REPORTS
ANALYTICS
INVESTIGATIONS
  • USD89.05
  • EUR95.39
  • OIL84.87
DONATEРусский
  • 722
OPINION

The weak mighty of this world. Milov's perspective on why attempts to create split among oligarchs through sanctions relief are futile

Recent occurrences – such as the withdrawal of sanctions against Oleg Tinkov, the inclusion of Mikhail Fridman and his associates from the Alfa Group in the American sanctions register, the controversy surrounding Yandex's founder Arkadiy Volozh, and the potential revocation of Latvian citizenship from Alfa-Bank's co-owner Petr Aven – have incited fresh rounds of debates on how to foment discord within Putin's inner circle. Is it advisable to offer them incentives, symbolized as a “carrot,” by lifting sanctions in response to actions against Putin? What actions could effectively drive a wedge? Does the entire discourse hold significance in the grand scheme of things?

The author of these lines boasts six years of experience in public service and possesses personal familiarity with roughly half of Russia's Forbes list, along with a considerable number of current government officials. It appears pertinent to adopt a pragmatic perspective on this issue, transcending abstract contemplations. The situation is far more intricate than it superficially appears to many.

First and foremost, the expression “split within the elite” is largely a construct for description. Political experts coined it to describe instances where, during turbulent historical junctures, segments of the elite refused compliance with governing authorities, thus catalyzing substantial political transformations in various nations. However, I confidently assert that projecting and, more audaciously, instigating a “split within the elite” has never been achieved by anyone. Historical evidence overwhelmingly demonstrates that it's an exceptionally uncontrollable and difficult-to-anticipate process. Moreover, elites in authoritarian systems possess compelling incentives to sustain loyalty to those in power until the very last instant (we shall delve into these incentives shortly). None of the experts on the Soviet Union could have envisioned the schism within the leadership of the CPSU (Communist Party of the Soviet Union) that began in 1985 – several prognosticators of the USSR's collapse, from Andrei Amalrik to Hélène Carrère d'Encausse, cited reasons fundamentally distinct from the eventual realities that unfolded. No one foresaw the Romanian Communist Party's toppling of Nicolae Ceaușescu in December 1989, and similar instances.

Hence, when discussions arise regarding the necessity of an “elite division” for political transformations, it's important to grasp that attempts to artificially trigger such a split—like a storm or an earthquake—constitute an unscientific approach. This approach lacks grounding in factual analysis of the situation and historical precedent. Drawing from our own historical encounter during the late 1980s to the early 1990s, it becomes apparent, firstly, that a split among the elites was exceedingly uncertain, and secondly, the elites steadfastly clung to their bureaucratic roles until the eleventh hour. Only when change became unavoidable due to entirely distinct, non-elite influences did these elites marginally embrace a more radical standpoint.

Attempts to artificially trigger a split within the elite—like a storm or an earthquake—constitute an unscientific approach

Why are they silent?

Let's consider two prime examples. It's widely acknowledged that Boris Yeltsin led the movement against the CPSU and eventually became the face of change. However, many have since forgotten that after Yeltsin's resignation and subsequent tarnish in the autumn of 1987, he made a trembling appeal at the XIX Party Conference of the CPSU for political rehabilitation. His confidence only grew when the grassroots movement against the party gained significant momentum. As for the conservative coup attempt in August 1991, Gorbachev's advisors, Primakov and Bakatin, did release a statement condemning the coup. But still they waited until the latter half of the third day of the coup, August 21, when the coup's failure became evident to all and the plotters themselves headed to Foros to surrender to Gorbachev.

A parallel scenario seems to be unfolding presently. Over a year has elapsed since Putin's full-scale invasion of Ukraine, yet we're observing a similar trend. Almost 100% of officials and major business figures remain silent. Any statements against the war that surface are mostly veiled and ineffectual. The few who openly oppose the war play peripheral roles. Even those who have left the country maintain a conspicuous silence. Even Arkadiy Volozh, who ostensibly issued a vehement condemnation of the war following a wave of public pressure, has not spoken directly — the media merely published a certain text relayed by his press office. It might have happened, or it might not have.

Why are they so afraid?

The first reason is that they can't envision themselves outside the system. The author of these lines has once experienced the significant step of leaving a leading governmental position “into nothingness” — especially into a realm of criticizing the regime. It's highly painful, you lose everything career-wise and acquire new serious risks, including risks to your life. More than twenty years have passed since then, and the situation has worsened dramatically — the independent private sector of the economy has practically been eliminated, finding oneself outside state-bound structures is almost impossible, and political opponents and public critics of the regime are literally being killed off.

By exiting the system, you lose everything career-wise and acquire new serious risks, including risks to your life

Theoretically, the notion of seeking refuge in the West might seem viable, but it's crucial to understand that these people lack the practical skills to navigate legal and competitive Western environments. Even “sophisticated” business figures like Pavel Durov or Mikhail Kokorich, who left Russia long ago, encountered significant challenges with American authorities due to their unfamiliarity with U.S. regulatory intricacies. This applies even more so to people with simpler business strategies revolving around “milking former Soviet factories” or “arranging subsidies through Putin's associates.”

Furthermore, the prospect of facing persecution in the West looms large. These figures carry baggage, and contingency plans for potential persecution are in place for each of them. To convince them to make a move to the West, robust guarantees of non-prosecution are imperative. The Russian establishment, however, views the reliability of such assurances skeptically. Even if certain officials offer such guarantees, they could easily be revoked under the pressure of opposition, independent judicial bodies, prosecutors, and public opinion. Notably, the Russian elite openly discusses the potential rise of isolationist Republican figures like Donald Trump or Ron DeSantis to power in the U.S. by 2024. These figures could very well extradite them back to Putin. True or not, but going by signals from the Russian establishment, they're deeply apprehensive about this scenario and consider it realistic.

Subsequently, concerns extend to the welfare of those close associates who remain within Russia. Every influential figure, whether a businessman or a government official, is accompanied by a significant group of associates who can't be effortlessly uprooted from the country. This circle includes relatives, aging and often unwell parents, mistresses, children from various marriages, diverse business partners across multiple projects, loyal managers, or employees of their ventures, and other individuals held dear. For any notable figure, the number of such individuals can easily surpass a dozen. The FSB (Federal Security Service) meticulously maintains dossiers on each significant member of the Russian elite, identifying potential pressure points within their inner circle should any of these figures deviate from Putin's alignment, or worse still, provide support to Ukraine or Western governments.

The FSB maintains dossiers on each significant member of the Russian elite, identifying potential pressure points within their inner circle should any of these figures deviate from Putin's alignment

I've encountered numerous instances where this phenomenon was evident, but perhaps the most striking was a situation in 2017 when I invited a well-known and prominent businessman to appear on Navalny Live. Just a few months prior to this, he had been declared wanted, fled to London, and authored a series of vivid blog posts sharply criticizing the Russian government. I made the foolish move of publicly announcing his appearance, even though I had thoroughly warned him about the risks beforehand. Immediately after the announcement, he called me and declined, stating succinctly: “I still have people in Russia, and they've been threatened with pressure if I appear on Navalny's channel” (this was during the Navalny 2018 presidential campaign, which was gaining momentum).

There are many such stories, and it's crucial to understand that representatives of the Putin elite are anchored in Russia by a much broader array of factors than what many of those who naively speculate about invoking a “split within the elite” through certain incantations or signed letters might suggest. No, folks, if you were to put all these factors on different sides of the scale, the attachment to Russia and the Putin system would vastly outweigh any other considerations. That's why they remain silent.

I'm not even touching upon, nor am I downplaying, practical issues like the absence of an easy route for emigration to the West. Nowadays, you can't just buy a ticket for a United Airlines flight from Domodedovo to Washington (oh, there were times when you could) — any genuine attempts to leave will be monitored and, upon suspicion of wanting to switch sides (disposing of assets beforehand and closing businesses), thwarted. In Dubai or Turkey, you're easily traceable and, if necessary, could be extradited.

Any genuine attempts to leave will be monitored and, upon suspicion of wanting to switch sides, thwarted

Well, here's the final point. I might be accused a thousand times of “radicalism,” “an inability to forgive,” “a lack of understanding the importance of getting part of the elite on the side of good,” but the fact remains that all these individuals didn't just coincidentally remain within the system until 2022. They understood everything perfectly well; they have far more information about what's happening than you do. If they chose to stay, it unequivocally means that they are extremely cynical individuals, ready to conduct business within a system built on bloodshed. They have no moral constraints in this regard; the only thing currently frightening them is that Putin is leading the entire system toward catastrophe (yet they're restrained from taking concrete actions by all the factors listed above). They have no ideological motivation to switch to the Western side. They view the West just as Putin does, and their main motivation is boundless cynicism. That's why many of you are surprised: how is it possible to be the creator of the largest Russian IT company, manage it for over a quarter of a century, and then, without batting an eye, present oneself as a “born-in-Kazakhstan Israeli businessman.” That's precisely how it is—you simply don't have a clear picture of these people; it's better to listen to those who truly know them well.

Achieving a split within the elite is possible

What can we deduce from this situation? Is it truly an unattainable goal to create a divide among Putin's elite? It's a possibility—but contingent upon international pressure, the escalation of socio-economic issues, a shift in public opinion, and a populace that starts opposing the government. At that juncture, “these” individuals will become active. Presently, they gauge the situation as one where the Putin system can endure; hence, it's logical for them to remain inactive at the moment. Furthermore, there's a substantial contingent of naive individuals holding anti-Putin and anti-war viewpoints, susceptible to being lured into drafting letters advocating the lifting of sanctions and other arguments like “we require oligarchs on our side.” If such an impractical plea for an “elite split” exists, why not initially consider hitching a free ride on the opposition's momentum, rather than engaging in a truly risky game against Putin, risking all, including one's life?

They gauge the situation as one where the Putin system can endure; hence, it's logical for them to remain inactive at the moment

What actions of Putin's officials and oligarchs can genuinely be considered a transition to the “good side”?

Substantial support for Ukraine, aiding the West, and backing the Russian opposition (either of these alternatives, if you, for instance, dislike the opposition) on a scale comparable to the gains they reaped in previous years through their involvement in the Putin regime. A mere Instagram post or even a “statement relayed to journalists” (instead of speaking directly) falls far short and doesn't hold any weight.

The subject of the “strategy for oligarchs and officials to break free from sanctions” is extremely counterproductive and should be abandoned immediately. At present, this strategy only fuels inaction, preys on the most gullible segment of the opposition to rally for support, and encourages one to avoid accountability by conveniently withdrawing after having the sanctions lifted. And the accountability is substantial — everything is well-documented for entities like Yandex and their role within the Putin framework; Tinkoff Bank, for example, significantly served as a cushion for the skeptical middle class who were distrustful of the authorities: see, we have a major private, high-tech bank, indicating that things aren't as grim as they may seem. This is the financial sector's equivalent to Ksenia Sobchak. By the way, the FSB's presence was well-established there as well — I yearn for interviewers to bypass Oleg Tinkov's personal narrative and straightforwardly ask him what the “First Department” did within his bank and whether the bank yielded to FSB requests pertaining to “politically dubious” clients.

Let them undertake something meaningful first — only then can we initiate discourse about the “strategy to break free from sanctions.” You've reveled far too much in the prolonged Putin festivities to demand front-loaded benefits — no one owes you anything here. The primary effective message for officials and oligarchs is that sanctions and other tactics will inflict pain on them, pain that's enduring and inescapable; the only way to evade this is by shifting allegiances. This communication is one they fully grasp. A soft dialogue about “lifting sanctions” and enthusiastic praise for anyone who writes an inconsequential “anti-war post” or, worse yet, simply “shares a text with the media,” only succeeds in further motivating them to exploit opposition efforts to advocate for their release from sanctions. As demonstrated over the past year and a half, this is far easier, more cost-effective, and less risky than actually taking action that could genuinely unsettle Putin.

A sterner stance must be taken with this group. They've aligned themselves with Putin because they comprehend his mannerisms and language. If you aim to achieve something from them, it's necessary to communicate using their language. Displaying your own blissful naivety during a conversation with these cynical individuals is highly counterproductive. And cease heeding the political analysts who chatter about “split within the elite.” If a biology professor can aptly describe the behavior of a wild bear, it doesn't imply that he won't suffer a heart attack upon encountering the bear in the forest. Divisions among the elite are erratic and materialize only at the eleventh hour, when the elites are devoid of other options. The key is to strip them of these options. Sanctions, support for Ukraine, altering public sentiment in Russia — these factors will accelerate such a scenario and precipitate the system's downfall. Toying with rapacious, cynical oligarchs who are poised to outmaneuver you in an instant — that's a losing strategy.

Subscribe to our weekly digest

К сожалению, браузер, которым вы пользуйтесь, устарел и не позволяет корректно отображать сайт. Пожалуйста, установите любой из современных браузеров, например:

Google Chrome Firefox Safari