Diary

Peter Pomerantsev

There are any number of paths and initiations into sistema, the liquid mass of networks, corruptions and evasions – elusive yet instantly recognisable to members – which has ordered the politics and social psychology of Russian civilisation since tsarist times. When I arrived in Moscow to work as a TV producer my initiation took the form of a driving test. I would never pass, my instructor explained, if I didn’t pay a bribe (500 dollars, but soon to double; I should get a move on). When I protested that I wanted to pass the test for real he said the traffic police would fail me until I paid up. He was a friend of a friend of my parents and I was told by everyone I knew that he was trustworthy. I gave him the money and he made the deal. I had assumed I would receive the licence in an envelope. To my surprise he told me to go to the traffic centre to take the test along with everyone else. The theory exam was held in a large, bright room with brand-new computers. There were around twenty of us working through on-screen simulations of various driving scenarios. I now decided, rather relieved, that my bribe had been lost in the works and set about using my common sense to get through the test. I got a handsome 18/20, enough to pass. Later I realised that every computer in the room had been rigged for an 18/20 result: everyone had paid.

Then came the practical, which involved a sequence of manoeuvres round cones in a car park. I got into a car, an instructor’s model with two sets of pedals, next to a traffic cop in uniform. He told me to start the car. I was so nervous, and had completed so few lessons, that I couldn’t master the pedals and kept stalling. The traffic cop smiled, glanced over his shoulder, and took control of the car. ‘Put your hands on the wheel and pretend to drive,’ he told me. While he ran the vehicle from his set of pedals I cruised around with an inane grin. After a while I thought: this is almost like driving. It was the system in miniature – the strange intermeshing of corruption and scrupulousness (you did have to go through the motions of the test), the role of officialdom as both obstructor and enabler, the co-option and the simulation.

Everyone talks – we all talk – about sistema but the first person to pay it attention and try to define it academically is Alena Ledeneva in her book Can Russia Modernise? Towards the end, a sistema player recounts a formative experience:[*]

I was about 12 and went to a sports camp. My friends were fishing near the camp and wanted to cook fish soup on the fire, so I went to the kitchen to ask for a saucepan and a couple of potatoes. I knew a girl in the kitchen and she gave me a saucepan and told me to pick up some potatoes from the cellar. As I was coming out of the cellar with four potatoes in the saucepan I bumped into the director of the camp. He decided I was a potato thief at once. Everyone was scared of him and I guess the kitchen girl denied her involvement. I was grounded to ‘think about my behaviour’ but remained fairly confident that I had done nothing wrong. By the evening of that day a man passed by, flipped his ID and introduced himself as a security officer. He threatened to lock me away as a young offender if I didn’t confess to the wrongdoing. I cried through the night and into the next day. Others were instructed not to talk to me, until one morning, an elderly trainer came over and spoke to me like a good cop. He said he understood I didn’t mean it and I didn’t do it, he said, the man who threatened me was only some friend of the director; and he said it would be easier for everyone if I simply apologised – then everything would be back to normal. He looked old, wise and trustworthy, and I couldn’t bear my isolation any longer, so I gave in. My memory blocked how exactly the apology went, but I felt shame, fear and disgust when I saw the director in subsequent years. This was what sistema did to ‘initiate’ people – it made them lie: to accept responsibility for what one didn’t do and vice versa; to compromise oneself by wrongdoing in order not to get others into trouble, to apologise for what one didn’t do in order to be allowed to break free and enjoy life. Yet one never breaks free from sistema.

For many young men initiation comes through the army, the subject of one of my documentary projects for Russian TV. A year of national service is in theory mandatory for males between 18 and 27 (with some exceptions), but anyone who can avoids it. The most common way out is a medical certificate. Some people play mad and spend a month at a psychiatric clinic. Their mothers bring them in. ‘My son is psychologically disturbed,’ they say, even though they know the doctors know they are pretending. Several weeks in a loonie bin will set you back in the region of five to ten thousand dollars. You will never be called up again – the mad are not trusted with guns – but you will have a certificate of mental illness hanging over you for the rest of your career. Other medical solutions are more short-term: a week in hospital with an injured hand or back, but this will have to be repeated every year as April and October approach because this is when the drafts take place, leaving hospitals full of pimply youths simulating back trouble. The medical route takes months of preparation and research, finding the right doctor and settling on the appropriate ailment. The ailments that can exempt you change all the time. You turn up at the military centre with the little stamped registration that your mother has spent months organising and saving for, only to be told by the local recruitment commission that this year flat feet or short sight is no longer a legal excuse – which may be the truth and may be an attempt to extract another bribe.

If you’re at university you can avoid military service (or take part in tame drills at the faculty instead): there is no greater incentive for young men to explore the world of higher education. And if you’re not good enough to make it to college? Then you must bribe your way into an institution: there are dozens of new universities which have opened to service draft-avoiders. For poorer people, it’s a matter of hide and seek. During the spring and autumn drafts soldiers will grab anyone off the street who looks the right age, demand to see their documents and their letters of exemption, and if they don’t have them, march them off to the local recruitment centre. So the young devote their energy to staying clear of metro stations, or hiding behind columns and darting past when they spot a cop flirting with girls or scrounging cigarettes off passers-by. You often see teenagers sprinting through the long, dark, marble corridors of the underground with figures in blue giving chase (they could of course be looking for drugs). When soldiers come by apartment blocks potential conscripts barricade themselves behind the door, holding their breath until the visitors go away. But by now they are in trouble: every time their documents are checked by the police, they tremble; every time they go into the underground, every time they cross a main road, or meet friends near a cinema, or even leave their little yard, they will be in a state of high anxiety. As a draft-dodger, you live semi-legally until you are 27.

This is the genius of sistema: even if you manage to avoid the draft, you, your mother and your family have become part of the network of bribery, fear, simulation and dissimulation. You have learned to become an actor playing different roles in relation to the state, the great intruder you wish to avoid or outwit or simply buy off. You are already semi-legal, a transgressor, but that’s fine for sistema: as long as you only simulate, you will never do anything real, you will always look for compromise and you will feel just the right amount of discomfort. You are now part of the system. If a year in the army is the overt process that binds young Russians to the nation, a far more powerful induction comes with the rituals of avoiding military service.

Another film I was working on was about a successful young businesswoman called Yana Yakovleva, who had founded a pharmaceuticals company that imported and sold industrial cleaning agents to factories and military bases. One morning she woke up to find herself under arrest: the Federal Drugs Control Service had reclassified her cleaning agent, diethyl ether, as a narcotic. She was now a drug dealer behind bars, awaiting trial. She assumed it was a case of reiderstvo, the most common form of corporate takeover in Russia with hundreds of reported, and probably tens of thousands of unreported cases a year, earning an estimated four billion dollars in profit. Business rivals or bureaucrats – long since interchangeable – pay for the security services to have the head of a company arrested; while they are in prison their documents and registrations are seized, the company is re-registered under different owners, and by the time the original owners are released the company has been bought, sold and split up by new owners. The usual way out is a bribe and there is a whole industry of pay-offs. Good ‘lawyers’ are not the ones who can defend you in court – the verdicts are pre-determined – but those who have the right connections and know who to pay off in the judiciary and the relevant ministry. It’s a complex game: pay off the wrong person and you’ve just wasted your money. Soon enough an array of middlemen appear, trying to persuade you that they, and only they, know how to pay the right person off. Yakovleva knew her parents were looking for that person on the outside. They had found a ‘lawyer’ who said he could help: he suggested she admit to the charges and then he could get everything sorted. The bribe would cost hundreds of thousands of dollars. Yakovleva smelled a rat. Her company had done nothing wrong, shouldn’t she stick to her story? And what exactly was she meant to own up to? That she’d traded what she traded? Face up to absurdity? If she started to negotiate, she told me, it would be like relinquishing a part of her sanity, letting the sistema dictate the terms – at which point everything starts to slip.

She decided to push back and go public, trying to get media and NGO attention. This was the anti-sistema approach: sistema is about deals done quietly in corners. At first her efforts had little effect. The head of the FDCS was Viktor Cherkesov, one of Putin’s older friends. During the 1970s and 1980s he had run the Fifth Directorate of the Leningrad KGB, in charge of arresting dissidents. In the new Russia its powers include breaking up trade unions as well as feminist and religious groups. Dissidents remember Cherkesov’s young daughter calling during interrogations. He would pick up the phone, smile gently and change his tone: ‘My pet,’ he would say, ‘I’m interrogating now.’

When Putin became president, Cherkesov was given the FDCS, considered the least prestigious of the security organs and less lucrative than the oil, arms, tax and customs portfolios. So what it did was launch a series of moves to capture the chemical and pharmaceutical industries. Overnight a host of chemicals had their status changed from industrial or medical to narcotic. The plan, Yakovleva sensed, was to ‘break’ these industries: force them to hand over their businesses to people with friends in the FDCS or share their profits. ‘I was meant to swing by the side of the road on the proverbial gallows as a message to others,’ Yakovleva said to me.

But Cherkesov had enemies. He was involved in a power battle with Nikolai Patrushev, another old Putin buddy and Leningrad KGB man, though from the far more glamorous counter-intelligence directorate. Patrushev was now head of the FSB, the KGB’s successor. Cherkesov was trying to undermine him by investigating a customs scam run by the FSB on the Chinese-Russian border. In revenge Patrushev arrested FDCS generals at Moscow airport. So when the FSB saw that Yakovleva and other business people were being victimised by the FDCS they let their public campaigns to beat the Cherkesov clan go ahead – they could have shut the protest down – and didn’t do anything to hold the media back. She was released; and around the time Patrushev won his tussle with Cherkesov, the charges were dropped and the ridiculous reclassification revoked. Though nothing would have been possible without her initial decision to fight publicly, even the bravest fighter against sistema has to dance with it to defeat it.

The only reason I was being allowed to make films for Russian TV about subjects like Yakovleva was that the Kremlin was having one of its periodic anti-corruption drives and the media had been given a dispensation to investigate certain issues. I was working for a ‘youth entertainment’ channel and during my time in Russia I’d learned how to present these stories. I cut Yakovleva’s tale together with the story of a woman whose child had cancer, so the show was about overcoming challenges rather than anything overtly political; I also cut out the part about the FSB, with Yakovleva’s approval, so that it seemed to be the simple story of a brave woman fighting corruption, without any of the Kremlin intrigue. Around the same time I made a film about the army, which focused on hazing, but that story was interwoven with others about playground bullying and a reality show star victimised by her boyfriend. But then the Kremlin’s anti-corruption drive was adjourned – these things are cyclical – and I was gently told by my commissioning editors that they didn’t want any more ‘social films’. I felt lucky to have got away with so much. I was learning to think like a sistemny. Soon afterwards I was offered larger productions by more important channels, and more overtly patriotic material about World War Two heroes. I agonised: on the one hand, there was nothing too crassly pro-Putin about the stories of great generals; on the other, the Kremlin’s overall ideological project was to praise Stalin and build Putin’s popularity around the defeat of the Nazis. In the end I decided not to take up the war projects.

Back in London I found myself covering the Berezovsky-Abramovich trial, one of the great illustrations of how sistema functions at the highest levels (and one of the key sources for Ledeneva’s book). As I sat at the back of the court I wondered what Mrs Justice Gloster could possibly be making of what Ledeneva describes as the ‘unwritten rules, double standards, multiple moralities and forms of self-deception played out in the field of informal politics’. Next door ran the humdrum affair of Plentyoffish Media Inc v. Plenty More LLP. But in Court 26 we were treated to a discussion on the meaning of the word krysha, which denotes political/mafia racketeering and racketeers. The case was ostensibly about Abramovich’s oil company, Sibneft, and whether Berezovsky was a co-owner or an actual krysha.

‘We agreed, that Roman will have 50 per cent of the shares and me 25 per cent,’ Berezovsky explained.

‘So you agreed that you would actually become a registered shareholder?’ Gloster inquired.

‘Not at all,’ Berezovsky answered.

‘So you weren’t going to be a registered shareholder in any company?’

‘We concluded that we are shareholders and we didn’t discuss how it will be registered.’

‘So you might have been a registered shareholder or you might not; either way?’

‘Exactly!’

As the trial went on it became clear that there are no Western-style property rights in sistema, only degrees of proximity to the Kremlin, rituals of bribery and toadying, and casual violence. As soon as Berezovsky lost his influence he lost his access to money. Putin and his network find it hard to leave the Kremlin now: the minute he retires they might lose everything.

When it became time for the judge to give her verdict I had naively assumed she would dismiss both parties as dishonest. Instead she censured Berezovsky as ‘unreliable’ and praised Abramovich as ‘truthful and on the whole reliable’. Berezovsky’s testimony was a mess, but Abramovich’s gains are equally sistema-gotten and amid titters in the gallery, he had calmly stated that the presidential administration does not influence the justice system and that it was possible for Berezovsky to have a fair trial in Russia. There seemed to be an underlying significance in the verdict: by becoming the place where sistema players legalise their money and launder their reputations, London reinforces and spreads the model.

Russians receive a quarter of the ‘investor visas’ that the UK hands out to anyone who can pay a million pounds a clip. It’s all part of the self-perpetuating circle in which most banks, according to the Financial Conduct Authority, are prepared to take on foreign clients if they have one of these visas: ‘three quarters of the banks in our sample failed to take adequate measures to establish the legitimacy of the source of wealth and source of funds to be used in the business relationship.’ The London Stock Exchange is perceived as an easier place for companies from the former Soviet Union to be listed than the US, where regulations are tighter. Then there are the ‘Lords on the Boards’. Peter Mandelson, for example, was recently made an independent director of a Russian company called, with a truly Muscovite sense of irony, Sistema, whose owner, Vladimir Yevtushenkov, was part of the crowd around the former mayor of Moscow, Yuri Luzhkov, when he was in his prime. Luzhkov’s wife, Elena Baturina, is the richest woman in Russia. She made much of her money on construction contracts but denies that they had anything to do with the mayor’s office. Yevtushenkov began his career as a bureaucrat below Luzhkov running the science and technology department of the Moscow city administration, before going on to make his own money in telecommunications, electronics, tourism, trade, oil refining, construction and real estate. To his credit Sistema is generally considered a well-run company. ‘Politicians shouldn’t try to turn into businessmen, and businessmen shouldn’t try to act like ministers and make their decisions for them. That’s the way it should be both in Britain and in Russia, in my opinion,’ Mandelson said when interviewed by the BBC – the interview then appeared (did they get permission?) in Russian Mind, a grand old magazine now based in London and owned by the son of one of the directors of Sistema. Here was a British public official criticising the intermeshing of business and politics while working for a company that has built up its power, at least in part, through relations with Russian politicians. Sistema has landed.

[*] Tony Wood will review Can Russia Modernise? in a future issue of the LRB.