The Rise Of The Deep State

On Dec 31, 1999, Boris Yeltsin announced his early resignation as head of state and appointed Vladimir Putin acting president, under the mistaken belief that Putin was a man who could be controlled by Yeltsin and his family | Wikimedia Commons

Waqar Zaidi

PUTIN’S People: How the KGB Took Back Russia and Then Took on the West by Catherine Belton is a book about how a shadowy establishment within an unstable country used political turmoil to empower and enrich itself to the point that it now controls most of the state and the country’s economy. This is very much a story of our times and, as such, serves as a warning from history to Pakistan.

Putin’s People is ostensibly about the rise of Russian strongman Vladimir Putin and the economic and political system — “Putinism” — he and his allies created over the past 25 years or so. But Putin here stands as a figure representative of the reach and power of the main security agency of the Soviet Union, the Komitet Gosudarstvennoy Bezopasnosti, better known as the KGB.

This is a story, then, about the power of the deep state, and how it weaves that power through visible state institutions, non-state actors, personal networks and, ultimately, brute force. This is also a story about the use of wars, the threat of violence, appeals to nationalism and patriotism and unfettered corruption. It is, ultimately, about the precariousness of democracy and the corrupting nature of power in the modern state.

The book begins — like many good stories — with a tumultuous storm. In this case, the storm is the 1989 people’s uprising in East Germany. Huge crowds march on state buildings in cities across the country, tearing down symbols of the oppressive state, including, most symbolically, the wall separating East from West Berlin. These crowds also arrive at the doorstep of the local KGB office in Dresden, looking to break in and destroy all traces of the Soviet spy agency then working hand-in-hand with the hated East German secret police, the Stasi.

Putin — at the time a middling KGB operative at the agency’s Dresden office — is forced to hastily destroy the agency’s records and then flee to a nearby Soviet military base. Shocked at the crumbling of the East German state and its eventual obliteration, by absorption into West Germany, Putin vows to never allow such a fate for his homeland.

An eye-opening book, currently the best study on Putinism and the politics of the Russian industrial oligarchy, offers a warning from history

However, the Soviet Union did, in fact, follow suit. It crumbled soon after its eastern German satellite, and split into a number of constitutive states, the biggest of which was Russia. In this turmoil, the old Russian order was abandoned by the new government headed by Boris Yeltsin. Communism was disavowed, democracy instituted and a free market economy embraced.

Those associated with the old order lost power, too. Mikhail Gorbachev, who had done so much to usher in the end of the Soviet Union, was himself removed from the presidency. The Communist Party was banned, and leading figures in the KGB lost their jobs. The once all-powerful agency was split into four separate organisations.

Through interviews with some of the leading figures of those years, as well as her intimate knowledge of the politics of Russia, journalist Belton explains how the KGB, in fact, did not simply disappear.

Although the agency was dismantled, many of its senior and middle-ranking officials re-emerged during the Yeltsin years to reassert their power and bring back much of the culture and prerogatives of their former employer. Belton’s book is a history of this KGB-ism, an afterlife of the organisation that materialised through Putin and his supporters.

The backdrop to the rise of this KGB-ism is the dire shape of the Russian government’s finances soon after the shift to a market economy in January 1992. Yeltsin’s cash-strapped government raised money by auctioning off state industries to well-connected businessmen, creating overnight billionaires who emerged as the new powerbrokers during Yeltsin’s reign. By one estimate, nearly 50 percent of the country’s wealth was in the hands of just seven business tycoons by the time Yeltsin left office.

Economic problems continued to pile on Yeltsin, however, and he became increasingly beholden to these newly emergent oligarchs. A disastrous currency devaluation in 1998, followed by a default on government debt and a subsequent war in Chechnya, forced Yeltsin to step down and install a figure who would be acceptable to his growing critics, and yet could also be controlled by him and his family. Mistakenly, he thought Putin was such a man, and Putin was appointed acting president on New Year’s Eve in 1999.

Putin was a popular choice. Following his return from East Germany, he had eventually ended up running the remnants of the KGB in Moscow, and later taken a leading part in the muscular Russian response to Chechen separatism. The strongman appealed to a population tired of political and economic turmoil.

“To the Russians”, writes Belton, “it seemed like a breath of fresh air. Compared to the sick and ailing Yeltsin, suddenly they had a leader who was in charge.” An election was soon called, and Putin was emphatically elected as the president of Russia in March 2000.

Putin brought several former KGB men into his administration and, through him and his supporters, the agency was finally able to take revenge for being shut out of power during the Yeltsin years. Seeing themselves as guardians of the nation — and the oligarchs as a threat — Putin and his guard set about curbing the power of the new billionaires. Yeltsin’s oligarchs were threatened, blackmailed and bribed into handing their industries over to Putin’s allies.

Once the old billionaires were subdued, Putin and the new oligarchs — who now controlled Russian industry — turned to expand their influence overseas through investment and the raising of foreign capital. In 2005 alone, they raised more than $4 billion in share sales in London, compared to $1.3 billion in all markets in the 13 years after the Soviet collapse. The London establishment, in turn, met Putin’s oligarchs with open arms. The Russian share listings earned huge profits for London’s bankers, lawyers, consultants and public relations firms.

The path to acceptance was paved with public relations coups, such as Putin’s close confidante Roman Abramovich’s purchase of the London-based Chelsea Football Club in the summer of 2003. London newspapers “marvelled at Abramovich’s private Boeing 767 as he swooped into London to inspect his new club. They devoted copious column inches to his luxury yachts, including the world’s biggest, the Eclipse, a 168-metre floating palace kitted out with two helicopter pads and its own submarine … Few asked where his money came from.”

Putin’s People: How the KGB Took Back Russia and Then Took on the West
By Catherine Belton
HarperCollins, UK
ISBN: 978-0007578795

London became the new oligarchs’ playground, known to Russians as “Londongrad”, or “Moskva-na-Thames” (Moscow on the Thames). “In London, money rules everything,” boasted one Russian tycoon. “Anyone and anything can be bought.”

Even American real estate tycoon Donald Trump was pulled into Putin’s orbit. With the possibility of a lucrative Trump Tower in Moscow as bait, Trump emerged as an empathetic supporter of Putin in the 2000s, and their support for each other during Trump’s election campaign and then presidency is, of course, well known.

Trump is now gone, but Putin and his deep state remains. Democracy in Russia is in tatters, and a state-within-a-state controls the country’s economy, military and foreign policy. Its reach and influence extend beyond the country into international financial and political centres of power such as London and Washington, DC.

Putin’s People is an eye-opening book, and currently the best study we have on Putinism and the politics of industrial oligarchy and the KGB during Putin’s reign. Although many of the processes described are particular to Russia, the book nevertheless stands as a warning about the fragility of democracy and the dangers of the deep state.


Editor’s Note– This review, first published in Dawn’s Eos magazine on May 30, 2021, is reproduced with permission.

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