Exposing the Fraud that is Dima Medvedev

Newsweek blows the lid off the “Medvedev is a liberal” myth, for all the world to see:

It says a lot about the kind of place Russia has become that just two minutes of mild mockery of the Kremlin could cause a political shock wave. But sure enough: when the state-controlled Channel One showed a short cartoon in January depicting Russian Prime Minister Vladimir Putin and President.

Dmitry Medvedev dancing together in Red Square, singing a comic duet about the big news stories of 2009, liberals rejoiced. After years of political repression, tight media control, and officially ordained Putin-worship, they saw the lighthearted cartoon as a sign that Medvedev is finally changing Russia. The cartoon followed on the heels of a number of speeches the young president has given on the ills of Russia’s rotten bureaucracy and its broken economy. He’s promised, for instance, to slash bureaucracy and reform the corrupt judiciary, to simplify regulation, and to put government services online. He’s vowed to break Russia’s economic dependence on natural resources and build a knowledge economy. He also recently ordered the firing of 10,000 cops and 16 top police officials, and warned police to stop “terrorizing” private businesses. Nasty nationalist youth movements have been shut down, and human-rights activists once squeezed by Putin have been received as honored guests at the Kremlin. Taken together, these moves have made it seem as though spring is in the air. “I believe President Medvedev sincerely intends to liberalize the system,” says Kirill Kabanov, head of the National Anti–Corruption Committee, an NGO.

If only he were right. In reality, however, Medvedev’s two years in office have seen much talk of radical change, but only skin-deep reforms. That’s because in real life, as in the cartoon, Putin still leads the dance. Putin is the senior partner in the relationship, the one who continues to address the boyish-looking Medvedev by the familiar ty, a Russian pronoun reserved for underlings (Medvedev uses the more respectful vy). There’s no question that Medvedev is full of smart ideas. But these good ideas serve as little more than window dressing meant to give a new, liberal gloss to Putin’s authoritarianism. The bottom line is that Medvedev remains a loyal member of the Putin team, and his role in it is clearly defined: to reform Russia’s creaking economy and prevent social unrest while ensuring that real power remains firmly in the hands of Putin and his circle of ex-KGB officers, known as siloviki. In fact, rather than undermining the system created by Putin, Medvedev’s reforms are actually strengthening it. Current Western analyses follow a longstanding tendency to misread the Kremlin by seeking to find within it a familiar contest of liberals versus conservatives. The reality is that “liberals” led by Medvedev are not challenging the siloviki; they are at their service.

Medvedev allies like Alexander Budberg of the Institute of Contemporary Development, the Kremlin’s favorite think tank, insist that Medvedev genuinely wants to reform rotten institutions like the court system and the police. The problem is that deference to his mentor, to whom Budberg says Medvedev feels filial loyalty, severely restricts how much he can change. One clear taboo is the extensive business interests of the Federal Security Serv-ice, or FSB, Putin’s alma mater and the ultimate core of his power. Also off–limits are the personal business freedoms of top Putin lieutenants, the senior bureaucrats who control giant state corporations like Gazprom and Rosneft, and the state arms businesses. Underpinning it all is the greatest taboo: the creation of any institution such as independent prosecutors, press, or political parties that could challenge or investigate these private empires.

There was also much less than many Western observers thought in a speech Medvedev made last year when he ordered police and other officials to stop harassing private businesses. The speech was apparently a response to the findings of an independent report, prepared on Kremlin orders, that painted a grim picture of shakedowns by those in power. Even by the government’s own figures, official corruption swallows a staggering one third of Russia’s GDP, and Medvedev was said to have been outraged by the findings. Yet Amnesty for Business, an NGO that fights for victims of such crimes, reports that in the year since Medvedev announced his crusade, cases of police blackmail have actually increased. Yana Yakovleva, the NGO’s leader, was even jailed for eight months on apparently fabricated charges. Medvedev’s role, it seems, was to make the right noises and deflect public anger at the corrupt police and bureaucracy without actually changing the way the system works.

A more shocking example of the jarring disconnect between Medvedev’s vision of cleaning up the police and the sordid reality is the case of Sergei Magnitsky, a lawyer who tried to expose a $500 million tax fraud apparently perpetrated by crooks in the tax police with links to the FSB. Magnitsky was jailed by the same police he had accused, and died in November of pancreatic failure after nearly a year in Moscow’s most horrible prison. Medvedev publicly deplored the death and vowed that heads would roll. But instead of a sweeping round of arrests at the upper echelons of the police, tax service, and FSB—all of which were clearly implicated in documents gathered by Magnitsky—only a handful of lowly officials have lost their jobs over the case, and no one was prosecuted. Even Medvedev’s latest purge of police is less substantial than it seems: most of the layoffs will be from police headquarters in Moscow, not bad apples on the street. According to Olga Kryshtanovskaya, an expert on the Russian elite who has worked for the Kremlin, that’s a clear sign that for all Medvedev’s talk, he is “careful not to break the spine of the machine” of bureaucratic and police power created by Putin.

Another key reason not to put much faith in Medvedev’s opening can be found by looking at the personnel he has assigned to execute it. Turns out they’re the very same people who helped tighten the reins under Putin, dismantling democracy and limiting free speech. Exhibit A is Vladislav Surkov, who led a recent Kremlin-sponsored delegation of top civil–society activists to Washington, where they spoke openly about Russia’s pervasive corruption and sought advice from the Americans on cleaning it up. Surkov has also written a series of newspaper articles outlining the Kremlin’s new liberal vision, emphasizing Medvedev’s idea of a “Russian knowledge economy.” But just five years ago, he was the creator of such deeply illiberal ideas as “sovereign democracy”—a system that still prevails in Russia and requires all parties to support the president for the supposed good of the nation. Before that, Surkov also founded the xenophobic Nashi youth movement. Thus his new role has engendered widespread skepticism among Russian rights activists. “I cannot believe I was actually sitting at the same table with Surkov and other Putin people talking about Russian corruption to Americans,” recalls Elena Panfilova of Transparency International Russia about the Washington trip. Clearly Surkov remains one of the Kremlin’s leading ideologues, with the only difference that the current party line he peddles happens to be superficially a little more liberal than the previous one under Putin.

Far from being challenges to Putin, Medvedev’s initiatives, according to Kryshtanovskaya, are all part of a clearly defined plan, called Russia 2020, that was cooked up by the Putin team as long ago as 2005. Phase one, carried out by Putin himself, was to make his hold on power unassailable by bringing all media and political parties under Kremlin control. Phase two, now underway, is to impose a highly controlled version of liberalization from above that will include more freedom of expression, a friendlier face toward the West, and inviting former liberal critics to act as Kremlin advisers. Or as Vladimir Pligin, a deputy head of the Kremlin–created United Russia, puts it, “Medvedev is undertaking a democratization of our political system, but without, God forbid, letting our state grow weak.”

If Putin and his people are still so firmly in charge, however, it raises the question of why they need liberals like Medvedev at all. The answer seems to be that the Kremlin’s old bargain with the Russian people—you give us political carte blanche, we’ll make you rich (or at least comfortable)—has been threatened recently by the recession and the drop in oil prices. Two signs of the times: the purchasing power of the ruble has fallen by nearly a third since 2008, and the government now plans to scrap subsidies for utilities. Such painful changes have forced the government to come up with a new liberal paradigm to dampen flickers of social discontent. Recent protests, such as a demonstration by 12,000 people on the streets of Kaliningrad over increased local taxes, have spooked Putin’s circle. He and his advisers hope that allowing a degree of free speech and creating the appearance of responsive government will keep voters happy.

But while Medvedev’s liberalism is skin-deep at home, there is one piece of good news for the rest of the world, or at least for Russia’s neighbors. The belligerence of Putin’s foreign policy, from gas wars with Ukraine to real wars with Georgia, has given way to a more conciliatory tone. Medvedev made a point of not crowing over the victory in Ukraine’s recent election of Viktor Yanukovych, the candidate heavily backed by Moscow in 2004. Russia even reopened air and rail links to Georgia, once the arch-enemy. Still, Medvedev’s soft foreign policy has its limits. As Russia did when Putin was president, the country still asserts its right to what Medvedev last year called “a privileged interest” in its near abroad, and is still wary of U.S. influence in former Soviet republics.

Medvedev’s real potential lies in dealing with the economy. All agree that Russia urgently needs to fix its deeply dysfunctional economy. And here Medvedev has hit all the right notes: encouraging small businesses by simplifying regulations and providing loans, boosting university research and obliging research centers to seek foreign partners and investors, and funding nationwide talent competitions for young innovators. This helps explain Medvedev’s recent speeches on diversifying the Russian economy away from natural resources and his efforts to stimulate a knowledge economy by boosting university research funding.

However, there is still another reason top bureaucrats need people like Medvedev, and it is the most cynical of all: to secure all the money they stole during a decade in power. Since Putin came to office in 2000, Russian officials are estimated to have skimmed some $200 billion to $300 billion a year from the economy, according to Transparency International Russia’s Panfilova. To keep these ill-gotten assets safe, Russia’s kleptocrats need to ensure that future generations of leaders never try to bring them to justice and that foreigners don’t pry too deeply. “All the Kremlin’s money is abroad, and [the siloviki] realize they should make friends with the Americans in order to provide themselves and their money some security,” says Panfilova. The best way to avoid scrutiny is to seem to lead, or at least endorse, the cause of reform—or so the thinking goes.

Medvedev and Putin do have genuinely different styles, mindsets, and backgrounds. Medvedev is a blogger, for instance, while Putin doesn’t even use a computer. But they agree absolutely on one of the most basic issues: that they must at all costs prevent any outside challenge to the system. This thinking has produced both an unceasing spin campaign and Medvedev’s public reform initiatives, which together have secured the two leaders approval ratings of 75 percent (for Medvedev) and 78 percent (for Putin), according to the independent Moscow-based Levada Center—truly astounding numbers for any leaders in a recession. The two Russians have evolved a sophisticated tandem act in which Medvedev presents himself as the smart young ideas man while Putin acts as the steady old hand who knocks heads together. While Medvedev may champion the Internet, write a blog, and talk about free speech, don’t expect him to relinquish real control by an inch. Sure, he will allow the media and Parliament more freedom—but just how much will remain firmly the Kremlin’s decision.

Still, Medvedev’s ideas are risky, because even limited loosening of free speech could release a dangerous flood of resentment. Putin’s strategists have taken careful note of Mikhail Gorbachev’s fatal mistake, which was to allow upstart democrats to discredit the ruling elite through the press and then unseat it at the ballot box. To avoid suffering a similar fate, the Kremlin has taken pains to exert firm control over the media (even if that now means allowing occasional signs of carefully controlled “dissent”) and ensure that all real political power remains within the Kremlin’s big tent. That was the thinking behind Medvedev’s appointment of opposition leader Nikita Belykh as a regional governor last year. It is also the reasoning behind a new liberal pseudo–opposition party the Kremlin is rumored to be cooking up.

The risk for Medvedev is that the public will turn on him if his proposed reforms never lead to important changes. Here corruption will continue to be the biggest problem, since it is the one malignant force all Russians encounter every day. According to a recent Gallup poll, 93 percent of Russians believe that the government is not doing enough to fight corruption. Yet it is also the one thing that Medvedev can’t tackle without damaging the interests of Putin and the clique of top bureaucrats who put him in office. “How can they possibly fight a mechanism they invented themselves?” asks Panfilova. The answer, of course, is that they can’t. As the experience of countless countries has shown, a corrupt system cannot reform itself; it takes outside institutions like a free press, independent prosecutors, and opposition politicians to fight their way in and make the necessary changes.

Thus over time Medvedev’s charm offensive may become harder to sustain. In the meantime, however, as you read the speculation about whether Putin intends to run again for president, as he is constitutionally allowed to do in 2012, keep one thing in mind: it doesn’t really matter what office he holds. The controlled, basically authoritarian system Putin created will remain— along with the men he appointed to run it. Medvedev is one of those men. And although he certainly has a different style from his stern mentor, they share a common goal: to preserve, as they see it, Russia from the upheavals, chaos, and uncertainty that its brief experiment with democracy and free speech in the Yeltsin years brought. In its place is a carefully choreographed political dance that bears about as much resemblance to real democracy as Swan Lake has to a real wildlife reserve. But the important thing is that just as in the New Year’s cartoon, all of Russia’s leaders are dancing to the same tune.