Money and Control

On Wednesday July 26, 2017, William “Bill” Browder testified before the United States Senate Judiciary Committee. The international financier with deep roots in the Russian business world explained what drives Russian President Vladimir Putin: money, power, and protecting the powerful men who hold his money.

When Putin first became president in 2000, he inherited the Yeltsin-era oligarchs who had amassed great fortunes via a corrupt and rigged process of state-run asset privatization following the fall of the Soviet Union. Putin’s initial strategy was to warn these powerful men they no longer would enjoy special treatment from the government, but at the same time, he would allow them to continue business as usual as long as they stayed out of politics. By October 2003, however, Putin had seen enough political interference, especially from Russia’s richest man, Mikhail Khodorkovsky, and had him arrested. During a very public trial, Putin humiliated the billionaire by forcing him to sit in a cage in the middle of the courtroom. As Browder notes, the spectacle had the desired effect:

Sanction many of Russia’s top oligarchs is exactly what the United States did when it passed the Magnitsky Act – which Browder lobbied for in honor of his murdered attorney Sergei Magnitsky – in 2012 and why Putin’s priority is having the U.S. repeal the suffocating legislation. The act freezes the U.S. assets of Russians guilty of human rights abuses and prohibits them from getting American visas. Not only does this impact Putin’s access to wealth, but it also calls into question his promised ability to protect his oligarchs and the true magnitude of his global power.

Putin’s response to the Magnitsky Act was to prohibit Americans from adopting Russian children, which is why, experts say, Russians discussing “adoptions” is code for lobbying to lift the Magnitsky Act sanctions.

Power

While Putin has amassed great personal wealth, Russia as a nation lacks financial security and the military superiority of the former Soviet Union. Russia’s economy is about one fifteenth the size of the United States’, and military spending is about a tenth. Russia struggles with an overdependence on oil which, when prices drop, greatly impacts government revenue. Less government income means fewer services and resources and greater risk of populist upheaval. At the same time, Putin craves territorial expansion or re-expansion. As James B. Foley, former Deputy Chief of Staff to the NATO Secretary General in Brussels, writes in a piece entitled “Don’t Let Vladimir Putin Destroy NATO” for Time, “Vladimir Putin has been remarkably candid about his strategic goal: to roll back the historic losses suffered by the Soviet Union at the close of the Cold War, and to restore Russia’s status and prestige as a great power and peer competitor of the U.S.”

Putin’s plan for empowering Russia relies in large part on destabilizing the Western democracies aligned against him and poisoning their relationships with each other. A fortified European Union and a strong NATO alliance are a check on Putin’s ambition. Weakening one or both coalitions gives the Russian leader more leverage. As it stands now, acts of aggression – such as Russia’s 2014 annexation of Crimea and ongoing intervention in Ukraine – are met with punishment like international sanctions. For Putin, the demise of strong Western alliances would mean the end of coordinated consequences.

Revenge

“Putin can’t undo Russia’s Cold War defeat by America. But he can avenge it.”

– Michael Crowley “Putin’s Revenge,” Politico Magazine 12-16-16

President Vladimir Putin grew up in the Soviet Union where he trained and served as a KGB agent on her behalf. He believed her demise was “the greatest geopolitical catastrophe of the century” and was unhappy with President Boris Yeltsin’s more cooperative approach to President Bill Clinton and U.S. foreign policy in the mid-1990s. One of Putin’s first actions on his first day as president on January 1, 2000 was to meet with Russian troops and tell them “their mission included ‘restoring Russia’s honor and dignity.”

Initially, Putin and President George W. Bush shared an amicable relationship, but in 2004, the U.S. supported a pro-Western movement challenging the presidential election outcome in Ukraine – the Orange Revolution -- that angered Putin. He did not like the U.S. interfering in a former Soviet region in the name of democracy. Also in 2004, President Bush helped Estonia, Latvia and Lithuania – three former Soviet republics – join NATO. Then in 2008, Bush championed allowing Georgia and the Ukraine to start NATO Membership Action Plans, a proposal overruled by allies who felt the move premature and an unnecessary provocation of Russia. Putin did warn he would interpret their addition as “a direct threat to Russian security.”

Putin’s distaste for the U.S. persisted under the Obama administration. He saw Secretary of State Clinton as someone promoting both democratization in Europe and the multilateral interventionist U.S. policy of her husband’s administration, an approach he considered dismissive of and a threat to Russia. Putin also viewed Clinton’s support for NATO’s eastward expansion as evidence of a crawling Western invasion and unacceptable Western interference in Russia’s “near abroad.”

In December 2011, Putin’s negativity towards Clinton turned even more personal when demonstrators turned out in the dead of winter to protest allegedly rigged elections. At a conference in Lithuania, Clinton made remarks in support of the Russian people having access to free and fair elections with transparency and accountability. Putin interpreted Clinton’s comments as interference in Russian internal matters and direct assault on his power. He also saw a threatening pattern emerge as the U.S. had toppled Saddam Hussein’s authoritarian government in Iraq, the Arab Spring had swept through North Africa and the Middle East, and NATO had intervened in Libya, resulting in Muammar Gaddafi’s very public, violent demise.

We now know Hillary Clinton’s presidential run gave Putin the perfect opportunity to plot his revenge and deploy Russia’s cyber warfare capabilities to reassert Russia as a force to be reckoned with on the international stage.