In Putin’s People, Catherine Belton reveals the untold story of how Vladimir Putin and his entourage of KGB men seized power in Russia and built a new league of oligarchs. Through exclusive interviews with key inside players, she tells how Putin’s people conducted their relentless seizure of private companies, took over the economy, siphoned billions, blurred the lines between organised crime and political powers, shut down opponents, and then used their riches and power to extend influence in the West.
Putin’s People is published by HarperCollins.
five minutes with catherine belton
Catherine Belton is an investigative correspondent for Reuters. She 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 Business Week. In 2009, she was shortlisted for Business Journalist of the year at the British Press Awards. She lives in London.
What sparked your interest in Russia?
I was finishing school around the time the Berlin Wall fell and studying German. The collapse of empires became something of a fascination. I studied ballet as a child and read lots of books about Anna Pavlova and the Mariinsky theatre so I also had this fascination with Russia. When I was deciding what I wanted to do after school, I considered studying either German and Japanese or German and Russian. Ultimately it depended on the prosaic matter of which country I’d saved up enough money to go to. So I flew to Moscow in December 1991 at New Year, right at the fall of the Soviet Union. It was just an incredible time, exhilarating, a completely new world. It was the first time people were allowed on Red Square to celebrate on New Year’s Eve. I went on to study in Krasnoyarsk, which had only been open to foreigners for a few years, and we were treated with such hospitality. After graduating, I worked for an English language newspaper in Moscow and became addicted to covering Russian news, but I had a general fear I didn’t fully understand what I was writing about, so I came back to the UK to study for an MA in Russian politics.
Why did you decide to write this book?
I felt I had had a position of great privilege, particularly at the Financial Times, where we had access to all kinds of senior people - government officials, the oligarchs. You were able to build relationships with so many people, but I felt in covering Russia day to day we didn’t get to the bottom of how Putin came to power, what happened to the security services, how they managed to return and accumulate so much power. I felt it would be a waste of all the time I’d spent in Russia and all the contacts I had made if I just went back to London and wrote about something different. I really wanted to take the chance to go deeper and took some book leave in 2013. I wanted to really delve into the role of the security services and how they developed and remained in the shadows in the 90s as a force to be reckoned with. Many books had written them off in the 1990s but they had preserved fragments of their networks. I wanted to look at how it was that Putin ran the country by taking a leaf out of book of KGB operations in the late 1970s and 1980s, and how they continued working underground in the 1990s.
How did you conduct your research?
It was a long process. I spent the first year and a half in Moscow and travelling to St Petersburg where I was doing most of the research. I left Russia in July 2014 just as the Ukraine crisis was exploding. It had become much more difficult to speak to my sources in Moscow by then: they were all looking over their shoulder. But many in London were willing to speak and those who travelled there from Moscow often spoke more freely than when in Russia. When you are writing a book it’s easier: you can offer anonymity and people know you’re speaking to a very broad range of people so generally they feel secure. People are a bit more relaxed when they know you are not producing an article the next day.
What did you discover that was new?
I was able to track down Felipe Turover, a KGB operative who played a key role in the scandal that brought Putin to power as the whistleblower who revealed the Yeltsin Family was given credit cards by a Swiss company reconstructing the Kremlin. He’d been quite high level operator who also happened to know Putin and worked with him in the early 1990s on the oil for food deals in St Petersburg. His explanation added a greater element to understanding how the Putin regime operates. Everyone knows that in Putin’s St Petersburg oil-for-food deals the scandal centred around crony companies appointed to handle commodity exports who were able to keep the cash (rather than import food). But Turover’s explanation of the deals showed they were not just about corruption, but more strategic: Putin was handing out export licences to people he knew, very often connected via the KGB, because the city needed to create a hard currency slush fund to pay off debts to pay for equipment for vital infrastructure and to maintain intelligence networks abroad. Turover added a strategic dimension to what we’d come to know as pure kleptocracy. Putin and his allies were not just lining their pockets but siphoning off funds for more strategic ends. It became apparent how Russia under the current Putin regime continues to run in much the same way: Putin has parcelled out the country’s economy and its cash flows to a tight network of loyal allies who run these sectors of the country and divert funds to the Kremlin, sometimes to help win elections, run propaganda, and more recently to seek to boost Russia’s geopolitical stature by undercutting rivals and undermining western democracy.
Did Putin have a plan in the early 1990s to become president?
I don’t think there was a masterplan. When the Soviet Union collapsed, the KGB was in deep trouble but fragments of it had also helped drive the transition to the market. There were progressive elements who saw that the Soviet economy would never compete with the West so they helped engineer the transition and then – when the collapse came so precipitously - they tried to preserve their networks. Putin never dropped his connections. His old allies were running the St Petersburg FSB and took control of much of the city’s economy along with the mafia. In Moscow, a new generation of oligarchs had taken over most of the economy. But there was a contingent of ex security service people who were still pretty influential and held quite high positions in the Kremlin. As one close Putin ally from the KGB said, when it came to the transfer of power in 1998-99, Yeltsin had so much botched the economy that he had very little choice but to contact this contingent and make a compromise. It was by chance that Putin was considered most loyal to the Yeltsin Family and was able to get to the top , but all the contenders to take over as president were ex KGB: Stepashin, Primakov and Putin.
What is your view on the claims of Putin’s personal corruption?
Obviously the regime now has so much cash at its command that the more than $1bn spent on a Palace for Putin on the Black Sea is a drop in the ocean [Putin has denied ownership of the palace by him or his close relatives]. I spoke to Sergei Kolesnikov, his money man and the original whistleblower on the Palace to which the cash was diverted. The funds Kolesnikov controlled were originally supposed to be spent on investment projects in the real economy such as developing a shipyard in St Petersburg. But Putin had developed a taste for living like a Tsar. Unfortunately even the US is now reviewing Russia’s status as a market economy - it is so tightly controlled by Putin’s KGB men. They control the legal system and all elements of power to such an extent that most businessmen of any stature have to share their wealth. Most deals have to be approved and profits shared.
Do you have plans for another book?
I think not. This one took me seven years. I don’t think I can afford to do that again. Maybe when I am 70 – and the court cases surrounding this one are long over.
INTERVIEW FOR PUSHKIN HOUSE BY ANDREW JACK (@AJACK)
REVIEWS
“This is the most remarkable account so far of Putin’s rise … Groundbreaking … several hair-raising revelations … Relentless and convincing. There are gobsmacking moments … This is a superb book” - The Observer
“A fearless, fascinating account … Reads at times like a John le Carré novel… A groundbreaking and meticulously researched anatomy of the Putin regime, Belton’s book shines a light on the pernicious threats Russian money and influence now pose to the west” - The Guardian
“Modern Russia in full, horrifying technicolour … this riveting, immaculately researched book is arguably the best single volume written about Putin, the people around him and perhaps even about contemporary Russia itself in the past three decades” - Financial Times
“Books about modern Russia abound … Belton has surpassed them all. Her much-awaited book is the best and most important on modern Russia. It benefits from a meticulous compilation of open sources, but also from the accounts of disillusioned Kremlin insiders, former business cronies and some remarkably candid people still high up in the system. The result is hair-raising.” - The Times
“An outstanding exposé of Putin and his criminal pals … [A] long-awaited, must read book” - The Sunday Times
