- The Washington Times - Thursday, January 6, 2000

With characteristic optimism about matters Russian, President Clinton has already said that he is "off to a good start" with Russia's acting president, Vladimir Putin. Moreover, the president was apparently sufficiently impressed by a New Year's Day conversation with the new Kremlin leader to characterize it as "encouraging for the future of democracy in Russia." But Mr. Clinton's eagerness to maintain the facade of his administration's "successful" Russia policy ignores serious questions about Mr. Putin's background, particularly regarding the nature of his association with Russia's corrupt oligarchy. The answers to those questions may have profound implications for Russia's development and American interests.

While the administration has rushed to burnish Mr. Putin's reformist credentials by highlighting his long service in St. Petersburg (still Leningrad when he arrived), under the city's former mayor, Anatoly Sobchak, this and other periods in Mr. Putin's career are ambiguous at best. First of all, very little is yet known about his decade-and-a-half as an officer in the KGB. Mr. Putin left his last post, in East Germany, just as communism collapsed there. This has led some to suggest that he may have been involved in operations intended to defend the dying regime of Erich Honecker. Other reports accuse Mr. Putin of having been involved in the illicit privatization of Soviet property in East Germany. If Mr. Putin is to be associated with the lofty goals of the "radical reformers" in St. Petersburg, where he served as deputy mayor from 1994 to 1996, he is no less associated with their venal excesses. While serving as deputy mayor, Mr. Putin was accused of holding foreign property and bank accounts and was investigated by a commission of St. Petersburg legislators for granting export licenses in a shady barter deal. The commission recommended his dismissal, which Mr. Sobchak resisted.

When Mr. Sobchak lost an ugly re-election race in 1996, Mr. Putin moved to Moscow as a protg of another St. Petersburg veteran, the notorious Anatoly Chubais. Soon thereafter, Russian prosecutors launched an investigation of Mr. Sobchak; he left Russia for medical treatment during the investigation and did not return until earlier this year.

Mr. Putin's new post was as a deputy to Pavel Borodin, the Kremlin's business manager. Mr. Borodin, who controls a vast empire of Russian government real estate, cars, and other assets, is most recently known for awarding highly lucrative contracts to a Swiss construction firm for Kremlin renovations as part of an alleged kickback scheme. The Swiss company, Mabetex, also was implicated in the Bank of New York money-laundering scandal and reportedly paid for credit cards issued in the names of members of the Yeltsin family. Mr. Chubais, Mr. Putin's patron, was also enmeshed in a series of corruption scandals himself, as were other members of the St. Petersburg clique such as former privatization minister Alfred Kokh.

Mr. Putin's later conduct as director of Russia's Federal Security Service, the principal successor agency to the KGB, raises further doubts about his relationship with Mr. Chubais and other oligarchs in the so-called "Family" the Yeltsin inner circle. Mr. Putin played an active role in squashing high-profile corruption investigations and at one point even appeared on national television to confirm the authenticity of a videotape purported to show the country's prosecutor general entertaining prostitutes. The prosecutor had been leading inquiries into the behavior of Mr. Yeltsin's daughter and the tycoon Boris Berezovsky, among others.

The fact that Mr. Putin's first official act was a decree granting Boris Yeltsin and his family immunity from criminal prosecution (among other benefits) suggests that Russia's acting president also had to cut a deal with the Family to win power. Statements that Russia's crony privatization cannot be reversed seem to reflect this as well. Because his popularity is largely a manufactured phenomenon created by carefully managed coverage of the conflict in Chechnya by media outlets controlled by the government and the Yeltsin entourage Mr. Putin will remain dependent on the Family at least until Russia's March elections, and possibly beyond.

Needless to say, Vladimir Putin is no more a prisoner of his past than Russia is doomed by its own history. He has claimed that he will fight corruption and may in fact do so. But only Mr. Putin's actions can tell us what kind of a president he might be; his words have little significance, particularly when he will face a crucial election in less than three months. Regrettably despite its concern over Russia's intervention in Chechnya, which Mr. Putin orchestrated the Clinton administration appears to have failed to grasp this distinction.

Further, the administration seems confused about the difference between words and deeds (also known as the difference between spin and reality) not only in Russia, but also in the United States. Mr. Clinton's statement that his call to Mr. Putin was "encouraging for the future of democracy in Russia" makes this clear. The United States cannot base a successful Russia policy, let alone an effective foreign policy, on this kind of self-deception.

Paul J. Saunders is director of the Nixon Center.

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