Putin’s Palace

Alexei Navalny’s​ arrival in Russia on 17 January was both a homecoming and a high-stakes opening gambit. His decision to return, made after several months convalescing in Germany from near fatal poisoning with a nerve agent in Siberia last August, was a provocation confronting Vladimir Putin with a choice: he could either arrest his most prominent opponent, drawing greater attention to Navalny’s anti-corruption campaign, or allow him to operate freely on Russian soil. The Kremlin took no chances and arrested him immediately. This was the spark for the protests that took place across Russia on 23 and 31 January, which drew thousands onto the streets in more than a hundred cities and towns despite sub-zero temperatures.

These were the most serious demonstrations of discontent in Russia for a decade, and they brought a serious crackdown. On 23 January almost 4000 people were arrested nationwide – more than double the previous record for a post-Soviet protest – and the following Sunday a new record was set, with another 5700 detained. In Moscow the authorities closed off the entire city centre, forcing the protesters to switch from their planned route and instead march to Sailor’s Silence, the prison where Navalny is currently being held. In St Petersburg protesters were prevented from marching down Nevskii Prospekt, and some were reportedly tased when they reached Sennaya Square. Similarly harsh treatment was meted out in Vladivostok, where protesters avoided police for a while by forming a large circle out on the frozen surface of the Amur Bay. Detainees reported being beaten by police in Kostroma, Ryazan and Chelyabinsk. As many as eighty journalists were among those detained.

The geographical breadth of the protests was striking. Protests of varying sizes took place in every region of Russia, from Yakutsk in the Far East to Murmansk near the Norwegian border. Several thousand marched in Ekaterinburg in the Urals and in the Siberian industrial hub of Novosibirsk, and there were smaller crowds in dozens of other places. A list of arrests by location maintained by OVD-Info, a Russian human rights monitoring organisation, suggests there are at least stirrings of opposition across Russia’s socioeconomic landscape as well as its map, from decaying industrial centres to more prosperous enclaves of oil wealth.

The immediate goal of the protests was to pressure the Kremlin into releasing Navalny – nominally detained for violating the terms of a five-year suspended sentence he received in 2017 for ‘financial crimes’. But sympathy for Navalny isn’t the main driver of discontent: his case has served as the focal point for a wider frustration with the status quo. Signs of unrest have been growing in recent years. In 2018, there were protests against the increase in the pension age, and in the summer of 2019 demonstrations took place in Moscow against the rigging of elections to the city assembly. But while public displays of dissent have become an increasingly normal part of Russian political life, nationwide, co-ordinated upsurges like this January’s are still rare.

Their emergence testifies to Navalny’s ability to galvanise Russia’s opposition movements. He has been able to do so in large part because he has turned his anti-corruption message into a powerful political weapon. His activism began more than a decade ago, with a demand for transparency from state oil and gas companies, but in recent years he has undergone something of a political evolution, discarding both his ethnonationalist rhetoric and his full-bore endorsement of the free market, and taking what could be called a ‘social turn’. The platform he developed for his abortive 2018 presidential campaign – he was barred from running thanks to his 2017 fraud conviction – emphasised the state’s role in promoting social welfare and called for greater spending on healthcare and infrastructure, as well as opposing any increase in the pension age. What have remained consistent, though, are the anti-corruption theme and Navalny’s highly effective use of social media and the internet. He has been able not only to reach millions of Russians but to spur many of them to action.

Two days after his arrest, Navalny released his latest documentary on YouTube. Putin’s Palace: The Story of the Biggest Bribe is just under two hours long and lays out in detail the networks of graft involved in the construction of a personal residence for Putin by the Black Sea. Much of the basic information isn’t new: the existence of the palace was first revealed in 2010 by the businessman Sergei Kolesnikov, who had been involved in the scheme but became disillusioned by the scale of the greed involved. (He fled Russia after blowing the whistle.) But Navalny’s team has built on Kolesnikov’s revelations and presents them in a way that combines serious investigative work with irreverent humour.

What began in 2005 as a project for a luxury dacha on a wooded cape near the resort of Gelendzhik turned into a gargantuan undertaking, which has now cost an estimated £1 billion of Russian taxpayers’ money. Calling it a ‘palace’ is an understatement: it’s more like a vast lordly estate, encompassing not only a 68-hectare complex of buildings around the palace, but also neighbouring tracts of land totalling another 7000 hectares. As Navalny points out, Putin’s private domain is more than thirty times the size of Monaco. But unlike Monaco, it is protected by a no-fly zone and a naval security order requiring ships to stay two kilometres from the shore. Navalny’s team nevertheless managed to float nearby in a dinghy and launch a drone over the estate. The sweeping aerial views make clear not only the scale of the project but the pointless extravagance: it has two helipads, an underground ice hockey rink, an orangery, an amphitheatre, an Orthodox church, a tunnel to the beach, and two vineyards complete with state of the art wineries.

The palace itself is a three-storey neoclassical edifice arranged around a colonnaded central courtyard, with a total floor space of 17,691 square metres. Based on leaked floor plans and photographs taken by construction workers, Navalny’s team has put together sleek digital renderings of the palace’s interiors and furnishings. The architectural style is self-aggrandisingly imperial, from the marble floors to the baroque frescoes adorning the ceilings. Film buffs will enjoy the moment when Navalny recognises the double-headed eagle atop the entrance gates from the storming of the Winter Palace in Sergei Eisenstein’s October.

But the dominant motif is not so much grandeur as excess. The ground floor alone boasts a cinema, a solarium, a hairdresser’s, a doctor’s office, a spa, a Turkish bath, a ‘cocktail hall’, a wine-tasting room. Outside there is a swimming pool and an ‘aquadiscotheque’, whatever that is. (The word was quickly taken up as a mocking chant: in Moscow’s Komsomolskaya Square on 31 January, protesters jumped up and down shouting ‘akvadiskoteka!’ at a phalanx of riot police.) Upstairs are a personal gym, a reading room, a music room, a private theatre, a billiard room, a casino and a hookah lounge. This last room also contains a platform with a pole on top; Navalny wonders aloud what the pole could possibly be for – a Christmas tree, perhaps, or a giant shawarma? The top floor is more modest, with a mere ten bedrooms in addition to the presidential suite. To judge by the plans and photographic evidence, the palace is being furnished at colossal expense; after perusing Italian luxury furniture catalogues, Navalny’s team established the cost of many individual items, the choicest being a gold-plated toilet brush that apparently costs €700.

This is the latest in a series of documentaries from Navalny. In 2015 he took aim at Yuri Chaika, then Russia’s prosecutor general. Two years later he brought out Don’t Call Him ‘Dimon’, detailing the then prime minister Dmitri Medvedev’s illicitly acquired assets – country estates, villas, vineyards, yachts – and a private fortune worth some £630 million. While Putin’s Palace shares the investigative approach and caustic tone of those films, it is bolder still in its ad hominem attack on the president, accusing him of pathological greed. As well as laying out the corrupt networks through which Putin and his associates channel their wealth today, it offers a historical account of how they built those networks in the first place.

The story of Putin’s rise has been told many times: his stint with the KGB in Dresden in the 1980s, several years spent working for the mayoralty of St Petersburg in the early 1990s, then the move to Moscow in 1996 and rapid rise to become Yeltsin’s anointed successor in 1999. Most versions of this told in the West tend to emphasise the formative influence on Putin of the Soviet period, in particular his connection to the security services. Putin’s Palace instead sees the 1990s as the foundational period for the contemporary Russian elite. It was then that Putin and his circle learned the corrupt methods they continue to use today: extracting bribes, skimming from government contracts, setting up shell companies, using charitable foundations to disguise flows of money, designating nominal owners in order to shelter their assets.

It was also in the 1990s that many of the people who now rule and own Russia became friends and colleagues. The personnel in Putin’s networks have barely changed since then: they’re just operating on a grander scale now. While running the foreign trade committee of the St Petersburg mayor’s office in the 1990s, Navalny recounts, Putin would write a number on a piece of paper indicating the size of the kickback required from visiting businessmen – usually $10,000 or $20,000. They would then hand over the cash to his assistant Alexei Miller. Since 2001, Miller has been the CEO of Gazprom, the giant gas company majority-owned by the state; in a strange coincidence, Putin’s cousin Mikhail Shelomov owns 39 million Gazprom shares, currently worth around £80 million. Shelomov is one of several people believed to be holding vast assets on Putin’s behalf. Another is the cellist Sergei Roldugin, who in 2016 shrugged off revelations in the Panama Papers of his vast fortune by saying: ‘I am rich with the talent of Russia.’ On 30 January yet another of Putin’s close friends (and former judo partners), Arkady Rotenberg, came forward to announce that the Black Sea palace in fact belonged to him.

By the end of January, Putin’s Palace had had more than a hundred million views on YouTube. At least one of them was from Putin himself, who on 25 January said he had seen bits of the film and found it ‘boring’. Two days later, Putin gave a virtual speech to the World Economic Forum at Davos in which he decried the worldwide growth of inequality: ‘Millions of people, even in rich countries, no longer see the prospect of increasing their incomes.’ The Davos gathering, of course, is a festival of elite insincerity, but even by those standards, and still more so in the wake of Navalny’s accusations, this was a real piece of chutzpah. But it was also an indirect acknowledgment of the resonance that Navalny’s anti-corruption agenda has had.

How far that agenda can take the protest movement, and whether the protests can be sustained in the face of formidable repression, remain to be seen. On 2 February, a Moscow court ringed by riot police sentenced Navalny to two years and eight months in a penal colony. Two days later, Navalny’s aide Leonid Volkov announced a pause in protests until the spring. As and when they resume, the Kremlin is probably betting that it can beat them into submission. But street protests are only one part of a strategy. As Volkov put it, ‘Alexei has asked us to concentrate on this autumn.’ Elections to the Russian parliament are due in September, and Navalny will aim once again to deploy his ‘smart voting’ tactic, designed to channel votes towards the candidates best placed to beat incumbents from Putin’s party, United Russia. It’s not clear exactly how effective this tactic is. Advocates claim it helped several opposition candidates to victory in local elections in 2019, and that it was crucial in depriving United Russia of its majority on the city councils of Tomsk and Novosibirsk last September. Detractors argue that these upsets were mainly driven by other factors, including slow-burning discontent with United Russia. But it adds an element of unpredictability to the electoral process, something the Kremlin thought it had successfully eliminated.

A year ago, Putin surprised the country by introducing constitutional amendments, later approved in a July 2020 referendum, that would enable him to remain in power beyond the end of his current term in 2024, conceivably until 2036. It seems that he doesn’t intend to retire to his palace any time soon. But playing the long game may not be the best strategy: a sizeable proportion of the protesters have been in their twenties or teens – people born and raised entirely under Putin’s rule, for whom the spectre of chaos the Kremlin so often invokes is less fearsome than a future of stagnation and endless corruption.

5 February