteen years before, Pugachev had been a Kremlin insider who’d manoeuvred endlessly behind the scenes to help bring Vladimir Putin to power. Once known as the Kremlin’s banker, he’d been a master of the backroom deals, the sleights of hand that governed the country then. For years he’d seemed untouchable, a member of an inner circle at the pinnacle of power that had made and bent the rules to suit themselves, with law enforcement, the courts, and even elections subverted for their needs. But now the Kremlin machine he’d once been part of had turned against him. The tall, Russian Orthodox believer with a dark beard and a gregarious grin had become the latest victim of Putin’s relentlessly expanding reach. First, the Kremlin had moved in on his business empire, taking it for itself. Pugachev had left Russia, first for France and then for England as the Kremlin launched its attack. Putin’s men had taken the hotel project the president had granted him on Red Square, a stone’s throw from the Kremlin, without any compensation at all. Then his shipyards, two of the biggest in Russia, valued at $3.5 billion, were acquired by one of Putin’s closest allies, Igor Sechin, for a fraction of that sum. Then his coal project, the world’s biggest coking-coal deposit in the Siberian region of Tuva, valued at $4 billion, was taken by a close associate of Ramzan Kadyrov, the strongman Chechen president, for $150 million.[1]

In the process, Putin’s men had blamed him for the collapse of Mezhprombank, the bank he co-founded long ago in the nineties that had once been the key to his power. The Kremlin authorities had opened a criminal case claiming Pugachev had caused the bank’s bankruptcy by transferring $700 million from it to a Swiss bank account at the height of the 2008 financial crisis. The Kremlin paid no regard to Pugachev’s claims that the money was his own. It seemed to matter little that the takeover of the shipyards by Sechin at a fraction of their value was the biggest reason for the shortfall in the bank’s funds to creditors.[2]


1. The valuations for the assets listed are based on documents seen by the author filed as part of a $12 billion Bilateral Investment Treaty Claim by Pugachev over the alleged expropriation of his assets. They show that Western accounting firm BDO had valued the shipyards at $3.5 billion, while Nomura had estimated them at between $2.2 billion and $4.2 billion. Ernst & Young had valued the coking-coal company EPK at $4 billion. Indeed, the buyers of EPK, Ruslan Baisarov and Igor Altushkin, had initially announced to the Russian press that they bought it for $4 billion.

2. Copies of correspondence between creditors represented by Nomura investment bank and the Russian central bank show that the stakes in the shipyards had been held as collateral for a central bank bailout loan. A sale at a market price would have guaranteed that all creditors’ demands could be met, the correspondence says.

The hand of the Kremlin seemed clear. ‘People within the state manipulated the rules against him in order to bring the bank down, unsurprisingly benefiting themselves,’ said Richard Hainsworth, a long-standing Russian banking expert.[3]

It was a typical story for a Kremlin machine that had become relentless in its reach. First, it had gone after political enemies. But now it was starting to turn on Putin’s one-time allies. Pugachev was the first of the inner circle to fall. And now the Kremlin had expanded its campaign against him from the brutal closed-door courts of Moscow to the veneer of respectability of London’s High Court. There, it obtained a freezing order against his assets with ease, tying the tycoon up in knots in the courtroom along the way.

Ever since Pugachev had left Russia, the Kremlin had pursued him. At his home in France, he’d been threatened by stooges sent by Mezhprombank’s liquidator. Three members of a Moscow mafia group had taken him out to a yacht off the coast of Nice and demanded he pay $350 million to guarantee his family’s ‘safety’. It was ‘the price of peace’, they told him, the price for making the Russian criminal case against him for the Mezhprom bankruptcy go away, documentary evidence shows.[4] In the UK courts, Pugachev had been a fish totally out of water, incapable of operating according to their unfamiliar rules and procedures. He was too accustomed to the backroom deals of his Kremlin past, too accustomed to slipping through the net of rules and regulations because of his position and power. He hadn’t done himself any favours. Convinced of the righteousness of his position, that he was the victim of the latest Kremlin asset grab, he believed himself above the regulations of the British courts. He’d failed to stick to court orders related to the asset freeze, and had burned through millions of pounds from an account he’d kept hidden from the UK court. He believed the disclosure rules were beneath him, petty compared to the calamity that had befallen his business empire, and no more than part of a Kremlin campaign to hound and frustrate him at every turn. The Kremlin, however, had become adept at pursuing its enemies through the UK court system, while a PR machine was honed to fill the pages of the UK tabloids with allegations of the Russian oligarch’s stolen wealth.

The Kremlin had first learned to navigate its way through the UK court system during its victory against Boris Berezovsky, the exiled oligarch who’d become Putin’s fiercest critic, in a case that seemed to turn Russian history on its head. Berezovsky was the fast-talking one-time Kremlin insider who had tried - and failed - to sue his erstwhile business partner Roman Abramovich, a close Kremlin ally, for $6.5 billion in London’s High Court. The judge overseeing the case, Dame Elizabeth Gloster, had taken a dim view of Berezovsky’s claim that he’d jointly owned one of Russia’s biggest oil majors, Sibneft, and a stake in Rusal, Russia’s biggest aluminium giant, with Abramovich, and that Abramovich had forced him to sell his stakes at a knockdown price. Though Berezovsky was recognised throughout Russia as owner of these concerns, Mrs Justice Gloster said she found him to be ‘an inhererently unreliable witness’,[5] and sided with Abramovich, who’d claimed that Berezovsky had never owned these assets; he’d merely been paid for providing political patronage. Later, it turned out that Mrs Justice Gloster’s stepson had been paid nearly £500,000 to represent Abramovich in the early stages of the case. Berezovsky’s lawyers claimed his involvement was more extensive than had previously been disclosed.[6]

The Kremlin had further honed its operations in the UK court system through its pursuit of Mukhtar Ablyazov, a Kazakh billionaire who happened to be the biggest political foe of the Kazakh president, a key Kremlin ally, Nursultan Nazarbayev. Ablyazov was pursued by Russia’s state deposit insurance agency, which charged him with siphoning more than $4 billion from the Kazakh BTA Bank, of which he had been chairman, and which had branches across Russia. The Russian agency hired a team of lawyers from the top London law firm Hogan Lovells, who launched eleven civil fraud lawsuits against Ablyazov in the UK, as well as a freezing order on his assets. Private detectives had traced the siphoned $4 billion to a network of offshore companies controlled by the Kazakh tycoon.[7]

But in Pugachev’s case, no stolen or hidden assets appeared to have been found. No fraud claims had ever been launched in the UK, or anywhere else outside Russia. Instead, on the basis of a Russian court ruling alone, the same team from Hogan Lovells had won the freezing order against Pugachev’s assets, and ably ran rings around him while he chafed at the multitude of court orders that came his way. He’d been interrogated over asset disclosures, and found to have given false evidence over whether the sale of his coal business had been conducted by himself or by his son. It didn’t seem to matter to the judge that the sale had been forced through at a price that was less than one twentieth of the business’s real value. What mattered was whether he’d followed procedure and declared all the assets that remained under his control. Pugachev had been forced to hand over his passports to the court, and was banned from leaving the UK during a prolonged period of questioning over his asset disclosures as the Kremlin’s lawyers tightened the legal net. He’d run through a series of lawyers who in turn seemed baffled by a case that had never been heard on its merits in the UK, while others viewed him mendaciously as easy prey. Spoilt by the flood of Russian cases that Moscow’s tycoons were willing to pay top prices for airing in London’s High Court, legal firms padded their bills to astronomical sums for work that was never done, as documents show. PR firms offered to defend Pugachev’s image for £100,000 a month. ‘He’s on our territory now,’ said one partner at a global law firm representing him.


3. Author interview with Richard Hainsworth, June 2014.

4. A tape of this conversation has been filed with the French interior ministry as part of a criminal investigation into the threats. The author has reviewed the evidence.

5. Jane Croft and Neil Buckley, ‘Kremlin Critic Loses $6.5 Billion Lawsuit Against Fellow Oligarch’, Financial Times, September 1 2012; Konstantin Kagalovsky, the former representative of the Russian government to international financial institutions and an architect of the loans-for-shares privatisation schemes, later told me that ‘many in Russia knew that [Abramovich and Berezovsky] were 50:50 partners’. He said that he himself had found documents testifying to that, but had since destroyed them. (Kagalovsky also served as first deputy head of Khodorkovsky’s Menatep bank, and was working on merger plans between Khodorkovsky’s Yukos and Sibneft.) ‘During [Berezovsky’s] court case no one from Russia came to testify about Berezovsky’s ownership because they did not want to damage their relationship with the Russian authorities and with Roma [Abramovich],’ he said.

6. Berezovsky had condemned the ruling at the time. ‘Sometimes I have the impression that Putin himself wrote this judgment,’ he said. ‘Roman Abramovich wins Court Battle against Berezovsky’, BBC News, August 31, 2012. Later, it turned out that Mrs Justice Gloster’s stepson had been paid nearly £500,000 to represent Abramovich in the early stages of the case. David Leppard, ‘Berezovsky Cries Foul Over £3.5bn Abramovich Trial Judge’, Sunday Times, September 22, 2012. Mrs Justice Gloster declined to comment, while the Judicial Office, which represents judges, said she had declared the matter and that Berezovsky had raised no objection at the time.

7. Ablyazov claimed he was the victim of a political witch-hunt. He was Nazarbayev’s only real political foe. The bank’s collapse, he claimed, was caused by the fact that Nazarbayev had seized it from him.

At first Pugachev had believed the case against him was being driven by unruly Kremlin underlings anxious to draw a line over their expropriation of his business empire. But as the campaign expanded, and Pugachev began to fear for his physical safety, he became convinced that it was being guided by Putin himself. ‘How could he do this to me? I even made him president,’ he said that evening as he sat in his Chelsea kitchen, still shell-shocked by the visit from SO15 and the suspicious devices found underneath his cars.[8] A former friend sent by the Kremlin to London had told him that Putin was personally managing every step of the campaign against him, warning: ‘We have control of everything here, we’ve got everything all stitched up.’

Pugachev had long detected the growing influence of Kremlin cash in London. Long before the legal attack started, he said, he’d met a string of English lords who’d guffawed and shaken his hand, and told him how great they thought Putin was. In those days they believed Pugachev was ‘Putin’s banker’, as the press had called him then, yet they’d still asked him to donate to the Conservative Party without any question or thought. All his former friends from the Kremlin kept relatives and mistresses in town, who they visited at weekends, flooding the city with cash. There was Sechin’s ex-wife, Marina, who kept a house with her daughter here. There was Igor Shuvalov, the deputy prime minister, who owned the most prestigious flat in the city, a penthouse overlooking Trafalgar Square. There were the sons of Arkady Rotenberg, Putin’s billionaire former judo partner, who attended one of the country’s most vaunted private schools, while his ex-wife Natalya shopped and sued her husband for divorce in London’s High Court. There was the deputy speaker of the State Duma, one of Russia’s most vocal patriots, Sergei Zheleznyak, who’d long raged against the influence of the West, yet his daughter Anastasia had lived in London for years. The list of officials resident in London was endless, said Pugachev. ‘They have sorted themselves out very well on this small island with terrible weather,’ he sniffed. ‘In the UK, the main thing was always money. Putin sent his agents to corrupt the British elite.’

The city had grown used to the flood of Russian cash. Property prices had surged as first tycoons and then Russian officials had bought up high-end mansions in Knightsbridge, Kensington and Belgravia. A string of Russian share offerings, led by the state’s Rosneft, Sberbank and VTB, had helped pay the rents and wages for the offices of London’s well-heeled PR and legal firms. Lords and former politicians were paid lavish salaries to serve on Russian companies’ boards, although they were granted little oversight of corporate conduct. Russia’s influence was everywhere. Alexander Lebedev, the former KGB officer and banker who’d positioned himself as a champion of the free press in Russia, had acquired London’s most-read and influential daily, the Evening Standard, becoming a fixture at the capital’s soirées and on the lists for the most sought-after dinner invitations. Another was Dmitry Firtash, a Ukrainian tycoon who’d become the Kremlin’s gas trader of choice, and who despite his links to a major Russian mobster wanted by the FBI, Semyon Mogilevich, had become a billionaire donor to Cambridge University. His chief London minion, Robert Shetler-Jones, had donated millions of pounds to the Tories, while influential party grandees served on the board of Firtash’s British Ukrainian Society. There were other less noticeable players. At least one of them had slipped through the cracks to become close friends with Boris Johnson, then London’s mayor, at the top of the Tory elite. ‘Everyone has gotten used to spies wearing dark glasses and looking suspicious in films,’ said Pugachev. ‘But here they are everywhere. They look normal. You can’t tell.’

Pugachev had no idea whether the envoy sent by the Kremlin to warn him that it had everything stitched up in the UK was telling the truth, or whether he’d been sent merely to frighten him. But at some point - after he found the suspicious-looking devices on his cars, and after he first got wind that Russia was going to seek his extradition from the UK - he decided he didn’t want to risk waiting to find out. Despite his previous closeness to Putin, and his extensive contacts with the Kremlin’s clan of former KGB men known as the siloviki, a meeting set up for him with a top-level official from the British Foreign Office had been cancelled at the last minute. Instead he’d been told by a visiting Kremlin agent that he should meet a man Russian intelligence had cultivated in MI6. Everything was being turned on its head. He feared that the UK government was preparing a deal with the Russians to extradite him. He wondered too about the fate of his friend Boris Berezovsky, the arch Kremlin critic who in March 2013 had been found dead on the floor of his bathroom in his country mansion in Berkshire, his favourite black cashmere scarf round his neck, an unidentified fingerprint left at the scene. For some unknown reason, Scotland Yard didn’t investigate, leaving it to the local Thames Valley Police, which called it a suicide and closed the case.[9] ‘It looks like there is an agreement with Russia not to make a fuss,’ Pugachev worried.[10]

And so one day in June 2015, a few weeks after we’d met in his Chelsea home, Pugachev was suddenly no longer in the UK. His phones had all been switched off, ditched by the wayside as he ran. He’d ignored the court orders forbidding him to leave the country. He hadn’t even told his partner, the mother of his three young children, the London socialite Alexandra Tolstoy, who was left waiting late into the night for him to appear at her father’s eightieth birthday party. He’d last been seen in a meeting with his lawyers, at which they’d warned him he’d need £10 million to secure bail on an imminent Russian extradition request - cash to which Pugachev didn’t have access. A few weeks later he surfaced in France, where he’d gained citizenship in 2009, and where French law protected its citizens from extradition to Russia. He’d fled to the relative safety of his villa high in the hills above the bay of Nice, a fortress surrounded by an impenetrable high iron fence, a team of bodyguards and a battery of security cameras at every turn.


8. Author interview with Pugachev, May 2014.

9. The coroner recorded an open verdict in the inquest into Berezovsky’s death, despite the protestations of the Thames Valley Police. A forensic expert acting on behalf of Berezovsky’s family testified that examination of the post-mortem photographs led him to believe Berezovsky did not kill himself. There was no v-shaped mark round his neck, which there should have been if he’d hanged himself. Police had been unable to find a match in FBI and Interpol databases for the fingerprint found on the shower-rail. (Jane Croft, ‘Open Verdict Fails to Dispel Mystery Over Death of Kremlin Critic Berezovsky’, Financial Times, March 28, 2014).

10. In March 2018, then home secretary Amber Rudd said the UK police and MI5 would reopen investigations into a string of Russian deaths on British soil, apparently including that of Berezovsky. (‘Russia Spy Poisoning: Rudd Says Inquiry Widened to Other Deaths’, BBC News, March 13, 2018).

The ease with which the Kremlin had been able to pursue its case against him in London seemed to Pugachev, as the Russians would say, like the first lastochka - the first swallow of spring. It was the arrival of Moscow rules in London, where the Kremlin could twist and distort the legal process to suit its agenda, where the larger issue of its expropriation of Pugachev’s multi-billion-dollar business empire could be artfully buried in the minutiae of rules related to the freezing order and whether Pugachev had correctly followed them. Pugachev was no angel, of course. It was not at all clear what had happened to the $700 million he’d been accused of siphoning from Mezhprombank. But a series of asset disclosures, unquestioned by the UK High Court, had revealed that $250 million of that money had been returned to the bank, while the trail of the remainder had been lost in companies liquidated by a former Pugachev ally who was now working closely with the Kremlin. Later, Swiss prosecutors, asked by Russia to block Pugachev’s Swiss bank accounts, said they’d found no evidence that any crime was committed when the $700 million was transferred from Pugachev’s company accounts in Mezhprombank to the Swiss bank account at the height of the 2008 crisis.[11]

But even though the Kremlin lawyers had not opened a fraud case against him in the UK, even though there appeared to be no trail of stolen funds, the legal pursuit of Pugachev was relentless. Lawyers working for the Russian State Deposit Agency insisted they had him ‘bang to rights’ over Mezhprombank’s bankruptcy. ‘If you get cash from a regulator, you should take it to help the bank survive, not fund a payment to yourself,’ one person close to the legal team said.[12] Despite the Kremlin having expropriated his business empire, and his having begun to fear for his life, Pugachev was found in contempt of court for fleeing the UK, and sentenced in absentia to two years in jail. During the contempt hearings he was frequently branded a liar. He’d flouted the rules of the freezing order. He’d not only fled the country, but transferred funds from the sale of two cars to France. One of the judges presiding over the case, Justice Vivienne Rose, found she could not ‘safely rely on any evidence he gave’. A New Zealand trust he’d set up to hold tens of millions of dollars in properties, including his Chelsea home, was later found to be a sham.

For all his flaws, Pugachev insisted he had been caught in a Russian state vendetta pursued through the UK courts. The Kremlin seemed intent on quashing any notion that he’d ever been well-connected in the Kremlin, or that he could have any knowledge that could be damaging to it. It had been able to suppress any political connotation to the case by leveraging the diminishing knowledge of Russia in the UK intelligence services, which had been distracted by monitoring the Islamic terrorist threat, and Pugachev’s own low profile. Before things had got tough in London, Pugachev had never given an interview in his life. Few knew who he was. Most people believed it was the recently deceased oligarch Boris Berezovsky who had helped bring Putin to power. Lawyers at Hogan Lovells had been told that Pugachev was a nobody, and the case against him had nothing to do with politics. ‘I’ve not seen any evidence of what he was doing in the Kremlin,’ said one person close to the legal team. ‘We have to be extremely careful. Pugachev seems to say whatever he wants. The people I have spoken to just say he was a blatant crook.’[13]

But in fact Pugachev had worked at the heart of the Kremlin, and had been privy to some of its deepest secrets, including how it was exactly that Putin came to power. This seemed to be one of the main reasons the Kremlin was so intent on pursuing him, and making sure he was tied up in legal knots. Even before the Kremlin took over his business empire, he’d been seeking to leave Russia, to escape the endless intrigue of business there. Already, he’d been sidelined by Putin’s KGB allies from St Petersburg, and he’d begun seeking French citizenship in 2007. For those on the inside, Pugachev was being punished precisely for seeking to exit the tight-knit system that ruled Russia, the mafia clan which no one was ever meant to leave. ‘Pugachev was like a kidney. He was essential for the functioning of the system. But he lost his mind and thought he could leave and work on his own business. Of course the order was given to destroy him,’ said a senior Russian banker involved in financial operations for the Kremlin.[14]


11. Documents from Swiss Prosecutors’ office obtained by author. Russia’s Investigative Committee, however, claims the funds transferred were not from Pugachev’s company OPK Development, but from the central bank bailout loan. The Russian prosecutors claim that OPK deposits in Mezhprombank, holding funds from a commercial loan from Russian state bank, VTB, since June 19, 2008, long before the central bank bailout loan, had been falsified and backdated. However, their evidence relied on testimony from two senior Mezhprombank executives who agreed deals with the prosecutors under duress. One of the executives, Dmitry Amunts, agreed to say the deposits were falsified after prosecutors promised him he would be freed from detention, according to transcripts of taped conversations between Amunts’s wife and a lawyer, Marina Yarosh, citing senior officials from the FSB. (He gave the testimony, but was not freed.) The other executive, Alexander Didenko, also agreed to cooperate with prosecutors, and was freed early. He currently holds a senior position at a bank under the management of the state deposit insurance agency, i.e. the government body that is spearheading the case against Pugachev. For more on all this, see Ilya Rozhdestvennsky, ‘Sbezhavshie Milliardy: kak Bankir Pugachev Vyvodil Dengi iz Rossii’, RBK, November 14, 2016.

12. Author interview with person close to the Russian state legal team, February 2018. The bankruptcy case against Pugachev was also based on claims that he ordered another senior bank executive to lift pledges holding shares in his coking-coal company EPK in preparation for its sale, which also allegedly worsened the bank’s financial position.

13. Author interview with person close to the Russian state legal team, February 2018.

14. Author interview with senior Russian banker, March 2018.

In the rush of his flight from the UK to France, Pugachev left behind a number of telltale signs. Detectives working for the Kremlin’s lawyers had swooped in to raid his Knightsbridge office on a court order issued in the days after his disappearance. Among the reams of documents, there were a number of disc drives. On one of the disc drives were recordings: the Russian security services had been secretly taping every meeting he held in his downtown Moscow office since the end of the nineties.

One of the recordings vividly documents Pugachev’s candid and rueful feelings about Putin and his own role in bringing him to power. The tape records Pugachev sitting in his office with Valentin Yumashev, former president Boris Yeltsin’s son-in-law and chief of staff, discussing over dinner and fine wine the tense state of affairs as Moscow hurtled through yet another political crisis. It was November 2007, and just a few months remained before Putin would come to the end of his second consecutive term as president, at which point Russia’s constitution dictated that he must step down. But although Putin had made vague statements about becoming prime minister after standing down as president, there was not yet even a whisper of his real intentions. In the warren-like corridors of the Kremlin, the former KGB and security men who had risen to power with Putin had been jostling for position, bickering and backstabbing in hopes that they, or their candidate, would be selected as his successor.

Pugachev and Yumashev quietly clinked glasses as they discussed the standoff. The uncertainty over the succession was bringing back strong memories of 1999, when they’d assisted Putin’s rise. It seemed to them an age ago. By now they had been eclipsed by Putin’s KGB allies from St Petersburg. By now they were almost relics from a totally different era. The system of power had changed irrevocably, and they were still struggling to understand what they’d done.

‘You remember how it was when he came into power?’ says Pugachev on the tape. ‘He would say, “I am the manager. I have been hired.”’ In those days, Putin had appeared reluctant to take the leading role, and seemed malleable and compliant to those who’d helped bring him to power. ‘Between us, at the beginning I think he had the idea to become rich, to live a happy life, to decide his own personal issues,’ Pugachev goes on. ‘And in principle, he decided these issues very quickly … But as the four years of his first term passed he understood things had happened that would never allow him to step down.’

Putin’s first term had been drenched in blood and controversy. It led to a sweeping transformation of the way the country was run. He faced a series of deadly terrorist attacks, including the siege of the Dubrovka theatre in Moscow by Chechen terrorists in October 2002. The hostage-taking ended with more than a hundred dead when the Russian security services botched the storming of the theatre and gassed the very theatregoers they’d been trying to free.

Putin’s battles with rebels from the restive northern Caucasus republic of Chechnya had caused thousands of deaths, including the 294 who died in a string of apartment bombings. Many in Moscow whispered Putin’s security services were behind these bloody attacks, not least because the end result was a security clampdown that strengthened his power. The freewheeling oligarchs of the 1990s were soon brought to heel. It had taken just one big case against the country’s richest man for Putin and his men to rein in the market freedoms of the Yeltsin era, and to launch a takeover by the state.

‘He would have gone gladly after four years, I think,’ Pugachev continues. ‘But then all these controversies happened. With the West now, there is such a serious standoff that it’s almost the Cuban missile crisis. And now he’s gone even deeper … He understands that if it goes further, he will never get out.’

For both these men, the power construct built by Putin, by which the president had accumulated so much power that everything now depended on him, looked the very opposite of stable. ‘It’s a pyramid. All you have to do is knock it once and it will all collapse … He understands all this, but he can’t change himself.’

‘I don’t have the feeling he understands any of this,’ says Yumashev.

‘It would be strange if he said everything I did is backward,’ Pugachev interjects. ‘Many of the decisions he makes are based on his convictions of how the world is run. The subject of patriotism - he believes this sincerely. When he says the collapse of the Soviet Union was a tragedy, he believes this sincerely … He just has such values. What he does he does sincerely. He sincerely makes mistakes.’

Putin had often justified his consolidation of all levers of power - which included ending elections for governors, and bringing the court system under Kremlin diktat - by saying such measures were necessary to usher in a new era of stability, ending the chaos and collapse of the 1990s. But behind the patriotic chest-beating that, on the face of it, appeared to drive most of the decision-making was another, more disturbing factor. Putin and the KGB men who ran the economy through a network of loyal allies now monopolised power, and had introduced a new system in which state positions were used as vehicles for self-enrichment. It was a far cry from the anti-capitalist, anti-bourgeois principles of the Soviet state they had once served.

‘These people, they are mutants,’ says Pugachev. ‘They are a mixture of homo-soveticus with the wild capitalists of the last twenty years. They have stolen so much to fill their pockets. All their families live somewhere in London. But when they say they need to crush someone in the name of patriotism, they say this sincerely. It’s just that if it’s London they’re targeting, they will get their families out first.’

‘I think it is a terrible thing,’ says Yumashev. ‘Some of my friends who work in the Kremlin now say - with absolute sincerity - how great it is they can get so rich there. In the nineties, this was unacceptable. You either had to go into business or work for the country. Now they go and work for the state to earn money. Ministers hand out licences to make money. And of course all this comes from the boss … The first conversation [Putin] has with a new state employee is, “Here is your business. Share it only with me. If someone attacks you, I will defend you … and if you don’t [use your position as a business] you are an idiot.”’

‘Putin said this himself,’ says Pugachev. ‘Openly. I remember, I was speaking with him. He said, “What is that guy waiting for? Why isn’t he earning? What is he waiting for? He has the position. Let him make money for himself.” These are now like people who have drunk blood. They can’t stop. Now it is state officials who are the businessmen.’

‘There are very few real businessmen left,’ Yumashev agrees, shaking his head sadly. ‘The atmosphere … The atmosphere has changed so much in the country. The air has changed. It’s suffocating now. Suffocating.’

The two men sigh. Everything has changed - apart from their ability to idealise their own roles. ‘What was great about the nineties was that there were no lies,’ Yumashev continues.

‘Absolutely,’ says Pugachev. ‘For me, my whole life, the truth was equivalent to freedom. I earned money not for riches, but for freedom. How much can you spend? As long as you have enough to buy two pairs of jeans, that’s fine. But a certain independence gave me one thing: I don’t need to lie.’

It seemed to the two men that the president had become surrounded by yes-men, all of whom proffered lengthy toasts to Putin, telling him he had been sent by God to save the country, while they served at his pleasure. Yet it seemed to Pugachev that these yes-men understood the deep hypocrisy of the system, the sham democracy represented by the Kremlin’s ruling party, United Russia, and how deeply corrupt it had become.

‘Look at the people around VV [Putin], who say Vladimir Vladimirovich, you’re a genius!’ Pugachev continues. ‘I look at them - and they don’t believe in anything. They understand it’s all crap. That United Russia is crap, the elections are crap, the president is crap. But they understand all this, and then they go on stage and say how great everything is. And all the toasts they make, which are total lies. They can sit and tell … rubbish about how they have always been together, ever since they were sitting on the school bench. But at the same time the guys sitting in the office next door are saying, “As soon as he comes out, let’s finish him off.” There is such cynicism. I don’t think they feel comfortable. The ones who have power … I am sorry for them. They’re stealing from all sides, and then they come out and speak about how Putin is fighting against corruption. I look at them and think, this is the end. I’m sorry for them … VV was always asking, “What is that word beginning with s? Sovest - conscience.” They don’t have receptors for this. They don’t understand it. They forgot the word and what it means. They’ve gotten totally messed up.’

All the achievements of the Putin era so far - the economic growth, the increase in incomes, the riches of the billionaires that had turned Moscow into a gleaming metropolis where sleek foreign cars filled the streets and cosy cafés opened on street corners - boiled down to the sharp increase in the oil price during the Putin years, they agree. ‘In 2000 the oil price was $17 and we were happy,’ says Yumashev. ‘When you and I were in power it was $10, $6. The best time for me was when it hit $16 for two to three weeks. Now it’s $150, and the only thing they’re doing is building awful houses for themselves.’

‘The state is doing nothing with the money. They could have transformed the country’s infrastructure. But he thinks everything will be stolen if we build roads … Time is passing so quickly,’ says Pugachev.

‘Eight years have gone. In 2000 we gave the boss such a smoothly oiled machine. Everything worked. And what did we get?’ asks Yumashev.

‘We didn’t understand that he wasn’t going to drive things forward. I thought he was liberal, young,’ Pugachev replies.

‘For me it was principally important that he was young,’ says Yumashev.

‘You understand it turned out he was from a different species.’

‘Yes. They are different people,’ Yumashev agrees.

‘They are different, special people. This was something we didn’t understand. The person who understood this very well was Ustinov [the prosecutor general],’ says Pugachev. ‘He told me, “You understand, the guys from the security services, they are different. Even if you were to suck all their blood out and then put on a different head, they would still be different. They live in their own system. You will never be one of them. It is an absolutely different system.”’

The recording offers a unique window into the unguarded views of two men who had brought Putin to power, and their horror at the system they’d help create. This book is the story of that system - the rise to power of Putin’s KGB cohort, and how they mutated to enrich themselves in the new capitalism. It is the story of the hurried handover of power between Yeltsin and Putin, and of how it enabled the rise of a ‘deep state’ of KGB security men that had always lurked in the background during the Yeltsin years, but now emerged to monopolise power for at least twenty years - and eventually to endanger the West.

This book began as an effort to trace the takeover of the Russian economy by Putin’s former KGB associates. But it became an investigation into something more pernicious than that. First research - and then events - showed that the kleptocracy of the Putin era was aimed at something more than just filling the pockets of the president’s friends. What emerged as a result of the KGB takeover of the economy - and the country’s political and legal system - was a regime in which the billions of dollars at Putin’s cronies’ disposal were to be actively used to undermine and corrupt the institutions and democracies of the West. The KGB playbook of the Cold War era, when the Soviet Union deployed ‘active measures’ to sow division and discord in the West, to fund allied political parties and undermine its ‘imperial’ foe, has now been fully reactivated. What’s different now is that these tactics are funded by a much deeper well of cash, by a Kremlin that has become adept in the ways of the markets and has sunk its tentacles deep into the institutions of the West. Parts of the KGB, Putin among them, have embraced capitalism as a tool for getting even with the West. It was a process that began long before, in the years before the Soviet collapse.

Putin’s takeover of strategic cash flows was always about more than taking control of the country’s economy. For the Putin regime, wealth was less about the well-being of Russia’s citizens than about the projection of power, about reasserting the country’s position on the world stage. The system Putin’s men created was a hybrid KGB capitalism that sought to accumulate cash to buy off and corrupt officials in the West, whose politicians, complacent after the end of the Cold War, had long forgotten about the Soviet tactics of the not too distant past. Western markets embraced the new wealth coming from Russia, and paid little heed to the criminal and KGB forces behind it. The KGB had forged an alliance with Russian organised crime long ago, on the eve of the Soviet collapse, when billions of dollars’ worth of precious metals, oil and other commodities was transferred from the state to firms linked to the KGB. From the start, foreign-intelligence operatives of the KGB sought to accumulate black cash to maintain and preserve influence networks long thought demolished by the Soviet collapse. For a time under Yeltsin the forces of the KGB stayed hidden in the background. But when Putin rose to power, the alliance between the KGB and organised crime emerged and bared its teeth. To understand this process, we must go back to the beginning of it all, to the time of the Soviet collapse.

For the men who helped bring Putin to power, the revanche has also brought a reckoning. Pugachev and Yumashev had begun the transfer of power in desperate hurry, as Yeltsin’s health failed, in an attempt to secure the future of the country - and their own safety - against what they believed to be a Communist threat. But they too had forgotten the not too distant Soviet past.

The security men they brought to power were to stop at nothing to prolong their rule beyond the bounds of anything they’d thought possible.

‘We should have spoken to him more,’ sighed Yumashev.

‘Of course,’ said Pugachev. ‘But there wasn’t any time.’

Dramatis Personae
Putin’s inner circle, the siloviki


Igor Sechin - Putin’s trusted gatekeeper, a former KGB operative from St Petersburg who rose in power as deputy head of Putin’s Kremlin to lead the state takeover of the Russian oil sector. Later became known as ‘Russia’s Darth Vader’ for his ruthless propensity for plots.

Nikolai Patrushev - Powerful former head of the Federal Security Service (FSB), the successor agency to the KGB, and current Security Council chief.

Viktor Ivanov - Former KGB officer who served with Putin in the Leningrad KGB and oversaw personnel as deputy head of Putin’s Kremlin during his first term, leading the Kremlin’s initial expansion into the economy.

Viktor Cherkesov - Former senior KGB officer who ran the St Petersburg FSB and was a mentor to Putin, moving with him to Moscow, where he remained a close adviser, first as first deputy head of the FSB and then running the Federal Drugs Service.

Sergei Ivanov - Former Leningrad KGB officer who became one of the youngest ever generals in Russia’s foreign-intelligence service in the nineties and then rose in power under Putin’s presidency, first as defence minister and then as Kremlin chief of staff.

Dmitry Medvedev - Former lawyer who started out working as a deputy to Putin in the St Petersburg administration when he was in his early twenties, and followed closely in Putin’s footsteps thereafter: first as a deputy head of the Kremlin administration, then as its chief of staff, then as Putin’s interim replacement as president.

The custodians, the KGB-connected businessmen


Gennady Timchenko - Alleged former KGB operative who rose through the ranks of Soviet trade to become co-founder of one of the first independent traders of oil products before the Soviet fall. Worked closely with Putin from the early nineties, and according to some associates, before the Soviet collapse.

Yury Kovalchuk - Former physicist who joined with other KGB-connected businessmen to take over Bank Rossiya, a St Petersburg bank that, according to the US Treasury, became the ‘personal bank’ for Putin and other senior Russian officials.

Arkady Rotenberg - Former Putin judo partner who became a billionaire under Putin’s presidency after the state awarded his companies multi-billion-dollar construction contracts.

Vladimir Yakunin - Former senior KGB officer who served a stint undercover at the United Nations in New York, then joined with Kovalchuk in taking over Bank Rossiya. Putin anointed him chief of the state railways monopoly.

‘The Family’, the coterie of relatives, officials and businessmen closely surrounding the first Russian president, Boris Yeltsin


Valentin Yumashev - Former journalist who gained Yeltsin’s trust while writing his memoirs, and was anointed Kremlin chief of staff in 1997. Married Yeltsin’s daughter Tatyana in 2002.

Tatyana Dyachenko - Yeltsin’s daughter who officially served as his image adviser, but was essentially gatekeeper to the president.

Boris Berezovsky - Former mathematician who made his fortune running trading schemes for carmaker AvtoVAZ, the producer of the boxy Zhiguli car that epitomised the Soviet era, and inveigled his way into the good graces of Yeltsin and his Family. When he acquired the Sibneft oil major, he became the epitome of the intensely politically-wired oligarchs of the Yeltsin era.

Alexander Voloshin - Former economist who started out working with Berezovsky on privatisations and other schemes, and was transferred to the Kremlin in 1997 to work as Yumashev’s deputy chief of staff. Promoted to chief of staff in 1999.

Roman Abramovich - Oil trader who became Berezovsky’s protégé and later outmanoeuvred him to take over Berezovsky’s business empire. ‘Cashier’ to the Yeltsin Family and then to Putin.

Sergei Pugachev - Russian Orthodox banker who was a master of the Byzantine financing schemes of Yeltsin’s Kremlin, and then became known as Putin’s banker too. Co-founder of Mezhprombank, he straddled the worlds of the Family and the siloviki.

The Yeltsin-era oligarch who crossed Putin’s men


Mikhail Khodorkovsky - Former member of the Communist Youth League who became one of Russia’s first and most successful businessmen of the perestroika era and the 1990s.

The mobsters, footsoldiers for the KGB: St Petersburg


Ilya Traber - Former Soviet submariner who became a black-market antiques trader in the perestroika years, and then an intermediary between Putin’s security services and the Tambov organised-crime group, controlling St Petersburg’s most strategic assets, the sea port and the oil terminal.

Vladimir Kumarin - Tambov organised-crime boss who lost an arm in an assassination attempt and became known as St Petersburg’s ‘night governor’, joining in business with Putin’s men, most notably with Ilya Traber.

The mobsters, footsoldiers for the KGB: Moscow


Semyon Mogilevich - Former wrestler, known as ‘the Brainy Don’, who at the end of the eighties became banker to the leaders of Russia’s most powerful organised-crime groups, including the Solntsevskaya, funnelling cash into the West and setting up a criminal empire of drugs and arms trafficking of his own. Recruited in the seventies by the KGB, he was ‘the criminal arm of the Russian state’.

Sergei Mikhailov - Alleged head of the Solntsevskaya organised-crime group, Moscow’s most powerful, with close ties to many of the KGB-connected businessmen who later cultivated connections with New York property mogul Donald Trump.

Vyacheslav Ivankov (‘Yaponchik’) - Mobster dispatched by Mogilevich to Brighton Beach, New York, to oversee the Solntsevskaya’s criminal empire there.

Yevgeny Dvoskin - Brighton Beach mobster who became one of Russia’s most notorious ‘shadow bankers’ after moving back to Moscow with his uncle, Ivankov, joining forces with the Russian security services to funnel tens of billions of dollars in ‘black cash’ into the West.

Felix Sater - Dvoskin’s best friend since childhood. Became a key business partner of the Trump Organization, developing a string of properties for Trump, all the while retaining high-level contacts in Russian intelligence.

Acknowledgements


This book would never have been written had it not been for the tremendous friends and family who helped and supported me as what began as a two-year project became an odyssey of writing and investigation. Research started long ago in Moscow and St Petersburg where this book was spurred and made possible by hours of conversations I had with Vladimir Milov, the former deputy energy minister whose relentless tracking of the business dealings of Putin’s inner circle provided a roadmap for the asset-siphoning of the Putin regime; as well as with Andrei Illarionov, the former presidential economic adviser, whose powers of forensic analysis and insights provided an early spark for part of the book’s thesis. Pavel Voshchanov, the former Yeltsin spokesperson and investigative reporter at Komsomolskaya Pravda, opened a window onto a long-forgotten world of asset-siphoning by the KGB at the Soviet fall. Outside Russia, Sergei Kolesnikov, the brave whistleblower who fled Putin’s tight-knit inner circle, shared documents and spurred further research, while Felipe Turover, the former KGB operative who was the informant sparking the investigation into the Mabetex Kremlin reconstruction contracts, was a source of revelatory insights. Tommy Helsby, the former Kroll chairman of investigations who died too soon in 2019, was a generous source of inspiration and valuable investigative leads. He is missed.

Vladimir Yakunin generously spent many hours explaining the point of view of the tight-knit clique of St Petersburg security men surrounding Putin, first in St Petersburg and then in London over many pots of tea. Valentin Yumashev, Yeltsin’s former chief of staff and son-in-law, also spent hours explaining his version of how it was Putin came to power, while in Moscow Yury Skuratov, the former prosecutor general at the centre of the investigation that partly led to Putin’s rise, shared the dramatic story of his probe and the Yeltsin Family’s counterattack. Mikhail Khodorkovsky met with me soon after his release from ten years in a Siberian prison camp and then continued to do so as he helped me make sense of his standoff with the Russian state.

Many other current and former Russian state officials - including former senior Kremlin officials, as well as Russian tycoons, former senior KGB operatives, and senior Moscow bankers - and the current and former associates of Gennady Timchenko - generously shared dozens of hours of their time explaining how the Putin system worked. Most of them did so anonymously because of the obvious sensitivities - and I am eternally grateful for the risks they took. My deep thanks too to N. and G.

It would of course also have been impossible to put this together without the faith shown in me by the Financial Times, for which I was Moscow correspondent for six years. My time with the FT enabled me to further deepen contacts with Russia’s oligarchs, as well as with current and former Kremlin and government officials, forming the foundations for my reporting in this book. It was then that I was first able to meet and interview many of those closest to Putin, including Igor Sechin, Arkady Rotenberg, Viktor Ivanov and Sergei Chemezov. For the great opportunity to write for the FT and take this ringside seat, I am grateful most of all to Lionel Barber, Neil Buckley and John Thornhill, who hired me and then continued to support me, as well as to my colleagues in Moscow and then in London - Charles Clover, Courtney Weaver, Cynthia O’Murchu and Michael Stott - who all guided and inspired me and brightened my day. In addition, I am deeply grateful to the FT for partly funding a reporting project that became part of this book after I departed on book leave, while I owe a great deal to the warm insights of Elena Kokorina and Ekaterina Shaverdova of the FT’s Moscow bureau who continued to help craft interview requests even after I went on book leave.

It would also have been impossible to understand any of these Russian influence and cash networks without the trailblazing and fearless work - and the assistance - of my Russian comrades at the country’s few remaining investigative outlets. Roman Anin of Novaya Gazeta generously shared documents on the operations of the St Petersburg sea port and provided a crucial contact. Anastasia Kirilenko at the Insider led the pack in reporting on the organised-crime networks connected to Putin, sharing documents and crucial contacts, while Roman Shleynov of Novaya Gazeta and then Vedomosti, shared documents on a probe into Putin’s activities as St Petersburg’s deputy mayor and produced some of the most important early work on the business dealings of Putin’s inner circle. The uniquely well- connected Irina Reznik, formerly of Vedomosti and currently of Bloomberg in Moscow, also generously shared invaluable contacts. Without the pioneering investigative articles of these four journalists long before me, it would have been impossible to even begin to put the pieces together. The late Vladimir Pribylovsky, who maintained a database of the connections of Putin’s men, was also a crucial source of information.

In addition, the late Jürgen Roth, the German investigative journalist, long ago provided valuable documents and a heap of inspiration. Steven Lee Myers of the New York Times through his former book research assistant Almut Schoenfeld in Berlin shared another crucial contact. I benefited, too, initially from conversations with colleagues in the US, including Andrew Weiss and Eugene Rumer at the Carnegie Endowment for International Peace, and Thomas Graham, the former senior director for Russia on the National Security Council. In the UK, Christian Michel was an early source of inspiration.

Felicity Bryan MBE believed in the book’s potential and agreed to become my agent, securing a deal with William Collins in the UK and Farrar, Straus & Giroux in the US. I am grateful for her efforts and for the great patience and belief in the project demonstrated by my editors - Arabella Pike, publishing director at William Collins, and Alex Star, executive editor at Farrar, Straus & Giroux. Fainter-hearted editors would have long given up! I had the immense fortune to have Alex Star’s sharp observations and editing advice that helped improve this book many times over. Arabella’s drive and patient understanding of the sensitivities propelled the book from manuscript into reality, while I am also extremely grateful to her team at William Collins - Jo Thompson for her wise read and suggested cuts, to Robert Lacey for a careful smoothing of the copy, and to Iain Hunt for his patient work on the final text. A deep bow too to the legal team.

Along the way, I was extremely fortunate and honoured to receive encouragement and endless patient advice from David Hoffman, the contributing editor and former Moscow bureau chief of the Washington Post, who carefully read chapters and whose 2002 book The Oligarchs stands not only as inspiration but as a model for the art of narrative non-fiction and the foundation for all future reporting on Russia’s troubled transition to a market economy.

Even with all this superb professional assistance, I would never have made it to the end without the great friends who supported me all the way. Some, including Brad Cook, Miriam Elder, William Flemming, Gina Skilbeck and Emma Wells, not only offered friendship but also shared their homes when I needed a place to stay for reporting trips. Others, including Ellen Barry, Catherine Bell, Richard and Charles Emmerson, helped me maintain sanity through this marathon.

I’ll always be grateful to Chris for his moral support. My deepest thanks go to my parents, Marjorie and Derek, as well as to Richard and to Catherine Birkett. Without their indefatigable support, none of this would have been possible.

About the Author


Catherine Belton

Catherine Belton is a journalist and writer. From 2007 to 2013, she was the Moscow correspondent for the Financial Times. In Putin's People, published in 2020, Belton explored the rise of Russian president Vladimir Putin. It was named book of the year by The Economist, the Financial Times, the New Statesman and The Telegraph. It is also the subject of five separate lawsuits brought by Russian billionaires and Rosneft.

She lives in London and currently works as an investigative correspondent for Reuters based in London.

Career

From 2007 to 2013, Belton worked at the Financial Times as the newspaper's Moscow correspondent, having previously written about Russian current affairs for both The Moscow Times and Business Week. She was also in 2016 the legal correspondent. In 2009, the British Press Awards shortlisted Belton for the Business journalist of the year award.[1]

She currently works as an investigative correspondent for Reuters based in London.[1][2]

Putin's People

Published in April 2020 by William Collins in the UK, and in June by MacmillanPutin's People: How the KGB Took Back Russia and Then Took On the West is an account of Russian president Vladimir Putin's rise to power, and the Kremlin's influence on the West.[3]

Luke Harding (author of Shadow State: Murder, Mayhem and Russia's Remaking of the West), writing for The Guardian, described the book as "the most remarkable account so far of Putin's rise from a KGB operative to deadly agent provocateur in the hated west... This is a superb book. Its only flaw is a heavy reliance on well-placed anonymous sources."[4]

The Economist named Putin's People as one of its books of the year in the category of politics and current affairs, saying "this [book] is the closest yet to a definitive account. It draws on extensive interviews and archival sleuthing to tell a vivid story of cynicism and violence."[5] The Financial Times also chose it as one of its best books of 2020.[6]

In March 2021, Roman Abramovich filed a lawsuit in London against Belton and her publisher, HarperCollins, for defamation. Harbottle & Lewis is representing Abramovich over the matter.[2] Belton, on the account of Sergei Pugachev, alleges that Abramovich acquired Chelsea Football Club in 2003 under Putin's instructions.[7][8] The libel suit was settled with HarperCollins issuing a public apology to Abramovich. Although the book carried a denial from him, future editions will explain Abramovich's motivations in more detail.[9]

Further lawsuits have been brought against HarperCollins by Mikhail FridmanPetr Aven; and against both the author and publisher by Shalva Chigirinsky, and Rosneft.[10] HarperCollins have stated they will "robustly defend" the actions. The Guardian described it as "a pile-on from Russian billionaires on a scale this country has never witnessed" and "London’s lawyers are hard at work. Carter-RuckCMS, Harbottle & Lewis and Taylor Wessing have a billionaire apiece in a kind of socialism of the litigious."[11]

References

  1. "Catherine Belton". US Macmillan. Retrieved 23 May, 2021.
  2. "Russia tycoon sues publisher and Reuters reporter over Putin book". Reuters. 23 March 2021. Retrieved 12 June 2021.
  3. "Putin's People | Catherine Belton | Macmillan"US Macmillan. Retrieved 23 May 2021.
  4. Harding, Luke (12 April 2020). "Putin's People by Catherine Belton review – relentless and convincing"The Guardian. Retrieved 23 May 2021.
  5. "Our books of the year"The Economist. 3 December 2020. Retrieved 23 May 2021.
  6. "Best books of 2020: Politics". Financial Times. 17 November 2020. Retrieved 23 May 2021.
  7. "Russian Billionaire Abramovich Sues Author Catherine Belton for Defamation". The Moscow Times. 23 March 2021. Retrieved 23 May 2021.
  8. Ahmed, Murad (22 March 2021). "Roman Abramovich sues HarperCollins over Chelsea acquisition claims". Financial Times. Retrieved 23 May 2021.
  9. Cheng, Amy (24 December 2021). "Publisher apologizes to billionaire for claim in book on Putin and oligarchs". The Washington Post.
  10. Shubber, Khadim; Foy, Henry; Seddon, Max (1 May 2021). "Russian billionaires file lawsuits over book on Putin's rise"Financial Times. Retrieved 23 May 2021.
  11. Cohen, Nick (8 May 2021). "Are our courts a playground for bullies? Just ask Catherine Belton"The Guardian. Retrieved 23 May 2021.

CATHERINE BELTON worked from 2007-2013 as the Moscow correspondent for the Financial Times, and in 2016 as the newspaper’s legal correspondent. She has previously reported on Russia for the Moscow Times and BusinessWeek. In 2008, she was shortlisted for Business Journalist of the Year at the British Press Awards. She lives in London.

© Copyright 2020 Catherine Belton


Putin’s People: How the KGB Took Back Russia and Then Took on the West

Catherine Belton

Copyright
William Collins
An imprint of HarperCollins Publishers
1 London Bridge Street
London SE1 9GF

WilliamCollinsBooks.com

This eBook first published in Great Britain by William Collins in 2020

Copyright © Catherine Belton 2020

Cover photograph © Getty Images

Catherine Belton asserts the moral right to be identified as the author of this work

A catalogue record for this book is available from the British Library

All rights reserved under International and Pan-American Copyright Conventions. By payment of the required fees, you have been granted the non-exclusive, non-transferable right to access and read the text of this e- book on-screen. No part of this text may be reproduced, transmitted, down-loaded, decompiled, reverse engineered, or stored in or introduced into any information storage and retrieval system, in any form or by any means, whether electronic or mechanical, now known or hereinafter invented, without the express written permission of HarperCollins

Source ISBN: 9780007578795

Ebook Edition © April 2020 ISBN: 9780007578801

Version: 2020-04-29