The Octopus State * Putin’s FSB, Oligarchs and the War in Ukraine

We need to splash cold water on our collective faces in the West.  The invasion of Ukraine is indeed marginally related to Putin’s fear of western, NATO expansion, and it is justified through propaganda by allusions to Russian mystical destiny and the Russian Orthodox Church with its roots in Ukraine.

It may even have been launched with one eye on the expansionist model of China’s New Silk Road, and of course, the demographics of Eurasia which may see Christian Russia overwhelmed by a Muslim world. I have discussed these elsewhere as likely factors in Putin’s war in Ukraine.

But what really drives Putin’s War is the battle to extend and maintain the tentacles of the Russian octopus state into and throughout Ukraine.  The riches of Ukraine are part of the riches of Russia being siphoned off by the tentacles of Putin’s vast FSB (Federal Security Service) organizations teamed with organized crime and a vast array of fabricated “private” companies.

As such, the invasion of Ukraine is like Putin’s invasion of Chechnya (and Crimea) – the stakes are the immense national resources and financial opportunities (including arms sales) and the determination to cement Putin/FSB control over them.  This is an extension of the project begun in Russia itself with the collapse of the Soviet Union, facilitated by Yeltsin and brought to fruition by his protege and designated successor Vladimir Putin.

Russia today under Putin is not a failed state, nor a democratising western state-in-progress. To call it a failed state would be like calling a cell invaded by a virus a “failed cell.” We cannot even call it a captured state because in Russia “big business” by itself has almost no power; it does not exist apart from the FSB/Putin matrix into which it must be plugged to survive.

Close study of Putin’s Russia, such as we have in the ground-breaking Putin’s Kleptocracy by Karen Dawisha, reveals the disturbing fact that Russia is really sui generis, hardly a state at all in terms of structure and functions. Just as the totalitarian state was said to be designed like an onion, we can describe Putin’s Russia as an octopus state.

Russia is actually held together as a political entity almost entirely by Putin’s refashioned FSB (the old KGB and NKVD) – the secret service and interior police units which endure from Tsarist times. These penetrate the fabric of Russian society at every level like the tentacles of a giant octopus.

It is a mistake to point to criminal investigations of top FSB figures or other major figures as evidence of an independent political or social structure; these investigations are launched only at the signal of Putin at his chosen targets and used only to intimidate and control political or economic enemies.

The organizational structures of the FSB with Putin at its head give a skeletal form, one might say, to the Russian polity. But these structures are not a system of checks and balances nor even administrative channels designed, like bureaucracies elsewhere, to deliver state services to the Russian people.  Instead, they exist to control the Russian citizenry and facades of government while extracting the wealth of Russia’s natural resources and productivity.

All this wealth is siphoned off through a variety of economic ruses into the coffers of the same FSB cronies acting in close, longstanding “business” partnership with Putin who functions as the brain of the octupus.

Often such organs of state as do exist, such as the legal system or regional governors, have been fabricated specifically by Putin to use as leverage against political and economic targets who resist the grasp of the tentacles of this unique, octopus state.

The FSB and Putin are also in longstanding partnerships with Russian and other organized crime families, extending Russia’s wealth-extracting tentacles, rather than genuine state interests and influence, into European countries, the Middle East, former Soviet Union republics, and of course, Ukraine.

In this context, it is necessary for the west to see in Putin’s War in Ukraine not merely the superficial issues of one state challenging the sovereignty of another.  At stake here for Putin – and for his FSB henchmen whose structures permeate Russia  –  is something else.  We should be invoking the old adage “Follow the money!”

So-called “Red Square” in London’s upscale Belgravia neighbourhood, home to many of Russia’s oligarchs

Putin is famous inside and outside Russia for taming the power of the oligarchs.  They got fabulously rich through buying “auctioned off” state resources largely during the Yeltsin era, in effect “privatising” the weath of a nation in the hands of a very few.

With Putin’s ascent this was not reversed; the wealth of Russia – and all its emerging private enterprise productivity – did not become the basis for a wealthy state with democratic structures.  The wealth of the oligarchs was kept by cooperating oligarches and/or thus transferred into the all-pervasive hands or tentacles of the one state structure to survive – the FSB, or intelligence services – all under the emerging dictatorship of Vladimir Putin.

Putin essentially offered the oligarchs deals they could not, or should not, refuse:  a partnership with him at the centre of an economic “state family” with tight political control delivered by the FSB.  The alternates were and are  imprisonment, exile or death, all orchestrated by Putin’s absolutist control over what should have become modern state structures but did not.

Today, Putin retains partnerships with many “old” oligarchs who are within his inner circle, and he has the devoted services of many “new” who owe their wealth to him. Many have interpenetrated European and other western banking, real estate and financial centers.

The convoluted financial links among leading figures within the Russian FSB, oligarchs, “private (state-created) companies”, and mafia are designed to be opaque.  Their extension into areas such as Chechnya, Crimea, and Ukraine is a given.

President Zelenskyy of Ukraine 2022

The invasion of Ukraine is therefore almost certainly a turf war waged by Putin against oligarchs within Ukraine who may have had deep ties to him and his unique system of wealth extraction.  Ukraine President Zelenskyy has vowed to eliminate the oligarchs of Ukraine and to the extent that some of these are Putin’s henchmen, vast quantities of wealth may be lost to the Russian “system.”

Similar such machinations and realignments occurred in Russia while Putin tightened his grip.  Corruption is a major problem in Ukraine, and very similar in nature to that of Russia.  Like Putin, will Zelenskyy find ways not to eliminate the oligarchs of Ukraine but to partner with them and absorb into an elite circle all the private and public economic spaces of Ukraine.  Will it just be a deal to share the plunder?

Either way, Putin’s own “machine” of exploitation would be jeopardized.  He and his cronies – including both Ukrainian and Russian mafia – have major holdings and operations ongoing throughout Ukraine.  We are witnessing – under cover of protestations about Nazism and NATO encirclement – a major turf war between Putin’s octopus state and some combination of threats to its multi-tentacled reach.

© Carol Leigh Rice 2022

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