Russian elites during wartime and after Putin
July 5, 2022
Nikolay Petrov
Senior Research Fellow, Russia and Eurasia Programme, The Royal Institute of International Affairs
Nikolay Petrov looks at the impact of the war in Ukraine and Western sanctions on the Russian business and security elites. Any kind of a consolidated opposition to the Kremlin is very unlikely, he believes.
Alisher Usmanov with Vladimir Putin, 2018. Source: Wiki Commons
What awaits the political regime in Russia following the departure of Vladimir Putin is a question on the minds of many. In a situation where the mechanisms for the transfer of power are undefined and well-functioning institutions lacking, our attention is naturally drawn to the elites.

In the personalist authoritarian system built by Putin, the dominant role is played by the “state apparatus” – the bureaucracy, which consists of three main groups: the security forces, technocrats and political managers. The rise of personalism, which has really gained steam since 2014, has inevitably led to depersonalization, when the influence of any single person in the system is determined less by his figure and more by his position. Naturally, the latter is referring to an official’s actual functions and authority, which can change rather significantly.

The ranking of the 100 leading politicians in Russia, which has been compiled monthly by experts and published in Nezavisimaya Gazeta for years, indicates that there have been no major changes since the outbreak of the war in Ukraine – we see the same picture, with basically the same officials in the same positions as before the war. However, serious shifts have actually taken place on the political Olympus of Russia. It’s hard to measure changes in influence in many cases because of the closed nature of the system, though what makes it into the media can be plotted.

Western personal sanctions and the selection of who would be sanctioned have added a practical element to the issue.

Radical personalization of the elites

War is a crash test, and so far everything indicates that the regime’s personnel management system has passed it with flying colors. At the very least, both first- and second-rank figures in government and business have remained in their positions, and everyone – actively or passively – has demonstrated their loyalty to Putin. This contrasts with the stark polarization among the cultural, scientific and media elite, which, at least before the war, was not incorporated into the state apparatus.

It is easy to explain this: amid the process of radical depersonalization, the modern Russian political and administrative elite acts like well-fitted parts of a single machine
“They aren’t individuals but 'cogs,' and unlike cultural figures they aren’t capable of acting individually."
The components of this single state machine, meanwhile, have specialized functions as parts of large blocks, through which framework we can analyze the situation with the Russian elite now and into the future. At first glance, four such blocks can be distinguished: oligarchs, security bureaucrats, technocrat bureaucrats and political manager bureaucrats. The first two have traditionally attracted heightened interest, so we’ll start with them. (Other blocks will be covered in a separate article to be published soon - Russia.Post)

“Yeltsin” oligarchs, “Yeltsin-Putin” oligarchs, “Putin” oligarchs

The role of the oligarchs – determined by their financial resources – has visibly declined during Putin's last two terms as president, even though their resources increased over that time. Like ants milk aphids, Putin’s security forces began to “milk” the oligarchs. With the creation of state corporations, at the end of the 2000s state oligarchs emerged alongside private-sector oligarchs. These were officials close to Putin who were given control over colossal resources on behalf of the state. Examples include longtime Putin associates Alexei Miller head of Gazprom since 2001) and Igor Sechin (head of Rosneft since 2012).
“Having found themselves on sanctions lists, the oligarchs have lost a significant part of their resources and are now busy saving what’s left."
Putin (left), with Sergei Pugachev (behind center), Mikhail Fridman (center) and Mikhail Khodorkovsky (right) in 2001. Source: Wiki Commons
It isn’t only about money and influence in the West, but also how useful they can be to the Russian system, though their usefulness has declined in proportion to their independence – financial, political and security. In this regard prominent has been Roman Abramovich, who initiated several attempts to have the sanctions against him lifted with appeals from eminent people, like the Yad Vashem director and film director Kirill Serebrennikov, besides taking on the mission of mediating between Moscow and Kyiv. Note that he, like other oligarchs such as Viktor Vekselberg, Mikhail Fridman and German Khan, has Ukrainian roots, a circumstance, however, that has had zero impact on their public position regarding the war.

The line between private-sector and state oligarchs has blurred even more, and at least for the last 10-15 years the state has been less dependent on the oligarchs than the oligarchs have been on the state.

They can be roughly divided into “Yeltsin,” “Yeltsin-Putin” and “Putin” oligarchs based on the origin of their wealth or initial accumulation of capital. In the first two groups are oligarchs who were allowed to leave Russia while leaving their production assets in the country and extracting cash from them, e.g. Abramovich and TNK-BP co-owners Fridman, Khan and Petr Aven.

Yeltsin oligarchs: Vladimir Potanin (#2 in the Forbes 2022 ranking), Vladimir Lisin (#1), Vagit Alekperov (#10), Mikhail Fridman (#6) German Khan (#14), Petr Aven (#29). 

Yeltsin-Putin oligarchs: Viktor Vekselberg (#22), Alexei Mordashov (#5), Alisher Usmanov (#7), Roman Abramovich (#17), Oleg Deripaska (#50), Andrei Kostin (VTB). 

Putin state oligarchs: Sergei Chemezov (Rostec), Igor Sechin (Rosneft), Nikolai Tokarev (Transneft), Alexei Miller (Gazprom), German Gref (Sberbank), Igor Shuvalov (VEB.RF); 

Putin private-sector oligarchs: Yuri Kovalchuk (#71), Gennady Timchenko (#8), Arkady Rotenberg (#53), Leonid Mikhelson (Novatek; #4).

All of them are now sanctioned.
“Yeltsin oligarchs reacted most publicly to the sanctions, especially the ones living outside Russia who believed they weren’t responsible for the war and were unfairly punished by the West."
Many of them cautiously spoke out against the war while still avoiding making an explicit judgement about who unleashed it. Only banker Oleg Tinkov loudly condemned the war, for which he was immediately forced to sell his business in Russia.

Oath of allegiance to the leader 

Immediately before the start of the war and within a few hours after, the Kremlin publicly demonstrated that the Russian elite was completely under control. First, a Security Council meeting with the highest political, administrative and security elites was shown on television, which was followed by a meeting between Putin and representatives of the business community – this way no one would have any doubts that they all bear or share responsibility for the war in Ukraine along with Putin.

With regard to big business, representatives of which Putin had last met a year earlier in March 2021, the public meeting can be seen as a review of the ranks and an oath of allegiance to the leader. It’s hard to say who wasn’t invited to the meeting and who was invited but didn’t come for some reason. It’s only known that Abramovich flew back from the French Riviera, and, having missed the general meeting, received an individual one. Among those who are usually present at such meetings but were absent are Lisin (NLMK), Deripaska (Basic Element), Rotenberg (SMP Bank), Timchenko (Volga Group), Vyacheslav Kantor (Acron), Mikhail Prokhorov (investor), Usmanov (USM Holdings), Vekselberg (Renova) and Chemezov (Rostec).

Three months later, in June, only six of the Russian billionaire oligarchs came to the annual St Petersburg Economic Forum, which took place this year amid the war: Vekselberg, Deripaska, Vladimir Yevtushenkov (Sistema), Leonid Mikhelson (Novatek), Mordashov (Severstal) and Dmitri Pumpyansky (TMK). It’s hardly worth interpreting the absence of the rest as a challenge to the system; rather this likely reflects a reluctance to be seen at another official Kremlin event. 

The war and the personal sanctions against both big and little oligarchs have made them much more dependent on the Kremlin than before the war, while the Kremlin, on the contrary, is now much less receptive to the wishes of the oligarchs – both the current economy and the outlook for its development now depend on oligarchs less than before.

State share of economy growing because of sanctions

The carpet personal sanctions against private-sector oligarchs have been used by the West mainly to demonstrate the ability of Western governments to put up a united front and punish Russia.
“In Russia itself, the Western sanctions have set in motion a process of de jure and de facto redistribution of property in favor of the Kremlin, amounting to a significant step toward more state control of the economy."
Vagit Alekperov, president of the oil company Lukoil, 2013. Source: Wiki Commons
Because of the sanctions, the following figures resigned from their positions: Alekperov (Lukoil), Andrei Guryev (PhosAgro), Yevtushenkov (Sistema), Dmitri Konov (SIBUR), Dmitri Mazepin (Uralkali), Andrei Melnichenko (SUEK and EuroChem), Vadim Moshkovich (Rusagro), Vladimir Rashevsky (SUEK) and others.

Alekperov was replaced as president of Lukoil by Vadim Vorobyov, a former associate of Sergei Kiriyenko, the deputy head of the Presidential Administration. In exchange for supporting the “special operation” in Ukraine and transferring his core energy assets for management by a state corporation, Alekperov was allowed to continue providing strategic direction for Lukoil and received a promise that Rosneft would halt attempts to take over the company for two years.

State oligarchs represent a hybrid of bureaucrats with backgrounds in business and private-sector oligarchs. On the one hand, they are better protected from the vicissitudes of the market, but on the other, they could lose almost everything they have by one stroke of Putin’s pen, should he decide to dismiss them.

With the outbreak of the war, the Kremlin demanded that they, like their private-sector peers, publicly and unequivocally declare their full loyalty and present an optimistic view of the future. Starting in March, the public was shown a parade of oligarchs giving lengthy interviews to the main news channels: Potanin (March 12), Shuvalov (March 18), Kostin (March 25), Lisin (April 5) and Deripaska (April 15).

The culmination of this oath of allegiance to the Kremlin was the St Petersburg Forum in June, where heavyweight state oligarchs, including Gref, Miller, Sechin and Chemezov, outnumbered their private-sector peers and gave lengthy statements.

Security bureaucrats

On the one hand, wartime is their time, but on the other, they act on command, are used instrumentally and aren’t executing this instrumental role of theirs very well. For the most part, the security bureaucrats aren’t in the public eye, and though every now and then information surfaces about dismissals and even arrests of high-ranking military and FSB officers (including a number of army generals who failed with their assignments, as well as head of the FSB Fifth Directorate Colonel General Sergei Beseda and National Guard Deputy Director Lieutenant General Roman Gavrilov, who oversaw its own security service and special forces), it’s still difficult to verify. What is for sure is that since the leadership at the Prosecutor General and the National Guard/Internal Troops was replaced, large-scale purges have been carried out at both institutions; at end-2021, Putin replaced his advisor Anatoly Seryshev for security personnel.

Unlike the oligarchs, all security officials are Putin’s people – in fact, it’s the second “generation” (second rotation). Among them are “old” officials who were appointed during the transition to the tandem (when Dmitri Medvedev was president and Putin prime minister) and Putin’s return to the Kremlin, along with “new” officials appointed during Putin’s last two presidential terms.

Old: Alexander Bastrykin (Investigative Committee; appointed in 2007), Nikolai Patrushev, (Security Council; 2008), Alexander Bortnikov (FSB; 2008), Vladimir Kolokoltsev (Internal Affairs Ministry; 2012), Sergei Shoigu (Defense Ministry; 2012) and Valery Gerasimov (General Staff; 2012). 

New: Viktor Zolotov (National Guard; 2016), Dmitri Kochnev (FSO; 2016), Alexei Rubezhnoy (Presidential Security Service; 2016), Igor Krasnov (Prosecutor General; 2020), Sergei Korolev (FSB; 2021), Dmitri Mironov (Presidential Administration; 2021), Alexander Kurenkov (Emergency Situations Ministry; 2022),

Among the security officials now promoting themselves against the backdrop of the war in Ukraine, it is necessary to note Ramzan Kadyrov, the leader of Chechnya and at the same time head of his own security forces.
“Special mention should be made of the praetorian guard phenomenon – a few years ago, Putin's most trusted bodyguards and assistants shot up through the ranks."
Viktor Vasilyevich Zolotov, Director of the National Guard of Russia, 2020. Source: Wiki Commons
The first was Zolotov, the long-time head of the Presidential Security Service, who in 2013 was appointed the deputy commander of the Internal Troops before heading up the Internal Troops in 2014 and then the National Guard in 2016.

In 2016, former Presidential Security Service officials Evgeni Zinichev, Alexei Dyumin, Dmitri Mironov, Sergei Morozov and Igor Babushkin were named regional governors. Usually, the Putin envoys were first appointed for a month or two to some high public office – say, deputy minister with the rank of general – and then to the post of governor, which for the appointees themselves was supposed to serve as a bridge to a federal bureaucratic career later. This was the case of Zinichev, who, after a couple of months as governor of Kaliningrad Region, became deputy director of the FSB and then minister of the Emergency Situations Ministry, as well as that of Mironov, who in 2021 was named advisor to the president on personnel decisions in the security services.

After the war began, we learned of two more former Putin guards in high positions: Kurenkov had becоme the Emergency Situations minister, while Roman Gavrilov had been deputy head of the National Guard (Zolotov’s deputy), where he carried out a large-scale purge of the leadership (he was recently dismissed, having held the position for two years). 

Thus, former Putin guards are now responsible for security personnel decisions (Mironov), head up two key agencies (Zolotov with the National Guard and Kurenkov with the Emergency Situations Ministry) and govern two regions (Dyumin in Tula and Babushkin in Astrakhan).

The answer to the question often asked by Western observers about whether the security forces can consolidate, or at least one or two corporations can consolidate, to oppose the Kremlin is definitely no. Such a “rebellion” is extremely unlikely due to their disunity (the “siloviki” don’t have links with one another, only with Putin), as well as the existence of multiple control mechanisms – both external (by the FSB and through interdepartmental competition) and internal (through quasi-checks and balances in the leadership of the security corporations themselves). In addition, the Kremlin makes sure that the security corporations aren’t headed by overly authoritative and independent figures.

The consolidation of the elites around Putin, both the oligarchs and the security forces, is now firmer than ever, having strengthened – not weakened – with the start of the war in Ukraine and Western sanctions.
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