Monday, October 24, 2016

Abacus Bank: The Fighters

Even the smallest victory is never to be taken for granted. Each victory must be applauded, because it is so easy not to battle at all, to just accept and call that acceptance inevitable.
       --Audre Lorde

Mr. Sung, I'm glad they pick on you, cuz you're a fighter.
--from the just released Steve James documentary, Abacus: Small Enough to Jail
Thomas Sung, founder, Abacus Bank

Of the many dire things I've found, thought and written about on EM08, until now there's been little sunshine. Thanks to the great Gretchen Morgenson, as dogged and principled a journalist in the msm as there is - particularly in regard to EM08 - I first learned of the tale of Abacus Bank.

When my initial EM08 research began, no less than Meredith Whitney came into my awareness, and I remember her ominously forecasting how what the government was doing was "saving" the system, but punishing and destroying community banks and credit unions.

In 1995, megabanks — giant banks with more than $100 billion in assets (in 2010 dollars) — controlled 17 percent of all banking assets. By 2005, their share had reached 41 percent. Today, it is a staggering 59 percent. Meanwhile, the share of the market held by community banks and credit unions — local institutions with less than $1 billion in assets — plummeted from 27 percent to 11 percent. 
-The Institute for Local Self-Reliance 

I wrote to Abacus to offer encouragement, and Jill Sung, founder Thomas' daughter and CEO, replied. That correspondence follows below. What's heartening is that Steve James, award winning filmmaker (Hoop Dreams, Life Itself, among others) has undertaken the task of telling the Abacus story, in a doc that evidently is knocking out audiences.

My mind's racing with a torrent of thoughts and emotions:
  • At the top, and as usual, there's outrage watching Uncle Scam pick on the small guys while rewarding the biggest psychotic crooks in history.
  • As a minority community bank, Abacus' David vs. Goliath story takes on magnitudes of importance, given how crazy America's racial history is.
  • An ironic EM08 observation: one of the most infamous EM08 weapon of destruction's name? Abacus. Who were the architects? In the main, Goldman and John Paulson. BILLIONS stolen, with Paulson alone netting a billion and Goldman in eating its own customers, made hundreds of millions. This is what my country has devolved to, a cesspool of crooks with "deals" that, to anyone with a shred of fairness and decency, reads like something out of Abbie Hoffman's Steal This Book for the vampire bureaucrooks. Forget innovation or entrepreneurship. No, let's just erect endlessly opaque bureaucrookery so we can feed off of the helpless, the small, the weak. Here's the REAL enemy, folks. It's not middle eastern, it isn't la cosa nostra, it isn't the Crips or Bloods. No less than Reuters has a highlight reel here.

Those who endure my endless ranting about these psychopaths deserve a break; here's a heretofore unseen ray of sunshine, some great Americans, heroes, really, sticking to their guns.

Abacus: Small Enough to Jail. Can't wait to see it. Our correspondence follows, but in a moment of serendipity, this first short piece, courtesy of Creatomic/Medium, just came to my attention, and deserves a place as preface. It makes me think of the many sacrifices my family went through, just so I could be here, blogging this... it aptly sets up the Sung's battle, while illuminating their resilience, courage and old school values.

Stop telling each other it’s alright. Sometimes, it’s just not.

People’s lives fall apart in a splinter of a second, their dreams get destroyed, they discover that their bodies have been hiding a disease that’s only getting worse.
Businesses fail, and products crash, and people who love other people get their hearts broken, and people who would give anything to succeed wait for their ships to come in long after they’ve lost the strength or the energy to do anything about it.
What’s the first thing we say to each other, when something goes wrong? What’s the first thing we say when the world gets turned upside down, when all of the shit and the tough times and the breakdowns come?
We say, “it’s alright.”
“It’s alright.”
And that’s a default reaction, it’s the first thing that comes out of our mouths, often. It’s the only assurance we can think of, and the only way we often know how to respond to awful things that seem so far out of our control or influence.
“It’s alright.” Or its alternative, “It’s going to be okay.”
But in the end, a great many things never turn out alright. A great many things just aren’t okay. And saying they are, trying to fool ourselves and the people who need us into believing that it’s all a blip on the radar, it’ll all be sorted out — that’s not helping.
Do you know why?

We know it’s just not true.

People don’t want to hear that everything is alright, when they know — deeply and painfully — that it isn’t. They don’t want to be lied to, even if it’s in the nicest way possible.
All they want is for us to be near. Be open. Be awake and willing to listen. Be patient. Be understanding. And most of all, to just be there. Because the greatest gift you can ever give to someone who is mourning a tragedy, a business disaster, anything — is to ensure that they aren’t alone.
That’s why people in a time of crisis often scream out for help or for companionship. It’s not because they want the rest of the world to solve their problems; they understand that nobody has a magic wand. It’s because they want the simple comfort of knowing that they do not walk in isolation when they’re in need.
We don’t want our pain to be minimized.
Because that’s what happens, when we’re told it’s alright. We feel like we’re over reacting, because if everything really is alright — we ask, why are we feeling so much pain, and what is the root and the cause of it, and are we even entitled to our pain?
We want the enormity of our disasters to be recognized by the people around us, so that we know that what we feel isn’t a trick of our hearts and our minds — it’s a reality. And it sucks, and it’s acceptable to feel like it sucks.

Life really does go on.

It does. And sooner or later, no matter what our struggle is, we start to understand that. And sooner or later, things do feel as alright as they ever can, without ever being the same. Life finds a way, in every nightmare, and life keeps on going. But the way we get there is long and hard, and we need other people to be patient and to walk with us, in silence if need be.
I remember in one of the roughest periods of my life, when it felt as though more things were ending than could ever begin again — I was floundering and struggling and I could barely keep my head above water.
My partner, Emily, told me this.
“I’m not going to say it’s alright, because I know it’s not. And it might never be. But I’m always going to be here, whether you like it or not, to make the best of it, even if that’s not much. I promise.”
5 years later, I’m happier than I ever thought possible. I got through things that seemed insurmountable. I got through things by recognizing that they just weren’t alright. And they weren’t okay.
If your startup fails? It’s not alright. But you can get through it.
If your freelance career bombs? It’s not alright. But you can get through it.
If your relationship comes to an end? It’s not alright. But you can get through it.
If your dreams burn out? It’s not alright.
But you can get through it.

July 23, 2015

Thomas Sung
Jill Sung
Vera Sung

Abacus Federal Savings Bank

Dear Thomas, Jill & Vera Sung,

As an Asian-American whose grandparents came to this country with nothing, I, and all of my cousins – over 25 of them – are testament to their and our parents' sacrifice for the better good, the big picture … the future. It's difficult to reconcile my family's history and the America of my youth with the America of today. When the events of 2008 occurred I was blindsided, but the history major in me was determined to find answers. Soon, Michael Lewis, Matt Taibbi, Nomi Prins… and Gretchen Morgenson, would broaden my view of what I call “EM08”: the economic meltdown of 2008.

So it was with this background I came upon Abacus Bank's story – I wish I could say that I was surprised, but no less than Meredith Whitney, years ago, predicted the woes for smaller lending institutions. What was so interesting to me was the way in which our legal system is front-loaded as a financial dis-incentive for small businesses.

Isn't it remarkable, what the America of my grandparents has devolved to? The last presidential campaign set a new fund record of over a billion dollars, and the 2016 circus will set yet another; some analysts forecast a new high of $2 billion. No clearer message to everyday, working class Americans (and the world) exists.

Yes, it's entirely fixed on behalf of the wealthy, but what can we do? Be decent. Your fellow New Yorker, Spike Lee, popularized the slogan, “Do the Right Thing,” and it's something my family was steeped in. The storm is coming, and while the practical necessities of protecting ourselves are in play – what finance calls “hedging” – I'm convinced that having principles and a morality based upon decency is at the core. It's like William Holden's Pike Bishop says in The Wild Bunch: If you can't do that, you're like some animal. You're finished. We're all finished.

This is why I am writing to you; KEEP YOUR HEAD UP. I was very proud listening to your story, and for what it's worth, want you to know that the great silent majority of decent Americans are out here. People like my ancestors and you are what this country used to stand for, and it's needed now more than ever. Don't ever let go of that.

Very truly yours,

JP Kaneshida
Los Angeles


Dear JP,

Thank you so much for your below email!  We are very fortunate to have supporters like you and we are proud to share a heritage of immigration, hard work and entrepreneurship with you.     

I am impressed that you have taken the time to understand what caused EM08.  The causes are numerous but the effects were devastating for small banks like ours where the resulting regulation created to stop the harms caused by big banks, ended up choking small community banks.  The ironic result is that we now in an even more dangerous situation than before –  more power concentrated in the monetary system in the hands of few.  

They say “that which does not kill us makes us stronger.”  This is a mantra my family and I have repeated over and over to ourselves these past several years.   Now with the trial over, we are focused on just that – rebuilding our small institution to make it stronger to meet the many challenges that still face us.  We feel that we have no choice but to continue to fight this fight and feel blessed that we have been given this opportunity to do this.

I hope we will be able to meet in person one day.  Until such time, we wish you and your family  peace, good health and success in whatever you do.

Best Regards,

Jill Sung
CEO & President
Abacus Federal Savings Bank

Great Americans: Vera, Jill & Thomas Sung

Sunday, August 21, 2016

Obama's Folly is isis' Stage

When isis was blazing its trail of gang pillaging, it did a VERY provocative thing; it seized oil production. At that point it seemed clear to me that Obama should stop their access; he didn't.

The black market soon became their dumping ground, greatly under-cutting the price of oil. Imagine what happened to their bankroll. With said bankroll, imagine now the ability to recruit, particularly to young, naive, dirt poor boys.

There are two important aspects to isis oil. First, getting the oil is one thing, refining is another. How is isis accomplishing this? Turkey, specifically, Erdogan. And who controls oil refining in Turkey? Erdogan's son, Real.

Note the wackiness of this sitch: Turkey is a nato country, fighting isis on the Syrian border, and yet is providing the key element to isis' ability to... well, to do just about whatever it wants.

Let's not forget that Erdogan is a psycho to the point of terrorizing his "own" peeps, the Kurds, who in fairness are punked everywhere they are. Even more, think about a recent Forbes (Forbes!) article that pegged Egyptian despot psycho Mubarak's  worth at a possible $700 billion!!! It'd be a ceiling hard to approach, but the Erdogan's bankroll must be EXTRA large by now. The lesson here is that, just as isis' fuel is oil (a convenient pun indeed) how can it be any less so for a Mubarak or Erdogan?

The second major point is who does isis'  - and Erdogan's - banking? We know that in the receding pinpoint of EM08 that banksters have ADMITTED to laundering for drug cartels and Iran. These are the biggest players around, HSBC, RBS, Standard Charter, JPMC... with that kind of complicity, aiding and abetting, it's no wonder isis is what it is; a bunch of punks living out their fantasies, just as unicorns run by 25 year olds  in Silicon Valley that ***lose money*** but are valued in the billions are capitalized by market forces.

In a time long ago, and long forgotten, there was an historic scandal: Watergate. Then Deep Throat insider/informant and now known Mark Felt uttered the infamous words, "Follow the money." He was right then, and just as much now.

Monday, April 18, 2016

No Exclamation: Yahoo! No More

My friend MM and I began a small venture back in 1992. Both of us were geeks, and in fact, I wrote my first serious piece on MM's Kaypro, complete with a 5.25 floppy! About then I told MM, "You know, I had email in school, you wanna get email?"

So we went off to a big trade show armed with our biz cards and email addresses. I still remember the director of a division at THE company we were vying to strike a deal with, holding my card and staring at it. "What's this?" he asked, pointing to our email address.

It underscores the point I've always believed; entrepreneurs are the cutting edge, the visionaries, the real innovators, the real risk takers... and yet, this country of mine does nothing but flap its yap about "entrepreneurs... blah blah blah" while hoovering up all our money and shoveling it into the pig mouths of the real terrorists destroying my country -- and the world -- at a record setting clip.

Two years ago I cited two mistakes -- one past and one present -- made by Yahoo! Simply, hiring both Terry Semel and Marissa Mayer. While Mayer is the closer, I think Semel's hiring was far more fateful.

Yahoo! The once king of the hill, THE Internet destination, was run over and leap-frogged by a young upstart company that didn't waste money on hiring an old media guard like Semel, and stuck to what good entrepreneurs do: innovate. The irony is that Yahoo! used to license search from Google, and in fact, Semel tried to buy Google. Page and Brin rebuffed him, and behind the scenes I bet they held him in contempt as an old media walrus, plying old walrus ways like buying out what you failed to innovate on.

Old walruses like to lay around and throw money at problems and desires. Take away their bankroll and these folks wouldn't know what to do with themselves, as they're useless. Actually, since they're useless and don't have a work ethic (as evidenced by their lack of innovation/problem solving and thus having to rely on buying their way to success) they're worse because they're drags on society.

Yahoo! is no more, they're just yahoo, a sad signpost of those early exciting "Net days." I remember when Jerry Yang left, I thought, "Well, there's the bell tolling."

And now, with the news of what appears to be Yahoo!'s imminent sale, the wagons are circling.

There's a distant wind blowing, gathering the dust and detritus of things past, only to sweep into the midst of the present. Don't let it get in your eyes.

April 18, 2016

by Tracy Lien [yes, that's her name!]

Yahoo's turnaround strategy could turn into a sell-off strategy starting Monday.
After a tumultuous decade that saw the Internet company lose the battle for search to onetime underdog Google, churn through five chief executives plus an interim CEO, and largely miss out on tech's move to mobile, the Sunnyvale, Calif., company sought "strategic alternatives" this year — industry-speak for a buyer.
Bids are due Monday.
A sale would mark an end for a company once considered a giant of the Web, but it's an option investors — who have grown increasingly frustrated with Yahoo's direction — have rallied behind.

Under Chief Executive Marissa Mayer, Yahoo has spent millions trying to be a media and technology company, while doing neither particularly well. Though its websites get nearly 1 billion visitors each month, the company has struggled to attract the big ad dollars its competitors reap. Costly bids at creating original content — including hiring high-profile news anchor Katie Couric on a $10-million-a-year contract — have yet to pay off. After building up a video arm intended to compete with Netflix and YouTube, the company quashed the project and canceled its original programming — a $42-million revival of the TV show "Community" and two comedy shows — after only one season.

Yahoo's failure to spin off its stake inAlibaba — worth $32 billion — only added to investor scrutiny.
Although Mayer has in the past been hesitant to explore a sale, tech analyst Jan Dawson of Jackdaw Research said Yahoo is now clearly in selling mode, affirmed by changes it made to its employees' severance plans this month.
"At this point, the only way Yahoo doesn't get sold is if they insist on a price no one is willing to pay," Dawson said. "But it seems like there's a willingness on all sides to do a deal."
But even if the company overprices itself, Yahoo soon might wind up on the auction block again.
Activist investor Starboard Value last month sought to oust Yahoo's board of directors in a proxy fight, a move that, if successful, would end Mayer's reign. The new board of directors would presumably push to sell immediately. Shareholders are expected to vote on the board members in June.
That is, of course, if the board doesn't choose to sell before then.
So far, at least 40 potential buyers have reportedly looked at Yahoo's books, but analysts say only a handful of names have emerged as serious contenders.

The mobile and broadband company is considered the front-runner to buy Yahoo. Aside from having the means to make an acquisition this large, analysts say Yahoo would complement Verizon as it continues to bolster its media efforts.
Last year, Verizon acquired AOL, a former Internet giant that itself had become more of a media company. Last month, it bought a 24.5% stake in AwesomenessTV, a Los Angeles entertainment company known for its digital videos. Yahoo properties such as Yahoo Finance and its online lifestyle magazines could be a valuable addition to the telecom's portfolio, expanding its audience and reach and opening additional revenue opportunities as its pool of new potential mobile and broadband customers dwindles.

The Daily Mail
The British tabloid newspaper and website confirmed it is in talks with private equity firms to consider a bid. Media analysts say it's somewhat out of the blue, but the two companies could be a good fit for each other.
“I think it's an opportunistic move,” said Richard Broughton, research director at British data and consulting firm Ampere Analysis. “The U.S. certainly is a market where the Daily Mail group has been doing well, and this could be a springboard for them.”
Analysts have noted that Yahoo and the Daily Mail trade in similarly low- to mid-brow, attention-grabbing content and target similar audiences — although those audiences are largely on different continents. A Yahoo acquisition could help Britain's most-visited news website quickly expand its U.S. footprint.
Google's name has come up in media reports as a potential bidder, but analyst Jan Dawson says a Google acquisition seems implausible.
“Why would they want Yahoo?” Dawson said. “Google is an enormously successful company. It does some of the same things Yahoo does. Why would it spend a lot of money to get an inferior version of what it already has?”
There are bits of Yahoo tech from which Google could benefit, such as combining Yahoo-owned photo storage site Flickr with Google Photos. But that would be “a heck of a lot of money and work to add an incremental amount of functionality,” Dawson said.
Not to mention the risk of antitrust concerns were it to snatch up Yahoo's email, search or online advertising business.

A Microsoft acquisition also seems unlikely. The tech giant famously tried to buy Yahoo in 2008 for $45 billion; an offer that Yahoo rebuffed.
Eight years later, Dawson doesn't think Yahoo has much that Microsoft would want. The company recently shut down and sold its display advertising business as Chief Executive Satya Nadella pushes the company toward the cloud, artificial intelligence and machine learning.
“Their search technology could potentially be interesting,” Dawson said. “But Yahoo uses Bing anyway, so it's just a small slice of additional tech. They'd be buying 99% of stuff they don't want.”
Media companies IAC and CBS would “make more sense” as bidders, Dawson said, because “if you're already an online content business, Yahoo gives you scale and an audience.”
IAC, which has shown a willingness to work with different business models outside of content (it spun off the Match Group last year, which is responsible for online dating apps and Tinder), could find a creative way to repackage Yahoo's properties for new revenue streams.
CBS, a more traditional media company with websites and a broadcasting network, could leverage Yahoo's size to have a greater online footprint.
But Yahoo also comes with a lot of baggage. If IAC or CBS were to win a bid, they'd have organizing — a task that they might not want to undertake.
Private equity
Private equity firms are rumored to be interested in Yahoo's assets — and if they win Yahoo may wind up being sold off piecemeal.
“Private equity may recognize that an asset like Yahoo has tremendous potential that has not been unlocked yet,” said Peter Csathy, chief executive of business consulting and legal services firm Manatt Digital Media. “They'll look for synergies, they'll look at cost reductions. Their job is to find undervalued assets and build those up for an ultimate, significant return on investment.”
Yahoo by the numbers
1 billion – the number of people who visit Yahoo every month
9,000 – the number of employees Yahoo expects to have by the end of 2016 after it culls 15% of its workforce
$35.33 billion – Yahoo's market cap
$32 billion – The amount of Yahoo's market cap linked to its stake in Alibaba
22 – the number of offices Yahoo has closed since Marissa Mayer joined the company. Another five will close by the end of the year, including those in Milan, Madrid and Mexico City

Sunday, April 17, 2016

Anna Politkovskaya, Putin and Power

Last July, however, the Duma passed a law, introduced by the Kremlin, to permit the assassination of “enemies of the Russian regime” abroad.
--Michael Specter 
We were aware of the fact that death walks hand in hand with struggle.--Stokely Carmichael
One of the basic laws of engagement with an opponent is, "Know your enemy." This is a fundamental problem with so-called progressives; they simply refuse or are incapable of seeing the blunt historical facts, that when dealing with power, they are dealing with psychos.

Protesting, demonstrating, marching... the "show aspects" of counter establishment sentiments, are all fine and good, but without counters to potential moves toward killing, are pointless.

In sports, there's a time-worn saying: the best defense is good offense. It's not an axiom, but it has it's place, given the right context. Right now, in EM08's second phase of maximum extraction, we can see how power is swallowing up swaths of real estate in a hoarding frenzy. While there are certainly other factors involved, such as cheap money (via printing and zirp), one way too look at this is through hedging; power is conglomerating in a hedge against the massive bubbles we see now on every front. It's offense as defense.

As many who heard of Anna Politkovskaya's murder, I was shocked and not surprised. But the point I want to make clear is that murder is not only by the bullet or bomb. Psychos have means unavailable to the poor, and it's access, power and means spurred on by economic imperative. While it's true that crimes of assault, robbery and murder occur within poor communities to the tune of the poster child cry of "black on black crime," comparing these to targeting millions of people of color for toxic loans or the invasion of Iraq -- or Cambodia! -- is like comparing Little League baseball to the World Series.

Long forgotten is when Muhammad Ali, in refusing to enter the draft, said that he was not going to sacrifice his beliefs in order to further and support the hegemonic US agenda. But he uttered 4 words that underscore just how hardcore he was: I'm ready to die.

The question then becomes, as much of a hero as Ali was, would he have been ready to kill? Certainly the evil empire has answered this question, many times over.

I think the problem is that many people in America think that racism is an attitude. And this is encouraged by the capitalist system. So they think that what people think is what makes them a racist. Racism is not an attitude. If a white man wants to lynch me, that’s his problem. If he’s got the power to lynch me, that’s my problem. Racism is not a question of attitude; it’s a question of power.
--Stokely Carmichael/Kwame Ture


Letter from Moscow JANUARY 29, 2007 ISSUE

Kremlin, Inc.

Why are Vladimir Putin’s opponents dying?


Vladimir Putin, the former K.G.B. agent Alexander Litvinenko, and the journalists Paul Klebnikov and Anna Politkovskaya.CREDITILLUSTRATION BY STEVE BRODNER

Saturday, October 7th, was a marathon of disheartening tasks for Anna Politkovskaya. Two weeks earlier, her father, a retired diplomat, had died of a heart attack as he emerged from the Moscow Metro while on his way to visit Politkovskaya’s mother, Raisa Mazepa, in the hospital. She had just been diagnosed with cancer and was too weak even to attend her husband’s funeral. “Your father will forgive me, because he knows that I have always loved him,” she told Anna and her sister, Elena Kudimova, the day he was buried. A week later, she underwent surgery, and since then Anna and Elena had been taking turns helping her cope with her grief.

Politkovskaya was supposed to spend the day at the hospital, but her twenty-six-year-old daughter, who was pregnant, had just moved into Politkovskaya’s apartment, on Lesnaya Street, while her own place was being prepared for the baby. “Anna had so much on her mind,’’ Elena Kudimova told me when we met in London, before Christmas. “And she was trying to finish her article.’’ Politkovskaya was a special correspondent for the small liberal newspaperNovaya Gazeta, and, like most of her work, the piece focussed on the terror that pervades the southern republic of Chechnya. This time, she had been trying to document repeated acts of torture carried out by squads loyal to the pro-Russian Prime Minister, Ramzan Kadyrov. In the past seven years, Politkovskaya had written dozens of accounts of life during wartime; many had been collected in her book “A Small Corner of Hell: Dispatches from Chechnya.” Politkovskaya was far more likely to spend time in a hospital than on a battlefield, and her writing bore frequent witness to robbery, rape, and the unbridled cruelty of life in a place that few other Russians—and almost no other reporters—cared to think about. One day at the Ninth Municipal Hospital, in Grozny, Politkovskaya encountered a sixty-two-year-old woman named Aishat Suleimanova, whose eyes expressed “complete indifference to the world,’’ she wrote in a typical piece. “And it is beyond one’s strength to look at her naked body. She’s been disembowelled like a chicken. The surgeons have cut into her from above her chest to her groin.’’ Two weeks earlier, a “young fellow in a Russian serviceman’s uniform put Aishat on a bed in her own house and shot five 5.45-mm. bullets into her. These bullets, weighted at the edges, have been forbidden by all international conventions as inhumane.’’
In the West, Politkovskaya’s honesty brought her a measure of fame and a string of awards, bestowed at ceremonies in hotel ballrooms from New York to Stockholm. At home, she had none of that. Her excoriations of Russia’s President, Vladimir Putin, insured isolation, harassment, and, many predicted, death. “I am a pariah,’’ she wrote in an essay last year. “That is the result of my journalism through the years of the Second Chechen War, and of publishing books abroad about life in Russia.’’ Despite the fact that Politkovskaya was articulate, attractive, and accomplished, she was barred from appearing on television, which is the only way the vast majority of Russians get news. To the degree that a living woman could be airbrushed out of post-Soviet history, she had been. “People call the newspaper and send letters with one and the same question: ‘Why are you writing about this? Why are you scaring us?’ “ she wrote. “ ‘Why do we need to know this?’ “ She provided an answer as much for herself as for any reader: “I’m sure this has to be done, for one simple reason: as contemporaries of this war, we will be held responsible for it. The classic Soviet excuse of not being there and not taking part in anything personally won’t work. So I want you to know the truth. Then you’ll be free of cynicism.’’
That afternoon, Politkovskaya drove to a supermarket near her mother’s apartment, on the Frunzenskaya Embankment. Her daughter had planned to meet her there but was delayed. Nonetheless, as a surveillance camera at the store later showed, Politkovskaya was not alone. A young woman and a tall, slender man whose face was obscured by a baseball cap lurked in the aisles as she shopped. When Politkovskaya finished, she drove home in her silver Vaz 2110 and parked a few feet from the entrance to her building. She carried two bags of groceries up to her apartment, on the seventh floor, in the building’s tiny elevator and dropped them at the door. Then she went down to fetch the rest of her parcels. When the elevator opened on the ground floor, her killer was waiting. He shot her four times—the first two bullets piercing her heart and lungs, the third shattering her shoulder, with a force that drove Politkovskaya back into the elevator. He then administered what is referred to in Moscow, where contract killings have become routine, as the kontrolnyi vystrel—the control shot. He fired a bullet into her head from inches away. Then he dropped his weapon, a plastic 9-mm. Makarov pistol whose serial number had been filed away, and slipped into the darkening afternoon.
The murder of Anna Politkovskaya was at once unbelievable and utterly expected. She had been hunted and attacked before. In 2001, she fled to Vienna after receiving e-mailed threats claiming that a special-services police officer whom she had accused of committing atrocities against civilians (and who was eventually convicted of the crimes) was bent on revenge. While she was abroad, a woman who looked very much like her was shot and killed in front of Politkovskaya’s Moscow apartment building. Police investigators believe the bullet was meant for Politkovskaya. In 2004, she became violently ill after drinking tea on a flight to Beslan, in North Ossetia, where, at the request of Chechen leaders, she was to negotiate with terrorists who had seized a school and taken more than eleven hundred hostages, most of them children. The Russian Army, which had bungled its response to the siege, did not want her there. Upon landing in Rostov, she was rushed to the hospital; the next day, she was flown by private jet to Moscow for treatment. By the time she arrived, her blood-test results and other medical records had somehow disappeared. She survived, only to be called a “midwife to terror.” The threats became continuous: calls in the middle of the night, letters, e-mails, all ominous, all promising the worst. “Anna knew the risks only too well,’’ her sister told me. Politkovskaya was born in New York while her father was serving at the United Nations, in 1958; not long ago, her family persuaded her to obtain an American passport. “But that was as far as she would go,” Kudimova said. “We all begged her to stop. We begged. My parents. Her editors. Her children. But she always answered the same way: ‘How could I live with myself if I didn’t write the truth?’ “
Since 1999, when Vladimir Putin, a career K.G.B. officer, was, in effect, anointed as President by Boris Yeltsin, thirteen journalists have been murdered in Russia. Nearly all the deaths took place in strange circumstances, and none of them have been successfully investigated or prosecuted. In July, 2003, the investigative reporter Yuri Shchekochikhin, a well-known colleague of Politkovskaya’s at Novaya Gazeta, died of what doctors described as an “allergic reaction.’’ Shchekochikhin, who became famous in the Gorbachev era with his reports on the rise of a new mafia, had been investigating allegations of tax evasion against people with links to the F.S.B., the post-Soviet K.G.B. Nobody ever explained what Shchekochikhin was allergic to, and his family is convinced that he was poisoned. On July 9, 2004, Paul Klebnikov, the founding editor of the Russian edition of Forbes—who had made powerful enemies by investigating corruption among Russian business tycoons—was shot dead as he left his Moscow office.
The attacks have not been limited to journalists. In September of 2004, Viktor Yushchenko, a candidate for President of Ukraine who helped lead the Orange Revolution, and who was vigorously opposed by Putin, barely survived a poisoning. Doctors determined that he had been given the deadly chemical dioxin, which left his face disfigured and his health severely impaired. Since then, two members of the Duma, the Russian parliament, have been assassinated, and last September Andrei Kozlov, the deputy chief of Russia’s central bank, was shot outside a Moscow stadium following a company soccer match. Kozlov had initiated a highly visible effort to rid the country of banks that were little more than fronts for organized crime. And just a few weeks ago, in an execution that could have been planned by Al Capone, Movladi Baisarov, a former Chechen special-forces officer who had come to be seen by Kadyrov as a rival, was gunned down on Leninsky Prospekt, one of Moscow’s busiest thoroughfares. A series of control shots were administered in front of scores of witnesses, including high-ranking members of the police force. No arrests have been made.
Four weeks after Politkovskaya died, Alexander Litvinenko, a little-known former K.G.B. agent who had been imprisoned by Putin and had then defected to England, fell gravely ill in London. Like many others, including Politkovskaya, Litvinenko had accused the Russian President of creating a pretext for the Second Chechen War in 1999 by blowing up buildings in Moscow and then blaming Chechen separatists for the attacks. Putin’s decisive response to those acts of terrorism propelled him toward immense and lasting popularity. He was outraged by Litvinenko’s accusation and equally angered that Litvinenko had fallen into the orbit of Boris Berezovsky, one of his most despised enemies. Berezovsky, a shady billionaire oligarch, wielded huge power in the Yeltsin years, helped bring Putin to Yeltsin’s attention, and even played a major role in persuading him to assume the Presidency. Once Putin took power, though, Berezovsky found himself shut off from the Kremlin; he accused Putin of turning his back on Yeltsin’s reforms, and was driven from the country. Litvinenko subsequently charged that his F.S.B. superiors had ordered him to kill Berezovsky. On his deathbed, he accused Putin of killing him; he also blamed Putin for Politkovskaya’s death.
The manner of Litvinenko’s poisoning was obscure almost until the moment he died. At first, doctors thought that he had an unusual bacterial infection; then they said that his symptoms pointed toward rat poison. When his immune system started to fail, they thought it more likely that the poison was a radioactive form of thallium, which had been used by the K.G.B. nearly fifty years earlier in a failed attempt to assassinate Nikolai Khokhlov, an agent who had refused to comply with an order to kill a prominent Russian dissident. Finally, just hours before Litvinenko died, the doctors provided a definitive and even more improbable diagnosis: he had been poisoned with polonium 210, a rare radioactive isotope; a millionth of a gram is enough to destroy a person’s bodily organs. Litvinenko’s murder was the first known case of nuclear terrorism perpetrated against an individual.
In Moscow, a city given to conspiracy theories, people could speak of little else: Putin had acted to silence a vocal traitor; no, Putin’s enemies did it, to destroy the image of the Kremlin and gain leverage in the 2008 Presidential campaign; Putin’s allies did it, so that they could use the affair as a convenient excuse to ignore the constitution and secure him a third term; the “Jews” did it, because Litvinenko had converted to Islam; Muslim extremists did it, because Litvinenko had reneged on a promise to supply parts for a dirty bomb; Berezovsky did it, to embarrass Putin. The Kremlin even suggested that Leonid Nevzlin, a wealthy oil executive who fled Russia and lives in Israel, might have been involved. There was no proof for any of these assertions. Last July, however, the Duma passed a law, introduced by the Kremlin, to permit the assassination of “enemies of the Russian regime” abroad. For people like Boris Berezovsky, whose hatred for Putin has become an obsession, the new law explained everything.
“This guy is a K.G.B. guy,’’ Berezovsky told me one afternoon over tea at a London hotel. “This guy issues a law allowing the Russians to kill opponents abroad. So they kill opponents abroad.’’ His voice rose, and he shrugged, and then he glanced at me as if to say, How could one draw any other conclusion? “This is absolutely logical. Why did they issue this law? For what? Because this is Russia and nobody agrees to kill without the signature of somebody more important who gave the order.’’ The Kremlin has denied any involvement in Litvinenko’s death. Whatever the truth, the manner in which he died has tarnished Putin’s reputation in the West. And so has the execution of a journalist who had been accused of nothing more than doing her job.
At first, Putin, like most other Russians, tried to ignore the Politkovskaya murder. He refused even to make a gesture of sympathy. As mourners gathered at services in Helsinki, Paris, and New York, and as many others—most of them members of Moscow’s dwindling liberal establishment—laid flowers on the doorstep of Politkovskaya’s apartment building and attended her funeral, at the Troyekurovskoye Cemetery, on the outskirts of Moscow, the President said nothing. On October 10th, he travelled to Dresden (where he had been stationed as a K.G.B. operative in the eighties) for a meeting with the German Chancellor, Angela Merkel. Afterward, they appeared at a press conference, and Putin was no longer able to avoid questions about the killing. He responded curtly, “She was well known in the media community, in human-rights circles, and in the West, but her influence on political life within Russia was very minimal. . . . In my opinion, she was too radical, and by virtue of this radicalism she did not have a very strong influence on political life within the country, and especially in Chechnya.”
The President’s detached and clinical approach to the murder infuriated Politkovskaya’s colleagues and shocked her family. “It was like he was saying she was of no value to the Kremlin, so she didn’t deserve to live,’’ Elena Kudimova told me. “I don’t care what he thought of her work, but what kind of man speaks that way about the dead?”
In the late nineteen-eighties, at the urging of Mikhail Gorbachev’s Kremlin, Communist newspapers began publishing exposés of Russian politics and the war in Afghanistan, and stories about many of the “blank spots” of Soviet history, going back to Lenin. The dull, formulaic journals of Soviet life—Izvestia, Literaturnaya Gazeta, Ogonyok, and Moscow News—suddenly became engrossing. Each morning, huge crowds would gather in Pushkin Square to read the papers, discuss the events of the day, and argue about what might come next. New papers were starting to appear as well; the first, and best, was Nezavisimaya Gazeta. By the end of the decade, the distinctly capitalist business journal Kommersant had also appeared, first weekly, then every day. Although truth, rather than profits, was the priority in that brief, emotional, and highly romantic period, circulations remained large, because people were still hungry for genuine information about their own lives and history.
Euphoria cannot sustain a business, however. When Yeltsin instituted the economic reforms known as “shock therapy,” in 1992, prices soared and the costs of publishing a newspaper became prohibitive. There were no advertisements, and subscriptions all but evaporated, along with whatever innocence remained. The moral tone of the journalistic world began to shift, from idealistic to mercenary. The practice of writing biased news articles for money became routine even at the best papers. Restaurant owners, businessmen, and public officials knew that the right price would bring them favorable coverage almost anywhere. “It would be good to say we had our hands clean at all times,’’ Raf Shakirov, who later became the editor of Izvestia, told me. “We tried. But it was done by everyone. Absolutely everyone.’’
As the process of Soviet disintegration accelerated, the Yeltsin government was consumed by economic and social chaos. Leaders of several Russian regions, including Siberia and Yakutia—both with vast reserves of diamonds, oil, and gold beneath their frozen ground—began to speak openly of seceding. One Soviet general, Dzhokhar Dudayev, watched from his post in Estonia as the Baltic republics demanded independence. He resigned his commission as commander of a strategic wing of nuclear bombers, went home to Grozny, and, after a dubious election, proclaimed himself the leader of an independent Chechnya. Boris Yeltsin did not take the Chechen threat seriously, but he began to worry that this rebellion, in a part of the country that had been hostile to Moscow for centuries, might set off similar demands in other republics. Yeltsin was struggling to keep the country together, and in 1993 he was even forced to turn his tanks against his own mutinous parliament.
By the end of the following year, Yeltsin had heard enough talk of Chechen independence. To those who encouraged the President to negotiate—as he had with Tatarstan and other regions seeking greater autonomy—Yeltsin replied by asking if the President of Russia should really be bargaining with “a bunch of shepherds.” Pavel Grachev, the Defense Minister, promised that he could win a war against Dudayev’s forces with one paratroop regiment “in two hours,’’ and Yeltsin told him to go ahead. Instead, what became known as the First Chechen War dragged on for nearly two years. By the time it ended, in the summer of 1996, Grozny had been levelled, tens of thousands of Russians and Chechens had died, and Europe’s largest army had been forced into a historic retreat.
Most Russians had quickly come to oppose the war in Chechnya, largely because of reports they saw on television, particularly on the NTV network. NTV was owned by Vladimir Gusinsky, one of the earliest Moscow “oligarchs.” Its correspondents were fearless. “Those pictures created an overwhelming sense that the war was unjust and that Yeltsin had to end it,” Masha Lipman, who was the deputy editor of Gusinsky’s magazine Itogi, said. “It hurt him very badly—his popularity plummeted. The war was seen as cruel.’’ For the first time, the Russian press had played a central role in altering the nation’s political direction. Indeed, with the single exception of the economic windfall granted to a few well-placed men—oligarchs who were permitted to buy state property at ludicrously low prices—the war in Chechnya did more to unravel the promise of Yeltsin’s Presidency than any other event.
By 1996, with a Presidential election scheduled, Yeltsin’s popularity ratings had fallen into the single digits. He suffered from heart disease and other ailments, and was drinking heavily and behaving erratically. Just five years after the “collapse of Communism,” the Communist candidate, Gennady Zyuganov, promising to bring back a stable, coherent past, seemed almost certain to win the Russian Presidency. To have even a hope of victory, Yeltsin was forced to sue for peace in Chechnya and form a political alliance with a gruff, theatrical, and very popular general, Alexander Lebed, who had openly and eloquently criticized the war. More important, just a few months earlier Yeltsin had made common cause with the Moscow oligarchs, including Berezovsky and Gusinsky, who set aside their rivalries to help the President. After all, he had made their fortunes possible, and they knew that a Russia led by Zyuganov would have no place for them. So the oligarchs and the journalists they employed conspired to pour limitless funds into Yeltsin’s campaign, and insured that the networks would provide only favorable coverage.
The young liberals who worked at Moscow’s newspapers and television stations, and had championed Yeltsin’s rise during the Gorbachev years, were terrified that their new liberties would vanish under a neo-Communist government. For all his faults and his increasing malevolence, Yeltsin rarely challenged the right of the press to do its job in Chechnya or anywhere else. “Yeltsin was an opportunist, as every politician is,’’ Igor Malashenko, the founding president of NTV, told me recently. “He had terrible personal flaws and made many mistakes. But he did not need to control everything. He had a visceral taste for democracy and for freedom. And he loved the mess.” So, despite Yeltsin’s precarious health, his loss of public support, and an inner circle riven by factional disputes and corruption, the most influential journalists in Russia—led by Malashenko and NTV—decided that nothing was more important than protecting Yeltsin’s Presidency.
They wanted to drive Communism from Russia forever; impartiality, they felt, was too decorous a response to what they saw as a national emergency. As a Moscow correspondent for the Times, I saw that many of my friends were certain that a Yeltsin loss would be a disaster for the country. One day, I travelled with the press corps to Novosibirsk, a center of Soviet-era science and scholarship, to watch Zyuganov campaign. He was attempting to convince people that their new freedoms were filled with false promises. At that time, factory salaries were often paid in dish towels, tires, or cheap cutlery. Inflation had rendered pensions almost worthless, and people in the crowd listened to Zyuganov with hope and relief. My friends in the Russian press, however, were disgusted. “We got rid of this shit,’’ one of them told me that night, “and we are never going to let it back. Never.’’ They wrote accordingly. Any suggestion that journalism shouldn’t work that way was rebuffed with assertions that people in America and Europe had less at stake.
“When NTV was busy reëlecting Yeltsin, when he had two per cent and it magically went to fifty-four per cent, why didn’t you in the West say, ‘Careful, Russia, this will lead to a system you will regret’?’’ Leonid Parfyonov asked me recently. Until two years ago, Parfyonov was the nation’s most influential television host, but he was abruptly fired after a dispute with the Kremlin over the censoring of his Sunday-night political news program. He is now the editor of the Russian edition of Newsweek. “No. We never got that from the West. You all said, ‘Good job. Yeltsin good, Zyuganov bad.’ You prevented the return of Communism as much as we did.’’ That is true, no doubt. But when Russia’s young democrats jettisoned the rules of democracy they also forfeited their independence. That made what came next for the media, and for Russia, possible—perhaps even inevitable.
The 1996 election “put a poison seed into the soil,’’ Andrei Norkin, a former anchor for NTV, told me. Norkin now works for the satellite network RTV1, which is owned by Gusinsky. “And, even if we did not see why, the authorities understood at once: mass media could very easily be manipulated to achieve any goal. Whether the Kremlin needed to raise the rating of a President or bring down an opponent or conduct an operation to destroy a business, or a man, the media could do the job. Once the Kremlin understood that it could use journalists as instruments of its will, and saw that journalists would go along, everything that happened in the Putin era was, sadly, quite logical.”
A few months before Putin became President, in 2000, there was a battle for control of parliament—and, by implication, the government—as Russia prepared for the end of Yeltsin’s administration. One group was backed by the Kremlin and the other by former Prime Minister Yevgeny Primakov and the extraordinarily powerful mayor of Moscow, Yuri Luzhkov. The outcome was determined wholly by television coverage. Most newspapers had lost what influence they had had. Channel 1, the main state network, unleashed a barrage of biased, defamatory reports that destroyed Primakov in less than two months. As Alexander Rodnyansky, who is the head of CTC, one of Russia’s major television networks, put it, “Television is the only reality in which we exist.’’
Putin had seen what true press freedom could accomplish during the First Chechen War, and he was not about to repeat Yeltsin’s mistake. In 1999, after the explosions that terrorized Moscow and provided the rationale for instigating the Second Chechen War, the Kremlin quickly assumed control of essentially all television in Russia and responded harshly to those who tried to resist. On April 14, 2001, the state-controlled energy monolith, Gazprom, forcibly took over NTV—cutting Andrei Norkin off in the middle of a sentence as he tried to explain what was happening inside the studios. The screen filled with colored stripes. Igor Malashenko referred to the seizure—a decisive moment in the muffling of free speech in Russia—as “a creeping coup.” Networks soon became wholly owned by the state or by companies—like Gazprom, which owns three networks and also Izvestia—that function as corporate arms of the government.
Propaganda has become more sophisticated and possibly more effective than it was during the Soviet years, when television was a tool used to sustain an ideology. The goal today is simpler: to support the Kremlin and its corporate interests. “It’s a magic process now,” Anna Kachkaeva, who broadcasts a weekly interview show on Radio Liberty, told me. Kachkaeva, who is also the head of the Television Department at Moscow State University, went on, “There is no censorship—it’s much more advanced. I would call it a system of contacts and agreements between the Kremlin and the heads of television networks. There is no need to start every day with instructions. It is all done with winks and nods. They meet at the end of the week, and the problem, for TV and even in the printed press, is that self-censorship is worse than any other kind. Journalists know—they can feel—what is allowed and what is not.’’
The Kremlin’s relationship with this pliable, post-Soviet press corps becomes obvious in any political crisis. Last January, for example, every channel helped wage an information war against Ukraine during that country’s price dispute with Gazprom. Oil and gas revenue is almost wholly responsible for Russia’s current economic boom—not to mention the Kremlin’s rapidly growing political confidence. Since Gazprom is the central instrument of that success, Putin keeps a careful watch on its interests. Dmitry Medvedev, the chairman of the Gazprom board, is also Putin’s first deputy prime minister and a likely Presidential candidate next year. (Many commentators have wondered if he and Putin will simply switch jobs.) In the corporatist, semi-authoritarian structure that Putin has created—the Kremlin refers to it as “sovereign democracy”—what is good for Gazprom is good for Russia, and no Russian television station would have dared to present the Ukrainian side of the story.
The Putin government has made a clever calculation: a few newspapers, with tiny élite audiences, can publish highly critical investigations and editorials as long as that reporting and criticism stays absolutely disconnected from television. (And as long as their reporters keep out of Chechnya.) Anna Politkovskaya began writing about the war in 1999, after the rules of press freedom changed, and she violated those rules every time she went to work. Not long before her death, she wrote, “I will not go into the . . . joys of the path I have chosen—the poisoning, the arrests, the threats in letters and over the Internet, the telephoned death threats, the weekly summons to the prosecutor general’s office to sign statements about practically every article I write (the first question being ‘How and where did you obtain this information?’). Of course I don’t like the constant derisive articles about me that appear in other newspapers and on Web sites presenting me as the madwoman of Moscow. I find it disgusting to live this way. I would like a bit more understanding.” The fact that Novaya Gazeta continued to exist says more about the paper’s minimal impact than about its openness.
Politkovskaya, like many others, attributed the precipitate decline of press freedoms to Putin’s background and his reflexes. In her book “Putin’s Russia: Life in a Failing Democracy” (2004), she wrote that he is “a product of the country’s murkiest intelligence service,” and “has failed to transcend his origins and stop behaving like a K.G.B. officer.” Putin has indeed presided over a remarkable resurgence in the power of the secret services, and many current Russian leaders are products of the K.G.B. and its successors.
“Reform of the K.G.B. never really happened,’’ Evgenia Albats, a professor of political science at Moscow’s Higher School of Economics, said a few weeks ago, after the deaths of Politkovskaya and Litvinenko. Albats has written more incisively about the K.G.B. than any other Russian journalist. “The organization was broken into several agencies in the early nineteen-nineties, but the reforms were abandoned, especially after Putin became President,” she went on. “The K.G.B.’s capacity to be a political organization is back. And, unlike in the Soviet era, the secret services are now in full power.”
Two stories dominated the news in Moscow just before Christmas: the centenary of Leonid Brezhnev’s birth and the death of the Chilean autocrat General Augusto Pinochet. Both men received adoring attention on television and in newspapers. Brezhnev held power for eighteen years as General Secretary of the Communist Party in an era most notable for economic stagnation and human-rights abuses. And yet he has never been more in vogue. A poll taken last month by the daily paper Moskovsky Komsomolets found that “the overwhelming majority of Russia’s people have very pleasant memories of Brezhnev’s era and of Leonid Ilyich himself, who would have turned a hundred on December 19th.” During the Brezhnev years, the decaying state was kept aloft almost exclusively by stratospherically high oil prices.
“Those years are now increasingly called the Golden Age of the great power, which preceded the turmoil of Gorbachev and Yeltsin—theirs was the age of a weak and lost Russia, ended by the return of Russia’s past grandeur under President Putin,” the columnist Sergey Strokan noted in Kommersant.
Like Brezhnev, Pinochet evoked a sense of stability, a lack of turmoil. Russia’s most popular paper, Komsomolskaya Pravda, asked readers if the country needed its own Pinochet. The overwhelming response was yes. “We don’t need a dictator,’’ the liberal legislator Irina Khakamada wrote. “But we might need an economic Pinochet.’’ Others were far more effusive. “Pinochet made an exemplary and glamorous nation out of Chile,’’ one typical reader wrote. “Stable and strong.”
Putin, who has called the breakup of the Soviet Union “the greatest geopolitical catastrophe of the century,” clearly agrees. Sick of the lines, the empty shops, and the false promises of Soviet life, Russians looked first to the West—and particularly to the United States—to provide an economic model. What followed was an epic disaster: the sell-off of the state’s most valuable assets made a few dozen people obscenely rich, but the lives of millions of others became far worse. The health-care system fell apart, and so did many of the social-service networks. Russia became the first industrial country ever to experience a sustained fall in life expectancy. Russian males born today can, on average, expect to live to the age of fifty-nine, dying younger than if they were born in Pakistan or Bangladesh. It is not surprising, then, that by the time Putin became President most Russians were only too happy to exchange the metaphysical ideas of free speech and intellectual freedom for the concrete desires of owning a home and a car and possessing a bank account. They also wanted to feel that somebody was in control of their country.
In today’s Russia, as Politkovskaya wrote, stability is everything and damn the cost. Gorbachev and Yeltsin are seen by an overwhelming majority as historical disasters who provoked decline, collapse, chaos, and humiliation before the triumphal West. The opportunities created in those years, the liberation from totalitarianism, have been forgotten. “Yes, stability has come to Russia,” Politkovskaya wrote. “It is a monstrous stability under which nobody seeks justice in courts that flaunt their subservience and partisanship. Nobody in his or her right mind seeks protection from the institutions entrusted with maintaining law and order, because they are totally corrupt. Lynch law is the order of the day, both in people’s minds and in their actions. An eye for an eye, a tooth for a tooth.’’
Vladimir Putin’s relationship with democracy is not ambiguous: in December of 2004, he signed a bill that effectively eliminated the election by popular vote of Russia’s eighty-nine governors. The President now nominates them himself—and then waits for regional legislatures to confirm his choices (as they always do). In another change that nobody protested and few people noticed, Putin also assumed the power to appoint the mayors of Moscow and St. Petersburg. Last November, again at the President’s behest, the Duma abolished any requirement that a minimum number of voters must participate in order for an election to be valid.
“I don’t know of a single case in the past six years when the Duma voted against any Presidential initiative,’’ Vladimir Ryzhkov, one of the last liberal legislators willing to speak critically and publicly, told me. “I also don’t know of any case where the Duma adopted an initiative that came from the regions. One man makes all the rules in Russia now, and the Duma has become like a new Supreme Soviet.’’
No company, foreign or domestic, can prevail in an argument with the Kremlin. That became clear on October 25, 2003, when armed and masked F.S.B. agents stormed a private jet and arrested Mikhail Khodorkovsky as he was about to depart from the Novosibirsk Airport, in Siberia. Khodorkovsky was Russia’s richest and, after Putin himself, easily its most influential man. He ran Yukos, the largest—and, by most assessments, the best managed—oil company in the country. Khodorkovsky had failed to honor an unspoken pact with the Kremlin: stay out of politics and stay rich. Instead, he had begun to speak out, act independently, and support Putin’s opponents. He even started appearing in foreign capitals—often acting more like a head of state than like an oil magnate. Khodorkovsky was charged with fraud and tax evasion, and was then convicted in a trial that few observers, in or out of Russia, believed was fair. He was sentenced to nine years in prison and is serving them at Prison Camp IZ-75/1, in Chita—one of Siberia’s most remote and inhospitable regions. The Kremlin then set out to destroy his company, suing Yukos for billions of dollars in what it said were unpaid taxes. Yukos’s assets are being distributed among the President’s allies, the biggest beneficiaries being the two companies that are sometimes referred to as the only meaningful political “parties” left in Russia: Gazprom and Rosneft, the state-run oil concern. (In December, the Kremlin began to assemble yet another case against Khodorkovsky, this time involving money laundering.)
The Russian government has become bolder and more assertive throughout Putin’s tenure. On New Year’s Day of 2006, Russia abruptly cut gas exports to Ukraine after the government there objected to a sharp rise in the prices charged by Gazprom. Gas headed to Europe from Russia passes through Ukraine, and the disruption—which was widely seen as punishment for Ukraine’s political intransigence—affected many European countries. This month, Belarus was treated in the same fashion: Russia doubled the price it charges for gas and began to impose much higher export duties on oil. Putin clearly sees today’s ideological battles in economic, rather than military, terms. Vladislav Surkov, who is essentially the Kremlin’s chief ideologist, told delegates at a meeting of the President’s party last year, “For all globalization’s benefits, all the talk of friendship, the Americans count their dividends at home, the British count theirs—and we count ours. The majority count their losses. So when they tell us that sovereignty is outdated, as is the nation-state, we should ask ourselves what they are up to.”
The Kremlin recently provided a particularly audacious example of how it sees its role as an “energy superpower”: Royal Dutch Shell, which had invested billions of dollars to develop the world’s largest oil-and-gas field, Sakhalin II, in the Russian Far East, was forced by the government to sell its controlling stake in the project. The company had endured a year of regulatory harassment—including ludicrous threats that the pipeline would not meet Russia’s environmental standards. The moment Shell surrendered to Gazprom, however, those environmental concerns vanished. And what was Shell’s response after its holding in the project was reduced from fifty-five per cent to twenty-five? “Thank you very much for your support,” the company’s chief executive, Jeroen van der Veer, told Putin at a meeting three weeks ago. “This was a historic occasion.”
With thirty per cent of the world’s gas exports, Russia can impose its will for one simple reason. “The entire world is obsessed with energy security and resources,” Fyodor Lukyanov, the editor of the quarterly journal Russia in Global Affairs, told me. “You need it. We have it. It is up to us to decide how to deal with that. India and China are seeking new sources of energy to secure their very rapid growth. The U.S. is lost in its war in Iraq, the European Union has no idea what it is anymore. And then there is Russia: stable, wealthy, controlled very solidly. No opposition. There is really a feeling of superiority, a sense that Russia is now an indispensable nation, as Mrs. Albright said just a few years ago about the United States.”
For the first time since the nineteen-eighties, when a steep drop in the price of oil brought on an economic crisis that helped destroy the Soviet Union, Russia feels truly independent. Throughout the nineties, every Russian leader, including Putin during the first years of his administration, was preoccupied with financial problems, in an attempt either to repair the broken Soviet economy or to respond to humanitarian crises or, finally, and most humiliatingly, to persuade the International Monetary Fund to help the country survive its birth. “Today, it is ridiculous to remember,’’ Lukyanov said, “but through much of the nineties economic decisions in Russia could be taken only after consultation with the I.M.F. and sometimes after the approval of the American Embassy in Moscow. Russia was weak. Russia didn’t know what to do. And today’s greed is a reaction to all of that. To poverty and humiliation. Our official ideology is to make more money.”
The gains of the past seven years have been remarkable, and, while the country’s two great cities, Moscow and St. Petersburg, have benefitted most from the new wealth, the rest of the nation has not been left completely behind. A friend of mine recently visited Perm, at the base of the Ural Mountains, and he was astonished to find seven Italian restaurants in the city where a dinner I had about a decade ago consisted of an unsightly slab of cold meat and some deep-fried potatoes.
Moscow has changed even more. Parts of the city are coming to resemble colder versions of Riyadh or Dubai. One afternoon, as I walked to the Lenin Library from my hotel, I noticed that one of the library’s main signs now shares space with another local landmark: Planet Sushi. Nearby, a few hundred yards from Red Square, is the Moscow Bentley, Ferrari, and Maserati dealership, and each new model seems to sell out faster than the one before.
Putin is proud of Russia’s economic achievements, and he took advantage of the press conference in Germany where he spoke with so little passion about Anna Politkovskaya to describe them in detail. “When I became President, our foreign-currency and gold reserves stood at twelve billion dollars, and now they have increased by eighty billion over the first half of this year alone, and currently come to a total of around two hundred and seventy billion,’’ he said. “We have paid off our debts in full. We have now become a grain-exporting country.” He added, “But none of this would mean anything if it did not bring change to people’s lives,’’ noting that incomes and pensions have risen nearly ten per cent each year since he became President. Nevertheless, the country is literally dying. When Boris Yeltsin took office, the Russian population stood at nearly a hundred and fifty million. By 2050, most official projections suggest, the number may fall below a hundred million. In describing the new Russia, neither Putin nor his loyalists mention the country’s rapidly expanding AIDSepidemic, its endemic alcoholism, or the vast differences in incomes among its citizens. Nor do they acknowledge that, despite the robust G.D.P., Russia’s rankings on such essential global economic issues as competitiveness and labor efficiency are appallingly low.
“The majority of the population, they are absolutely happy,” Alexei Volin, who served for three years as deputy chief of staff in Putin’s government and now runs a highly successful publishing house, said when we met in Moscow. “They get more money. Consumption has increased two and a half times in the last six years. People are buying cars, country houses, they are going to big shopping malls—as big as those in the United States.’’ Volin, a trim, clean-cut, forty-three-year-old man dressed in a white button-down shirt and khaki Dockers, smiled. “They are just as happy as they can be,’’ he said. “They don’t have a headache because of some political problem or the concentration of power. They don’t watch TV news. They don’t care.
“There is another group,’’ he went on. “They are unhappy, because political life has been frozen. They don’t like the situation with Russian television or the press. Several months ago, I talked to one important Kremlin person and I asked him why is our TV news so awful and dull. And his answer was ‘Why are you watching TV? People like you should go read the Internet if you want information. TV is not for you. It’s for the people. ’ ’’
In this context, freedom of the press doesn’t matter much and, increasingly in Russia, doesn’t exist. “Here we have this question of freedom or wealth,’’ Aleksei Venediktov, who runs the radio station Echo of Moscow, told me. It’s the one remaining station in the capital that broadcasts truthful, and even combative, news reports and live call-in shows—a genre that has disappeared from Russian television. “People chose wealth. They do not understand that freedom is a necessary condition for preserving that wealth and the security that they have come to value. To be engaged in honest reporting about delicate subjects like corruption or to travel to Chechnya is too dangerous. People don’t want it, they don’t ask for it, and they really don’t understand that they need it.”
Anna Politkovskaya seemed to draw energy from the public’s indifference. Her pieces could be shrill and polemical, and even those who agreed with her often failed to read them. She didn’t care. “She was on a mission for justice,” Aleksei Simonov, the longtime leader of the Glasnost Defense Fund, told me when we met for a drink at Moscow’s House of Journalists. “Anna was a very peculiar figure in journalism. She was not loved, because she was never part of a team. She was a loner. She could address her best friends in a most rude and dismissive manner if she thought they were wrong about something.’’
Simonov, a bull of a man with a pointy white beard and the ability to smoke two cigarettes at once, gulped his beer. “Truth to tell,’’ he said, “she was a very difficult woman.’’ He sighed and waved his arms. “Very difficult. But nobody can say she was not honest. She one hundred per cent believed in what she wrote. And she had the facts. She had the facts and the truth, and for that she will always be a hero of Russia.’’
When it comes to press freedom, Russia is now ranked below countries like Sudan, Zimbabwe, and Afghanistan. It has become nearly impossible to work in places like Chechnya, and Politkovskaya, despite support from her newspaper, was often alone there, unprotected, and out of touch. That made it easy for the Russian Army to abuse her.
“First they ordered me to stand right in the middle of a torn-up field for more than an hour,’’ she wrote in “A Small Corner of Hell,” describing how she was tortured in 2001 by the Army. “Hour after hour of interrogation followed. A succession of young officers completely took away my freedom.” The officers constantly reminded her that they answered to Putin alone. She went on:
I was not allowed to make a phone call or walk around, and I was forced to put all my personal belongings on the desk. I choose to omit the nastiest details, since they are completely indecent. . . . From time to time, the zealous young officers were joined by their senior officer, a lieutenant colonel with a swarthy face and dull dark bulging eyes. He would send the youngsters out of the tent, turn on music that he considered romantic and hint at a “favorable outcome” of the affair if I were to comply in certain ways. Between the lieutenant colonel’s visits, the young officers tortured me, skillfully hitting my sore spots. They looked through my children’s pictures, making a point of saying what they would like to do to the kids. This went on for about three hours. Finally the worldly-wise lieutenant colonel, who would boast now and then that he was giving his life for the Motherland, glanced at his watch and said in a businesslike tone, “Let’s go. I’m going to shoot you.”
Politkovskaya was eventually released. Afterward, she came to see Chechnya as a metaphor. “This vicious cycle of widespread lies has been maintained by people who call themselves officers,’’ she wrote. “After this lawlessness, they leave for their homes, all over the country. Chechnya as a mode of thinking, feeling, and acting spreads everywhere like gangrenous cells and turns into a nationwide tragedy, infecting all strata of society.’’
The last time I saw Akhmed Zakayev, he was wearing a camouflage outfit and carried an AK-47. He had a bandolier around his waist and a Motorola walkie-talkie tucked into his web belt. It was August, 1996, days after a few hundred Chechen separatists had surrounded thousands of Russian soldiers, capturing them and the city of Grozny. Zakayev was the vice-premier of the last legally elected Chechen leader, Aslan Maskhadov. Before the war, he had been a Shakespearean actor and the Chechen culture minister. Putin regards Zakayev as a terrorist. In 2002, while attending a conference in Copenhagen, Zakayev was arrested at the request of the Russian government and held in a Danish prison for more than a month. But the Danish courts—saying that they could find no evidence of any crime he had committed—refused to extradite him. When he was released, Politkovskaya came to collect him. “We both would have cried if we were capable of it,’’ she wrote. She accompanied Zakayev to London, where he settled, living across the street from Alexander Litvinenko, to whom he became very close. The courts there, too, refused Russia’s request to extradite Zakayev, saying that he ran a high risk of being tortured. Zakayev looks more like a lawyer these days than like a revolutionary; when we met he was wearing a blue suit, a white shirt, and a red tie. His shoes were spit-shined. When Litvinenko died, on November 23rd, Russian prosecutors once again began an effort to extradite him—and also Berezovsky. “Putin won’t stop till every one of us is dead,’’ Zakayev told me. By “us” he meant not only the Chechen people but also those who oppose Kremlin policies, people like Politkovskaya and Litvinenko. “Alexander and Anna were killed to send a message,’’ he said. “I am sure of that.”
The Russian press belittled the British response to Litvinenko’s death. The night after he died, all three major national networks, Rossiya, Channel 1, and NTV, led their news shows with extensive coverage that focussed not on his death but on the British reaction to it. Rossiya began its broadcast with the words “Panic in London,” and Channel 1 opened with images of British police officers on the streets of central London. “Britain is on the brink of panic,’’ the correspondent said in a grave voice. On NTV, Gazprom’s channel, one man suggested that “thousands of people around the world might now start panicking.” What had happened to Britain’s legendary stiff upper lip, they wondered—as if it were somehow childish to respond fearfully to an act of nuclear terrorism carried out on one’s own soil.
Polonium 210 is not easy to acquire—at least, not the amount necessary to kill a man. Nearly all of it is produced in Russia. Even though the amount necessary to kill Litvinenko was minuscule, it would almost certainly have required a sophisticated organization to procure, transport, prepare, measure, and administer it. Most people in London, and many in Moscow as well, believe that that organization was the F.S.B. Its members reserve special hatred for those who turn on it, and Litvinenko was a very high-profile traitor. He had accused the Russian President—a member of their secret fraternity—of killing his own citizens to start a war, and he had joined with the forces of Berezovsky. The F.S.B. had the motive, the skills, and the money.
“You know, for the first time in my life I really watched how the mass media in a free country works,’’ Berezovsky told me when we met in London. “When Litvinenko died, there were a thousand theories: He killed himself, I killed him. Al Qaeda. Jews. Putin. Everybody. But the free press has competition, and step by step it started to get rid of the stupid versions and go to the mainstream: Kremlin. Kremlin. Kremlin. I was impressed. These are people who don’t even understand about Russia, and yet, step by step, they got there. And in Russia it’s the opposite. The press presents an artificial story, and if you open a Russian newspaper you just have to laugh.’’
Initially, Berezovsky did not believe that the F.S.B. was involved in the murder—it was too obvious and sensational, certain to bring Russia and Putin unwanted publicity. Then he learned that the job had been botched. “I think that the people who were planning to eliminate Sasha were sure that nobody would be able to trace anything,’’ he said. “They screwed up. They underestimated the British doctors, and they also overestimated their own talents, which is common. Nobody expected so many traces left. It was clearly a sloppy job. So what happened is that they outsmarted themselves. The polonium was discovered three hours before Sasha died. Three hours. If he had died in the first week or the second week, nobody would ever have known a thing.’’
Alexei Volin, the former Kremlin official, thinks that Berezovsky’s conjecture stems more from a hatred of Vladimir Putin than from evidence or reality. “I don’t believe it was the Russian state that killed Litvinenko with polonium,’’ he told me. “He is not one of the people who should be killed first. We have Mr. Kalugin,’’ he said, referring to Oleg Kalugin, the former chief of K.G.B. foreign counterintelligence, who became a harsh critic of the agency and now lives outside Washington. “We have a lot of high-ranking Russian spies living abroad. We have Mr. Berezovsky, Mr. Zakayev. They are more interesting people to kill to demonstrate the power of the state. Also, if somebody from the secret forces wants to kill a person he wouldn’t kill him in a way that is evident to the entire world that this is from Russia. Polonium is produced in Sarov. One city in this whole country. Say, for example, I am the head of the F.S.B. You come to me and you need to kill Mr. Litvinenko. There are a lot of Arab and Martinique and Jamaica guys who are drinking alcohol and using drugs in London and who can kill Mr. Litvinenko by knife. It doesn’t cost a lot of money. It’s not hard. Bringing these containers of polonium from Europe, from one city to another, bringing them on British Airways and Aeroflot flights—that is absolute madness. Why would you bother?’’
A couple of days before leaving Moscow, I went to see Viktor Shenderovich at what was once an NTV building; it still houses Vladimir Gusinsky’s cable channels. The place looks like a Courtyard Marriott—a central atrium with big trees, a glass roof, and lots of chrome. It is one of the last refuges for liberal journalists in Moscow. Shenderovich is a grumpy-looking former standup comedian whose satirical television show “Kukly” (“Puppets”) aired on NTV between 1994 and 2003. For much of that time, it was required viewing for anyone who cared about politics—a weirdly effective combination of “Saturday Night Live” and “60 Minutes.” Shenderovich was savagely funny, using his puppets to ridicule whoever held power. Nobody was spared, not Boris Yeltsin or Mikhail Gorbachev, and certainly not Vladimir Putin. But Putin does not take well to being made fun of. A few weeks after he was portrayed by a puppet as a nasty dwarf, Shenderovich was out of a job. He now has a weekly radio broadcast on Echo of Moscow and another on Radio Liberty.
Shenderovich had just received a phone call from his daughter, who had heard something about Garry Kasparov, the chess champion. Kasparov has emerged as the most prominent man in what is called the Other Russia—a coalition of Putin’s most outspoken critics. “The office is being raided as we speak,’’ Shenderovich said. “The police are there locking down computers and confiscating everybody’s cell phone.’’ They took away newspapers, books, and other literature to see if any of it was “extremist” and therefore illegal.
The raid occurred a few days before the Other Russia planned to hold a Saturday-afternoon march from Triumphalnaya Square to the Kremlin; permission was denied, so more than a thousand people gathered across from the Tchaikovsky Concert Hall, beneath an enormous billboard featuring a picture of Gisele Bündchen. There were nearly ten thousand police officers—in green, blue, and brown uniforms, denoting different services—and two helicopters hovered above. To enter the square it was necessary to walk through one of the many metal detectors that the police had provided—and one might well have walked through a time machine. The protest was a bizarre ideological stew; Kasparov spoke about liberty and openness, but Communists spoke about liberty and openness as well. Ancient Stalinists stood on the curb selling anti-Semitic literature, Order of Lenin badges, and yellowing copies ofZavtra!, one of Russia’s most rabidly right-wing newspapers. There were chess players, too. Speakers talked of “saving Russia from the horrors that had descended upon it.’’ People chanted for a while, and then everyone went home.
The next afternoon, Sunday, brought glorious weather, and thousands of people took advantage of it to do some shopping. Many of them ended up in Red Square. Workmen had placed a giant skating rink between Lenin’s Tomb and Christian Dior’s new flagship store at GUM. Hundreds of young parents stood in line holding their children’s hands as they waited to skate. They seemed happy. The gray, thousand-yard stare so representative of Soviet life was gone, replaced with, of all things, a smile. It was not difficult to see why so many Russians—more than seventy per cent, in most polls—seem to support the President. Since Alexander Litvinenko’s death, there has been much public discussion of what Putin will do next year, when his term concludes. He has promised to step down, but he has also said that he intends to “retain influence,” and people have speculated on the many ways he could do that: as Prime Minister, for example, or as chairman of Gazprom. Nobody knows, perhaps not even Putin. Russia today, and not for the first time, has wagered its well-being on the price of oil, and, as long as salaries continue to rise, people seem untroubled by the future and unwilling to dwell on even the most compelling warnings from the past. Oil prices have crashed before. In recent months, they have fallen more than twenty per cent. At some point, if the fall continues, it may no longer be possible to ignore Russia’s dead Cassandra.
“I have wondered a great deal about why I am so intolerant of Putin,’’ Politkovskaya wrote. “Quite simply, I am a forty-five-year-old Muscovite who observed the Soviet Union at its most disgraceful in the nineteen-seventies and eighties. . . . Putin has, by chance, gotten his hands on enormous power and has used it to catastrophic effect. I dislike him because he does not like people. He despises us. He sees us as a means to his ends, a means for the achievement and retention of personal power, no more than that. Accordingly, he believes he can do anything he likes with us, play with us as he sees fit, destroy us as he sees fit. We are nobody, while he whom chance has enabled to clamber to the top of the pile is today Tsar and God. In Russia we have had leaders with this outlook before. It led to tragedy, to bloodshed on a vast scale, to civil wars.” For her part, she said, “I want no more of that.”