How Vladimir Putin Came to Power (And How He Has Held on to it for So Long)

When Boris Yeltsin resigned as president of the Russian Federation, it was expected, but sudden. He resigned so his Prime Minister, Vladimir Putin could become president on January 1, 2000 – the start of the new millennium. Since then, Putin has been the most powerful man in Russia and one of the most powerful men in the world. Today that power has been felt worldwide as the war in the Ukraine rages, contributing to gas price hikes, food insecurity in many countries, and not exactly helping the soaring inflation felt around the world. It may surprise many to learn that this man who was only the Russian Federation’s second president is not a career politician and had his position more or less thrust upon him precisely because of this. So how did Vladimir Putin come into power in the first place, and how has he managed to maintain his position as the leader of Russia for so long?

Vladimir Vladimirovich Putin was born on October 7, 1952 in Leningrad. Vladimir’s father, also Vladimir, was a factory worker and former soldier who fought in the siege of Leningrad. His mother, Maria, gave birth to two other sons who died before Vladimir was born. At first, the family lived in a communal apartment that was barely big enough for them, let alone the other two families they had to share it with.

As you might have deduced from all this, Putin grew up in poverty, and would get into fights around his apartment building, a habit that would land him in trouble as an adult and even risk jeopardizing his career at points. This habit would also lead him to channel that energy into Sambo, a Russian martial art that combines catch-as-catch-can wrestling with Judo. Putin would later practice Judo proper, and it is one of the things he is known for on the world stage. As for education, Vladimir did not get good grades at first, but the chance to join a sports club to learn martial arts inspired him to improve his mind as well, along with another motivation to improve his marks which we’ll get into shortly. He also learned German in school which would likewise greatly influence his trajectory later. What may come as a surprise given where he’s ended up, is that Putin was politics-averse as a youth. For example, he declined to join the youth wing of the Communist Party, even as he was pressured to do so by teachers and fellow students. However, Putin would eventually relent and find that he was a natural leader.

One thing that he was far more interested in, even as a child, however, was spycraft.  As a teenager, he dreamed of joining the KGB, inspired by approved literature and film about Soviet spies during World War 2. There circulates, whether fully accurate or not, a famous story where in 1968 a teenage Putin walked into the KGB headquarters in Leningrad and asked a guard what he needed to study to get into the KGB. The guard told him he should study law. Allegedly emboldened by the response, Putin started to put more energy into school, hoping to enter Leningrad State University for Law, and ultimately achieving this goal.

However, he was warned by his coaches and friends early on that he would not enjoy the more realistic life of a KGB officer compared to the one he saw in films. Still, Putin persisted and his studies in university instilled in him a great respect for law and order. He ultimately interned for the city’s transport ministry in its criminal division until he wound up getting recruited to the KGB in 1975.

In 1976 Putin became a first lieutenant, working for the KGB’s counterintelligence department: the Second Chief Directorate. Here he learned how to recruit informants and collaborators in the war with the Soviet Union’s internal enemies. There is much talk of deep states in modern conspiracy theories, but the KGB was truly a state within a state. It monitored everything to ensure law and order within and without of the Soviet Union, and Putin learned a lot from his time working for them. The “without” part is something Putin would become more familiar with as after six months he was transferred to the First Chief Directorate which handled intelligence outside the borders of the Soviet Union.

That said, while you might envision Hollywood spy type scenarios were his daily life, in fact, according to journalist and biographer Masha Gessen, “Putin and his colleagues were reduced mainly to collecting press clippings, thus contributing to the mountains of useless information produced by the KGB.”

Nevertheless, his employment in the KGB brought out a side of Putin that would become central to his rise to power. He worked. He worked hard, meticulously, and kept his head down. He had ambitions, no doubt, but they don’t appear to have been initially to rule the country or party, but to advance in the KGB. For now, he monitored and shadowed foreigners in Leningrad until 1985 when he would be sent to the Red Banner Institute for training in foreign intelligence.

This was the real spy school where he fulfilled his childhood dream. However, his fondness for fighting continued as an adult with the consequence that his conduct there resulted in him being unable to get into the secret service. Instead, he was assigned to Dresden in East Germany because of his knowledge of German. There he worked with the KGB and the Stasi, East Germany’s secret police, during the last half decade of the Eastern Bloc. There he immersed himself in German culture and by all accounts performed his duties with distinction.

The unravelling of Eastern Germany which was most dramatically captured in the fall of the Berlin Wall impacted Putin deeply. He saw the Soviet Union’s reach in the area crumble before his eyes, and Moscow unable to even relay simple orders to the KGB amidst the chaos. In 1989 he returned home to Russia. Due to Gorbachev’s social and economic reforms like Glasnost and Perestroika, the Soviet Union’s days were visibly at an end at home as well. Putin didn’t know what the future held for him, either as a Russian, or as a KGB officer. This was not unique to him as for most Russians, the future was uncertain. A way of life was coming to an end and there was a lot of chaos in building a new one.

While still working for the KGB, he was assigned the position of assistant to the rector at Leningrad State University. This was a semi-official KGB post used to spy on foreign students.

Enter Anatoly Sobchak, a professor of law at the university, and would-be democratic reformer. Sobchak recruited Putin in May of 1990 for his elections to the city council.  In this, Putin disclosed to Sobchak that he was an active KGB agent, but Sobchak did not mind. He ran for city council, and then chairman of the city council. He wished to establish free elections for the post of mayor as part of his platform of democratic reforms. The hope was that a referendum could be held in which he would be elected mayor, and the city would be renamed its original name: Saint Petersburg. This is exactly what happened in 1991. In all of this, Sobchak trusted Putin as a reliable worker, and soon would reward him.

Also during this period, Putin tried to quit the KGB twice as his active status with the agency attracted too much scrutiny. The first time he tried to quit was in the beginning of his tenure with Sobchak. He tried again during a failed coup in 1991. However, the KGB were only too happy to have him in Sobchak’s midst. They even tried to lean on Putin to supply them with a document which would allow them to manipulate Sobchak, which Putin refused to provide, not wanting to violate Sobchak’s trust. His resignation was ultimately accepted, and he was officially out of the agency he served for most of his life.

Going back to Sobchak, his time as mayor did not go well. The democratic reformer became known as anti-democratic in his dealings with the city council. He often tried to shut them out of important decisions, kneecap his rivals and any challengers to his mayorship, and was accused of numerous under-the-table dealings.

Putin, also was not immune from this seemingly shady behavior.  In fact, the first rumor that Putin was using a government position to stash away quite a lot of money for his own personal gain came around this time in his then position as head of the Committee for External Relations at the Mayor’s Office in St. Petersburg. Specifically when he allegedly helped broker a $93 million deal to acquire various food supplies for the city. In a nutshell, various companies were granted permits that would allow them to supply a huge amount of materials to foreign entities, and in exchange would be given an equivalent value back in foodstuffs to then be used within the famished city. The thing was, as far as anyone can tell, while the companies did send out the materials, no foodstuffs came back in return. The matter was ultimately investigated by one Marina Salye at the behest of the city council, with Salye in turn claiming Putin’s signature could be found authorizing the deals.

She states, “The raw materials were shipped abroad but the food didn’t materialise. There’s 100% proof that in this Putin was to blame. As a result in 1992 – when there was no food at all – the city was left with nothing. The evidence I have is as solid as it gets…. Putin – well, his committee – made bartering contacts to get food for the city. He issued licenses. And commodities – wood, metal, cotton, heating oil, and oil – flew out of the country.”

That said, while she states Putin was to blame and, at least according to her, she had definitive proof, she did not find any evidence that Putin had received anything in return for the apparently botched deals.  As for Putin, he claimed the companies that had been given the export permits in the deal were to blame for foodstuffs not coming back as they were supposed to have- implying that Putin had no knowledge the deals wouldn’t be completed as originally brokered when he issued the licenses.

The city council would move forward with further investigation, but ultimately Mayor Sobchak put a stop to it and the matter was dropped… While you’ll read in many outlets reporting this story that Salye would die of so-called natural causes mere weeks after she made these accusations and the investigation was killed, in truth she would go on to help found the Free Democratic Party of Russia and more or less continually rail against Putin to anyone in the media and public who would listen, until eventually giving up in 2000 after the election and moving to the countryside. There she lived until her death at the age of 77 in 2012, though she did give a handful of interviews during that span, still unabashedly anti-Putin.

In any event, going back to his rise to power, Putin was also linked to the federal government of the new Russia under Boris Yeltsin’s administration. Sobchak and Yeltsin were friends and shared a lot of the same economic ideals that made 1990’s Russia a tumultuous place. Boris Yeltsin’s Shock Therapy was an attempt to shock Russia’s economy rapidly into capitalism. In the end it also encouraged a lot of corruption and rising crime.

Speaking of seediness, Sobchak’s regime in Saint Petersburg attempted to change the city into a Russian Las Vegas. To help him in his various ventures, Sobchak gave Putin the position of deputy mayor. This is when we can ostensibly say Putin entered politics. Putin was supposedly surprised at the promotion but accepted the new duties. He used his knowledge of the German language and culture to travel to Germany to foster connections for the mayor there. Putin claimed these visits changed him, as he got to see West Germany for the first time and how it was so different from the former East Germany. During this time he also researched models for casinos and in the process saw an erotic performance that shocked him to his core. This was the unfettered lust and vice of a world without strict Soviet discipline. He also came to the conclusion that if such vices were to be allowed in Russia, the profits should go to the state.

Sobchak tried to reshape Saint Petersburg into this image, but along with the rest of Russia, crime came calling. Corruption with these casinos was high, and the government itself was not making the types of profits from the casinos as expected, but organized crime, and presumably many of the politicians themselves, were. Organized crime became such a huge problem that contracted murders and assassinations became common. This issue gripped all of Russia, with no clear way as to solve it given the power structure and chaos.

Reporters blamed Sobchak and his inner circle for the corruption. Some of the blame even landed on Putin. However, while Putin did get paid a little more than he was as a KGB agent, his property remained modest for his position. Like many things in this story, this could be an attempt to clean Putin’s image in the wake of his later success, and rumors swirl that his public property didn’t exactly match his actual total earnings when factoring in earnings under the table, something we’ll get into more in a bit when discussing how Putin accumulated his wealth and how much he actually has.

Whatever the case, Sobchak did not escape scrutiny the way Putin might have. Tell-all books were published by former allies, and betrayals were common. Many former deputies and aides started running against Sobchak in elections while accusing him of countless improprieties.

Sobchak did not help himself either. He was focused on improving the city in all the wrong ways. He brought Henry Kissinger, Bill Clinton, Ted Turner, and other international figures for political and economic visits, some of which Putin oversaw in one of his many accumulated positions. Some of these visits led to misguided attempts at diverting business to the city like Ted Turner’s Goodwill Games. The games were a mismanaged disaster for Saint Petersburg. However, any opposition to Sobchak from the council was met with undemocratic resistance from Sobchak who would use his control of the city’s tv channel to block rivals from having as much screen time as himself.

In 1996, Putin’s fellow deputy mayor Vladimir Yakovlev ran against Sobchak as mayor. Sobchak had his back against the wall and Putin was allegedly horrified at Yakovlev’s betrayal. In the end, Sobchak and Yakovlev made it to a run-off election which Sobchak lost. Upon his loss, an official investigation into Sobchak caused him to flee Russia. However, Putin’s experience with Sobchak had made them friends and Putin had developed a loyalty for those within Sobchak’s circle and for the man himself. From this, he supposedly developed bitter hatred for those who betrayed Sobchak. Putin’s fierce loyalty and lack of forgiveness for betrayal are something the future president would come to be known for going forward. Another trait Putin picked up in his time working for Sobchak is a distrust of the public, and a growing hatred for the reach of journalism. He saw their attempt to hold officials accountable as something that got in the way of the government’s work and progress…

Putin also embraced Sobchak’s attempts at privatization of markets and companies the Soviet Union once controlled. He was also party to some of Sobchak’s mistakes in dealing with newly privatized assets, as was all of Russia during this time of transition. Whether that was deliberate corruption on his part or growing pains is debated, however, with some who have even been exiled by Putin and little reason to lie about it at this point, claiming that, while Putin was no saint, it was more of the latter growing pains, as we’ll get into shortly when discussing just how wealthy he is these days.

Whatever the case, in all this, he learned the inner workings of the government, albeit on a municipal level. Even then, Sobchak gave him very high responsibilities such as dealing with foreign dignitaries. This was a natural extension of his KGB training and time in East Germany, but it is something he would carry forth with him to the federal level. Putin gained a lot of knowledge under Sobchak. He learned not so much how to gain power, but what to do with it, and the many ways it can be lost..

With Sobchak’s career finished, Putin found himself jobless again. However, his work with Sobchak put him in orbit of Boris Yeltsin’s people. Boris Yeltsin’s Russia was not going well. It suffered a lot of the same issues Saint Petersburg suffered under Sobchak. The rapid transition to a capitalist economy opened the country to rampant corruption and crime, with many politicians seeming not too upset about this given the opportunity for their own advancement in all this.

Yeltsin also dealt with two major issues Sobchak did not: an unpopular war in Chechnya between 1994 to 1996, and ailing health that saw Yeltsin disappear from the public eye on occasion. He was at this point still the Federation’s first president and was constantly worried about a safe transition of power. He also knew Russian history was not kind to former rulers or their families, so picking a successor with a thing for loyalty and able to keep him and his family safe were high on his list of qualifications… On this note, Yeltsin’s Moscow had a thick atmosphere of mistrust by the time Putin fully entered that world.

This brings us to August of 1996 when a member of Yeltsin’s cabinet called Putin to Moscow for an interview. The opportunity fell through, but instead of returning to Saint Petersburg with nothing, Putin found himself working for Pavel Borodin of the Presidential Property Management Directorate. He worked as Borodin’s deputy, and it was more or less his job to purchase Soviet property that now lay outside Russia’s borders. From there in March of 1997 Putin was placed in the position of Main Control Directorate. He was given authority in investigating how government money was being spent, and to end government corruption where he could find it. From his new position, he discovered just how corrupt and damaged the Federation was. He also became respected for doing his job well and returning government control to sectors that had gone rogue due to corruption.

His outsider status, competence, and staying out of the Yeltsin inner circle drama allowed Putin another promotion. He was appointed director of the FSB, the KGB’s Federation successor. This was an attempt by Yeltsin to control the more old-fashioned leaders of the FSB by appointing someone who understood them but was loyal to him. In this position, Putin guided the FSB through some modernizing reforms that reflect some of his later interests such as monitoring the emergent internet. He also worked to corral the old guard, reshape the FSB to Yeltsin’s demands, and even deal with a torrent of scandals dealing with the Kremlin, the FSB, and tensions in Chechnya. Because of all this, Putin was once again rewarded for his diligence. On August 5 of that year, Yeltsin would tell Putin, a man who just a short time before was relatively unknown to the wider public, of his plan to appoint him Prime Minister.

Being Prime Minister was more than a big deal, it was the ticket to presidency. Yeltsin was worried about his own health, and on top of that, he had a habit of firing prime ministers. Putin, the aloof yet competent outsider, showed none of the signs of machinations or as overt visible corruption of the previous prime ministers. Yeltsin wanted a stable figure for whom to leave the country to avoid the repeated fates of Russia’s previous rulers. On this note, he also sought a successor who would guarantee the safety of his family upon leaving power. Putin’s reputation for loyalty preceded itself on that one. He was the perfect candidate.

Putin supposedly did not want to accept the position at first, but he eventually folded to Yeltsin. He was also put in charge of the Security Council in March of 1999, something he would hold on to even after he became president. During this time, the second war in Chechnya started when rebels invaded the neighboring republic of Dagestan. This war thrust Putin into a repeat of the mid nineties. The people feared an unpopular and bloody war. However, in his stint as Prime Minister, he proved to be more effective in leading the war than Yeltsin was before him. As a result of this and his other work, he became popular as a prime minister. His successor firmly in place, at the end of the millennium, Boris Yeltsin resigned as president. This put Putin in the position of acting president, but he would have to run for election after six months which he did, winning as his predecessor had hoped.

From here, Putin held on to power with little difficulty. However, in 2008, after 2 terms as president, he faced a dilemma. The constitution allowed only 2 consecutive terms for any president. To overcome this obstacle, he had his Prime Minister Dmitry Medvedev run for the presidency. Medvedev won and appointed Putin as Prime Minister. In reality, Putin held the real power and was subsequently re-elected in 2012 back to his old position.

As for his presidency, Putin’s outlook changed over the years with a pronounced Conservative turn starting with the ongoing tensions in Chechnya in 2004. Putin also became an ally of the Russian Orthodox Church as a by-product of this turn. As with countless politicians, whether true or not in a given case is often a matter of debate, but his asserted Christianity is often a talking point in his appeal to the people, emphasizing the importance of family and Christian values.

Whatever the case there, Putin is often accused of scheming in his presidency to keep his inner circle in line and himself in power. On this note, it is speculated that he was in a rather good position for this given his rise from the lowest ranks to the highest. Once he reached a state of power as president, he had a good understanding of how Russia worked from the municipal level all the way to the federal level.  He also knew where the bodies were buried, literally and figuratively for people all the way up the chain. Further contributing to his maintaining of power, he saw the way constitutions could be manipulated. Putin believed more in the letter of the law than the spirit of the law, and any constitution in Russia did not have the same semi-scriptural status that, say, the American Constitution has. In the end, Putin’s time with Sobchak showed him how malleable constitutions are.

On his own, Putin developed the idea that stability was more important than freedom, a position he has carried forth increasingly into older age. As previously alluded to, he also has little love for journalists. His curtailing of the media is well known, and it largely stemmed from his time rising through the ranks. He saw media and journalism as an obstruction to the government’s workings and making rapid progress. Either because enterprising rivals would use the media to their advantage, whether what they said was true or not, or journalists would poke their nose into sensitive business that may hinder something ostensibly overall good for the people. Even Putin’s long connections to the oligarchs did not shield some of those who ran media companies that stepped on his toes. Such is the case of the oligarch who owned NTV which, after being critical of Putin, this was given to a more Putin-friendly oligarch in 2001.

Controlling the media with an iron fist is one way to keep in power, but it is not the only one. As such, Putin maintained countless connections he made in his career. Like elsewhere, these connections remained important in Russian politics, but they were leaned on more heavily as social currency. He understood this and developed and maintained numerous such associations, even as he reached the top, continuing to keep a large core of allies loyal to him among those below him. Part of this social currency is loyalty and punishment of betrayal, which Putin took extremely seriously. Loyalty was rewarded, such as helping out Sobchak during his legal troubles heading into 2000. The system of connections is how he keeps the oligarchs in line. As long as they don’t get involved in politics against him and support him, they are more or less free to operate.

What about the infamous assassination attempts the regime is known for? Shootings and poisonings were never something Putin was known for during his time with the KGB. He denied ever “committing crimes” for the agency during his political rise. If anything, he had experience investigating hits and assassinations during his time with the FSB, rather than being the one to order them. That said, it is probable he trained in assassinations at the Red Banner Institute. And it is noted that the assassinations of people like Boris Nemtsov, Boris Berezovsky, and the attempted assassination of Alexei Navalny helped protect Putin’s regime. Of course, whether he was directly involved or simply that people who have an interest in keeping Putin in power just take care of it for him without consulting him is a matter for debate.

Moving on from there, Putin also values the aesthetic of the old Soviet Union over its ideology. He appeals to a nostalgia of Russia’s central place in the Soviet empire, but he is no communist. One of Putin’s famous quotes is “Anyone who doesn’t mourn the passing of the Soviet Union has no heart. Anyone who wants it restored has no brains.” On a domestic level, Putin offers a form of continuity between Soviet and Federal Russia that appeals to many hardliners left over from the Soviet days while also courting those who enjoy the freedoms gained during the Federation, especially Orthodox Christians.

He also appeals to nostalgia for the Russian empires of Peter and Catherine the Great. This plays into the fears of republics like Chechnya breaking away. Such breakaways are feared to trigger a domino effect of independence movements that would weaken Russia, and the pride of the Russian people. The pre-Soviet legacy hangs heavy on Putin. After all, he took part in changing Leningrad back to Saint Petersburg.

He often struggles to keep land that was gained during Imperial Russia such as the Caucus republics. On an international level, his Soviet nostalgia is less assuring for former Eastern Bloc and Soviet Republics. The presence of Russians in many of these countries, and the claims of former Soviet lands have opened these countries to invasions and excursions, of which there were the wars in Georgia and Ukraine. Putin uses the spectre of the Soviet Union and Russia’s past as an empire to fuel the drive forward for a modern Russian identity.

Now, you might note in all of this, we haven’t really explicitly mentioned Putin accumulating wealth as a means for himself to stay in power or protect himself.  This might seem strange given Putin is rumored to be one of, if not the wealthiest person alive today. But is Putin actually anywhere near as wealthy as the rumors say?

Beyond, as mentioned the seemingly rather shady 1990s St. Petersburg $93 million food supply scandal, which, again, at least as far as anyone can tell, did not make Putin himself a single dollar richer, what about after and now?

Once elected, Putin, like his predecessor, began reporting his finances and holdings publicly, including his salary and exact amount in his many bank accounts. He has continued to do so since. The result? Over the years while his salary has changed regularly from year to year, he has made approximately $100K-$190K annually in that span, for example in 2018 reporting an income of $135K. Today between his wife’s and his own accounts, the couple seem to have a little over a half a million in cash in various bank accounts, though why he isn’t investing this is rather curious given his apparent lack of any other investments and almost complete lack of actually needing any cash for his day to day life given the government foots the bill for most everything. Of this, Putin states, “Honestly speaking, I don’t even know what my salary is. They deliver it to me, I take it, put it my bank account and don’t even count it…”

As for his other assets, he also owns a studio sized apartment in Saint Petersburg, a slightly larger apartment in Moscow, owns a small garage, a couple cars, a small plot of land outside of Moscow, and otherwise has various minor assets of no great worth.

Of course, over the years people can’t help but notice that Putin has a collection of watches he wears very publicly whose purchase price combined is around that of his reported entire net worth, ringing in at about $400,000-$700,000 if various reports are to be believed. For reference, the highest valued watch he has been spotted wearing costs around $140,000- a Patek Philippe Perpetual Calendar watch.

On top of that, the clothing he can often be seen wearing is likewise extremely expensive, such as his $6000+ tailored suits from outlets like Kiton and Brioni. Not just expensive suits, in one photo of him working out, Putin can be seen wearing sweatpants that cost over $1,400 a pair, apparently made from silk, cashmere and the tears of impoverished children, along with a similarly priced top.

On top of that, among other mansions, he is long rumored to own an estate known as “Putin’s Palace” near Praskoveevka, widely reported to be worth $1 billion by media outlets. However, this was actually sold in 2011 to one Alexander Ponomarenko, a former associate of Putin’s, for somewhere around $350 million. (Note, the exact amount has not been publicly disclosed, but Ponomarenko has indicated it’s in the ballpark of that widely reported figure.)

Ponomarenko purchased the estate from a group led by businessman Nikolai Shamalov. Ponomarenko claims he decided to buy the company behind the estate project, and thus the mansion, as it was a steal of a deal owing to the project being stalled from lack of funds to complete the estate and the business group wanting to cut their losses on it rather than complete it.

That said, Russian businessman Sergei Kolesnikov, who is exiled from Russia, claims the palace was built specifically for Putin’s use. He claims Putin was able to afford its construction in part thanks to a gift given him by the aforementioned Nikolai Shamalov in the form of 94% of the shares in a company called Lirus Holding. Among other personal knowledge of the development of the palace, Kolesnikov claims Shamalov himself told him this and, to quote him, “I have no reason not to believe (him).”

However, no documents concerning any ownership connected to the project seem to indicate Putin, or any holdings of Putin’s, ever were directly involved with this estate. That said, some contract documents concerning its construction allegedly have the signature of one Vladimir Kozhin, one of Putin’s inner circle of confidants. Of course, this still doesn’t definitively indicate whether Putin actually owned the palace or even was behind its building at all- simply, allegedly someone he is close to was involved in some capacity and later someone else he is close to bought it- a bit of a theme for a lot of these rumors. Though this, perhaps, shouldn’t come as a huge surprise even if nothing shady is going on, given Putin’s widespread connections to most of the powerful and extremely wealthy elite in Russia that comes naturally by his very position in the government.

On this specific one, Putin himself denies he had anything to do with the palace being built. Nevertheless, Putin allegedly frequents the palace and Federal Protective Service guards have been seen at the mansion, along with locals reporting seeing Putin in the area regularly.

Of course, among the extremely wealthy with such mansions, it’s not uncommon at all to allow friends to guest in one’s estates whenever they please, so Putin would not have to actually own the thing to stay there, nor would it be a big ask to do so- more or less par for the course among the exorbitantly wealthy with giant mansions.

That said, on top of all this estate, Putin has been connected to causing to have had built or secretly owning several other mansions, yachts, planes, etc.

Whether he actually owns any of these or, like Putin’s Palace, seemingly is just using them when he pleases, his flashing of extreme wealth in the case of his watches and other such items, along with an awful lot of not implausible allegations of widespread corruption within his government connected to him, has led to the belief that he has boatloads of money secretly stashed away in accounts throughout the world.

Others speculate Putin is simply using the government coffers to finance all these extravagances. For many items, this would not actually be that uncommon for a major world leader, if more excessive than most. For example, the replacement Air Force One planes the U.S. President will have at his disposal have a budget of over $3 billion. The U.S. President also gets a pretty posh mansion (The White House) and vacations spots to go to at their leisure with the tax payer footing the bill for quite a lot of such perks with few batting an eye at these extravagances.

But, of course, the U.S. government isn’t funding $140,000 watches for the President (though bullet proof tailored suits occasionally worn by the president are presumably paid for by the U.S. taxpayer. For more on this incredible thin bullet proof fabric, go see our video: How Many Times Can You Shoot Through a Bulletproof Vest Before It Stops Working?) To attempt to clarify these items, requests have been made to the Russian government asking if, for example, Putin’s watches are actually his or property of the state that he is just wearing, but no answer to this question has been given that we could find.

Whatever the case, and going back to the issue of how he has stayed in power so long, yet others claim Putin is simply enriching many people around him and it is they who are then happy to provide Putin with anything and everything his Judo-master heart can desire.

Yet others claim it is all three- Putin is enriching himself through shady means and using government funds and people he is helping make wealthy to get whatever he wants while he’s in office.

But what does the man himself say about all these rumors of him accumulating insane amounts of wealth? To quote him- “I am the wealthiest man, not just in Europe but in the whole world…”

Case closed, right? He admitted it! Well, in truth, he wasn’t finished talking. He goes on, “I collect emotions. I am wealthy in that the people of Russia have twice entrusted me with the leadership of a great nation such as Russia. I believe that is my greatest wealth.”

Of course, whether he collects emotions or not doesn’t inherently negate the first part of that statement, simply that he considers that a greater wealth than whatever he has possession-wise.

Argue amongst yourselves whether this was Putin cleverly admitting to being the wealthiest person in the world while making it seem like he was saying he wasn’t, and also simultaneously admitting he’s a Lizard Person given a hallmark of these creatures is apparently feeding on human emotions… 😉

For a more direct answer to the question about the rumors of his extreme wealth, he clarifies, “It’s just chitchat, nonsense, nothing to discuss… They picked it out of their noses and smeared it on their pieces of paper.”

The Press and Information Office of the President of the Russian Federation’s also asserts of these rumors, “This information has no substance. As you may know, the declarations of Mr. Putin’s income and property are published annually… We recommend you to use only reliable sources henceforward and not to believe fake news…”

Naturally, nobody seems satisfied with these assertions given his apparent and frequent flashing of wealth far beyond what anyone with his salary should be able to afford.

So what do others who might know a little more say? First, we have political analyst and noted critic of Putin Stanislav Belkovsky who claimed to the Bureau of Investigative Journalism in 2012 that Putin had a net worth of approximately $70 billion, though how he came up with this figure isn’t exactly definitive nor inspiring confidence in his hard knowledge here. In his own words, “The figure of $40 billion emerged in 2007. That figure could now have changed, I believe at the level of $60-70 billion…. Maximum we cannot know. I suspect there are some businesses I know nothing about.”

Mildly more concrete, at least in terms of giving something more specific, he also claims much of this wealth is because of Putin’s alleged 4.5% stake in Gazprom, 37% stake in Surgutneftegas, and allegedly 50% ownership of Gunvor. How he knows this, however, isn’t fully clear. Belkovsky simply states he got this information through sources he has within the companies. It’s also noted that for a time Gunvor was co-owned by a friend of Putin’s, billionaire Gennady Timchenko.

So what do the three companies say? For whatever it’s worth, Corporate Affairs Director of the Swiss-based Gunvor Group, Seth Thomas Pietras, states, “President Putin has never had any interest in, investment in, or involvement with Gunvor Group either directly or indirectly… Mr. Belkovsky’s claims are based on absolutely nothing and are fundamentally ridiculous. And the U.S. government, despite its statement has never sanctioned Gunvor in any capacity, nor has it provided any evidence of its own.”

Moving on to Surgutneftegas, they likewise deny Putin owns any shares.

Gazprom, which is majority owned by the Russian government itself, with the rest of the stock publicly traded, likewise shows no records of Putin owning any shares.

Belkovsky counters these denials by the companies and lack of records stating Putin has a rather elaborate network of off-shore companies and funds that own the shares, which all ultimately mask that he himself actually owns, or at least, controls them.

Moving on to the CEO of Hermitage Capital Management, Bill Browder, he is the one that seems to have started the widespread rumor that Putin’s personal wealth is in excess of $200 billion, stating before a Senate Judiciary Committee

“I believe he is worth $200 billion. The purpose of the Putin regime has been to commit terrible crimes in order to get that money…He keeps his money in the West and all of his money in the West is potentially exposed to asset freezes and confiscation. Therefore, he has a significant and very personal interest in finding a way to get rid of the Magnitsky sanctions.”

On this latter note, one of Browder’s former associates, Russian lawyer Sergei Magnitsky, was investigating corruption within the Russian government and allegedly found evidence of various Russian officials taking part in a near quarter of a billion dollar tax fraud scheme. Magnitsky himself was then arrested for allegedly being the mastermind behind the tax fraud, and died while in jail before his trial. At the partial encouragement of Browder, the U.S. then passed the Magnitsky Act in 2009. In an oversimplified nutshell, this allows the U.S. government to sanction various individuals thought to be human rights offenders, ban them from entering the U.S., and more importantly freeze their assets where the government is able. The bill was essentially meant to allow the government to legally hold somewhat accountable those thought to have been involved in Magnitsky’s death.

As for hard data, however, Browder offers little.

Next up, noted economist Anders Aslund, author of the book Russia’s Crony Capitalism: The Path from Market Economy to Kleptocracy, states, “I would estimate that Putin is worth around $100-160 billion. We can see that Putin and his friends have taken $10-15 billion from Gazprom every year since 2004. That’s just Gazprom. There are large numbers of transactions being made… What’s much more difficult is to see where the money goes. It’s typically Cyprus, Cayman Islands, British Virgin Islands and Willmington, Delaware…”

As to how he came up with these figures, he states, “My assessment is that since Putin’s circle got its looting fully organized around 2006, they have extracted $15-25 billion a year, reaching a total of $195-325 billion, a large share of the Russian private offshore wealth. Presuming that half of this wealth belongs to Putin, his net wealth would amount to $100-160 billion. Naturally, Putin and his cronies cannot enjoy their wealth. It is all about power. If they are not the wealthiest, they fear they will lose power.”

Why he assumes Putin would get half of these alleged amounts instead of some other percentage isn’t fully clear.

On that note, like so many before, nobody seems to be able to actually offer hard evidence that Putin has any money stashed away anywhere not publicly known, which when talking sums of allegedly $200 billion, is a pretty neat trick for someone who has been so highly scrutinized, including by the U.S. Senate, who presumably if they wanted could just ask the CIA or other entities good at collecting such data to look into it. Given, instead, they are asking the likes of Browder, it has been presumed and widely claimed, that the CIA and other such government entities have no definitive intelligence on this either.

From this lack of a paper trail directly linking money or assets to Putin, yet his clearly lavish lifestyle indicating he does indeed have access to an awful lot of money, this has led many to conclude that Putin himself doesn’t actually officially own most or all of the wealth attributed to him, but rather he is leveraging his position and connections to enrich those close to him who, in their gratitude, are then more than happy to provide Putin with any money or items he wants, from access to mansion to yachts to sweatpants that keep his Judo-jubblies ultra comfortable when working out. And, of course, all of this keeps them having a vested interest in Putin staying in power, so it works out for everyone if true.

As alleged evidence for this, we turn to 11.5 million documents from the Panama Mossack Fonseca law firm made public in 2016, dealing in off-shore holdings by over 200,000 entities. While Putin himself is not listed in any of them, the documents do reveal three close associates of Putin’s among those having off-shore holdings partially managed by the law firm, with a combined amount of around $2 billion between the trio.

Despite not owning these assets, there are many claims by various individuals that Putin uses some of these like his “personal bank account”, most notably the holdings of a man claimed by many in the media as Putin’s best friend- famed Russian musician and conductor Sergei Roldugin. Not just a friend, Roldugin is also the godfather to one of Putin’s children and was the man who introduced Putin to Putin’s wife.

As for where Roldugin supposedly got his extreme wealth, beyond his noted music career, starting in the 1990s Roldugin began investing in various oil and other business entities, to great success. Beyond all of this, in 2019, Roldugin also was accused of being involved in a massive multi-billion dollar money laundering scheme in conjunction with Sberbank CIB, which allegedly profited him greatly.

That said, for those using these records as proof of Putin having money elsewhere via his associates, it should be again noted these are the records of well over 200,000 entities throughout the world. And the vast majority who are using the firm are doing so completely legitimately, including actor Jackie Chan who reportedly had six perfectly above board off-shore companies the law firm helped manage various facets of. So that three among Putin’s numerous friends who are exorbitantly wealthy should be included isn’t necessarily proof of anything other than they wanted to have some assets outside of Russia, which isn’t uncommon among the wealthy in Russia. As some formerly close to Putin who have had their assets stripped and forced to flee the country demonstrate, having some off-short holdings is probably a good security blanket of sorts, just in case.

On this note, political scientist professor and author of Putin’s Kleptocracy, Karen Dawisha, stated before her death from lung cancer in 2018, “Why is it that $150 billion left the country last year? Because they believe that their wealth can only be secured in the long term outside their own country.”

Coming back to the question of Putin’s wealth, whether these funds are being held for him or not, this is still not Putin’s money, not just technically, but we’re guessing regardless of the amount of good-will Putin has built up with these various businessmen and women, should he no longer be in power, they might quickly find themselves less than willing to continue to support his lifestyle, if that is what has been happening as is widely believed. And some speculate he might even find himself in a rather unsafe circumstance in that case, giving him even more of a vested interest in staying in power.

For example, one-time billionaire and the man formerly known as “Putin’s banker”, but now exiled from Russia, Sergei Pugachev, says “Everything that belongs to the territory of the Russian Federation Putin considers to be his. Everything – Gazprom, Rosneft, private companies. Any attempt to calculate it won’t succeed. He’s the richest person in the world until he leaves power.”

As for leaving power, he goes on that Putin chose not to leave office after his first term and beyond, not because of a desire for continued power, but rather because he feared for his own safety should he no longer be in that position. Even today, Pugachev claims, “I don’t see any guarantees for him [if he steps down]. Putin doesn’t see them either,” which is why he finds it unlikely that Putin will ever willingly leave office.

Also for whatever it’s worth, Pugachev, despite having billions stripped from himself by the Russian government, being currently in fear for his life, and in exile, states, in his opinion, Putin himself is not evil, nor did Putin originally plan to setup a corrupt government when he took power, simply that, “He surrounded himself with like-minded people whom he didn’t know very well and who had served with him in the KGB. They immediately began enriching themselves….Putin wanted to get rich, too. He was a pragmatic person. We talked about this. He didn’t want to leave office poor.”

As for the Russian government’s position with regards to Pugachev, it is claimed that Pugachev defrauded the government of hundreds of millions of dollars which is why the one-time bosom-buddy of Putin originally had to go on the run.

Pugachev counters, “The state steals something then has to defend its theft. In my case the scale is huge, but in other respects this is a normal contemporary practice in Russia.” This has all left the one-time billionaire with, by his own account, only about $70 million to his name which he kept in off-shore holdings. It must be rough…

In truth, this amount is unfortunate for him because Pugachev allegedly was offered a deal from a Russian official that if he paid $300 million to certain entities, his legal issues in Russia would be made to be resolved to his benefit and he could return to Russia.

Further siding in the camp that Putin doesn’t have hundreds of billions stashed away he officially owns, the aforementioned Karen Dawisha, who perhaps gives some of the best account and most concrete details of the alleged corruption within the Russian government in her Putin’s Kleptocracy book, states that Putin’s real wealth comes from his position. “He takes what he wants. When you are the president of Russia you don’t need a written contract. You are the law.”

Again backing up this position, financial investigator L. Burke Files, states, “Putin controls wealth through proxies.” He then makes up examples to illustrate,  “Sergey owes his fortune to Putin, so when Putin asks Sergey a favor, the favor must be honored. A luxury cruise, use of a private dacha, expensive consumer goods, etc….Ivan owns a shipping company and owes his wealth to Putin, so when Putin requests a favor, Ivan— like Sergey—honors the request.”

So, again, is Putin actually enriching himself in all of this? While, as Gaddafi demonstrated, it is possible to squirrel away $200 billion secretly, given the level of scrutiny thrown Putin’s way by governments the world over looking into the matter, with nobody seemingly able to come up with any hard evidence, most think he probably doesn’t have anywhere close to such an absorbent amount that is actually his, though it is generally accepted that he probably does have at least some significant amount stashed away somewhere.

For most, however, the explanation for his rather luxurious lifestyle is more reasonably explained by the simple fact that he can pretty much have the Russian government foot the bill for anything he wants without much uproar or oversight. And it does seem like an awful lot of his compatriots have gotten exceedingly wealthy during his tenure at least in part thanks to their connections with Putin and him leveraging his position to help facilitate their enrichment. Thus, if that is what has happened, it’s reasonable enough that many of those are happy to scratch his back whenever he feels the need for a new yacht or the like, without Putin needing to have anything in his name to avoid the backlash that would result should he be discovered to have such. This further also all ensures that many wealthy and powerful people have a vested interest in keeping Putin in power so long as the spice continues to flow, so to speak.

Thus, going back to the question of using his wealth to stay in power, it is alleged that he doesn’t exactly use any of his own money to make this happen, but it is speculated does use money via his influence on a pretty broad scale to help ensure he does stay in power as previously described. Make everyone loyal to him rich, and they will ensure he stays in power.

Of course, as to the idea that he really does have $200 billion simply being held in other people’s names, as alluded to, we’re guessing even if many of these individuals are actually holding money for Putin, that should he step down from power and ask for that money be given to him en masse, or even remain in power and ask for a combined sum of $200 billion, that shortly thereafter memorials and monuments would be being built for the former Russian leader who sadly died in his sleep of natural causes…

But for now, the man himself remains in power via a variety of means that really aren’t that different from many a leader the world over today and throughout history.

In the end, Putin is a complicated man who rose from almost nothing to heights of power few in history have achieved. Like him or hate him, he has been and continues to be one of the most important shapers of the 21st century, and his presence can be felt more now than ever with little end in sight. Although, unless he really is one of the Lizard People, he’s probably not immortal, so at some point in the next couple decades he will shuffle off this mortal coil and, perhaps then, like Gaddafi, more definitive data will be revealed about his wealth and conduct in his time in office. Or perhaps sooner if he eventually loses the protection of his position and the vultures swoop in to pick clean his political corpse.

Expand for References

Eltchaninoff, Michel. Inside the Mind of Vladimir Putin. London: Hurst & Company, 2015.

Myers, Steven Lee. The New Tzar: The Rise and Reign of Vladimir Putin. New York: Alfred A. Knopf, 2015.

Share the Knowledge! FacebooktwitterredditpinteresttumblrmailFacebooktwitterredditpinteresttumblrmail
Print Friendly, PDF & Email
Enjoy this article? Join over 50,000 Subscribers getting our FREE Daily Knowledge and Weekly Wrap newsletters:

Subscribe Me To:  |