Source: Carnegie

Proving Loyalty in Putin's Russia

By Masha Lipman

Originally published in The Washington Post, February 23, 2004.

MOSCOW -- Apparently not all Russia's tycoons are in trouble with the Kremlin. Earlier this month Viktor Vekselberg, the oil and aluminum magnate, was given a warm welcome on state-run television, which presented him as a role model for the Russian rich. His was a story combining generosity and patriotism: Vekselberg has spent at least $100 million of his personal fortune to restore a bit of Russia's historical greatness. He bought from America's Forbes family, of publishing fame, nine bejeweled Easter eggs made for the czars by Peter Carl Faberge in the late 19th and early 20th centuries. Vekselberg modestly said it was his duty to return the lost treasures (his purchase included other precious pieces) to their homeland.

The government obviously appreciated the gesture, although Vekselberg's purchase is not charity in the strict sense of the word. He will remain the owner of the decorated Easter eggs, which were taken by the Bolsheviks after the revolution and execution of the czar's family and then sold to foreign capitalists to acquire funds for the young Soviet state.

This new Russian capitalist has pledged to make the eggs "available for all Russian citizens to see." Several major Russian museums are competing for the honor of exhibiting them.

But not all such acts of philanthropy are welcome in Putin's Russia. Just recently another $100 million gift was turned down by the recipient -- the Russian State University for the Humanities. The university received the donation early last summer and had spent about $5 million of it before deciding, about six months later, that it couldn't accept the money. It's not that the school didn't need it; like just about every Russian institution of learning, it is badly in need of funds. Salaries are insufficient, and professors routinely take jobs on the side; some of the best regularly abandon their students to teach a semester abroad for real money. The $100 million was intended by the donor to improve the quality of teaching and introduce Western management techniques.

The problem was with the donor. He was the Russian oilman Mikhail Khodorkovsky. Khodorkovsky, you'll recall, was arrested in October by the Putin government and is still in jail, facing an array of tax and other economic charges. After his arrest, the government forced the university to fire the rector Khodorkovsky had picked. The school, meanwhile, made it clear that it would rather be poor than accept "blood money" from the tycoon who had fallen out with the Kremlin.

The university leadership, of course, would not admit that this decision was driven by fear of the Kremlin, just as Vekselberg would not admit that his costly purchase may be a way of pledging his loyalty. But this is the way it is in Russia these days. Loyalty to the Kremlin (or at least the demonstration of it) comes first. And if you're in big business, you must try twice as hard to prove your allegiance. Since Khodorkovsky's arrest, Russia's top capitalists have fallen all over themselves vowing not to meddle in politics or engage in tax scheming. The expanding prosecution of Khodorkovsky and his colleagues gives the Russian rich no opportunity to relax; it works as a menacing reminder that everyone is under suspicion and no one should feel secure.

Ironically, Khodorkovsky was the first Russian tycoon to undertake large-scale philanthropy in the social sphere. He did it not to curry favor with President Vladimir Putin but to demonstrate his independence. That's one crime the Kremlin won't tolerate. Charity cannot be driven by rich men's ideas or whims; Putin's Kremlin wants control over who makes donations and to whom.

There's another difference between Khodorkovsky's and Vekselberg's philanthropic spending. Khodorkovsky's $100 million university gift, like other charity programs he has financed, was meant to be a contribution to Russia's future. High-quality liberal education, training schoolteachers in computer skills, instructing provincial journalists to understand the intricacies of modern economies -- all of which Khodorkovsky supported, along with liberal political parties -- imply a vision of Russia as a modernized, open, advanced country.

Apparently Vekselberg's generosity is much more agreeable to Putin and those around him, since it goes for symbols of the past -- and of imperial greatness. But Faberge eggs, rare and expensive jewelry, are hardly useful symbols for today's Russia. They recall the royal magnificence of the Russian state at a time when great social antagonisms were building. Beneath the luxury of the czar's court lay an economically, politically and socially backward country desperately in need of radical reforms. They were never implemented, and the great Russian empire disintegrated in war and revolution.

In Putin's Russia, citizens are encouraged to look to the past for sources of national pride and to seek reassurance in the country's historical greatness. After all, that's much easier than facing the present and the future -- and assuming responsibility for what needs to be done to close the gap separating Russia from the developed world.

Masha Lipman, editor of the Carnegie Moscow Center's Pro et Contra Journal, writes a monthly column for The Post.