Karen Dawisha

"I expected a lot more criticism when I wrote the book... I think everyone is beginning to see the kind of person Putin is. What he did in Ukraine crossed a line, and that really mobilized the media to portray him as what he really is. ...I never meant for this book to bring down Mr. Putin; its purpose is to be educational... It may... provide evidence, but I would really just like it to educate readers about Russia, about Putin's presidency, and politics."

"Putin operates a ""... that severely punishes disloyalty while allowing access to economic predation on a world-historic scale for the inner core of his elite."

"Yevgeniy Gontmakher... deputy director of Moscow’s Institute of World Economy and International Relations... "[T]here is no state in Russia. ...millions of ...bureaucrats work," but they do not perform the [state] function... "Instead of... implementing the course of a developing country, we have a ...private structure ...diverting profits...[T]here isn't even a pale copy of ...the formation of the state." The Parliament had become "...another department of ...Presidential Administration" ...with the ...legal system, and bureaucrats who thought they worked for the state ... [but] serve only the interests of ...[a] "monopolistic business structure which can do anything it likes" and ...controls "...50 percent of the economy.""

"Anton Surikov... former military intelligence specialist.. "...all Russian politicians are bandits from St. Petersburg." Surikov...was dead within several months of this 2009 interview."

"[A] rich... hybrid combination of Chekists, mobsters, and officials in bureaucratic positions of power existed throughout the USSR... Putin was at the nexus of these three worlds: ...[A] former ...employee, "Nikolay" ...claims ...he was approached by his superior ...1990 to be part of the following scheme:...a new clandestine structure ...Your personnel files will be removed ...No one will ...know your past. ...you will ...work for the Fatherland. Against those who want to destroy it. ...I worked ...cleaning up the archives of the . ...hundreds of [files] removed. Including ...Putin. After the failed coup of '91... as the chief financial officer ...on behalf of the KGB. ...Money ...and more money. ...in one offshore paradise or another. We... were moving millions and millions of dollars into bank vaults. ....along those same channels ...money from organized crime ...I would not be able to tell which monies belonged to the KGB and which to the mafia. In response to ...questions, they responded: just move the damn money. And I did."

"Bank Rossiya was not... just a vehicle for investment by... what would become Putin's circle. It was... one of the many places where this circle... collaborated with, Russian organized crime. ... concluded ...18.6 percent of the original shares in Bank Rossiya were owned by ...[companies affiliated with] mob boss Gennady Petrov (arrested by Spanish police in 2008 as head of the Tambov-Malyshev crime group)."

"Spanish... officials... having intercepted ..."hundreds" of phone calls ...about [Gennady Nikolaevich] Petrov's "immense power... political connections... [and] criminal activity in Russia ...directed from Spain....Troika mafia leaders invoked ...names of senior ...[Russian] officials to assure ...illicit deals would proceed ..." ...[I]n 1990 with the purchase ...of ...[a] Hotel in , Majorca ...with Leningrad Communist Party and funds ...Petrov was able to host ...notables, including ...mayor , Putin'’s boss. Reznik... and... wife... were co-owners of... companies with... Petrov and , also arrested on suspicion of , , and the establishment of a criminal structure that traded in , , and murder ...traced back to ...the monopoly ...given by the St. Petersburg government to the Tambov criminal organization in ...gasoline in the 1990s."

"The bank... united elites close to Putin... [and] became a vehicle for investment... [e.g. for] 51 percent control over SOGAZ... A report on corruption... claimed... Bank Rossiya... [paid] $58 million, despite... [a] value of $2 billion."

"Sergey Ivanov, Nikolay Patrushev, Aleksandr Grigor’yev, Vladimir Strzhelkovskiy, and were... contemporaries of Putin in the Leningrad in the 1980s. ...Patrushev and Ivanov... remained... closest to him. ...Strzhelkovskiy ...worked in the Leningrad ... In... 1990 he created... Neva ...[later] official travel agency of ...St. Petersburg ...Putin ...named Strzhelkovskiy deputy minister... of ...sports, and tourism, and after 2000... of economic development and trade... In 2008... [he] was named CEO of... ... world’s largest... and [producer]... [with] support... of Putin... [and] ....When he ...resigned in 2012 with a $100 million cash , the New York Times summarized... "...another data point in the shift of corporate wealth and influence away from the first generation ...oligarchs... toward ...former security service agents ...under... Putin.""

"[R]eports allege that after Putin became president, Tsepov continued... running... the ’s tribute system... "administrative resources"... provided to those who paid the largest tribute... Once... accepted... payments from... public funds were disbursed for the campaign. ...[G]overnors were chosen who responded to central interests irrespective "of ...promoting the welfare of the inhabitants of the region." ...Russkiy Kur’er wrote that ...a price list for promotion to governor ...included charges of $3 million to $5 million ..."

"Putin began his political career in St. Petersburg in... 1990, as advisor to... Mayor Anatoliy Sobchak, and later as the deputy... mayor... From... 1991, to... 1996, he was... chairman of the Committee for Foreign Liaison (KVS)... regulating, and licensing foreign investment in St. Petersburg and Russian investment... abroad... uniquely positioned to regulate... money, goods, and services into and out of Russia’s largest trading city... When Putin went to work for Sobchak, he immediately began to gather ...the core group ...who would work with him throughout the 1990s... into his presidency. They came from... the KGB, the Main Intelligence Directorate (...GRU), , and legal and business circles. ...[T]he inner core consisted of Dmitriy Medvedev, , , , , , , , Aleksey Miller, , and ."

"[Putin] was... in the 's active reserves until at least August 1991, and... initially... placed with Sobchak by the KGB... to monitor... emergence of democratic leaders... [F]oreigners who did business in Russia... universally reported... to get something done in the city, you worked through Putin, not Sobchak."

"... "...Putin’s political philosophy and favorite concepts—managed democracy, administrative vertical, dictatorship of law, a 'control' shot to the back of the head, etc.—are close to this group.""

"Gref and Kudrin appeared... drawn to Putin... because of his... liberal economic policies and... ability to... get things done in St. Petersburg... when most... were paralyzed by the "alegal" political situation and the total eruption of criminal activity at all levels."

"Shamalov... was hired by Putin in 1993. The conflict of interest was massive. Kolesnikov... described... [Dmitri] Gorelov... director of Petromed, ordering medical equipment; Shamalov... representative of , delivering the equipment... a good friend of Putin, with whom he went on to found... .... Kolesnikov said, "When Shamalov came to us with a proposal... we understood... this was... directly from Vladimir Vladimirovich." Gorelov believed that... Putin’s KVS... provided the "roof" to protect against... organized crime. When Vladimir Yakovlev became governor of St. Petersburg... the relationship... [with] Petromed... soured, and Gorelov and Kolesnikov bought... the city's stake... They became major shareholders in Bank Rossiya, purchased a stake in s, and by the mid-2000s were... in the ' Russia... richest Russians. Kolesnikov... ultimately became a whistleblower... [claiming] diversion of funds... to build ".""

"No action was more symbolic of the intention of the group around Putin... than the registration... 1996, of the Ozero Dacha Consumer Cooperative... establishing... Vladimir Smirnov as its leader. ...[O]ther members ...Nikolay Shamalov, Vladimir Putin, , Yuriy Koval'chuk, Viktor Myachin, ...Sergey ...and ...Andrey Fursenko. ...This group ...stayed by Putin throughout his ...period in office, and ...all made hundreds of millions and... billions of dollars. ...[A] cooperative... is a... way for Putin to avoid being given money directly, while enjoying... wealth shared among co-owners. ... Smirnov had long been "closely linked with the well-known 'mafia' businessman Vladimir Barsukov (Kumarin).""

"Smirnov met Putin in 1990 in Germany... He... headed one of the companies... in the [early 1990s] food scandal... millions being stolen; [beginning in 1994] he and Putin sat... on the board of the... SPAG... accused of laundering money for Russian and Columbian organized crime; and he signed over a monopoly position to the Petersburg Fuel Company, which he co-owned with Barsukov-Kumarin. ...Putin ...appointed Smirnov head of Tekhsnabeksport, one of the world’s largest suppliers of nuclear goods and services to foreign governments..."

"... in 2005 became head of . In... 2013 Putin announced... $43 billion... borrowed from Russia’s pension fund... to stimulate the economy, including $14 billion to build three infrastructure projects, two... by Russian Railways. The Russian free media... forecast... such... would... stimulate... corruption. ...Navalnyy ...criticized Yakunin’s entry to... Russia’s billionaires... as the head of a state-owned firm ...a salaried employee ..."In all other countries, the railways are used for movement, but we use them for stealing.""

"The Economist outlined the essential truths of the Putin era...The job of Russian law enforcers is to protect the interests of the state, personified by their... boss, against the people. ...[F]ormer (and not so former) members ...have gained huge political and ...since ...Putin came to office. ...[T]op ranks in the ...FSB ...describe themselves as the ...new nobility ...personally loyal to the monarch and entitled to an estate with people to serve ...As Russia’s former Procurator General ...said in front of ...Putin: "We are the people of the sovereign." Thus they do not see a redistribution of property from private hands into their own as theft but as their right."

"By 2013 the ' Russia list of the wealthiest businessmen in Russia was replete with friends of Putin."

"Putin’s relationship with his friends was... of reciprocity: ...supporting their raids on private businesses, providing ...no-bid state contracts ...allowing the courts to legalize their activities and criminalize those of ...opponents. In return ...they became the bulwark of his base ...helped finance and secure his electoral victories ... removed ...enemies... and... paid him . All... began in St. Petersburg in the early 1990s, when he started to promote ...s from ...Leningrad and ..."

"Vladimir S. Milov......[T]hese guys have benefited and made their fortunes through deals which involved state-controlled companies... operating under... direct control of government and the president... [C]ose friends of Putin... of relatively moderate means before Putin came to power all of a sudden turned out to be billionaires. ...[A]t the same time ...income disparity in Russia had never been worse, with the superrich doubling their wealth and the bottom fifth of the population in 2011 making only 55 percent of ...1991 earnings ...despite Putin’s electoral claims that his rule had brought prosperity ..."

"Putin's ...securing a monopoly position for select firms was a feature ...while deputy mayor. While he professed ...economic liberalization and private property, he ...acted to reduce competition ...and maximize profits for ...friends. In St. Petersburg, Åslund reported, "...Swedish and Finnish businessmen complained about Putin squeezing out their companies ...through ...lawless tax police, to the advantage of [friendly] companies ...""

"Putin... allegedly favored a takeover of the St. Petersburg port by the Tambov organized crime group."

"...Timchenko's company "was a beneficiary of a large export quota under a scandal-tainted oil-for-food scheme set up by Mr. Putin when he worked as head of the city administration’s foreign economic relations committee in 1991 ..." Timchenko and his colleagues were never prosecuted, and indeed he went on to establish ."

"2014... U.S. government’s sanctions... claimed a direct connection between Putin, Timchenko, and : "Timchenko’s activities in the energy sector have been directly linked to Putin. Putin has investments in Gunvor and may have access to Gunvor funds.""

"International, with Timchenko as co-owner... grew out of and benefited from the Russian state's dismantling of in 2003... gained control of... 5 percent of Russia’s total economic output and revenues of over $70 billion annually."

"After his electoral loss in 1996, Sobchak... charged... with corruption... had to flee the country... widely reported as masterminded by Putin. ...[G]etting Sobchak out... protected those, like Putin, about whom there was a lot of incriminating information. ...Sal'ye ..."Before, Putin was under Sobchak’s protection [under his roof], and now Sobchak was under Putin’s protection [krysha].""

"Sal'ye summed up the operation and Putin’s ambition... "...Cook up a legally defective contract ...take a license to the Customs Office... open the border... send the goods abroad... and put the money in your pocket. ...It was ...not put out to tender. They needed their 'partners'... of the shadow economy, criminal and mafia structures, front companies that could ensure this... . ...[H]is ...lamentations about the disappearing firms deserve nothing but contempt.""

"Putin... 1991... was made head of the supervisory council overseeing the... gambling industry in St. Petersburg. ...[H]ow did the city become a majority owner in... [that] gaming industry in St. Petersburg? ..."by relinquishing the right to collect rent for the facilities that the s occupied," the city could claim 51 percent ownership ...[E]stablishing a joint stock company called Neva Chance, which... went on to create over twenty-five different [gambling industry] companies ...many ...headed by ex-FSB officials ..."

"Baltik-Eskort operated openly as a private security service to protect Putin, Sobchak, and other[s]... It... allegedly acted as a liaison with the criminal underworld in St. Petersburg, including... Aleksandr Malyshev, reputed head of the Malyshev criminal organization, and , the reputed head of the Tambov crime organization. Some... employees were members of criminal groups and... accused of being involved in the assassinations of political figures..."

"Some... gambling companies were controlled by ex-KGB, and as such ...pushed hard to get the to submit to their authority. ...Several reputed members of the Tambov and Malyshev gangs became acquainted with Putin at this time. ...Reputed crime bosses who might not have easily received visas to Western countries now arrived as members of official cultural delegations and did their business abroad under ...protection of ...delegations."

"Putin will not go gentle into the night. ...[L]ess flexible and more bombastic in his public appearances ...those in his inner circle suggest that after the 2011–12 election demonstrations, there is ...fear. Gleb Pavlovskiy, his PR guru... believes that Putin will never leave power and ...hampered by the idea that Russians will always decide ...by violence. Pavlovskiy ...heard Putin say, "We ...know that as soon as we move aside, you will destroy us. ...you'll put us to the wall and execute us. And we don’t want to go to the wall.""

"[T]hese sanctions represented a public admission by the United States government of what it had known for over a decade... Putin has built a system based on massive predation not seen in Russia since the Tzars. Transparency International estimates $300 billion are paid every year in corruption. , according to official Russian Central Bank figures since 2005 have been $335 billion, and ... stated that Russia now has the highest income inequality of any country in the world."

"110 billionaires control 35% of the... wealth of this very wealthy country. ...[T]he median wealth in Russia ...(50% are richer, 50% are poorer) ...is ...$871. It is the lowest median wealth figure of any country. A country that is a net exporter of energy has a lower median wealth than India. It... scores below Nigeria in its ability to control corruption, and... its willingness to control corruption."

"The Putin system nationalizes the risk and privatizes the reward to loyalists."

"The pattern we see now of the redistribution of to the inner core, has been in place since the beginning, and even before . This is not a system in which robber barons create the industrial basis of a robust emerging capitalist economy. This is a system in which barons are robbed by value-detracting state raiding elites whose sole position is determined by their relationship to the current president. Value-detraction is an extremely important part of this picture."

"Most of the academic world... have spent the last 20 years focusing on democracy in Russia... but not on authoritarianism succeeding, and the basic conclusion... in this book is that Russia is not a system under Putin, of accidental autocrats."

"It is a system that was created with a purpose by intelligent design from the very beginning of the Putin regime. ...[E]ven the 2000 election was fraudulent. Putin would not have won in the first round without massive fraud."

"[F]rom the very beginning the Putin project was... all about guaranteeing to win."

"Gleb Pavlovsky... an extremely important member of the PR team around Putin in 2000, and who has fallen out with the ... stated (and I agree...) that "Putin was part of a very extensive, but politically invisible layer of people, who after the end of the 1980s, were looking for a revanche in connection with the collapse of the Soviet Union.""

"The argument of the book is that this group failed in 1991, but they succeeded in 2000. It's the same group, ideologically, not everybody, but ideologically."

"This group was seeking also to help themselves. They were a group of trained officers, very interested in economic liberalism, but with political control, and primarily liberalism for them[selves]."

"Seeing the collapse of communist rule in Eastern Europe after 1989, and the loss of the ruling status of communist parties... the [CPSU] authorized the ... to move money out of the Soviet Union, realizing that if the CPSU lost its ruling status... [i.e.,] access to the state budget without limit, they would need money to live in a . Something that the Polish, East German and Hungarian parties hadn't thought about."

"Money started to flood... in such amounts that they virtually bankrupt the Gorbachev regime first, and then when Yeltsin failed to find the Communist gold, they also significantly handicapped the ability of the Yeltsin regime to succeed."

"[T]his was CPSU money safeguarded by the , but when Yeltsin outlawed the CPSU, who did the money belong to? ...[T]o whoever knew what the bank account number was, and this started the scramble for offshore accounts. Kroll International was hired... by Gaidar and Yeltsin. They couldn't find the money."

"[T]he core of the book starts 1991... I regard it as the most conservative analysis possible, based on extensive interviews, of Putin's involvement in illicit activities in the 90s. His efforts to suppress legal cases... against him, and the rise to power of the group around him."

"What we know about this episode... It's there in the written source material. We just need to do the work of... bringing it to light. ...[T]he book is dedicated to free Russian journalism because it was Russian journalists who followed this story, first and foremost! ...[T]hey wrote this story when there was free journalism. They covered it extensively. They were on Putin's tale from the very beginning. They couldn't write this now, but they were writing it in the 1990s."

"The book contains major sections on Bank Rossiya, on the food scandel in Saint Petersburg in the early 90s, on Putin's involvement in the control and emergence of the gambling industry in Saint Petersburg, Putin's involvement as a member of the board of the St. Petersburg Real Estate Holding Company [St. Peterburg Immobilien und Beteiligungs AG]... registered in Germany... investigated by and B&D for its involvement in the laundering of money from the Cali Cartel, ...giving ...a monopoly position to the Tambov gang in the , ...creating and using... money from the mayor's contingency fund through... Twentieth Trust... and the unauthorized use of funds from the mayor's contingency fund in getting an apartment for himself in Saint Petersburg..."

"[I]t was a detailed account of the criminal activities that [Andrey Zykov] feels Putin was involved in—abuse of power... of his official position... relations with organized crime, knowledge about money laundering... a whole range of economic crimes."