Sergei Pugachev for Politique Internationale: “The hawks have won”

Interview with Sergei Pugachev, by Isabelle Lasserre

Isabelle Lasserre: You have been Vladimir Putin’s “best friend” for many years. When and why did you break up with him? Was any particular event the cause of your growing apart?

Sergei Pugachev: Not really. I have known Vladimir Putin since 1992, but our friendship only really began in 1996, at the time when Vladimir Yakovlev (1) was mayor of Saint-Petersburg. Putin was already working in Moscow, but back then he was a perfectly unknown person who had no political influence. He was deputy head of the Administrative Directorate of the President. We worked together setting up international investment projects.

I left Russia in 2010, just before Christmas. We spoke at length about my leaving. We had always been very different and aware of that. But our political and economic visions had become incompatible. I no longer wanted nor could live in Vladimir Putin’s Russia. After he was reelected in 2004 things became very difficult. He had changed very much, compared to the man he was when he came to power. I realised that there was no point in wasting my efforts trying to convince him; it was useless.

I.L.: What was the nature of that change and how would you explain it?

S.P.: When he came to power, Vladimir Putin at first attempted to carry on with the liberal course taken by Boris Yeltsin some ten years earlier, including economic reforms. He also renewed relations with the West. During the first four years the results were not actually that bad, if one puts aside the second Chechen war (2), the NTV case (3) and the YUKOS case (4)… But very soon Vladimir Putin realised he was unable to control a country that had changed so much since the collapse of the Soviet Union. And so he changed the team. He called upon his friends from Saint-Petersburg and that new generation put an end to reforms and began to tighten the screws, starting with a crack down on the media. Vladimir Putin and his friends are first and foremost former KGB men, meaning that they have an entirely different mentality. The president believed in making Russia a powerful country again, as the Soviet Union once was. He wanted to build a new empire, create a new country, write a new page of the Russian history of which he would be the hero. He has always drawn his inspiration from the stalinist period, when the USSR was a huge and powerful country, one that mattered in the world. You will have doubtless noticed that the only person with whom he seeks to establish a dialog on the international arena is the president of the United States. For him China counts for nothing. What he wants is to restore the power balance that used to exist between the USA and the USSR twenty-five years ago. Vladimir Putin has tried to rewrite history and to bring the country thirty years back. But this is ludicrous! The USSR is dead and will not be resurrected.

I.L.: What were the consequences, specifically, of this turnaround operated by Putin?

S.P.: Around 2004 Putin began to take the strategic sectors of the economy under control. The State’s takeover of YUKOS rang as the death sentence of the rule of law in Russia. Indeed, in order to seize the company and ensure that Khodorkovsky would stay in prison, the Kremlin had to subject the judiciary to its will completely. From then on, the Russian judicial system had become a realm of “dead souls”, i.e. judges who followed strict instructions, written for them in advance.

This was the subject of many a conversation between us. I was telling Putin that I was against this policy, because it was stifling for the economic and political openness made possible by Yeltsin. But he said in reply: “Forget about Yeltsin. Russia is a new country. It will work, you will see.” What could I do? He had convinced Vladimir Gusinsky (5) and many other influential figures, that they should play by the new rules.

Clearly, at that time many people held a grudge against Boris Yeltsin and were prepared to compromise on many things in order to check the chaos that reigned in the country. After replacing his former advisors by his Petersburg friends (among whom Dmitry Medvedev (6), who had worked with him in the early 1990s at the Petersburg city council), Putin put his men at the head of the country’s key energy companies, such as Gazprom (7) and Rosneft (8), which had taken over the major part of YUKOS’s assets.

He then extended his influence to the other sectors of the Russian economy. The problem was that he did not know how the Kremlin worked, nor how to manage a country! His desire to keep everything under personal control was a huge mistake.  Let me be clear: I do not mean to say that the system inherited from Yeltsin needed no changing. I, too, would have wanted some things to change, to evolve, the country required some order after the excesses of the 90s.  But centralising all the powers in the hands of the executive was not the right option. The result of Putin’s action is that now the entire population, some 140 million people, are entirely dependent from the will of a single person! Such a way of functioning is poisoning Russia and holding back its development.

I.L.: Yet, as you have told me before, it was you who introduced Vladimir Putin to Boris Yeltsin’s daughter, Tatiana Diachenko. You suggested that he ought to be made Yeltsin’s successor in the Kremlin. What was there in him, that appealed to you?

S.P.: I introduced him to Tatiana Diachenko because the situation in the Kremlin was no longer tenable. Boris Yeltsin was ill, Russia was in chaos. We needed at any cost to safeguard the course on openness and reform, set after the Soviet Union collapsed. Sergei Stepashin (9) would have liked to be president. But in spite of his young age (he was not yet fifty), he was already a political veteran in a certain sense. Having very little charisma, he was little likely to gain support from the population. Putin seemed a better choice to me. He, too, was young and, most importantly, he was a new figure on the political arena. Moreover, he had for a long time worked beside Anatoly Sobchak (10), the democrat mayor of Saint-Petersburg, who was convinced of the need for openness and change. At the same time, he was a member of the KGB-FSB, which gave him additional appeal in the eyes of those who felt nostalgic of the USSR. In putting forward Putin, we were moved by the desire not to let the old communists like Evgeny Primakov (11) come back to power and destroy everything that had been achieved during the past ten years. But Tatiana Diachenko was not very favourable to that choice. She said that she could not trust a man from the KGB, that her father had fought the KGB, that it was dangerous to have a man from the secret services brought to power… She was, above all, worried for herself and her family. Then I asked: “Have you anyone else to propose? You don’t? Then let’s go ahead with this one.”

I.L.: What are the qualities and the flaws of Vladimir Putin? His strengths and his weaknesses?

S.P.: When I proposed that he should succeed to Boris Yeltsin, he seemed loyal. He had always remained loyal to Anatoly Sobchak, despite the political pressure around Petersburg’s former mayor, which had, at a certain stage, forced the latter to leave the country. And we trusted that Vladimir Putin would uphold Boris Yeltsin’s legacy. We saw him as a champion of progress, rather flexible, one that would be easy to control. But in retrospect, I can say that his foremost quality is to be a chameleon: he is able to say to everyone exactly what one wants to hear. He is not, however, as strong a man as the West likes to picture him. He is, on the contrary, a weak leader.

I.L.: What exactly do you mean by that?

S.P.: He lacks vision. He pursues short-term gains, and values control – both in politics and economy – above all else. He is short-tempered and takes any criticism directed at him as a personal offence. He cannot stand to be contradicted, he lives in his own world, in a bubble mostly disconnected from reality.

I.L.: With hindsight, would you say it was a bad casting? Do you regret it?

S.P.: Yes. In fact, in the situation in which Russia was back then, any attempt to impose a leader by a decision from above was doomed. Citizens ought to choose their leaders themselves, by voting. Such choice should not be made by a small group of people. It is true, that after having replaced Boris Yeltsin as interim president, Putin succeeded in winning the election himself. But electors make mistakes too!

I.L.: You mentioned the “battle of entourages” in the Kremlin, including the struggle, during the early 2000, between the liberal democrats, to which you belonged, and the siloviki, i.e. those belonging to the military, the police and the security services. Why did Putin and the siloviki decide to pick on the oligarchs? Why did they take your property and your money?

S.P.: Vladimir Putin has never hated capitalism. But he disliked those who were there before him, because he had in mind to make a new country. Besides, as I already mentioned, Putin wanted to control everything, including all of the country’s wealth. I am not the only victim of a looting organised by the Kremlin. Many have found themselves targeted by the State on the day Vladimir Putin sided with the siloviki. I think that this was his greatest mistake. But he was convinced that there is nothing that money cannot buy, including political loyalty, even outside Russia. This is why, for example, he twice gave his support to Viktor Yanukovich (12) in Ukraine.

I.L.: Is it true that Vladimir Putin is the richest man in the world? Is he personally  corrupt?

S.P.: Yes, you could put it like that. But what may seem odd in the West, is perceived as quite normal in Russia. Many people see the leaders’ wealth as a token of the country’s affluence. Such a mentality is more Asian than Western. Today in Russia money is the most important thing. Especially in terms of power balance between the different clans gravitating around Putin. Sechin, the head of Rosneft (13), and Yakunin (14), two friends of Putin’s, were removed from power for the reasons connected to  money issues. The same applies to Aleksei Kudrin (15), Minister of Finance and a very close friend of the president’s. Putin could not bear his minister tell him that there were not sufficient funds to finance his projects. So he dismissed him and replaced him with another, weaker, man, who never contradicts him and whose name is unknown. And this is not an isolated case: there are many unknown people in the ministries. The system has become very opaque.

I.L.: If I may insist: is Vladimir Putin personally corrupt?

S.P.: Yes, he is. But not in the sense in which you would understand it in France. I mean that he is not paid secret commissions when such or such transaction is concluded. This is not how his system works. Putin is corrupt in the sense that he considers that everything belongs to him. He can shop around, as it were, and do as he pleases: he can order any company, such as Gasprom, to buy goods, to pay invoices… All of it in the name an alleged “interest of the State”.

I.L.: Who governs Russia today?

S.P.: Putin does not have advisers in the common sense of that word. There are several conflicting clans around him and he has to manoeuvre between them. The clans that get the upper hand are always those that push Vladimir Putin ever further, those that drive the escalation. This is why his decisions are largely influenced by the hawks. With the passing years he has become a hostage of his entourage. I told you: there was a time when liberals and hawks were competing for influence over Vladimir Putin, they fought for a chance to weigh on his decisions. Today the hawks have won. The annexation of the Crimea, the intervention in Eastern Ukraine were not ideas with which Putin had come up himself; these came from the siloviki.

I.L.: The Putin you describe appears to be a man who is much easier to influence than we, in the West, would normally assume.

S.P.: Putin seems almighty. He can seize YUKOS, throw opponents and oligarchs in prison, amend electoral laws, call a judge to demand that someone is sentenced to ten years in prison… The existing political system allows for this. Such behaviour is inconceivable in the West, so it gives the impression that Putin is a strong leader. But I believe that he is weak. And here is why: I cannot remember a single occasion when he voiced a personal opinion. Once again: it is the people around him that tell him what to think and what to do, whether regarding Khodorkovsky, expropriations, the closing of newspapers, big international manoeuvres and so forth.

I.L.: So, if I understand you correctly, Vladimir Putin does not have the slightest personal geopolitical vision…

S.P.: Precisely. Here again, it is his entourage that explains the world to him. Decisions concerning Chechnya (16), Ukraine (17), Syria (18) were not his. If Putin had any kind of geopolitical vision, he would not have changed his mind so often over the past fifteen years and the country would not be in such a dismal situation. Relations between Russia and the EU are as bad as they can be. The Russian intervention in Syria was motivated by his desire to pull himself up to the level of the USA on the international arena, but it was yet another mistake. The Russian bombers have been operating there since 30 September. So? Nothing has changed in Syria. No one in Russia has anticipated the next moves. The Russian intervention put an obstacle to the expected rapprochement between Moscow and Washington. So it was a wrong bet to make, a short-sighted policy. It did, however, lead to the death of many Russian civilians – I refer to the terrorist act that led to the crash of the passenger plane above the Sinai (19).

I.L.: Are there any liberals now in Putin’s entourage? Any democrats?

S.P.: Zero. None at all. Or maybe it is like North Korea: there are some, but no one knows who they are. It is not possible to be a liberal or a democrat in today’s Russia. Maybe it will become possible again in some fifty years’ time…

I.L.: Fifty years?

S.P.: Vladimir Putin has been in power for fifteen years. An entire generation has grown up under his rule. Those who were twenty years old when he arrived in the Kremlin are thirty-five today. These are the people who will be electing our rulers in the coming decades. They have a specific mentality: a Putin-like mentality. No one from that generation remembers Boris Yeltsin. If they do, the image they have of him is that of an old drunkard. This is reminiscent of Brezhnev’s times (20). In the end the Soviet system collapsed and the West won. But it took a long time… Russia will not change overnight, even if Vladimir Putin leaves. Just as it happened with the USSR, the system will endure. Today’s period is very different from Yeltsin’s time. Yeltsin was a strong man, but he stood alone. Putin is weak, but he has everyone’s support.

I.L.: Is the population’s support real?

S.P.: The Russians had their fingers burnt by the great turmoil of the 1990s, they are afraid of change. All they desire is a peaceful and stable life. They may not necessarily support Vladimir Putin, but they do not want any more troubles. People believe that as long as they are not in prison, as long as they are not dying from hunger, they can live with the status quo. It is the fear of change that explains Vladimir Putin’s popularity, rather than his patriotic and nationalistic discourse.

I.L.: What strategy should the West adopt towards Vladimir Putin?

S.P.: Putin always says that it is difficult to have relations with Western leaders, because they change so often. He finds that having a new president or a new prime minister every four or five years is a very bad idea. “Where is my friend so-and-so?”, he would often ask, when one of them loses the election and has to go… He had much rather have to deal with the same partners, as is the case for Kazakhstan or Belarus. For example, he would have liked for Gerhard Schröder, the former German chancellor, to stay in power for some fifteen or twenty years. The Russian political system is really a whole different world. In any case the USA and the EU should take a firmer stance vis-à-vis Putin. They should uphold international law. The sanctions policy is working. Unfortunately Western countries are not fully committed to their own principles. One example: it is often said that Great-Britain is harsher than the other European countries towards Putin. But it is not so. The wealthiest Russians live in London, they have invested money there, and everyone in the UK is quite happy with this financial relationship! You see, there is a dual discourse, when Russia is concerned. On the one hand resounding public threats are made, and on the other hand there is considerable flexibility in the name of financial interests… The EU must hold on to its sanctions policy. This is the only thing that may, in the long run, bring about change. Do not yield to Putin.

I.L.: You have personally negotiated the contract for the Mistral ships (21). Was France right to breach that contract?

S.P.: I initially thought that it was a good idea to buy that licence to be able to build such ships in Russia. I had personally negotiated that contract during one year in 2007. Then it became clear that the Mistrals, if they were sold to Russia, would become a threat to our neighbours. Indeed, in the meantime, the war in Georgia broke out, demonstrating how aggressive Russia had become (22). So I do approve of France’s decision. France’s position had become incoherent. Why hesitate, when Russia had obviously annexed a part of a neighbouring country’s territory? Why deliver to the Russian leaders such a powerful ship, which would provide them with the quickest means of controlling the neighbouring States?

I.L.: How do you think Vladimir Putin would have used the Mistrals?

S.P.: It is obvious that he would have used them in Ukraine, and possibly one day against the Baltic States.

I.L.: Who can save Russia today?

S.P.: Only the people who live in Russia can save Russia. But not now. I do not believe in it. I know all of Russia’s ruling class closely. We shall have to see in some ten years’ time, when today’s elite is gone. In the meantime, the situation is not as desperate as to have the Russians make a revolution. Things are not bad enough for an uprising to erupt. We have not yet reached that critical stage.


1) The reformer Vladimir Yakovlev was governor of Saint-Petersburg from 1996 to 2003.

2) The second Chechen war was started after the terror acts that happened in Moscow in August 1999. Vladimir Putin, who had just been appointed prime minister and who was to become president in December, gave his full support to the army and promised to “hunt the Chechens and waste them in the outhouse”.

3) Vladimir Gusinsky, owner of the independent TV channel NTV and a keen critic of those in power, was arrested by the police in 2000. The control of the channel was handed over to the gas company Gazprom.

4) YUKOS was one of the biggest private oil companies in the world. In 2003 its owner, Mikhail Khodorkovsky, was arrested and thrown into jail for ten years.

5) See Note 3.

6) Between 2008 and 2012 Dmitry Medvedev replaced Vladimir Putin as Head of State, the latter being unable to stay in office for more that two successive terms.

7) Gazprom is the world’s largest exporter of gas.

8) The State company Rosneft is the second largest Russian oil producer.

9) Sergei Stepashin was minister, then prime minister under Boris Yeltsin (in 1999). In 2005 Boris Yeltsin stated that he had for a time considered making Stepashin his successor.

10) Anatoly Sobchak was the first democratically elected mayor of Saint-Petersburg. He lived in Paris between 1997 and 1999, having left Russia because of the unpleasant circumstances around his succession, when the new governor Vladimir Yakovlev and his entourage accused Sobchak of embezzlement. He died of a heart attack in 2000.

11) Evgeny Primakov was a high-ranking officer of the KGB in the USSR. He was Minister for Foreign Affairs from 1996 to 1998, then Prime Minister (1998-1999). He died in 2015.

12) Viktor Yanukovich was Prime Minister of Ukraine from 2002 to 2005, then again from 2006 to 2007. In 2010 he was elected president in elections whose results were challenged. After the postponement of the Association agreement between Ukraine and the EU, a mass movement of protest led to Yanukovich being dismissed by the Parliament on 22 February 2014.

13) Deputy prime minister of Russia, chairman of the Board of Rosneft he is considered by Forbes to be the most influential person in Russia after Vladimir Putin.

14) Former president of the Russian Railways (2005-2015).

15) Former Minister of Finance, who belonged to the group of the liberal reformers. He had to resign in 2011.

16) The second Chechen war was started after the terror acts that happened in Moscow in August 1999. The authorities attributed them to Chechen separatists, but numerous investigations have revealed that the Russian security services were involved.

17) Russia annexed the Crimea in March 2014, then invaded Eastern Ukraine.

18) A Russian military intervention has been ongoing in Syria since 30 September 2015.

19) On 31 October 2015 a Russian passenger aircraft exploded above the Egyptian Sinai. ISIS claimed responsibility for the terror act.

20) Leonid Brezhnev was Secretary General of the Soviet Union Communist Party from 1964 to 1982.

21) In August 2015 France finally cancelled the contract for delivery of two military ships to Russia.

22) On 8 August 2008 the Russian army launched a blitzkrieg against Georgia. Vladimir Putin has since then recognised that the intervention had been planned and prepared two years before. The Russian troops still occupy about 20% of Georgian territory.