PUTIN’S REGIME STARTS TO CRACK

A couple of days back, Russian Transport Minister Roman Starovoit was fired by Vladimir Putin. The reason was simple enough and we’ll come to that in a moment. Within a day he’d committed suicide.

Starovoit was previously the Governor of Kursk Oblast. His deputy was arrested some time back for conspiracy to defraud the state – he had helped himself to the money for funding the construction of defensive lines and obstacles to prevent a Ukrainian incursion. When one happened the fraud was exposed almost immediately. Starovoit was believed to be largely complicit in the fraud, but had been promoted to Minister of Transport and was largely protected, his deputy getting the blame. With his firing that protection lapsed and I suspect it was made clear to him that investigations would follow and disgrace would fall upon him and his family. He took a short cut.

Putin is said to have had quite a soft spot for Starovoit, seeing him as one of the more honest (in Russian terms) and reliably loyal Governors and hence his promotion to the Ministry, of what is a major department inside Russia.

Russia runs on three key transport elements. People who want to get anywhere fly, except on the St.Petersburg-Moscow train which is one major exception. Heavy goods move by rail – and Russia has a complex rail network often tied to industrial parks and major cities, oil fields and oil refineries. Its primary link to Vladivostok is rail on the infamous Trans-Siberian route. Almost all other goods are trucked on Russia’s extensive road network.

Ukraine has been waging a major drone war against Russia and vice versa. While Russia is terrorizing and attacking civilian targets, Ukraine is hitting militarily relevant ones, ranging from war equipment factories and sub components to the chemical and base material operations producing gunpowder and ball bearings, telemetry aerials and optronics. Add to that the strikes of operation Spiderweb, the destruction of railway bridges, general rail sabotage which has reached as far as the Pacific, ammo depot strikes, drone factories, key telecoms points, and the list goes on. Don’t forget the oil infrastructure attacks that were so devastating in the past.

The drone attacks that have entered the Moscow area are especially upsetting for the Kremlin and the denizens of Moscow. Moscow’s major airports, Sheremetyovo, Domedodovo and Vnukovo (there are also four others, one of which is largely to service Government transport), have been repeatedly closed down, with thousands of flights canceled, delayed or diverted. These in turn have affected regional airports, cargo flights and have had a huge knock-on effect. No sooner do things get back to normal and the Ukrainians strike again.

Russia’s aviation sector is already in dire straits. The only reason there hasn’t been a major disaster is the solidity and reliability of Airbus and Boeing aircraft, though fleets are slowly shrinking as parts are continually cannibalized.

The Minister of Transport could do very little about any of this. However the FSB and the military are at loggerheads over who is responsible – the military blaming the FSB for failing to stop the multiple rail line attacks and disruptions from what must be domestic partisans working with Ukraine. The FSB blaming the military for failing to defend Russian skies from what is an ever increasing volume of Ukrainian drones – over 120 the other night – reaching deeper and deeper into Russian territory pretty much at will.

Putin understood he needed a scapegoat and Starovoit was it, no doubt doubly fingered by the FSB for his part in the Kursk fraud. Publicly the axe fell on Starovoit and this was supposed to placate an increasingly worried public that something was being done, when in reality there’s really not a lot that can be done about any of it.

In the past 48 hours more military airfields were hit – these are very often near mid-sized towns so there’s no hiding it and everyone knows who is responsible.

The airports around Moscow closed again, only this time a particularly agitated crowd at Sheremeytovo and another at St Petersburg started posting a litany of videos on Telegram – all of which coincided with the news of Starovoit killing himself, leading to a wild ride of speculation and dark Russian humour. Add to that new video of the explosions of arms depots – one in Donetsk looked to have achieved a new record for explosion size – the new attacks on airfields and a feeding frenzy of disgruntled video raced across the Russian internet.

So the authorities panicked. They did something they have so far not done – effectively shutting down mobile internet across the country – you could only properly access it from your home wi-fi hub. Telegram and WhatsApp were effectively shut down. Not just in Moscow – but nationwide, even on Sakhalin Island in the Far East where the excuse was an anti-drone test. Russians do not have many ways to freely vent – Telegram is it even though it is monitored by the GRU and the FSB. They use it to gain insight into the public mood and reaction. Clearly this was a moment that sent them into a scramble.

As you can see from the above, Ukraine’s ever growing campaign of drone strikes that are both daring and clearly visible as black palls of smoke rise above Russian towns and cities, as people are laid off when there factory is shut down, is starting to have its impact on civilian life. A life that no longer feels as secure as it did – a life that Putin’s pact with the people was all about keeping secure. The people stay silent while Putin keeps them safe. He’s failing to do that economically and physically. Deflecting the blame on to his now dead transport minister has clearly failed and Putin is facing taking the blame – and that is something he loathes to do, always trying to stand above it and blame others down the line. And for the first time a confluence of events has caused the regime to wobble – all initiated by a Ukrainian drone strike – and Russians have seen through it.

The cracks however are far deeper and again demonstrated by a recent incident, that is perhaps more telling about the state of Putin’s real support, the economy and the fragility of existence in his dictatorship, as he becomes progressively more paranoid about who might be out to get him.

Konstantin Strukov, head of gold giant Yuzhuralzoloto, Russia’s third largest gold mining company was arrested while sat in his private jet – ironically delayed by over two hours because of Ukrainian drone strikes causing airport mayhem.

My contact thinks he had been tipped off that he was going to be arrested and would have been out of Russian air space and gone. The Kremlin would have been fine with that for services rendered over the years. What they wanted was his company and as much of his money as they could lay their hands on – if he ended up in Switzerland with his daughter and a comfortable ‘retirement’ they didn’t mind too much.

Strukov was an ardent Putin supporter, he paid large amounts of money to Putin’s United Russia party to get him elected, he was even Deputy Chairman of the Chelyabinsk Regional Legislative Assembly on behalf of United Russia.

The problem seems to have come when the government asked him to give them the company for a far smaller consideration than it was worth. They wanted to nationalize it and use it to finance the depleting reserves of the state coffers, now verging on bankruptcy. Like many proud men he decided to fight back thinking his position and his donations were enough to have created protection for him. What he didn’t see was that from Putin’s perspective, that loyalty meant he should surrender willingly.

Strukov by some accounts appealed to other billionaires to help him – and nobody did, fearing they’ll be next on the list. He realized the game was up and was given just enough time to flee – the FSB and state prosecutors from the tax office raided his company HQ. Then found he was on his plane. He nearly made it.

This is not the first time Russian oligarchs have been rounded up and faked tax charges used to get rid of them and their companies. It’s been a long standing tactic of the Putin regime. The problem is the process is accelerating. As the state coffers run dry and legal taxation fails to meet the demand of the war, which is sucking Russia dry in so many ways, the oligarchs are feeling especially threatened. And from two directions. Some of the latest companies are so deeply in debt they may never survive an economic collapse. The oil majors are losing money hand over fist, almost every business is, inflation and economic mismanagement, plus the added burden of endemic corruption, is stripping them of their wealth. If it isn’t that its taxes, forced currency swaps and a dozen other government tricks to extort their money. And now it’s nationalization where they are forced into, what for them is relative penury and made to lose everything they have built over decades. They have a lot to hate in Putin; sooner or later the disquiet will boil over.

The state apparatus – especially the FSB, thinks Putin is being too weak. The recent bombing just days ago of an FSB general, Alexei Komkov in Moscow, was a deep shock. He was head of the Fifth Directorate. The ‘Fifth Service’ or the Service for Operational Information and International Relations, was responsible for the FSB’s planning and advice to the government prior to the invasion of Ukraine. It’s the main directorate for operations inside Ukraine, as well as global espionage, information, influence and a special focus on former Soviet states. When the FSB thinks the president is being weak, that’s a problem. When outsiders know about it, that’s a serious problem.

Yet the one element that hasn’t yet broken ranks, largely because it’s gaining so much from the war, is the army. What they will not want is the economy to derail – because if that goes so does their gravy train and their ability to maintain the army they finally think they should always have had, despite the fact its a mess.

And the security services? Omron remains as a praetorian guard, all 40,000 of them that defend the Kremlin administration. But even that could be bought off if things were so inclined. The security services in the regions, especially the police are near destitute and more bothered about political crimes and censorship than dealing with real crime or criminals – a fact not lost on your average Russian.

Putin is not in a good place right now. He has rats wanting to leave the sinking ship, a blame game that’s gone hideously wrong, ministers complaining about the economy and recession in public, again a ploy that seems to have been about isolating Putin from blame, but which seems to have backfired. His pact with the people – security for acquiescence – has been broken. The war is not going well, Ukrainian drones are making themselves felt in ways nobody ever imagined on the battlefield and on the home front. Ukraine is increasingly using interceptor drones to reduce the nightly onslaught and in a few months time I suspect the scale of those attacks will be increasingly less damaging.

There are cracks in the regime. From the FSB to the oligarchs, the people to the government ministries themselves. mistakes are being made, Putin is making them. Sooner or later one or more factions will want him gone. My estimate is sooner. It will be a good day.

The Analyst

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