Disarray Among Putin’s Elites Deepens as Russia’s Self-Isolation Progresses

Publication: Eurasia Daily Monitor Volume: 10 Issue: 30

President Vladimir Putin speaks at the G20 ministerial in Moscow, February 15 (Source: RIA Novosti)

The meteor that exploded over Chelyabinsk in the early hours of February 15, as damaging as it was, produced even more jokes than material destruction. One of those was about the State Duma urgently approving legislation banning the incursions of celestial bodies because of their pronounced anti-Russian inclinations (Newsru.com, February 15). The joke captures the frantic activity of the Russian parliament, which has lost legitimacy in the crudely falsified elections in December 2011. As a result, the Duma now tries to compensate for this disgrace by producing a deluge of laws aimed at restricting the growth of the country’s fledgling civil society and promoting “patriotism” even in such ugly forms as the prohibition of adoption of orphans by American families. Consequently, this commonly disparaged institution is now seen by a record high 42 percent of Russians as playing a big or very big role in Russia’s political life (Levada.ru, February 14). The unintended consequence of this attention-seeking behavior, however, has been a series of scandals that reveal the scope of corruption among the parliamentarians who are supposed to represent a key part of the political establishment (Moskovsky Komsomolets, February 14).

Vladimir Pehtin, the head of the committee on parliamentary ethics, had to resign from this chair after the publication by activist-blogger Alexei Navalny of documents confirming his ownership of a condo in Miami, which was not mentioned in his tax declaration (RIA Novosti, February 13). This revelation could have gone unnoticed, if it had not coincided with President Vladimir Putin’s introduction of a draft law that would prohibit a wide group of key state officials from holding bank accounts abroad, while all real estate owned overseas would need to be declared (Nezavisimaya Gazeta, February 13; see EDM, February 14). The aim of this legislation is to ensure loyalty among the prime beneficiaries of the “power-is-money” regime through the newly-launched campaign of “nationalization of the elites” (Forbes.ru, February 13). The predatory elites, however, remain reluctant to be “nationalized” in terms of repatriating their ill-gained fortunes. Keeping their wealth abroad allows them to enjoy a level of property rights, which are mostly non-existent in Russia.

These elites have suddenly discovered they can no longer dismiss as irrelevant the disclosures of their “safe havens” by fierce bloggers who promise hundreds of new sensations in the campaign called “Pehting”—the resonance in Internet-savvy Russia has grown too damaging (Vedomosti, February 13). Putin, on the other hand, has recognized the urgency of containing this damage and instructed the Federal Security Service (FSB) leadership to “neutralize” the attempts of extremists controlled from abroad to “rock the society and the country” by spreading malicious propaganda through the Internet and social networks (Moscow Echo, February 14). He may indeed be furious about Navalny’s defiance, but his Siloviki enforcers are en masse ignorant of information technologies; and all their awkward attempts to control the web invariably backfire. A new trend spreading joyfully across the Russian social networks is the demonstration of shameless plagiarism in the academic dissertations defended by government officials and Duma deputies, and Putin knows that his own degree was obtained by rather dubious means (BestToday, February 16).

A deeper worry for the business elites is the fallout from messy domestic corruption scandals related to their ties with the West. Indeed, their inflow of Russian money is being scrutinized more closely as transactions are getting murkier and reputations sink lower. Meeting at the Kremlin with the G20 finance ministers on February 15, Putin found it opportune to remind them of the need to help Cyprus, which is in budget distress, but was rebuffed by Germany’s no-nonsense Finance Minister Wolfgang Schäuble who is firmly against rescuing the Russian money laundering channel inside the euro zone (Kommersant, February 16). Prime Minister Dmitry Medvedev, on the other hand, sought to reassure investors disappointed with the domestic climate by asserting at the Krasnoyarsk Economic Forum that only democracy could ensure Russia’s return to strong growth (Expert, February 15). This theoretical argument was, however, even less convincing than his half-joke that the Chelyabinsk meteor could be a symbol of this forum—which is known for encouraging liberal economic thoughts that are, in fact, becoming irrelevant. One piece of empirical evidence for the sour mood of entrepreneurs is the fact that in the last two months, more than 200,000 small businesses in Russia were shut down because of heavy bureaucratic pressure (Rossiyskaya Gazeta, February 15).

While Medvedev tried to re-connect with the liberal-minded part of the elites, Putin and the head of his presidential administration, Sergei Ivanov, attended a meeting of a militantly conservative organization oddly called “Parent’s Resistance” and praised them as the “true patriots of Russia” (Moskovskie Novosti, February 11). It is uncertain, however, whether Putin is more credible in the eyes of Soviet-style statists than Medvedev is for liberal reformers. For one thing, the Kremlin has been unable to curtail corruption, where the test case is the investigation against former Defense Minister Anatoly Serdyukov who refuses to wear the mantle of an appointed scapegoat (New Times, February 11). This confusion among the key elite groups is seen by the anti-Putin factions as a major weakness in the regime’s defenses, and the allied opposition’s Coordination Council aims at deepening the splits. The Council has issued a statement pinning personal responsibility for election fraud and human rights violations in Russia on four officials who deserve to be included on the “Magnitsky list”: the head of the Investigative Committee Aleksandr Bastyrkin, the head of the Central Electoral Commission Vladimir Churov, the chairperson of the Moscow City Court Olga Egorova, and the president of Chechnya Ramzan Kadyrov (Moscow Echo, February 16).

In search of a new solid support base for his aggressive-defensive presidency, Putin drifts further into the territory of anti-reform populism and anti-Western “patriotism,” where even the timid Medvedev is reluctant to follow him. The emphasis on restoring Russia’s traditional reliance on military might, meanwhile, proves counter-productive as defense-industrial clans feud over divvying up the budget funding, while not bothering with returns on their ambitious investments. The majority of elites that gained access to enormous wealth during the “Putin era” has no stake in the rearmament but is positively irked by the corruption scandals and irritated by the damage to its reputation in the West. The last thing these elites want is to be disciplined and “nationalized,” and this erosion in the upper layers of the vast bureaucratic pyramid leaves Putin isolated at the top, while releasing the bricks to Brownian motion. It would not take a political meteor to trigger a runaway implosion.