By Matthew McWilliams
On April 21, 2016, Professor Karen Dawisha gave a CAS/MillerComm lecture to a packed house at Spurlock Museum’s Knight Auditorium. Her lecture was entitled “Is Russia a Kleptocracy? And If So, Who Cares and So What?” Dawisha is the Walter E. Havighurst Professor of Political Science and the Director of the Havighurst Center for Russian and Post-Soviet Studies at Miami University. She is the author of a number of books and articles on Russian politics and post-communist political transitions. Her latest book – Putin’s Kleptocracy: Who Owns Russia? – was the subject of her lecture.
Dawisha began her presentation by discussing her controversial new book’s path to publication. In a letter published in The Economist, her longtime publisher (Cambridge University Press) declined to move forward with her manuscript due to British libel law, telling her that its “basic premise that Putin’s power is founded on his links to organised crime” made them uncomfortable. Eventually, she published the book with Simon and Schuster in the United States, which offers protection under the first amendment – but her publisher has still “made every effort to ensure that the book is not distributed, translated, or sold” outside of the country. However, Dawisha noted that “the book is doing very well in its pirated version.”
Dawisha argues that Putin’s government is a kleptocracy, a “system in which the risk is nationalized while the reward is privatized.” This entails a lack of transparency, the distortion of the market by political considerations, property rights being “secured by loyalty [rather than] law,” and the extraction of tribute. Dawisha also asserted that “loyalty and silence [are] demanded,” commenting, “I don’t like using mafia analogies… but the rule of omerta is applicable to Putin’s Russia. There are many cases of people who have been killed because they broke the code, and many others who fled the country in fear.” She mentioned the assassination of Boris Nemtsov, a former political figure and reformer “murdered in the shadow of the Kremlin” in 2014. Nemtsov had authored reports detailing Putin’s lifestyle and the real cost of the Sochi Olympics, “detailing the extent of the money that was being skimmed off.”
In order to ensure loyalty, kleptocracies don’t allow people to establish their property rights by law. In the age of globalization, this means that Russian oligarchs have moved a massive amount of money outside of the country. In 2014 alone (after the invasion of Crimea), Russia experienced over $150 billion in capital flight. This money strengthens tax havens, weakens sovereign controls, and “contributes massively to black economies in the West” – and according to Dawisha, “this is happening everywhere, including in the U.S,” where wealthy Russians buy property through LLCs. In part, Dawisha attributes this phenomenon to E.U. and U.S. sanctions on Putin’s associates: “when there’s an impediment to the flow of money, people will always find ways around it.”
Expanding her argument, Dawisha showed slides detailing Putin’s closest associates, the beneficiaries of this system – most of them have a net worth of over $1 billion, and all of them have been with Putin since the 1990s. According to Dawisha, these men “are truly bound to each other as a kind of brotherhood. In Russia, it’s very common to call this group ‘bratva.’” At the same time, wealth inequality in Russia is greater than in any other country: “110 billionaires own 35% of the wealth.”
Dawisha also revealed that she found a 2000 document detailing plans to dismantle the Russian democracy. She concluded that the document indicates “that every single election under Putin was organized in such a way that the opposition would not have a chance… They were stealing the elections from the very beginning.”
For more information, visit http://www.miamioh.edu/cas/academics/centers/havighurst/cultural-academic-resources/putins-russia/.
Matthew McWilliams is a REEEC M.A. student and a FLAS Fellow for the 2015-2016 academic year for the study of Russian.