Putin’s People. Catherine Belton

vote.[116] By that time, Primakov had re-emerged from the political sidelines to form a bold new alliance with Yury Luzhkov, the powerful Moscow mayor, for the upcoming parliamentary elections. By comparison, said Yumashev, ‘Putin looked like a child.’[117] But many in the Kremlin still worried that Yeltsin had gone too far in naming him as his preferred successor. ‘Many of our colleagues considered that Yeltsin categorically should not do this – because Putin was an unknown entity and Yeltsin only had 5 per cent political support. They thought that after such an announcement Putin would never win,’ Yumashev said.

      To the outside world, it seemed the Yeltsin Family were taking an enormous risk. But other plans were afoot. An escalation of a Russian military offensive against Chechnya had already been under discussion, Stepashin said later.[118] Most important for the bureaucrats and spin doctors inside the Kremlin was to transform the awkward-seeming candidate they’d been presented with into a force to be reckoned with. At first glance, the material didn’t seem very promising. People still talked over Putin in meetings. The plan was to cast him in the image of one of the most popular fictional TV heroes from Soviet times. He was to be a modern-day Max Otto von Shtirlitz, an undercover spy who’d gone deep behind enemy lines to infiltrate the command networks of Nazi Germany. Putin would be the kandidat rezident, the spy candidate, a patriot who would restore the Russian state.[119] Their main task was to distinguish him from the Yeltsin Family – so that the public would see him as independent. His youth, cast against the ageing and ailing Yeltsin, was meant to give him an immediate advantage, while Kremlin-linked TV channels sought to portray him acting decisively against the separatist incursion into Dagestan. In the background, Berezovsky was perfectly capable of trying to organise a small victorious war to help spur Putin’s vault to power, two of his close associates said.[120]

      In the rush to help engineer his ascent, Pugachev had paid little attention to warning signs of Putin’s duplicity. That July, when Pugachev had attempted to deal with the fallout of the Swiss prosecutors’ case, holding talks in the Kremlin late into the night with Putin, Patrushev and Voloshin to try to persuade the acting prosecutor general, Yury Chaika, to step down in favour of an even more loyal ally, Putin had apparently played a double game. Chaika initially resisted, only to agree a few days later after separate talks with Pugachev, during which he warned him that Putin’s allegiance to the Kremlin might not be clear-cut: ‘With Putin you need to be careful,’ he said. ‘When you all met with me in the Kremlin and tried to persuade me for six hours to step down, Putin accompanied me out of the Kremlin after it was all finished. He told me I was right not to agree. He told me if I did it would be a crime.’[121]

      But Pugachev promptly forgot Chaika’s warning. The scandal over Mabetex was still refusing to die down despite all the manoeuvrings, and at the end of August calamity hit, when details of how the probe was linked to the Yeltsin Family finally broke into the open. The Italian newspaper Corriere della Sera published an article that disclosed how Mabetex’s owner Behdjet Pacolli had issued the credit cards to the Yeltsin Family and covered the payments for them.[122] The paper said the Swiss prosecutors suspected the payments were bribes in return for the Kremlin renovation contract. It named Felipe Turover as the central witness for these claims.

      The news hit Yeltsin’s Kremlin hard.[123] Till then, only they – and the prosecutor – had known how far the probe might go. Pugachev once again scurried to assist. ‘Tanya was totally flabbergasted when the press reports appeared,’ he said. ‘But I promised her I would make it go away.’[124] He invited the Yeltsin Family to open accounts at his own Mezhprombank, and then told the media that the credit cards in question had first been issued years ago, through his bank. The move was designed to confuse the press and remove questions over whether Yeltsin had broken the law by holding a foreign bank account.[125]

      In Pugachev’s eyes, the whole case was unfair. Yeltsin, he said, had never even understood what money was. On one occasion, drunk, he’d asked his chief bodyguard, Alexander Korzhakov, to buy him vodka, and had pulled a wad of notes out of a safe in his room. This, said Pugachev, was where he’d kept the royalties for the books he’d written with Yumashev. Yeltsin had pulled out $100. ‘He asked Korzhakov if this was enough. He had no idea what money was, or how much things were worth. He never handled this himself.’ Almost no money had ever been spent on the credit card issued in Yeltsin’s name – only some for an official visit to Budapest. His daughters, however, had spent considerably more. ‘Tanya could spend $100,000 a month on furs,’ said Pugachev. But none of them understood what a credit card was, or how it worked or what it signified: ‘They would just go out with this piece of plastic and use it to buy things. They didn’t understand that someone had to pay for it.’[126]

      Yumashev said they’d been convinced that the cards were financed by Yeltsin’s royalties from his memoirs. Borodin, the Kremlin Property Department chief, had told them so, he said: ‘They absolutely sincerely spent this money believing it was from the royalties of the books. But I don’t doubt that this stupidity of Borodin could be used by all kinds of forces against us, including Primakov and Skuratov.’[127]

      Clouds were looming ever larger on the horizon, and the money trail had the potential to go further still. On the first anniversary of the August 1998 financial crisis, the New York Times broke the news of yet another Russian financial scandal.[128] US law-enforcement agencies were investigating billions of dollars in suspected money-laundering transactions through the Bank of New York by Russian organised crime. A month later, reports of a link to the Yeltsin Family emerged. Investigators had traced the $2.7 million transfer to two accounts held with the Bank of New York in the Cayman Islands, held in the name of Tatyana’s then husband, Leonid Dyachenko.[129] Later, documents from the Swiss prosecutors’ office showed that they were also investigating a much bigger transfer through Banco del Gottardo to an account beneficially owned by Tatyana.[130] No charges were ever pressed and Yumashev said any suggestion that Tatyana had ever received such funds was ‘absolute lies’.

      But amid the mounting tension and the scramble to save themselves from attack, Pugachev had brushed aside a warning from Putin’s former mentor Anatoly Sobchak, who’d told him he was making a great mistake: ‘I thought maybe he was jealous. But of course he knew it all.’[131] He’d forgotten about Berezovsky’s own qualms when he told him, ‘Sergei, this is the biggest mistake of your life. He comes from a tainted circle. A komitetchik cannot change. You don’t understand who Putin is.’[132] He’d forgotten, too, about his own deep hatred of the KGB, about how he’d run and dodged from them long ago when he was trading currency as a teenager in the tourist hotels of Leningrad. He’d forgotten Chaika’s warning, and nobody – not even Pugachev – noticed that Putin still met frequently with Primakov, who was meant to be the arch-enemy, after he’d been fired as prime minister. It turned out that Putin had taken the entire top ranks of the FSB to Primakov’s dacha, where they toasted him, and in October that year Putin attended Primakov’s seventieth birthday celebrations and gave a speech lauding him.[133]

      Pugachev and the Yeltsin Family had closed their eyes to all this. They wanted above all to believe that Putin was one of them. That summer of intensifying investigations had left them desperately seeking a successor from among the security men who could protect them. Somehow they came to believe that Putin was the only candidate capable of that. Increasingly impaired by illness, Yeltsin seemed forced to go along with them. Ever since Primakov had been appointed prime minister in the wake of the August 1998 financial crisis, the Yeltsin Family had believed there was no alternative to appointing someone from outside the siloviki as a replacement. In the financial collapse, liberal ideals and the young reformers among whom Yeltsin had once been searching for his successor had become tainted. ‘We swallowed so much freedom we were poisoned by it,’ Yumashev later said wryly.[134]

      Putin’s lip service to market and democratic principles had helped the Family believe he would continue their course. But paramount in their calculations had been his daredevil operation to whisk his former mentor Anatoly Sobchak out of Russia and away from the threat of arrest. ‘This show of loyalty was counted … as a weighty factor in choosing him,’ said Gleb Pavlovsky, a Kremlin adviser and spin doctor at the time.[135] The Family knew that, much more than Stepashin, Putin was ruthless enough to break the law to protect his allies if necessary.

      Besides,