I Was Putin’s Adviser. I Accused Him of Crimes to His Face

It was July 25, 1998, and I happened to be in the anteroom of Alexei Kudrin’s office. He was the first deputy Russian finance minister, and I was discussing Russia’s looming financial crisis with him, his assistants, and a few visitors when somebody entered behind my back.

I didn’t see a person, but everybody turned their heads to the incomer. It became clear this wasn’t a regular visitor. When he approached, I saw he was a shorter man in a very strange light green suit; unusual for a serious person in Moscow’s corridors of power.

The man turned out to be Vladimir Putin, whom Russian president Boris Yeltsin had that morning appointed director of the FSB, Russia’s internal intelligence service.

My presence was a sheer coincidence. It seemed Putin had come straight to talk with Kudrin, apparently his closest friend in Moscow then. Kudrin asked me to repeat for Putin what I had talked about for months—the inevitability of the ruble’s devaluation. So, briefly, I did.

Putin didn’t respond or react at all. Neither agreement nor disagreement. Just silence. He listened, though it was unclear if he understood. After my brief monologue, I left.

I was head of a research think tank, the Institute of Economic Analysis, that I founded four years earlier. We focused on the Russian economy during a period of turmoil and reform after the Soviet Union’s collapse, and on policies to sustainably grow Russia out of its nine-year Great Depression.

At that troubled time, there was a huge shortage of economists who had some understanding of the market economy. I was among a few young economists who had professionally studied market economics and monetary policy invited into the newly formed Russian government.

I became deputy director of the government’s analytical center under former prime minister Yegor Gaidar, and then, after his departure, was invited to be chief economic adviser to his successor, Viktor Chernomyrdin.

While in Moscow I heard positive news about some KGB lieutenant colonel who happened to be in the team of then St. Petersburg mayor Anatoly Sobchak.

My circle of people there were mainly economists; some were anti-communists and anti-KGB Soviet dissidents. It was quite unusual to hear flattering comments about a former KGB officer from them. I was shocked, but my friends were relaxed.

He, I was told, was a different type of KGB member—a real reformer who switched camps to our side.

I continued to be skeptical. A KGB member who is a reformer? For me, that was impossible; a clear contradiction in terms. They tried to reassure me, saying I simply didn’t know him and in front of other KGB agents he was a different person.

Anyway, I never met Putin before that short encounter in the Ministry of Finance building. I didn’t have any contact with him again until February 28, 2000, when Putin was already acting president after Yeltsin’s departure on New Year’s Eve, 1999.

I sat in my institute doing research, as usual, when the telephone rang. I was invited to see Putin that evening at his dacha outside Moscow because he sought an economic adviser.

A government car collected me and when I arrived there were a lot of people, but not Putin. It was the peak of the presidential election campaign, so a busy time at the dacha. Eventually, Putin appeared and, after shaking hands with a few people, at around 8 p.m. he invited me to sit and talk.

Election day was a month away, but nobody doubted Putin’s victory, so he started forming his future team. I’d been told he’d already seen about 10 candidates for the economic adviser position, but he didn’t like any of them, so there was no guarantee he’d choose me.

When we sat together, at the very beginning he asked me: What would I suggest to him to do with Russia’s economy?

I responded: “And what do you want?”

He was visibly surprised. It looked like nobody had asked him such a question before.

Putin was silent for quite a while.

It took him some time and effort to formulate what he’d like to happen. It seems it wasn’t his idea to hire an economic adviser. Perhaps he was just told he needed one. But why did he need this toy? He wasn’t clear.

I said his choice must depend on his…