“Putin’s rule redefined Russian oligarchs’ power dynamics and loyalty.”
When Vladimir Putin assumed power in 2000, the global perception of the “oligarchs” in Russia was that of individuals whose immense wealth, acquired ruthlessly, almost positioned them as shadowy rulers – a ‘government of the few,’ as per the word’s origins. This term continued well into Putin’s tenure, expanding in popular usage to encompass nearly any Russian possessing substantial fortunes.
The extent of political influence wielded by Russia’s super-rich today, however, remains dubious. Shortly after Putin deployed troops into Ukraine in February 2022, a televised meeting at the Kremlin with top industrialists and entrepreneurs highlighted a shift in dynamics: Putin simply informed them of his decision to invade. Despite the anticipated adverse impact on their wealth due to the war, they had no choice but to acquiesce; the authority lay firmly with Putin, not with them.
Following the collapse of the Soviet Union, astute businessmen capitalized on the loosening government controls during Mikhail Gorbachev’s “perestroika” reforms. They swiftly amassed extensive holdings by exploiting the privatization of state industries. Boris Berezovsky, a fast-talking mathematician, epitomized this group, becoming the primary dealer for Russia’s largest automaker. He took over the management of the Sibneft oil company, controlled the national airline Aeroflot, and gained command of Russia’s biggest TV channel, then known as ORT.
Other figures from that era, like media mogul Vladimir Gusinsky, whose NTV channel held significant influence, and oil tycoons Mikhail Khodorkovsky and Roman Abramovich, were somewhat less flamboyant than Berezovsky but nonetheless prominent.
Upon assuming office, Putin was keenly aware of the widespread resentment felt by ordinary Russians toward the ultra-wealthy, who flourished while millions struggled amidst economic upheavals. In the summer of 2000, Putin convened a closed-door meeting in the Kremlin with around two dozen regarded as top oligarchs. According to reports, he sternly conveyed a deal: refrain from political involvement, and your wealth will remain untouched.
“The guarantee… was that all the riches amassed before his presidency could be kept by their owners, and this has never changed,” noted Carnegie Endowment for International Peace analyst Alexandra Prokopenko in a commentary. “Loyalty is what Putin values above all else.”
At that time, Berezovsky had already begun criticizing Putin. He subsequently left Russia for the United Kingdom and was granted asylum in 2003. A decade later, a disputed post-mortem examination suggested he had died by hanging.
Gusinsky, whose media holdings opposed Putin and even mocked him, was arrested amid a probe into misused funds. Within weeks, he agreed to sell his holdings to a branch of Russia’s state natural gas monopoly before departing the country.
Khodorkovsky, then considered Russia’s wealthiest man, lasted longer. He founded the Open Society reformist group, expressing heightened political aspirations. Yet, in 2003, he was apprehended when special forces stormed his private plane. He spent ten years imprisoned for tax evasion and embezzlement before receiving a pardon from Putin and leaving Russia.
Putin tolerated a presidential bid against him in 2012 by Mikhail Prokhorov, who amassed a fortune in metals. However, the campaign was widely perceived as Kremlin-supported, designed to create the illusion of genuine political diversity in Russia.
Despite the financial setbacks resulting from the Ukraine war, most of Russia’s ultra-wealthy either remained silent on the conflict or offered only mild criticisms. Oleg Tinkov, a banking and brewing entrepreneur, stood as a rare exception, condemning the war and labeling its supporters as “morons.” He departed the country in late 2022 and subsequently renounced his citizenship.
Mikhail Fridman, a co-founder of Russia’s largest private bank, termed the war a tragedy and urged an end to the “bloodshed.” Although holding Israeli citizenship and having resided in Britain, reports indicated his return to Moscow following clashes between Israel and Hamas.
“Even as the elites grumble, they continue to show loyalty,” wrote Prokopenko. Nonetheless, she and other analysts suggest that Putin desires not just loyalty but to establish a new set of immensely wealthy figures who owe their allegiance to him. This would be achieved by distributing assets seized from foreign companies leaving Russia and invalidating the privatizations from the 1990s.
Nikolai Petrov, an analyst from Britain’s Royal Institute of International Affairs, argued that Russia is involved in a process of deprivatization, aiming to redistribute wealth to a new group of individuals with lesser power, thus consolidating the president’s position.
“A new group of quasi-owner state oligarchs is being created, with wealth and control redistributed from the ‘old nobles’ to the new,” he remarked.
