
English: 
In the spring of 2012,
Vladimir Vladimirovich Putin
entered the Kremlin to start his third term
as president of Russia.
It had been a remarkable ascent.
In just over 20 years,
a journey from unemployed spy
to modern day tsar.
Lt. Colonel Andre Zykov has watched that climb to power.
A former police investigator
who once wanted to arrest Putin,
he says his rise has come at great cost.
 
Well, of course there has always been corruption in Russia.
But building it into such a meticulous system

Serbian: 
 
 
 
 
 

English: 
was something only Mr Putin has managed to do.
 
Could Putin be held clearly responsible
based on the evidence that has already been gathered?
Absolutely. Yes.
 
In 2010,
Zykov laid out evidence he had gathered
from an investigation of Putin's early years
in city government in Saint Petersburg .
He posted it on YouTube.
Mysteriously, there have been efforts to delete it from the web.
But not before it was downloaded
by Russia expert and author Karen Dawisha.
[Frontline]: And in its essence,
what did that series that he posted,
what did it, what was the summation of it?
The summation of it was
a detailed account
of the criminal activities that he feels
Putin was involved in.

English: 
Abuse of power, abuse of his official position...
involvement in
relations with organized crime,
knowledge about money laundering.
I mean, a whole range of economic crimes.
 
Dawisha says that Zykov's charges
are part of a larger culture of corruption in Putin's Russia.
She has been gathering extensive documentation
for a new book on what she calls
"Putin's kleptocracy."
And how he and his circle have shaped the country.
I started thinking,
instead of seeing Russia as a
as a democracy in the process of failing,
we need to see it as an authoritarian system
in the process of succeeding.
That they're not actually incapable of being democrats.
They don't want to be democrats.

English: 
What about that? Let's work on that thesis.
And if that's correct,
when did that start?
And that's what took me to the '90s.
Because they were stealing from the very beginning.
In 1990,
the old Soviet system was collapsing.
But what exactly would replace it wasn't clear.
The uncertainty had a whole nation on edge.
Among them was a young KGB officer named Vladimir Putin.
He'd returned to his hometown of Saint Petersburg
from his posting in Dresden, East Germany.
And he was looking for work.
He would eventually find it
at Saint Petersburg's city hall.
His former law professor, Anatoly Sobchak,
had just been elected mayor.
Sobchak's widow, Lyudmila Narusova,
remembers her husband's response

English: 
when his former student insisted on telling him
that he'd been working for the KGB.
 
My husband was shocked by the candor
and asked what his job was.
And he said he had worked in the German Democratic Republic in Eastern Germany,
and he said,
"Well, I just happen to be looking for people
that know Europe, that know the languages,
in order to work on foreign economic relations.
They wouldn't have hired an idiot to work in reconnaissance,
so I hope you can manage it."
And it needs to be said that, according to my husband,
he never regretted it.
Putin would soon be deputy mayor of the city.
And, crucially,
chair of the Committee on Foreign Economic Relations.
He was the lynchpin.
He controlled
which foreign companies could register their offices,
and receive offices...
After all, remember:

English: 
All this property was Soviet property.
The Soviet Union hadn't fallen yet.
So how was a company gonna get access to property
to set up
a branch in Saint Petersburg?
Putin.
Putin would have to assign it.
Even as his star rose,
there was an early example of his ambition.
He commissioned a documentary about himself.
It was called "Power."
Made by Igor Shadkahn.
 
Putin had an agenda.
He wanted to admit that he had been a KGB agent
in foreign reconnaissance.
For Putin, it was an effective way to out himself

English: 
as a former member of the reviled KGB.
But for mayor Sobchak,
Putin's past would prove useful.
After all,
he was running a city with a notorious criminal history.
And according to prominent political analyst
Stanislav Belkovsky,
he needed someone who could work in its
shadows.
 
St. Petersburg [was] called
[the] bandit capital of Russia,
gangster capital of Russia,
at that moment,
and the mayor's office should communicate
to those Europeans some way.
But of course Anatoly Sobchak
could not be involved in such conferences.
And it was Vladimir Putin who was in charge.
When I arrived for the shoot,
his entire lobby was full of foreigners.
This included Finnish, Germans,
and there was some agreements they were all coming to.
Now the agreement for the most part was about food aid

English: 
for Saint Petersburg.
 
 
Putin had his work cut out for him.
The collapse of the Soviet Union
brought terrible food shortages
to St. Petersburg.
The agricultural system was in chaos,
and there was little foreign currency
to buy food from abroad.
 
To fill the shelves, a program was devised.
Companies would be allocated raw materials,
like oil and minerals, to be
sold abroad, and
the money
was then used to buy food.
 
In his film, the deputy mayor
assured hungry residents [that]
food was on its way.
 
 
 
 
 
 
 
But otherwise, most of the
promised food never arrived.
 

English: 
Despair turned to anger, and then protest.
A city councilor,
named Marina Salye,
was charged with investigating
what it happened.
 
Salye would eventually leave politics,
disillusioned,
and retreat to the countryside.
But she kept all her documents.
 
She says that they show what went wrong
in St. Petersburg in the 1990s and
whom she believes was to blame.
 
So, without going into all details,
I tell you from this document,
signed by Putin.
All 124 million disappeared
without a trace.
Without a trace!
Because from this list of materials
that I have listed
not a single gram of food came.
 
 
And what happened was...
fly-by-night companies were set up,
many of his friends, who are still
around today
were behind those companies

English: 
 
the goods went out, and
incomplete or no shipments came back.
 
So millions, millions
were made
just in that episode alone.
 
In the end, the St. Petersburg's city council
approved Salye's recommendation
to turn the case over to the prosecutors.
 
We concluded that Putin and
his assistant should be fired.
 
Mrs. Sobchak dismisses
the investigation as a political vendetta
against her husband.
You [have to] understand that
all of the
"investigations" that were being undertaken
by the deputies were
complete rubbish.
 
 
It was just a way to somehow influence my husband
to get rid of Putin.
 
But Sobchak protected his deputy.
A case of the missing food

English: 
would never be prosecuted.
And Putin
would deny the charges
and blame the companies and
other bureaucrats.
 
A six-hour drive west of
St. Petersburg is
the ancient Piatygorsky Monastery.
Andrey Zykov says he comes here
often to find peace.
 
He is haunted by case 144128.
It was an investigation
into a construction campany called
Twentieth Trust,
which had been registered by Putin's
Economic Relations Committee.
 
Lt-Colonel Zykov was the top federal investigator
in St. Petersburg
and became convinced that crimes had been
committed.
 
 
So, 2.5 billion rubles were
transferred to the company's account.
The way it worked was the funds were supposed
to be used for
specific building projects. But

English: 
they ended up being used
for completely different purposes.
 
 
 
The investigation tracked how the city paid
Twentieth Trust to do work, a work
[that] was never done, and
how much of the money disappeared.
In one case,
according to Zykov, money was
syphoned off by Putin and his friends
to build vacation villas in Spain.
 
It was theft.
 
Sobchak and Putin should
have been jailed, and would be
in jail, undoubtedly, Putin
probably first and foremost, as
the greatest number of documents and
orders were signed by him.
 
But Putin didn't go to jail.
He went to Moscow.
By 1996, he
began his rise in the Kremlin,
and was soon in
the position to help his mentor.
 

English: 
Back in St. Petersburg, Anatoly Sobchak
had a problem.
He just lost the election, and was
the subject of yet another corruption
investigation.
 
In 1996,
when Sobchak stopped being mayor,
as [it] is often the case in the Russian elite,
a lot of people immediately turned their backs
on him.
 
Vladimir Putin was nearly the only one
that didn't do that.
 
This time, Sobchak
WAS questioned by prosecutors.
But suddenly, he had a heart attack
and was rushed to the hospital.
 
So, when my husband
had a heart attack and it was hard
to get treatment because
people were calling the cheap cardiologist of the city
[who was] treating him, telling him,
"Don't treat Sobchak, let him die!"
That's when I decided to take him
overseas for treatment.
 
 

English: 
It was an orchestrated escape.
Sobchak took off
on a national holiday weekend,
aboard a private plane,
apparently arranged by Vladimir Putin.
 
Weeks later, she showed up in Paris,
looking surprinsigly healthy.
 
Vladimir Putin helped me organize that.
This and everything [else].
 
Back in the Kremlin,
Putin's loyalty to Sobchak
had been duly noted.
 
By 1999, an ailing
Boris Yeltsin was nearing the end of his presidency
and looking for a savior himself.
 
His administration was the focus
of a massive corruption investigation.
 
Having parceled out much of Russia's wealth
to a band of oligrachs and
allowed aides and family members to
enrich themselves in the process,
there was fear in the Yeltsin camp
about what might happpen if his
successor proved less than understanding.

English: 
 
He'd already hired and fired 4 prime-ministers
before anointing Vladimir Putin.
Well, I think what they saw in him
was that he had protected Sobchak and,
as they said, he didn't give up Sobchak,
and he's not gonna give us up.
[Frontline]: How vulnerable were they at the time?
Very vulnerable.
But there was a problem.
Putin was a faceless bureaucrat,
unknown to the public, who
would have to win an election if he was
to become president of the country
and protector of the Yeltsin family.
 
 
As in St. Petersburg, an instant biography
was commissioned.
Natalya Gevorkian was on the writing team.
She now lives in Paris.
 
[Frontline]: What was the narrative that they wanted out?
Just to... his... everything, I mean,
where he comes from, who is he,
why he was in KGB,
think about him, he's the KGB man!
That's all.

English: 
So, what... they wanted to
present him that
he's a normal human being, he
has parents, he has biography...
 
His biography tells of an
only child who
grew up in a poor quarter of St. Petersburg.
 
An unsual boy, who at age 16
went to the local KGB office
and asked to join up.
He was told to come back later.
Seven years later
he did, with a law degree,
and after KGB training, [he] was assigned
to his post in East Germany.
 
[Frontline]: Once and always KGB...
Can you explain to a western audience,
what does that mean?
 
They, they are the people who prefer
to operate in shadow,
they are the people which are...
like state
is first and people are second,
 
all these kind of things,
 

English: 
and he cannot...
I don't think he can change it, you know...
It's unchangeable.
He was so much the KGB man, [that] he
would take a turn as head of its successor agency,
the FSB,
in the year before he became prime-minister.
 
 
Then, one month
into his new job, in the fall of 1999,
 
this -- bombs obliterated
four apartment buildings
in Moscow and other cities. All blown up at night,
while people slept.
Hundreds died.
This was Russia's 9/11.
 
Russian historian Yuri Felshtinsky
has written a book
on the apartment bombings.
You have to understand that the whole country
was very nervous.
That the feeling is that every single day,
like once a week,
the building is going to be blown up.
 
All of a sudden,

English: 
a prime minister a few Russians have heard about
was everywhere, swearing revenge.
 
 
 
 
 
 
 
 
Putin would point to rebels in Chechnya,
where a separatist movement was holding ground.
 
Russian officials said that there was a
Chechen trail...
in the apartment bombings,
not proof of Chechen involvement,
a Chechen trail. It wasn't
clear what that meant.
But it was used in order to justify
a new invasion of Chechnya.
 
 
And Putin's invasion
would be brutal.
 
 
 
 
 

English: 
The man who waged it
was a new national hero.
He quickly
became the most popular politician in Russia,
even though before the apartment bombings
he was believed to have had
no chance to succceed Yeltsin
as president.
[Dawisha] They needed a...
set of situations
in which they can postpone the elections entirely
and making more difficult for the opposition
to focus on unimportant things, like
the corruption of the Yeltsin family.
As the irony is,
this is precisely
how the First Chechen War was started.
The First Chechen War
 
was started and provoked
in 1995
in order to have a situation which
would allow the government to
cancel elections or to postpone elections,
claiming that you
cannot have them during war time.
And
absolutely the same was done in 1999.
So there was

English: 
a real Yeltsin
interest in this,
but there also was
a Putin interest
because he wanted to be president.
 
 
And it worked.
Three months into a new millenium,
Russia had a new president.
 
He seemed a modern man,
a man for the future,
a future all Russians hoped
would be better than the past.
 
 
 
But fifteen years later, shadows
from the past haunt this place.
 
It's a memorial to those who died in those
apartment bombings.
Since that day, books, newspaper reports,
and documentaries, have all raised
disturbing questions about what
really happened here, who
was really responsible.
 
Among the questioners,

English: 
Mikhail Trepashkin, who's spent 2 years trying
to investigate the crime on behalf
of one of the famiilies.
A former KGB officer
himself, and a lawyer,
Trepashkin was always dubious about
the official story, the Chechen connection.
 
His doubts only grew
when his former colleagues in the security
services reacted to his investigation.
 
They were telling me,
"Don't dig into it, otherwise you'll get
in prison yourself." And then specifically
they were telling me in a straightforward way
"Just leave it if you don't want to have trouble",
and I was saying that
"Well, I'm the former investigator and
I have experience, and I can help, I can
run my own investigation."
 
 
But there would be
many obstacles placed in the way
of an investigation.
 
The Russian government destroyed all the evidence
in the case of the earlier bombings.
No sooner had the bombings taken place

English: 
that bulldozers showed up to remove
the rubble, including human remains,
and in that case
they destroyed the crime scene.
 
But the troubling questions about the bombings
were really fueled by what happened here,
a few days later,
in a town outside Moscow,
called Ryazan.
A fifth bomb was discovered
in the basement of an apartment building
in Ryazan by...
by watchful inhabitants
of that building. And
that bomb was defused.
And the people who had placed that bomb
in the basement turned out to be
not Chechen terrorists. They
turned out to be agents of the FSB,
the Russian Security Service.
Tests showed
that the bags contained an exclusive
military explosive, called hexogen [RDX].
 
The detonator, too, was military.
I think that
the evidence that
there was an FSB operation to place
explosives in

English: 
the apartment building in Ryazan
is incontrovertible.
 
At the time, the FSB claimed
the Ryazan operation was part of a
training exercise.
 
But the broader conclusion that
security services could have killed their own people
in the other apartments
was dismissed by the government.
 
In his biography,
Putin called it "utter nonsense",
"totally insane".
 
No Chechens were ever charged.
 
Others arrested were convicted in secret trials
and still others
in trials tainted by allegations
of forced confessions.
But all along, it's been
disturbingly dangerous to investigate
too closely.
People who tried
to investigate
the apartment bombings
in many cased ended up dead.
 

English: 
Yuri Shchekochikhin,
Sergei Yushenkov,
Alexander Litvinenko,
Anna Politkovskaya...
 
Sergei Markov is a political analyst,
and often speaks for Vladimir Putin.
 
[Frontline]" [...] there have been a number of
credible investigations
that have concluded that
this was the work of the FSB
and could not have happened
without the knowledge of Mr Putin.
It was a no one,
credible investigation
which shows that it had been
done by FSB. All this
propagandistic,
quasi-investigation,
just using
tricks and so on.
I already heard
about this story about this
FSB exploded
building in Moscow
maybe hundred of times.
 
And all these people... free?
Nobody was in jail.

English: 
Don't became
victim of propaganda. It's very dangerous also.
There were 3 attempts
in the Russian
Duma
 
to investigate the events in Ryazan.
In all cases they were voted down
with
with the ruling party under Putin's
control voting unanimously
not to investigate
and not to ask questions.
Mikhail Trepashkin
was asked to help with one of those
Duma investigations.
A week before he was due to report
his findings,
he was stopped by the police.
 
So they stopped me at the police checkpoint,
where there was a crowd of people.
 
They checked my ID twice
and checked the car and they didn't
find anything, and when I was
closing [the car window up] one of the officers threw in a bag,
and I told him, "That's not mine! Why are you
putting that in my car?"
He opened the bag and said

English: 
"Here's the gun! Here's the gun!"
And I was immediately arrested.
 
 
 
Trepashkin was sent to prison for 2 years.
 
He came out and again spoke
about this investigation of the apartment
bombings, and was arrested
and jailed for another 2 years.
 
Well, the apartment bombings
saved the Yeltsin system.
They saved the corrupt
division of property that
took place after the fall of
the Soviet Union.
They cost thousands
of innocent lives,
both Russian and Chechen,
by starting a new war.
They brought to power
someone from
the security services, and
that's Putin,
who, of course,
 
had...
had no interest in democracy.

English: 
 
His first act as president
was to grant his predecessor, Boris
Yeltsin, immunity
from prosecution.
But Putin's administration would quickly
ensure his own safety, too.
Case # 144128,
that corruption investigation
in St. Petersburg,
quietly went away.
 
The Prosecutor General
gave an order that the criminal case
should be terminated.
It was explained to us that
criminal investigations are not pursued
in relation to the president.
 
 
Investigator Zykov
still wonders how things might have been
different had he
been allowed to continue with this case,
The situation in our country would be
different. People
would respect civil law because
everyone would understand that if
the president can be prosecuted,
then in essence our officials would understand

English: 
that the law has to be protected.
As it now stands, Russia
has no law.
 
 
In the earlier years of his presidency,
there was hope that Putin would live up
to his billing and take Russia on a path
closer to the West -- democratic,
liberal, and capitalist.
 
In 2003, he
summoned the country's oligarchs
to a meeting in St. Catherine's Hall,
in the Kremlin.
Under Yeltsin, they'd become
billionaires. Under Putin,
they hoped for even more business
and new legitimacy.
On the left, the richest of all,
Mikhail Khodorkovsky.
 
I've got the impression that
he was a person of our generation.
 
[Frontline]: What do you mean by that, "of our generation?"
 
 
Our parents' generation. They
have a totalitarian view.

English: 
Even if they're against it, as opposed to
our generation -- we're closer
to the West.
Khodorkhovsky was concerned about a new US
anti-corruption law that
would affect Russian companies doing
business in America.
 
That forces heads of companies who
want to list their shares on the market
to sign a disclaimer that they don't allow
corruption practices within their companies.
 
At the same time, by 2003 corruption was
already the key method of state governance,
used by the bureaucrats,
and [the] bureaucrats started to demand the kind of money
that was impossible to hide.
 
One has to make a choice:
Build companies that are open and list them
or do business Russian style.
In other words,
pay bribes, receive privileges,
but remain within a close system.
We decided the question was worth a discussion.
 
 
Khodorkovsky asked
if he could speak frankly, and made the case

English: 
that it was time for Russia to change
its ways.
 
 
 
 
 
 
[Frontline]: As I understand it,
when you where... essentially doing
with the TV cameras running, was accusing
the president of Russia
of running a corrupt state.
 
I did not accuse him personally
of corruption, and this is not
how he took it.
Yes,
I did accuse his inner circle and him [of]
creating a model that uses corruption as his
backbone, and he told me that we too
took part in creating that model.
 
Putin reminded him that his oil company,
Yukos, was facing tax problems.
 
 
 
 
 

English: 
 
 
 
It was a
veiled threat.
I did not
argue with him, I said "We may
have started that, but we must be the ones who end it."
Did I realize it would provoke Putin's
displeasure? Of course it did,
but I thought he would choose the European
model, and I was not the only one
thinking that because it was obviously
more beneficial for the country.
 
 
Khodorkovsky was also perceived
as a political threat.
He had been funding opposition parties
and spending money to promote democracy.
The meeting
in the Kremlin had
sealed his fate. He was arrested,
his oil company dismantled
and divided among Putin loyalists.
 
Russia's richest man would
serve 10 years in a Siberian prison camp.
 
Today,

English: 
he lives in exile in Switzerland, and
has no doubts about the system Putin
put in place.
 
At first, he thought he could build [a] sort
of a democratic model that he could control.
A model like this does not exist, so
he started to slide towards, at first
[a] mild totalitarianism,
and then an increasingly harsh
totalitarianism. If the situation
develops further, he will reach
a full totalitarian model.
In reality,
every authoritarian system
is a kleptocracy.
 
 
Some early evidence of that
kleptocracy and how it worked was found
in 2003, when police
raided the offices of a small company,
called SPAG, in a suburb of Frankfurt,
Germany.
 
Author and journalist Jürgen Roth
has written extensively about the raid which
targeted money launedring in several countries, allegedly by
St. Petersburg's Tambovskaya

English: 
mafia group.
In this report, they mentioned
 
SPAG
as a company who has
close links to criminal organizations,
the so-called Tambovskaya mafia
in St. Petersburg
and Mr. Putin. [Frontline]: And so, there was money that was being laundered
in Germany.
Laundered in Germany through investments in...
real estate.
Putin had been on SPAG's advisory board
since 1992, and had
a close relationship to one of its
principals.
He only stepped aside when he became
president. But
when German police moved in to raid SPAG's offices,
they discovered they had a problem.
 
It was a political affair.
They must inform, at that time
Chancellor Gerhard Schröder...
 
So, it's the first time, I think,
that a normal investigation
from prosecutor
in a small town in Germany

English: 
 
Mr. Schröder get informed,
would like to be informed about
this investigation. Why
would he like to be informed?
Because Putin.
 
It was a so high level.
To this day,
Gerhard Schröder and Vladimir Putin are close
friends, who celebrate birthdays
together.
[Frontline]: What happened to the investigation, in the end?
It finished,
without any result.
Schröder has
never publicly addressed the case,
but their friendship provoked a scandal
in Germany in 2005.
Just
two weeks before losing a general election,
Schröder signed off on a billion euro loan guarantee
to Russia's gas pipeline to Europe.
After he retired, Schröder had
a new job -- chairman of the pipeline's
consortium.
 
That Gerhard Schröder pissed the money [up the wall] is the scandal in Germany

English: 
and, to put it mildly,
he didn't seem to be very bothered
about avoiding the appearance of impropriety.
 
 
 
 
 
In his early days
in office, Putin went on a
charm offensive towards the West.
 
 
President Bush famously
looked into Putin's eyes and saw
his soul. He believed he was
committed to the best interest of his country.
 
Putin's trained in the KGB to
deceive foreigners.
He has a very sharp eye
for human beings. This is good for
persuading people, intimidating them,
and he's been doing this with Western leaders,
sometimes with charm, sometimes with threats, but,
boy, does he do it!
 
 
Early on, British prime minister Tony Blair
was charmed by him.

English: 
And as with Germany, their two
economies would become even more entangled.
 
 
London's financial center
was a city enchanted by Russian money.
These were the years of high oil prices,
and Putin's Russia was growing like never before.
 
It fueled massive corruption,
and much of that money was
flowing into London.
The City of London, which had made
a huge amount of money out of laundering,
Russian money, over the years,
the City is ultimately the measure of the
British economy, and it runs on Russian money.
 
 
 
 
 
 
Valery Morozov
is a Russian construction magnate,
and now lives in exile in London.
 
His company has done projects for the Kremlin,
most recently on the scandal-ridden

English: 
Sochi Olympics.
But finally, he says,
the corruption under Putin had gone
beyond what he could live with.
 
If you put these people in United States or in Canada,
and check what thay've done,
they're criminals.
Yeltsin was bought
and supported by criminals.
Putin
was brought up
to power
in the 1990s.
He had
his own group,
and it was older
when he came to Moscow
and became prime-minister and president.
It was called Piter's [St. Petersburg's] group. So,
he changed immediately
the whole system.
But not changed...
 
he made it different.
He made it
in order.
It is everywhere. It is a system.
So the system is a system
of...

English: 
mutual support and tribute,
it's a pay-to-play system...
If you
are
on a list of possible people
who might be approached,
to be member of the Duma, for example,
you have to pay for your seat.
Once you're in there,
then you can turn around
and charge
businnessmen
to have lined items
in the budget.
Same thing all across
all sectors.
Sergei Kolesnikov
is another Russian tycoon who lives in
exile.
He fled to Tallin, Estonia.
He has
intimate knowledge of how the system works
and how, he says, corruption goes
right to the top.
 
Russian business entirely
depends on protection.
You need

English: 
protection. It is called
having "a roof", or "krysha", in Russian.
The more "krysha" you have, the more
successful your business will be.
So every businessman
dreams about giving presents and
gaining protection.
And if you give a present
to the president, it's like having God
himself watching your back.
 
 
Kolesnikov says
he used to run one of Putin's gifting
schemes, and explains how it worked.
A business
put money into a charity, in this case,
Pole of Hope.
Kolesnikov's company, called
PETROMED,
took the money to buy medical equipment,
purchased from SIEMENS.
But the profit
margin was huge,
around 40 percent. That money was
funneled through a myriad of other
companies, ending up
in something called ROSINVEST.
Kolesnikov
owned 2 percent of ROSINVEST but,

English: 
he says, 94 percent was owned by
Vladimir Putin.
 
 
All investments,
all projects of ROSINVEST
were only implemented if Putin said "Yes'
to it.
So no activity would have been
possible without his acknowledgment.
 
Kolesnikov says,
in the beginning,
the money was raised for a 20 millon-dollar
retirement home for the president.
But then the president decided
not to retire.
At that point,
Kolesnikov says he was told to divert
even more money, and soon
the retirement home had
blossomed into a palace.
 
Built on state land, it's a $ 250 million
Italianate extravaganza,
overlooking the Black Sea, near Sochi.
 
 
 
I started saying that

English: 
I'm not happy with all the finances going
for this palace.
I was told,
Putin is the tsar,
and you are his serf.
 
Putin has denied that
he has any connection to the palace.
It was reportedly sold
to a rich businessman,
but it remains a heavily guarded mystery.
 
Kolesnikov
believes his scheme was one of many ways
to hide money for Putin
through proxies.
How much is a matter of speculation
and some educated guesswork.
 
I started such investigations
more than seven years ago, and in
late 2007 I published my estimate
on the assets being kind of
possessions under personal control.
It was the figure of 40 billion dollars.
 
Forty billion dollars -- that
figure was reportedly
confirmed by the CIA in 2014.

English: 
 
If true, it would make Russia's
president one of the richest men
in the world.
In 2008,
as he approached the end of his second term,
that wealth was a problem.
 
Under the Constitution,
he would have to leave office for at least
one term before he could run again.
Diplomatic cables revealed he was
worried about how his riches might
be viewed by a new president.
He solved
the problem by swapping places with
his hand-picked prime minister
Dmitri Medvedev. It was
an arrangement that worked for a while.
 
I think, and it was proved
by many sources in Kremlin and around
Kremnlin in 2010,
and the first half of 2011,
he wanted to let Dmitri Medvedev
to go for a second term,
in 2012,
but the chain of revolutions
in the Arab world
has made a too

English: 
big impression upon
Vladimir Putin.
 
The Arab Spring surged out of Tunisia
into Tahir Square and on to Tripoli.
 
For Putin, these mass demonstrations,
overthowing
powerful dictators, must
have been worrying.
It was the first stage
of his coming to understanding that
he could never quit the post
because
the destiny of Gaddafi
could be waiting for him.
 
 
 
In 2011,
Vladimir Putin announced he would run
again for Russia's presidency.
The response
was mass demonstrations
in Moscow's streets.
Protests which
had to be put down by police.
It has never been
a good succession model in
the Soviet Union or in Russia.

English: 
And he's very worried about
how he would leave; he doesn't want
to leave in coffin, he doesn't want
to go to a jail cell.
He has so many guilty secrets,
so much money has been stolen,
so many people have been killed,
but he really doesn't trust anyone
to keep him safe if he steps down
from power. So in a way, he's a master
of the Kremlin but also a prisoner in it.
 
 
 
In 2012, Putin moved Medvedev
aside and took back the presidency
in a Kremlin-controlled election.
 
By now, the presidential
term had been extended to 2 six-year
terms. Vladimir Putin
could remain in power
until 2024.
But the country
he rules over
is in deepening trouble.
 
In Russia's cities there is a veneer
of prosperity, left over
from the earlier days of high oil proces.
 

English: 
But the economy has been pillaged,
 
and in the vast reaches, where
the majority of Russians live,
deep poverty stubbornly prevails.
 
 
Putin's greatest fear
is that the Russians will realize
that his modernization project
has failed. He came to power
promising to make Russia into
a modern western country. And it's still,
basically, a corrupt, backward country.
 
 
 
The bottom line, just to put it
with two numbers, two numbers
is all we need.
The medium, or the midpoint wealth,
for the average Russian, is
eight hundred and seventy-one dollars,
according to Credit Suisse,
[a] very neutral report.
 
$ 871. [It] means half the population
has more than that wealth
and half the population has less.
Medium wealth

English: 
in India -- over a thousand dollars.
So, the average Russian
is poorer than the average Indian.
 
So that's one number: 871.
The other number is one hundred and ten.
110 individuals own
35 percent of the wealth
of Russia.
 
They are the most unequal
country by far
in the world.
 
Not to distract from that,
a very powerful tool he's got is his anti-western [stance]:
Blame the West for anything that's going wrong
and couple that with a very
powerful propaganda machine,
where all the mass-media is under Kremlin control,
and he's in very good position,
he has a very stong sense of entitlement,
that Russia has stuff taken away from it
during the Soviet collapse, and
Russia has the right to get it back.
Putin has invaded Crimea,
and re-drawn the map of Ukraine,
claiming he is protecting
ethnic Russians.
 

English: 
According to his spokesman,
it is a justifiable response
to Western encroachment on territories
the Soviet Union once held.
 
Look at the Latvia and Estonia, which is
became full members of European Union
and NATO, but they are not
independent.
Ethnical Russians under the clear
discrimination in those country.
 
And look at what happened with Ukraine:
United States all this year
supported de-Russification.
 
If you're Russian, you can be killed.
 
If you're Russian, your civic rights
would not be protected.
If you're a Ukrainian ultra-nationalist,
OK, you will be in the parliament,
 
you will be the president
everything with be to you.
But if you're Russian, bombs,
artillery, and killings
will be answer.
This is, sorry, we

English: 
answer it, strongly, no!
 
It is a sentiment that has played well
at home.
On the streets where they had demonstrated against him
only 2 years earlier,
they were now singing his praises.
Meanwhile, the United States was calling
for strong sanctions against Russia.
But in the capitals of Europe there was
reluctance.
We keep on trying to bring Mr Putin in,
we invite him to our summit meetings
which treat Russia as normal country
and we think we're trying to calm things down
but in fact what we are doing is stating things.
We're giving Mr Putin the impression
that we are not to be taken seriously,
and he continues to push us harder
and harder and harder, and that's extremely dangerous.
But then in July 2014
one violent act would transform
the political landscape.
Malaysian passenger plane MH-17
was shot down
over Eastern Ukraine by
what was wildly believed to
have been a Russian supplied weapon.

English: 
298 people were killed.
 
Suddenly,
the West was galvanized.
 
I demand
that Russia fully
cooperate with the
criminal investigation of
the downing of MH-17.
It's necessary to
make it clear that
it will not be business as usual...
We're posing Russia's aggression
against Ukraine, which is
a threat to the world, as we saw
in the appalling shootdown of MH-17.
 
In November,
Putin arrived to
the G-20 meeting in Australia,
and found himself on the margin
of the class photo.
Obama and
other leaders who had once welcomed his
rubles as gas and oil,
now distanced themselves.
 
At lunch, Putin
seemed the lonely figure.

English: 
 
 
He left the summit early.
He returned to a country in crisis.
An economy beset by plummeting
oil crisis.
A ruble in free fall.
And new tough sanctions.
 
 
The question is:
What will he do next?
 
[Dawisha]: I haven't seen any evidence that
he's willing to back down.
And it's not his style -- at all. Ever.
He doesn't back down.
 
 
There's a story in his biography
that Putin tells about himself:
It happened in this building,
 
where he shared a one-room apartment
with his parents, and it involved
a cornered rat.
 
He said that "I learned very good.

English: 
I learned for ever:
Don't try to push somebody
into the corner.
 
They will jump." Because, when...
you don't have what to lose,
you just... you attack.
 
I think it's...
it's absolutely true about himself.
 
When he's in the corner,
that's why he's dangerous.
He can jump.
He will not say, "OK,  let's talk..."
He will jump.
