Association of Former Intelligence Officers From AFIO's The Intelligencer 7700 Leesburg Pike, Suite 324 Falls Church, Virginia 22043 Journal of U.S. Intelligence Studies Web: www.afio.com * E-mail: [email protected] Volume 26 • Number 1 • Fall 2020 $15 single copy price operations, and dirty deeds, such as “wet affairs,” Reviews by assassination of regime opponents. Putin’s KGB origins. Putin was sent to Dres- Peter Oleson den, East Germany in 1985. Not the backwater that some have thought. Because it was out of the Berlin limelight, Dresden became a center for training “ille- gals” and running illicit technology acquisition efforts from Western Europe and the US. Putin worked closely with the Stasi and supported terror organizations in the West and Middle East, including the Red Army Faction (Baader-Meinhof Gang), the Popular Front for the Liberation of Palestine terrorists, and Libya. Belton Putin’s People: How the KGB Took Back Russia claims Putin knew in advance of the 1986 La Belle and Then Took on the West discotheque bombing in Berlin by Qaddafi’s agents by Catherine Belton that killed two American GIs and wounded 229. In a New York: Farrar, Straus and Giroux, 2020, 624 pages, heavily footnoted (101 pages), with Index. nuclear world, terror is the chief weapon, according to Ion Mihai Pacepa, the former head of Romanian A fascinating book that foreign intelligence who defected to the West, quoting explains in detail how Vladimir the head of the KGB’s First Chief Directorate. Such Putin rose to power under Boris activities were the “heart and soul of Soviet intelli- Yeltsin and has become Russia’s gence” said Oleg Kalugin, the former KGB general modern day tsar. The book is who also defected to the US [37]. detailed, well researched, and St. Petersburg. When Putin departed the crum- pulls no punches. Catherine bling German Democratic Republic in 1990, he went to Belton was a journalist for St. Petersburg, ostensibly resigning from the KGB. He Moscow Times, Business Week, and soon became a deputy to St. Petersburg mayor, Anatoly the Moscow correspondent for Sobchak. Putin, as head of the city’s international London’s Financial Times. She economic affairs and principal liaison to the KGB and knows how to follow the money, which is what she law enforcement, became known as Sobchak’s fixer. has done and which shows how Putin, aided by his By this time the KGB was active in siphoning funds allies from the St. Petersburg KGB (the siloviki) and from various contracts and export licenses to send criminal organizations, consolidated power, crushed abroad to preserve its financial position and support opponents, and took over Russia. its operations via friendly firms, some of which were Belton focuses on the personalities that have sup- fronts, others willingly witting. Some in the KGB ported Putin and the roles they have played both inside foresaw the coming economic collapse of the Soviet Russia and in the West, where at Putin’s direction his Union and were hedging bets [69]. Belton observes agents and collaborators have stashed vast amounts that the real Perestroika started under Andropov’s of “black cash” siphoned from Russian enterprises. regime, before Gorbachev, when entrepreneurs were Putin’s motivation. Belton writes that Putin given latitude to engage in “black markets,” i.e., not was deeply angered by the breakup of the Soviet under the bureaucratically planned economy. But these empire. He has been quoted as saying in 2005 that the required KGB connections for protection. It was the breakup of the Soviet Union the “greatest geopolitical “beginning of the looting of the Soviet state” [66] and catastrophe of the century.” He views it as a national the start of the KGB alliance with organized crime humiliation and his aim is to restore Russia’s global networks in Russia. position as a major power. St. Petersburg was a tough town. Its port was Putin’s weapon is money – hundreds of bil- largely controlled by organized crime. It was used to lions of dollars diverted surreptitiously from state smuggle drugs from Colombia to Western Europe. enterprises now run by subservient oligarchs to well A reformer, Mikhail Manevich, was shot dead by a hidden black cash accounts in the West. These funds, sniper when his actions threatened criminal control estimated to be over $800 billion—half the GDP of the port in 1997 [104]. Galina Starovoitoya, a Duma of the country—are used for corruption, influence member and reform activist, who opposed the grow- ing KGB influence in Yeltsin’s regime, was gunned Fall 2020 Intelligencer: Journal of U.S. Intelligence Studies Page 103 down in her apartment building in November 1998. enterprises. On December 31, 1999 Yeltsin resigned The KGB has been believed to be behind her assassi- as president of the Russian Federation and named nation [113-4]. Corruption was rife in St. Petersburg. Putin as acting president. Later confirmed by the Putin reportedly destroyed many records when the Duma, one of Putin’s first decrees was to prevent any USSR disintegrated and Yeltsin assumed power. prosecution of “The Family.” Later decrees scuttled When the August 18, 1991 attempted coup other investigations of Putin’s St. Petersburg cohorts against Gorbachev failed and Boris Yeltsin emerged as including Putin himself, Belton reports. the leader of the country and the USSR disintegrated The St. Petersburg ‘siloviki.’2 Putin’s insiders into its regional parts, leaders of the KGB worked largely came from St. Petersburg. He appointed them to secret abroad much of the wealth of the Commu- to critical positions once he assumed the presidency. nist Party. When Russian Federation investigators He moved quickly to consolidate power from the attempted to discover what had happened to much of clique that had supported Yeltsin. Putin initially went the wealth, they were blocked by Yevgeny Primakov, after the independent media. Vladimir Gusinsky, the appointed head of the SVR by Yeltsin.1 Primakov was oligarch owner of Media Most and NTV, had openly a leading conspirator in looting the hidden assets of speculated about FSB involvement in the apartment the Communist Party. Sergei Tretyakov, a senior for- bombings. He was forced to sell his shares to avoid eign intelligence official, later said “tens of billions of criminal prosecution for misappropriation of funds dollars had been transferred to maintain the foreign and left Russia in June 2000. Next were the Yeltsin oli- intelligence networks of the KGB” [95]. garchs, who controlled vast wealth. Belton estimates From St. Petersburg to Moscow. In 1996, seven controlled fifty percent of Russia’s total wealth. after Anatoly Sobchak lost reelection as mayor of St. In the summer of 2000, police raids on several Petersburg, Putin, unemployed, moved to Moscow. oligarch-owned enterprises were meant to scare the Pavel Borodin, a friend, hired him in the Presidential oligarchs into submission. With Boris Berezovsky, one Property Management Department where ironically of the most powerful oligarchs under Yeltsin, intimi- Putin was to organize the transfer of Communist Party dation didn’t work and he quickly fell out with Putin. assets to the new Russian Federation. Soon he was Berezovsky publicly attacked Putin over proposed named as a deputy of Yeltsin’s Presidential Staff and legislation and his handling of the Kursk submarine then put in charge of relations with Russia’s regions. disaster in August 2000. Putin’s government charged In July 1998 Yeltsin appointed Putin as chief of the FSB. Berezovsky of fraud involving Aeroflot, and he fled to Thirteen months later, in August 1999, he was acting the United Kingdom in October 2000. From there he prime minister of the Russian Federation. continued his attacks on Putin, despite two assassi- Following increased unrest in Chechnya in nation plots in 2003 and 2007, until his 2013 alleged September 1999, a series of apartment bombings suicide. (Conflicting autopsies have never concluded in Moscow and other locations shook Russia. Putin whether it was murder, but some evidence exists responded forcefully and initiated retaliatory air that it was.) strikes on Chechen targets, which helped his popu- A principal target was Mikhail Khodorkovsky, larity and set him apart from other leading Russian the richest oligarch under Yeltsin. Through currency figures. This was the start of the Second Chechen War. exchange and importing computers he was wealthy (Questions remain to this day, Belton writes, as to by 1989. He created Menatep Bank through which whether the apartment bombings were a provocation he amassed an additional fortune and stashed hun- by the FSB and not Chechen terrorist attacks.) dreds of millions of dollars in overseas accounts. He Yeltsin’s regime was rife with corruption, and gained political power by financing politicians in he suffered from extreme alcoholism. After 1998 the the Duma. When in 1992 fixed prices were freed the government debt default scandals became daily affairs result was inflation. Khodorkovsky and other tycoons involving “The Family,” including his daughter, her loaned funds to the needy government that offered husband, close associates, and pro-Yeltsin oligarchs, as collateral shares in state enterprises, which they who had become rich by taking over former Soviet collected when the government defaulted in 1998. Khodorkovsky acquired the Yukos oil network. When he tried to integrate the Yukos oil conglomerate with 1. Yeltsin broke up the Soviet KGB after its involvement in the at- tempted coup. The First Chief Directorate (foreign intelligence) was reconstituted as the SVR. Most of the rest by 1995 became the Federal 2. “Siloviki” translates as men of force. The term came into use in the Security Service (FSB) responsible for internal security and counterin- Yeltsin years referring to members of the KGB, SVR, FSB, Federal Drug telligence.