Putin, Prigozhin and the management principle: “work with the hand you are dealt”

There has been a lot of talk these past couple of days about the revelation that on 29 June, less than a week after the Wagner Group’s armed mutiny, Vladimir Putin received Yevgeny Prigozhin and 35 of his senior military commanders in the Kremlin for three hours of talks.

How can this be? What is the sense of it? Why would Putin talk to the man he had denounced a few days before as a traitor?

Anyone posing these questions has not been paying much attention to Vladimir Putin’s “people management” record these past twenty-three years.  It all follows the principle that you find practiced in many large institutions, both private and public: work with the hand you have been dealt, considering that most everyone under you is good for something. This is the operating principle I saw around me during my four years working for United Parcel Service. It surely is the ruling principle in the United States armed forces.

When he came to power in 2000, Putin was dealt a large contingent of rapacious oligarchs whom he tamed, especially by breaking the back of Mikhail Khodorkovsky’s presumptuous political ambitions and sending the troublemaker to a long stay behind bars. Once tamed, the robber barons stayed clear of politics and spent their time developing the broad swathes of the economy that they had come to control, even if they skimmed off unseemly profits for themselves.

Back in the year 2000, Putin also inherited Liberal functionaries of doubtful loyalty to himself and to the country. Geniuses in organizational matters or financial management, they often had thieving proclivities. Anatoly Chubais comes to mind. He had run Boris Yeltsin’s reelection campaign in 1996 which achieved victory by all means fair and foul. He went on to head several state enterprises, in particular, in charge of nano technologies, from which he stole with both hands. But the same disloyalty could be said of Alexander Kudrin, who long served as Russia’s Finance Minister and was named the best finance minister over a succession of years by his West European peers.  Kudrin was also the single most visible political leader who spoke at the Bolotnoye anti-Kremlin street demonstrations in 2011 which brought Putin-hater Alexei Navalny to prominence.

Both Chubais and Kudrin are now in self-imposed exile abroad, together with many smaller ranking Liberals who served in the Russian government or state enterprises until the start of the Special Military Operation.  And a charge of doubtful loyalty could even be brought against German Gref, who has in recent years overseen the total transformation of Russia’s largest bank, Sber, into a customer oriented, highly efficient and technologically advanced institution.  Gref remains at his post, though he has lost some feathers in terms of air time on State television. In his decision to serve on, he may be paired with the Central Bank Governor, Elvira Nabiullina, who also is a strong defender of the Liberal, market driven economy at a time when Russia has had to take further central control to put the country on a war footing.

None of these very capable if equivocal political and economic actors during the Putin years has been squeezed dry. They were allowed to spread dissension and/or to steal in small doses while they contributed a lot of “juice” to the cocktail of Russia’s economic success during the Putin years.

Then there are many prominent members of the Russian political Establishment who were deeply flawed in one way or another but were retained and, as justified, promoted to ever greater responsibilities.  Here, speaker of the Federation Council, the upper chamber of Russia’s bicameral legislature, Valentina Matviyenko is a prime example.  You see a lot of her on Russian television as she  performs her public functions of all kinds. Yesterday she was in Beijing where she was received for talks by Chinese President Xi Jinping. In official ranking, Matviyenko is the second most important political figure in the Russian state hierarchy after Putin.

But where did Matviyenko come from?

When I was living and working in St Petersburg in 1994 and later, we saw a lot of Matviyenko. She was a known drunkard who occasionally appeared in public ‘under the influence’ and her son was widely known for his corrupt practices making a fortune in speculative real estate deals that were enabled by his mother’s position. I recall seeing denunciations of mother and son on park benches in Petersburg.

After her candidacy for reelection as mayor of the city was withdrawn and she was replaced by a relatively unknown candidate favored by the Kremlin, a certain Yakovlev, she returned to Moscow. There she sobered up and was given a new chance to succeed, which she has done with élan.

                                                                                   *****

A couple of weeks ago, in my first commentary on the Wagner Group rebellion, I remarked that over the centuries Russian history has had a number of rebellions that were more similar to the Wagner affair than the February 1917 “revolution” that Vladimir Putin evoked when he first spoke on television following restoration of order.  Among these previous episodes was the treason committed in 1708-09 by the hetman of the Zaporozhie Cossacks, Ivan Mazepa, who had been the Peter the Great’s man on the ground in what is now part of Ukraine, but who turned against the tsar and joined the forces of the Swedish King Charles XII who was then engaged in a life or death struggle with Russia.  Like Prigozhin, Mazepa was one of the wealthiest people in the land with extensive land holdings, and like Prigozhin he rebelled when he understood that the new military reforms being introduced by Peter would strip him of much of his power as a freebooter. Mazepa was a rare instance when Peter the Great’s trust in his subordinates was misplaced.  Otherwise, over the course of his reign, Peter raised to high and responsible positions many ambitious men of very modest backgrounds. Some were scoundrels who abused their power, others less so, but nearly all contributed their superior intelligence and talents to the cause of Russia’s greatness.   

.                                                                                    *****

We have heard very little about what Vladimir Putin may have discussed with the leaders of the Wagner Group at their meeting in the Kremlin. According to his press secretary Peskov, these commanders all swore allegiance to the State and to Putin and he laid down ground rules for their returning to active fighting in the Special Military Operation.

We may expect to learn more in the weeks to come.

©Gilbert Doctorow, 2023