Putin's People summary

At the time of the Soviet Union, the ruling Communist Party and the KGB were like peas in a pod. The laundry list of financial crimes they committed together is practically endless.

One of their joint schemes involved the KGB physically smuggling millions of dollars to left-leaning groups abroad. Legally, these funds had to be pulled from donations to the Communist Party. So, the government sent its own money to Communist Party members. Then they transferred it abroad via the KGB.

Early in 1990, as the Soviet Union was collapsing, Vladimir Putin was ordered to return to Leningrad, as St. Petersburg was then known. There, he set his sights on Leningrad’s burgeoning pro-democracy movement. The movement seemed dangerously likely to disrupt the Communist Party’s dominance over the city’s politics.

Soon, Putin became the liaison between the KGB and a man named Anatoly Sobchak. Sobchak was a charismatic law professor who frequently spoke in favor of democracy and against the KGB in public. But in private, he may have had unofficial dealings with the organization. By May of that year, Sobchak was appointed the new city council chairman, with Putin as his right-hand man.

St. Petersburg’s mayor, Anatoly Sobchak, lost his campaign for reelection in the summer of 1996. Vladimir Putin, who was loyal to Sobchak, immediately resigned from the city’s administration.

Less than a month after his resignation, Putin was invited to Moscow. He was asked to take the position of deputy head of the Kremlin administration. He was ultimately blocked from that role. But in its place, he became head of the Kremlin’s foreign property department. The position represented the core of Russia’s imperial wealth. This was a major promotion for Putin.

At the very beginning of Putin’s reign, few people predicted that the country was heading toward authoritarianism and kleptocracy. But a few people did see the writing on the wall.

One of these prescient few was an oligarch named Boris Berezovsky. Among other businesses, he owned a television channel called ORT. The channel devoted much of its airtime to criticizing Putin. On one occasion, it repeatedly played footage of Putin riding on a jet ski in the aftermath of a Russian submarine’s tragic explosion.

Mikhail Khodorkovsky, the Russian oligarch who was once the chairman and CEO of the oil company Yukos, is a self-described adrenalinschik – an adrenaline junkie. In his youth, he was fond of rock-climbing without any equipment. Later, in prison, he slept soundly even when threatened by knife attacks.

So when Vladimir Putin sought to take control of Yukos, Khodorkovsky refused to bend to the president’s will. He hired Western executives and drilling equipment manufacturers to entrench the company in Western markets. He created Open Russia, a philanthropic organization that taught Russian teenagers the principles of democracy. He even gave a presentation accusing the Russian government of corruption – at a meeting where Vladimir Putin himself was present.

It was Wednesday, October 23, 2003, at Moscow’s Dubrovka musical theater, a few miles south of the Kremlin. Nine hundred audience members packed the seats as tap dancers leaped across the stage.

As the second act of the musical opened, the unthinkable happened: 40 armed Chechen fighters stormed into the theater, firing warning shots from assault rifles into the air. They began to wire the building with explosives and sealed off the auditorium. Women wearing black hijabs and explosive belts positioned themselves amongst the rows.

In 2004, just at the time Yukos was being broken up and its assets vacuumed up by the Kremlin, a few other transactions on Moscow’s stock exchange brought further power to Putin.

Shares in an insurance company called Sogaz – which belonged to the state-controlled Gazprom – were sold at a discounted price to three obscure companies. All three turned out to be connected to Bank Rossiya, a St. Petersburg bank that was the stronghold of Yury Kovalchuk, an old Putin ally.

Thanks to rising oil prices, Russia’s fortunes were growing throughout the early 2000s. A burgeoning middle class could now shop at Western-style malls cropping up in city centers. Even in remote Siberia, restaurants were serving lamb from New Zealand and wine from France.

These days of plenty also allowed Russian companies to slowly begin listing their shares on Western stock exchanges – especially in London. In 2005 alone, they gained more than $4 billion in share sales in the British capital. Comparatively, in the 13 years after the Soviet collapse, Russian company shares had only netted $1.4 billion in all markets combined.

After Putin’s second term ended in 2008, Dmitry Medvedev assumed the Russian presidency. Many in the West hoped he would move his country’s economy back to a freer market system. His willingness to cooperate with Western leaders seemed like a sign that liberalism was back on the rise in Russia.

Unfortunately, many of Russia’s actions early in Medvedev’s presidency undermined this hope. In August 2008, Russia escalated military action in the Western-leaning former Soviet republic of Georgia. This ended any hope the country had of joining NATO. And Medvedev extended the term of his successor to six years instead of four. This was a clear signal that Putin was waiting in the wings to return as Russia’s president. And this time, Putin was ready to extend his political reach even further.

Throughout the 2000s and 2010s, Putin and his men were funneling black cash into the West through a series of complex money-laundering schemes.

Some of these schemes involved offshore companies that received payments funneled in from tycoons close to Putin. Others involved shell companies signing fake loan agreements between themselves – agreements that were then used to siphon money out of Russia. Then there were mirror trades. These allowed investors to buy Russian stocks in Russian rubles while seemingly unconnected companies sold the same amount of stock through Deutsche Bank in London.

Long before Donald Trump ever announced his intentions to run for president, he had dealings with Russians.

It all started with a man named Shalva Tchigirinsky, an antiques smuggler who was rumored to have ties to the infamous Solntsevskaya organized crime group. He first met Trump at the Taj Mahal in Atlantic City, New Jersey. He was impressed by the casino’s glitz and glam.