Putin’s Meeting with the Oligarchs – Who Is the Master of the House

Putin’s Meeting with the Oligarchs – Who Is the Master of the House

The meeting took place on 28 July 2000 in the Kremlin in Moscow. It was the first and historically most significant meeting of Vladimir Putin (then a recently elected president — in March 2000) with Russia’s largest entrepreneurs/oligarchs, who arrived at the meeting to explain, as masters of life, who was in charge, who was the boss in the country.

Vladimir Putin’s first meeting with Russia’s leading business leaders took place on 28 July 2000. One of its organisers was the politician Boris Nemtsov, then head of the Union of Right Forces faction in the State Duma.

Officially, three topics for discussion were outlined:

• the new Tax Code,
• changes to customs regulations,
• Russia’s prospects of joining the WTO.

In reality, the meeting was held for the purpose of getting acquainted and assessing the balance of power. The masters of Russia, intoxicated with power, arrived in order to “put in his place” the new official-chekist who had replaced Yeltsin (and the Family) at the pinnacle of state power. During the preparation of the meeting, warnings had already been voiced that it would not be easy with Putin, but this was clearly not taken into account. The guests arrived confident in their influence and with an unambiguous statement about the possible terms of cooperation, which ultimately proved to be a fatal mistake.

The guests failed to take into account that Putin was better prepared for the conversation than they were. From the Kremlin’s side, a completely different scenario had been planned — “the main goal of the meeting was to put the oligarchs in their place.”

At the beginning, the entrepreneurs were explained the principle of “equal (read: reasonable) distance” from power. Several months earlier, Putin had already said: “No clan, no oligarch should be close to the regional and federal authorities — they should be equally distant.”

“The era of the oligarchs is coming to an end,” Boris Nemtsov concluded after the meeting.

This meeting is regarded as a cardinal turning point, after which the unlimited “era of the oligarchs” in the style of the Yeltsin Family came to an end. New times began — Putin’s very concrete and real control over big business and economic processes as a whole.

At this meeting, Putin clearly defined the new “rules of the game”:

• the oligarchs would be able to retain their wealth and business under the strict condition that they do not interfere in politics and “keep their distance” from political power;
• the parties agreed that the results of the completed privatisation would not be reviewed.

The president’s opinion was formulated roughly in the following thesis: “You yourselves created this state through structures you controlled, so there is no point in blaming the mirror.”

Main participants of the meeting

Approximately 21–22 of the largest entrepreneurs took part in the meeting. Among them were:

• Vagit Alekperov (Lukoil)
• Rem Vyakhirev (Gazprom)
• Mikhail Khodorkovsky (Yukos)
• Mikhail Fridman (Alfa Group)
• Vladimir Potanin (Interros / Norilsk Nickel)
• Oleg Deripaska
• Kakha Bendukidze
• Dmitry Zimin
• Vladimir Lisin
• Alexey Mordashov
• Anatoly Chubais
• and some other heads of major companies and banks.

It would have been useful for the invited group of oligarchs to appreciate the fact that such influential figures as Boris Berezovsky and Vladimir Gusinsky were not invited to the Kremlin — against whom clarifications of relations and pressure had already begun at another level, from the structures of power. Perhaps the representatives of the oligarchy planned this conversation in order to explain to the new master of the Kremlin that he was doing something wrong, while the president, for his part, agreed to it in order to explain that what was happening with Berezovsky and Gusinsky was no accident and that henceforth many things would happen differently than before.

Both of those mentioned had already felt that the rules of the game were changing. Later both were forced to leave Russia, but that is a separate story.

At this meeting it was important for Putin to convey the new “rules of the game,” namely: everyone has their place in the pyramid of power — the oligarchs would be able to retain their wealth and business only if they live by the established rules, do not interfere in politics, and “will be kept at a distance” from power.

Khodorkovsky either did not hear, or self-confidently did not want to hear, the warning in the president’s address and made a fatal mistake by declaring that he was ready to rise to the next level of the power pyramid and claim the post of president of the country. One can say that with that, Yukos came to an end...

It is telling that the oligarchy is reluctant to recall both this and other unofficial meetings, calling them legends. It is known that as early as May 2000, a couple of months after the election, there was some private informal picnic with shashlik and mutual introductions. However, subsequent events indicate that the evolution of mutual coexistence developed mainly through specific criminal cases, of which history has only fragmentary information in specific court archives.

Another digression. The grey cardinal of Kremlin affairs in the 1990s, Boris Berezovsky, who was close to the Family, was the only one among the oligarchy who invested his resources in the gradual elevation of Putin to the heights of power. The others, especially the “7 bankers” group (actually larger)*, self-sufficiently observed the processes and simply did not interfere. More precisely — they did not obstruct, with the exception of the media magnate Vladimir Gusinsky, who was able to assess the possible changes in the system replacing oligarchic capitalism in Russia and came out both against the Family and against the succession processes it was promoting. For his foresight he paid dearly, being forced to wind down a large part of his business and his influence, as well as emigrating from Russia.

Berezovsky, however, was always interested not only in the result but also in the opportunity to savour the process of his power and possibilities. Unlike the other Russian magnates who belonged to the influential social group of the “seven bankers,” he actively invested in Putin’s electoral victory. The others waited for their moment, neither particularly supporting Yeltsin’s successor nor taking a hostile position towards him.

Boris Abramovich, in the early period of Putin’s rule, behaved as befits a billionaire involved in big politics, trying to use his personal financial resources and influence in the highest echelons of power in order to participate in the governance of the state. Just as almost all of them — Russia’s most influential men — behaved under Boris Nikolayevich, brushing aside individual government officials who had offended them, appointing governors, while simultaneously supporting freedom of speech and corrupting the mass media, attempting to end the Chechen war, calling for a political compromise between Yeltsin and Zyuganov, and ultimately choosing Yeltsin. In exchange for gifts and preferences in the future.

*) The Group of Seven Bankers: Different sources mention different names, so the so-called list of the “seven” bankers actually contains nine people, possibly more.

• Boris Berezovsky (deceased) — LogoVAZ, especially close to the Kremlin and the Family, acting separately within the system;
• Mikhail Khodorkovsky — Rosprom group (Menatep) — with not only business but also political ambitions; later one of the most prominent leaders of the opposition;
• Mikhail Fridman — Alfa Group (a cautious observer of the processes);
• Pyotr Aven — Alfa Group (likewise a cautious person, even more attentive and least inclined to oligarchic ostentatious luxury, who distanced himself after the war began);
• Vladimir Gusinsky — Most group (media magnate, a pronounced opponent of the Kremlin and shaper of public opinion);
• Alexander Smolensky (deceased) — SBS-Agro (Stolichny Savings Bank);
• Vladimir Potanin — Oneksimbank;
• Vitaly Malkin — Russian Credit;
• Vladimir Vinogradov (deceased) — Inkombank.