The Russian president says a military operation
is now underway in eastern Ukraine.
I was in Moscow when the war broke out,
or when Russia invaded, on a reporting trip.
I told myself, "Okay, this is fascism playing out."
I think there was a sense of total shock,
which not just I had.
The city, Moscow, felt.
Then in the evening was the first protest.
People were just walking on the streets.
The police was grabbing them, dealing with them very harshly.
Putin is cracking down at home
as he's facing more pushback internationally.
These were Moscow liberals. This was the opposition.
They were incredibly brave,
and people continued to protest until they really couldn't.
There were calls from two different sources
that special forces were coming to the newsroom.
"No to war."
Those were the final words of the final broadcast of Russia's TV Rain.
On Thursday, the news outlet shut down
due to the government's attack on free press in the country.
It was clear for me that that was the end.
We lost the future.
The future was over.
For us, for the Russian people I belong to,
we lived for decades
dreaming of some better life.
And it was all over that day.
No to war! No to war!
The Soviet red flag with its hammer and sickle
was lowered for the last time over the Kremlin tonight.
In its place went up the white, blue, and red flag of the Russian Republic.
I think it's very hard for us to remember now
what an immense task Russia was faced with
after the fall of the Soviet Union.
You don't just become a democracy like that.
Yeltsin's trying to make the laws of supply and demand work,
but there's almost unlimited demand, and virtually no supply.
The predictable result is economic chaos.
All kinds of processes were carried out that were a disaster.
Most notoriously, the auctioning off of state enterprises.
So here you have a country that, yes, it's badly disorganized,
but there's immense resources.
Timber, oil, gas,
all kinds of minerals, et cetera.
So they organized these auctions for these giant state enterprises.
The auctions were carried out in a sleazy way,
and people that were close to power
were able to get, to put it mildly, insider prices.
So something worth a billion dollars was bought for $50 million.
And the next thing you know, there was a class of people
that we now know as the oligarchs.
Many of them had backgrounds among the elite
of the Soviet system.
They were people who had access, perhaps, to some initial capital.
They were traders who then bought banks or, you know, created new institutions
out of the opportunities left behind by the old Soviet system.
What ended up happening was that a bunch of oligarchs
who were pretty much predetermined and chosen by Yeltsin,
ended up with more than 40% of the GDP of Russia.
Mikhail Khodorkovsky was one of the oligarchs.
Probably in my mind, at the time, one of the most rapacious oligarchs.
I think he was smarter than the other ones.
He really accumulated anything and everything he could.
The Soviet economy was extremely monopolized.
That is, every industry effectively had one overarching corporation
called the ministry of so-and-so,
but they did not have their own supply system.
Nor did they have their own distribution systems.
Add to that difficulties of working
with outdated equipment
and the other legacies of seven decades of communism.
So one day, when they were told, "You're on your own,"
the entire management system fell apart.
And of course, there were plenty of young and enterprising people like me
who could earn money on this
and take part in the purchase of industrial enterprises.
BANK MENATEP
And we made a lot of money.
Mikhail Khodorkovsky was able to parlay
an initial amount of backing from institutions
into, uh, one of the first new banks of the post-Soviet era,
and from there, to ultimately become the richest man in the new Russia.
In the mid to late 1990s,
Khodorkovsky probably was worth $15 billion.
Seven or eight of these big bankers, we call them oligarchs.
Maybe that's too nice a word. Robber barons.
They're buying up newspapers, airlines, oil companies.
It's everybody for themselves.
It's a winner-take-all economy,
and the rules don't exist except the rule of the gun
and the rule of the use of force.
These people lived in the most lavish villas and mansions,
and floated around on the biggest yachts, and flew around on private jets.
Well, someone had to become rich.
We rebuilt this living network of the country's economy.
In six to seven years, we did manage to rebuild it.
And yet those six years had to be lived.
The people had to live through those six years.
You can't feed them in six years.
And that was a disaster, a real disaster.
Because the system was set up without a rule of law,
without proper institutions,
you ended up in a place where capitalism was actually much worse than communism.
Bread prices shot up 400%,
from 60 kopeks to more than two-and-a-half rubles a kilo.
Gasoline prices also quadrupled.
The government didn't have any money. There was no tax revenue.
And since most people worked for different government organizations,
most people weren't paid their salaries.
"I simply can't survive on a pension," declared one man.
"It's daylight robbery, stealing from the honest," complained another.
"A kilo of cheese now costs me twice my monthly pension."
The average Russian was dying at the age of 57
because they didn't have any medicine in the hospitals.
There was no teachers in the schools.
Professors had to become taxi drivers,
and the art museums were selling the art right off the walls
just to survive.
From Hollywood, where dreams do come true,
it's the return of the one and only Supermarket Sweep!
And you're watching on TV, not the old Soviet programs,
but huge amounts of Western television.
This new inequality was a disaster.
And that infuriated a lot of people, and it undermined the status of democracy,
so that democracy which was, in Russian is demokratiya,
was now known as der'mokratiya.
"Shit-ocracy."
We should have invested heavily
in what was a very difficult economic transformation.
Going from communism to capitalism is costly and hard,
and we took our eye off the ball.
So in 1992, we had an election and the incumbent,
President George H.W. Bush,
was criticized by the Democratic Party as being too internationalist,
too engaged in foreign affairs.
I think it is important that the United States stay in Europe,
and continue to guarantee the peace.
We simply cannot pull back.
And there was this rather obscure governor from Arkansas,
who ran on the slogan, "It's the economy, stupid."
We have to face that, in this world,
economic security is a whole lot of national security.
Our dollar's at an all-time low against some foreign currencies.
We're weak in the world. We must rebuild America's strength at home.
Democrats really skillfully used in that 1992 campaign
the promise and possibility of this post-Cold War era
as a way to reset American politics,
and Bill Clinton was going to be the first president
of the post-Cold War era.
As a result of 1992, this pivotal year in Russia,
we were disengaged,
and I think that was a real lost opportunity.
We should have gone all in.
A lot of government officials in Europe and in the United States
hugely underestimated the magnitude of the humiliation of the Russian people
after the collapse of the Soviet Union.
This is a country that went from being
one of the world's two superpowers,
to really not knowing what its status and place in the world were.
There was a moment in the Yeltsin years
that always stuck with me,
when they couldn't even come to a consensus
on what the lyrics should be for a new Russian national anthem
to take the place of the old Soviet national anthem.
And so when their athletes won medals at the Olympics,
they just played the music.
There was no song yet to sing.
Starting in 1994,
Yeltsin's engaged in a war in Chechnya, which was a horror show.
Moscow has battled for centuries
to suppress Chechen independence
and exert ultimate control.
Russia is a multiethnic country
that includes bits that were joined in or annexed or conquered
in the late 19th century.
The republics of the North Caucasus, Chechnya, Dagestan, et cetera.
The vicious Russian efforts over the past 14 months
to crush the Chechen nation
merely continue a deep, ingrained tradition of mutual hatred.
And it was a huge crisis for Russia. The Russian army was failing.
People were not really, uh, enthusiastic about the war.
1996, there was just a real sense of things falling apart.
You got corruption, you got a depressed economy,
you got crime on your streets, you got a war in Chechnya.
And of course, that became exploited
by those who were resentful
and who believed that this was a direct result
of the collapse of the old system.
Yeltsin's poll ratings were within spitting distance of zero.
And he was faced with having to run against, wait for it,
a communist.
Gennady Zyuganov.
There was a very real possibility
that Boris Yeltsin would be defeated
and that the communists would return to power.
This was viewed with great alarm in Moscow,
as well as in Western capitals
and, in a way, there was a sort of a corrupt bargain struck
between Yeltsin and the oligarchs.
We go in to see Yeltsin,
and Chubais starts persuading him,
that there's no need to declare a state of emergency,
that there's no need to call off the elections,
and that he can win these elections.
Yeltsin said to these oligarchs,
"If you use all of your resources, your television stations, your money,
everything else to help me get reelected,
then I will make sure that you get the largest and most coveted
and valuable oil companies and metals companies in the country."
These companies hadn't yet been privatized.
These oligarchs funded the hell out of him...
and pushed Yeltsin like a recalcitrant elephant
up and over the hill.
You, young people, are the future of Russia!
Yeltsin's campaign managed to scare people with the threat of communists returning.
People still remembered how it was back then.
No way. I had enough of all that communist history at school.
Boris Yeltsin!
He ended up getting reelected, barely.
But after he was reelected, things got worse and worse
because these oligarchs controlled everything.
And then he was in a very bad place because he was an alcoholic,
his health was failing, he had heart disease.
He was not able to perform his duties, uh,
for the last three and a half years of his presidency, and that was obvious.
Most Russians, uh, felt huge shame for Russian president Boris Yeltsin.
He was obviously a disgrace.
In Washington, he has, you know, a day of summits with Bill Clinton,
and then he goes back to Blair House, the guesthouse in Washington, D.C.
And no one quite knows what happens,
but he's found on the side of the street in his underwear,
yelling in Russian that he needs a taxi and a pizza.
By 1999,
Yeltsin begins a search for a successor.
He went through a series of successors,
basically prime ministers that he appointed to test them out.
And the first three completely failed one way or another.
And they were kind of running out of time because his health was so bad,
and he was really struggling.
And so they just randomly picked this strange unknown man
that nobody had really had much experience with.
This is the man Boris Yeltsin says should lead Russia
in the 21st century.
Vladimir Putin.
In the year of 1952,
about five months before Stalin's death,
was born Vladimir Putin.
The legend of Vladimir Vladimirovich Putin
that has come down to us
in a campaign-style book called First Person
portrays his hardscrabble childhood in the mean courtyards of Leningrad.
Putin describes himself as almost a hooligan,
running around with tough boys in the corridors, chasing rats.
He describes essentially being bullied and beaten up...
until he used his fists and he fought back against the aggressors.
And that, in Putin's telling, is a sort of a core principle.
Only the weak get beaten.
THE SWORD AND THE SHIELD
The story, as told by Vladimir Putin,
is that he grew up watching
the kind of World War II movies and television shows
that glorified the role of the secret services.
One in particular that captured his attention,
called The Sword and the Shield.
And he has said that it made him essentially want to grow up
and to become an agent himself in the KGB.
And he ultimately did join the KGB.
Vladimir Putin was not some daring secret agent
as much as he was a counterintelligence officer,
and that means that he was looking for betrayal from within.
He was looking inside the ranks of the KGB
and trying to make sure that everyone was loyal.
The KGB was never a law-abiding organization.
It was always an organization that lived according to Mafia principles.
The KGB used tricks against American diplomats in Moscow,
including, uh, very nasty things.
You know, even some sort of, uh, poisoning.
Not to kill, but to put in an awkward position.
Putin had what would be a relatively lackluster career
in the Soviet-era KGB.
He didn't rise to be a top general in the KGB.
He didn't rise to have one of its premier foreign postings in the West
somewhere, uh, undercover.
He ends up instead in a relative backwater in Dresden, in East Germany.
He's working with the Stasi, the East German secret police.
And the country around him,
which has been the leading part of the Soviet Bloc, is unraveling.
Your government seems to be changing every day.
Where do you think it's going?
That's the government's problem, not mine.
For Putin, this was a terrible catastrophe.
It was the end of the Soviet Empire that he had served and believed in.
So Putin at this point is in his 30s. He's a mid-level KGB officer.
And he's horrified that Moscow is not responding violently
to the collapse of East Germany.
In particular, when the crisis comes to his door.
Peaceful protesters occupy the headquarters of the Stasi,
which is the East German secret police.
Putin is in the KGB outpost in Dresden,
which is around the corner from Dresden Stasi headquarters,
since they work together.
Some of these protesters who are occupying the Stasi headquarters
say, "Let's go over to the KGB outpost. Let's go take that over."
So they go over to the KGB outpost where Putin is the senior officer on duty.
And Putin is not amused.
And in the book First Person,
he remembers colleagues calling Moscow for directions.
"What should we do?"
And the phrase was, "Moscow was silent."
In other words, Moscow had written off East Germany.
And this enraged Putin.
Central power had collapsed.
And greatness, in his view, had been relinquished.
All these events have inspired intense bitterness in him.
Humiliation.
This is the great country that defeated the Nazis.
It's hard to overestimate how important that is.
What a foundation to Russian self-identity the defeat of the Nazis is.
And so to have to retreat in such a way from Germany was just, for Putin, awful.
He was shocked, I think, by his years in Germany.
He saw that even in East Germany, there was a much higher standard of living
than there was inside Russia itself.
He describes returning, in fact, to Russia with, I think,
a washing machine, you know, strapped to his car.
Then he basically decides to throw his lot in with his old law professor
at the University of Leningrad, Anatoly Sobchak,
who was the first democratically-elected mayor
of what was then going to be St. Petersburg
and no longer Leningrad.
And back then, St. Petersburg was like Chicago in the 1930s.
There is even a set phrase.
"Gangster's Petersburg."
He immediately went into contact
with people with a very shady background.
With criminal groups.
And he was the mayor's man to fix these kinds of problems
and to talk to these people,
and to make sure that the mayor was safe, and some shady deals were done.
Sobchak loses his reelection as mayor for a second term.
Putin is then again looking for another job.
And Putin is brought to Moscow
for now a succession of jobs in the late '90s.
He becomes the head of the Kremlin's properties division,
which is a fantastic place to be if you want to have access to corruption.
All the perks of the old system that are run by the Kremlin,
he's in charge of them.
The disposition of everything from dachas, vacation homes,
to places in Kremlin hospitals and schools,
leases on cars that are run by the Kremlin and boats.
And that gave him some powers.
And that was his start of his national career.
After that, it was a very quick way to become, uh, the new head
of the Russian Security Service, FSB.
Which is the successor agency to the KGB.
Suddenly this not very distinguished KGB guy's the head of the whole thing.
And all this is happening fairly rapidly.
In 1999, Boris Yeltsin is not seen as being fully in control
of his own government.
And there are enormous concerns that Yeltsin and those close to him
might actually face corruption charges from a future president of Russia.
So they are desperately looking not just for a successor for Russia,
but they're looking to protect themselves.
The people around Yeltsin, especially his daughter,
say, "You need someone like Putin."
And now, I have decided to name a man,
who, in my opinion,
is capable of uniting society.
The decision has been made.
Vladimir Vladimirovich,
we congratulate you on your appointment as prime minister.
Yeltsin tells a senior American diplomat
when he appoints Vladimir Putin as prime minister, "This one's different."
"I can even envision him as a future successor to me."
And so he rises in this incredibly short period of time
from FSB director to prime minister of Russia.
And what's made clear at a certain point,
is that after Yeltsin leaves,
Putin would not act on the Yeltsin family.
There'd be no arrests.
They would be allowed to live out their lives in wealth, and untouched.
He was appointed prime minister in August,
and in September, there was a series of terror attacks, uh, in Moscow.
My mom was a very well-educated, beautiful woman.
She wanted to give us better future.
That's why we've moved to Moscow.
In 1999, she had started a new job, a new life, at Russian television,
as an editor at a morning show.
One day, I was in Tbilisi, Georgia,
visiting my grandfather and my grandmother,
and she was home alone.
September 9th, first explosion in Moscow.
Guryanov Street.
A nine-story apartment building has been blown up.
The middle part, two entrances, collapsed.
Ninety-three corpses and many so-called fragments of human bodies
were recovered from the rubble.
My uncle, who was in Moscow,
he went to the building.
He saw terrible things.
Parts of people's bodies were all over the place.
Our apartment was in the epicenter of the explosion.
So that's why they didn't find even DNA of my mom.
How do I find out-- Where is my family?
And who lived there?
My nephew and his mother lived there.
There were others after that Guryanov explosion.
These bombings occur in Moscow and several other cities.
The Russian government blames them on Chechen separatists,
Chechen terror groups.
The North Caucasus region is
not exclusively, but primarily, Muslim.
And it was very easy for the Kremlin and for Putin
to other the people of the North Caucasus
as Muslims who have terrorized the Russian population.
It's an attempt by international terrorists to frighten the people,
stir up panic,
paralyze the political leadership of the country.
But as these bombings unfold, there's this series of odd events.
At one point, the speaker of the Russian Duma
announces the fourth bombing.
The fourth bombing actually doesn't take place for three more days.
Can't you see what is happening in the country?
Remember, Mr. Chairman,
on Monday you told us a house in Volgodonsk was blown up.
Three days before the explosion!
Then residents report to local police
that they see these men carrying sacks
into the basement of this apartment building.
The local police discover a bomb
identical to those that had gone off in other cities.
The cops were running all over the building,
banging on doors and shouting, "Everybody out! There's a bomb!"
And they arrest three FSB agents,
agents of the Russian intelligence service,
who had been carrying those sacks into the basement.
Positive measures are already being taken.
One example is the prevention of an explosion
in an apartment building in Ryazan.
The day after those arrests,
the Russian government announces
that it was actually an FSB training operation all along.
It was an exercise. There were no explosives, just sugar.
But the sacks test as real explosives.
And so what many people believe
is that the Russian intelligence service
actually carried out as a false flag operation
to gin up the pretext for war.
There is only one independent investigation of this
that ever takes place,
and of those independent investigators,
two of the commission are actually assassinated,
and the third, the lawyer,
is actually arrested and imprisoned for four years.
We don't have solid evidence of Vladimir Putin being involved in this.
The only thing that we know is that after these explosions,
Russia started the second Chechen war.
And Vladimir Putin, as Yeltsin's hand-picked prime minister,
he becomes the public face of this war.
For seven straight days now,
Russian warplanes have pounded Chechnya.
Russia stepped up its air strikes
against Chechen villages today.
At that period of time in 1999, Vladimir Putin didn't have any popularity.
No one knew what he was.
And after that, he became a strong bogatyr.
A hero for Russians.
A person who says, "We don't negotiate with terrorists."
"We kill the terrorists."
We'll be chasing the terrorists everywhere.
At the airports or in the toilet.
We'll waste them in an outhouse. End of story.
Putin was willing to do the most brutal thing imaginable,
which is to bring the Chechen War to an end by obliterating,
obliterating the better part of the Chechen capital Grozny.
And he goes from basically an unknown, in the course of months,
to the most popular politician in Russia.
And it's really on the backs of this very popular military campaign.
And then, as the millennium's changing,
Yeltsin gets up on television on New Year's Eve and says...
"I am leaving."
Today, on the last day of the outgoing century,
I am retiring.
I want to ask your forgiveness,
because many of our hopes did not come true.
He makes it very clear that he is, if anything,
apologizing to the Russian people in his diminished state
for the failures that have taken place in the '90s.
I have signed a decree entrusting
duties of the President of Russia
to Prime Minister Vladimir Vladimirovich Putin.
For the next three months, he will be head of state.
Again, in accordance with the constitution,
presidential elections will be held in three months' time.
And then Yeltsin abdicates,
and Putin becomes the acting president.
On March 26th,
we will be electing, not just a head of government,
but also a supreme commander,
in the sense that the president is also the head of the armed forces.
Russia is one of the largest governments in the world
with a powerful nuclear arsenal.
And this is something not only our friends remember.
One of Vladimir Putin's ideas
was if he explains to people that he is the one
who can bring stability and safety to Russians,
then he would have a very high level of, uh, support.
He was elected as a president in 2000.
So it... it really worked.
Putin took over a nation demoralized
and traumatized by defeat in the Cold War.
And this was very hard on Russians. There's no doubt.
And President Putin was able to say to the Russian people,
"Look, I will restore Russian pride."
And he didn't say this exactly,
but the implication was, the implied deal was,
"I will make your lives better, but it's not gonna be a democracy."
He is still a... a Soviet type of a man.
I think that he even dreams about the Soviet Empire.
One of the first things that Vladimir Putin did
was he restored the old Stalin-era Soviet national anthem.
♪ Be glorified ♪
♪ Our free Fatherland... ♪
Russians had this very negative experience
during the later years of Boris Yeltsin,
and there was a sense that it was a good thing for Russia.
Putin immediately reached out to the West.
Putin's first significant act in foreign policy
was to send a message to the Secretary General of NATO,
and he said, "We'll start again."
And so, NATO reopened an office in Moscow,
and Putin started building up the relationship with NATO.
From that point, his second significant act in foreign policy
was to get on to Tony Blair.
Tony Blair, at the time, was the preeminent leader in Europe.
Enormously popular figure.
So rather cunningly, Putin said,
"Why don't you and your wife come to a premiere
of a new production of Prokofiev's opera War and Peace in St. Petersburg,
in my home city?"
So a totally informal, kind of family visit.
I was the first leader to go and see him from the West.
He was wanting the meeting in St. Petersburg.
He wanted it to be Western-oriented.
He was talking about the reform of his economy,
a new era for Western-Eastern relations.
This informal weekend wasn't at all informal.
The very first meeting took place in a grand room of a grand palace,
with all the world's press covering it because it was the first time
a Western leader had been seen meeting Putin.
And then they spent several hours together.
It's very important to emphasize
we're desperate to have a good relationship with Russia,
to bring Russia closer towards us.
Some people in the European Union even talked about Russia
becoming a member of the European Union.
I believed that he was someone who was potentially going to be a partner
we could work with.
And with whom we could resolve some of the world's problems
rather than aggravate them.
I remember meeting Putin in Slovenia for the first time
as the President of Russia.
And he walked toward us, and, uh, he had a kind of athlete's gait.
Any breakthroughs?
But I remember thinking that he was a little bit lacking in confidence, oddly.
And when he met President George W. Bush, he so wanted to be treated as an equal.
And President Bush didn't want to do anything to embarrass him,
and thus that famous moment at the press conference
when he was asked if he trusted Putin.
I'll answer the question. I looked the man in the eye.
I found him to be very straightforward and trustworthy.
We had a very good dialogue.
I was able to, uh, get a sense of his soul.
He's a man deeply committed to his country,
and has the best interests of his country.
I thought, "Oh my God, what did he just say?"
But he was just trying to develop a relationship with, uh, with Putin.
Also, would you make everyone aware
that we're gonna be seeing some tape?
Holy shit. Jesus!
Early in his time in power in Russia,
September 11th happened here in the United States,
and he saw terrorism as a common enemy between Russia and the United States.
Everybody go straight. There's an ambulance...
I think Putin felt that he had found, actually,
a new strategic rationale
for the relationship with the United States.
I want to tell the American people on behalf of Russia, we are with you.
We share and feel your pain. We support you.
Putin thought, "Finally,
finally the United States and the West will understand
this war on terrorism that I am carrying out
inside of Russia against Chechnya."
But of course, quickly, I think, Putin realized
that his definition of the global war on terror
was very different than the United States's.
And that came to a head pretty quickly
by the time that it became clear US was moving toward war in Iraq.
Iraq had been one of the major Soviet proxy states and military partners
in the Middle East throughout the long years of confrontation
of the Cold War.
And this was not the kind of military adventurism
that Putin thought he was signing up for with the war on terror.
I will do everything in my power
so that this time as well Russia is not pulled
into the Iraqi crisis in any form.
Because of Iraq and other factors, Putin gets lucky.
The price of oil goes up.
Russia's an oil and gas country,
and if the oil price goes up, that can really help.
The money starts to pour in.
It made it possible for Putin to pay off the Soviet debt.
It made it possible for him to increase the pensions for Russians.
It made it possible to increase other social service payments for Russians.
You start to see, more vividly than ever before,
the creation of an urban middle class.
And people just say, "Look, if he can provide us
with these new living standards, we're okay with it."
"Why we should care about your democracy?"
Putin, he started collecting taxes from the oligarchs.
And because of that, the state then started to function again.
And then Putin basically makes this very concerted effort
to bring the oligarchs to heel.
Putin decided to take control
of the two main television channels in Russia,
which had been in private hands.
Gusinsky and Berezovsky had owned these two channels,
and they were taken off them.
I am in the studio of NTV, and it is strange,
but today is a very important event for all NTV staff.
Today our TV station was taken over by force.
They are put into hands effectively controlled by Putin.
Because Putin understood as a KGB officer that 85% of the Russian population
got pretty well all of their information
through these two main television channels.
And then there was a signature early confrontation
between Putin and a possible rival power center, Mikhail Khodorkovsky...
...who, by that time, was not only the richest man in Russia,
but also one of the very wealthiest men in the whole world.
Khodorkovsky, he seemed to think that the rules no longer applied to him.
You know, I don't remember when I met Putin.
Here, I'm looking at a young guy much like us.
He's ready to listen, understand, communicate.
It turned out that this guy was just a very talented recruiter.
He showed each of us, each of his partners,
precisely what each one of us wanted to see.
Khodorkovsky owned an oil company called Yukos,
which was the largest oil company in the country.
Khodorkovsky wanted to venture beyond Russia.
He wanted to become an international businessman.
He felt as if it would help him if Russia wasn't so corrupt anymore.
If Russia became normal,
he could become the richest man in the world.
So he went from poacher to gamekeeper.
He went on a campaign of transparency in his company.
He stopped all the dirty practices that were going on in the 1990s.
Here is an example of corruption.
There was this company called Severnaya Neft,
and its owners wanted to sell it.
The price they wanted was $200 million.
We crunched the numbers and decided it wasn't worth that much.
And then we find out later that Rosneft, a state company,
is buying this company for $600 million.
Well, for us, this was blatant corruption.
Simply blatant.
And most importantly, that $400 million,
it went into Putin's pocket.
Turns out, he had no interest
in getting rid of the oligarchs.
He just wanted to become the biggest oligarch himself.
Putin gathers these oligarchs in a roundtable,
and Mikhail Khodorkovsky starts talking about corruption at the meeting,
which infuriated Putin.
I said corrupt practices are highly developed in Russia,
they have begun to interfere in the economy's development,
and they are interfering with our companies' business.
The scale of corruption in Russia
is estimated by four different organizations
at $30 billion a year.
And here we noticed that Putin's face had simply turned to stone.
Putin glared at him and said, you know,
"You've done your own crimes. Don't tell me what to do."
Some other oil companies, such as Yukos, have extra reserves.
How did it get them?
This is the question in terms of the topic we are discussing today.
Including, therefore, such issues as the payment
or non-payment of taxes.
And then all sorts of trouble began for Khodorkovsky.
Mikhail Khodorkovsky was arrested in October 2003 for tax evasion.
The best-known, most successful Russian businessman,
really in the vanguard of the business
of bringing Western investment into Russia, had been arrested.
This was a fantastically negative signal to the markets,
because Putin's personal agenda had trumped, as it always does,
the national interest.
The reason why Putin arrested--
And I want to say Putin arrested Khodorkovsky,
not the other one, is just politically motivated.
This is now a war between the oligarchs and Putin?
No doubt.
The indictment I was charged with,
there were an insane number of counts.
When you're on trial in Russia,
there's a 99.7% conviction rate.
And so they put you in a cage, because that's where you're gonna be.
And they allow the television cameras to come into the courtroom
and film the richest, the most powerful man in Russia
sitting in a cage.
I think Russians were pretty happy that the biggest oligarch was arrested.
Everyone must be equal in the eyes of the law.
A modest clerk, a civil servant,
even one of the highest rank.
And a big businessman,
no matter how many billions of dollars
he has on his private or corporate accounts.
I was in prison for ten years.
That was very painful. Well...
I survived.
The other oligarchs then go to Putin and say,
"What do we have to do so we don't go to jail ourselves?"
and the right answer would have been, "You're all going to jail."
But instead, he said, "Something like 50%."
Not 50% for the Russian government,
or 50% for the presidential administration of Russia.
Fifty percent for Vladimir Putin personally.
And that was the moment that Putin became the richest man in the world.
The oligarchs that remain, he makes them a deal.
"I will let you keep your wealth
if you turn your wealth and power towards helping me, Vladimir Putin."
"If you don't, I will crush you. I will imprison you. I will kill you."
And very quickly, the old oligarchic gang cracks up.
Berezovsky is in London,
and years later he "commits suicide."
Who the hell knows what happened there?
Gusinsky ends up in Israel and Connecticut.
Roman Abramovich is a different thing. He shows his loyalty by Putin.
So the old gang is gone, and a new oligarchy begins to accumulate.
Who are they?
They are people, lo and behold,
from the Leningrad, St. Petersburg secret services.
They are people from Putin's old dacha community.
His old pals.
And he begins to enrich and put in positions
people that he knows and he trusts.
And that's the new power structure.
It never occurred to us that the president of Russia
could be about money.
It was, of course, our dramatic mistake.
My personal mistake.
Putin has been, I think, consistently underestimated
by American and Western leaders.
So one consequence of that, is that Putin repeatedly took escalatory measures
that his partners in the West did not think he would undertake.
Arresting Russia's richest man was one example.
There was also his actions in Ukraine.
In 2004, there was about to be an election in Ukraine.
2004 was only 13 years after the collapse of the Soviet Union.
Yes, Ukraine was an independent country,
but for Putin, nothing changed.
In early 2000s, was the clash of two men
who competed for the position of Ukrainian president.
One pro-Russian, one pro-Western.
Viktor Yushchenko was running against another Viktor,
Viktor Yanukovych, in 2004.
I remember going to Putin's dacha.
I was about to become Secretary of State.
And Putin had this man come out from behind a door.
Kind of like "door number one." And it's Yanukovych.
And he says, "This is Yanukovych,
and he is going to run for president of Ukraine."
And he might as well have said, "This is my man Yanukovych,
and he's going to run for president of Ukraine."
I think he believed in 2004, 2005, that he could still control Ukraine.
An independent Ukrainian democracy on Russia's border
is a danger to what he wants to achieve at home.
And in his own mind, Ukraine is a made-up country.
It's a part of the Russian Empire.
President Putin supported Yanukovych.
Somehow during that campaign,
Viktor Yushchenko was poisoned.
When Yushchenko began his campaign a year ago,
he looked like this.
For the last few months,
his face has been marked by boils and cysts.
He suffers from severe back pain.
My face was twice its size.
It was all inflammation.
And after having received the result of blood tests,
there is no doubt in our minds
that Mr. Yushchenko's disease
has been caused by a case of dioxin poisoning.
Tests at a Vienna hospital confirmed
Yushchenko has 6,000 times the normal level of dioxin in his body.
I was at a hospital.
At the time I couldn't spend more than ten minutes
without painkillers.
But to tell Ukrainian voters,
"Sorry, I won't take part in the elections."
"Let's go into Moscow's hands voluntarily."
I couldn't do that.
He was lucky that he was brought to Vienna
because doctors said if he would stay another 24 hours in Ukraine,
there could be a "final solution," so-called.
My older daughter...
she hadn't seen me, probably...
maybe for a month.
She was shocked.
She couldn't imagine her father would look like that.
Yanukovych won the election due to voter fraud,
perpetrated by Viktor Yanukovych, supported by President Putin,
stuffed ballot boxes, and otherwise stole the election in 2004
away from Viktor Yushchenko,
which brought the Ukrainian people to the streets around the nation.
With thousands of supporters standing in the snow,
Ukraine's opposition leader dug in his heels.
Our action is only beginning.
Yushchenko! Yushchenko!
Hundreds of thousands, even millions of Ukrainians,
came to protest the stolen election.
The orange banners, the songs that they had created,
the willingness of people to sit through freezing cold temperatures
in order to fight for what they believed was right,
was like nothing I had ever seen
on the territory of the former Soviet Union before.
Yushchenko! Yushchenko!
That was a total shock for the Kremlin.
We shouldn't introduce the practice
and means of an international society
of addressing similar disputes through
mayhem on the streets.
Yushchenko!
Yushchenko! Yushchenko!
Yushchenko!
In a clear sign that the old order is wobbling,
a hundred young police cadets joined the demonstrators
and announced that they will not follow orders to crush the protests.
So October-November of the year 2004
was for the Ukrainian nation, like, either we go into yesterday,
where we spent 370 years,
or we have a chance
to choose the democratic way.
If you're a citizen, you know your duty is to make a change,
as no one will do it for you.
We thereby oblige the Central Election Commission
to appoint a second round of presidential elections in Ukraine.
Excellent! Very good!
According to this count, the results of the votes
for the two candidates are as follows.
53.22% for Viktor Yushchenko.
Dear friends, the first piece of news, it has happened!
The pro-Western forces in Ukraine
ended up winning.
This made Vladimir Putin very angry.
I think it's the first day of independence of Ukraine.
That was the beginning of the confrontation
that we're seeing today between Ukraine and Russia.
Putin became more and more suspicious of the West's designs
where Ukraine was concerned.
He was always suspicious of the West,
and he always experienced the end of the Cold War
not as a moment of awakening and possibility,
but as a horrendous defeat,
and famously he said the collapse of the Soviet Union
was the worst geopolitical tragedy of the 20th century.
He starts to worry, especially after the Orange Revolution,
that Ukraine is getting away.
And if he doesn't act, then Russia,
just as he saw the Soviet Union losing its place in Europe without an answer,
will have lost its dominance of the former Soviet republics as well
without an answer.
So he sees playing out in the 2000s
the same thing that he saw playing out in the 1980s.
And this time, he wants to have an answer.
Moscow, in his view, will not be silent.