Russian Roulette: Russia's Economy in Putin's Era — Edition Insights

The Security Apparatus as Economic Actor

The Kalmanovich case is not an isolated anecdote but a lens into Vaknin's broader argument: that former and active intelligence officers leveraged state positions for personal wealth. The text describes Kalmanovich's flamboyant lifestyle in Africa—'an entourage of dozens of African chieftains and their mistresses'—and his collaboration with IPE, a London firm allegedly tied to Israeli defense figures. Vaknin emphasizes that such activities were not exceptional but systemic, with the security apparatus functioning as both a political tool and an economic player. The chapter suggests that Putin's background in the KGB (FSB) allowed this symbiosis to continue, though the excerpts do not provide direct evidence of Putin's personal involvement. Instead, the focus remains on institutional patterns visible in the 1990s.

Financial Services and the FIMACO Scandal

The financial services chapter centers on the FIMACO affair, a complex scheme involving the Central Bank of Russia, offshore entities, and IMF funds. Vaknin presents specific figures: Central Bank chairman Dubinin earned $240,000 in 1997 when the average Russian salary was under $2,000, and Alan Greenspan earned half that. The text details how FIMACO, registered in Jersey, managed billions through Eurobank, with management fees alone yielding $3.5 million annually. The IMF's reliance on PricewaterhouseCoopers reports is questioned, as the reports were later withdrawn from the IMF website at PwC's request. Vaknin notes that the PwC disclaimer stated they performed no verification work, undermining the Fund's exoneration. The episode illustrates a recurring tension between official narratives and documented discrepancies.

The IMF's Role and the Question of Accountability

Vaknin extends the FIMACO case to critique the IMF's handling of the Russian crisis. He reports that Michel Camdessus, then IMF Managing Director, wrote an indignant letter to Le Monde in 1999 defending the Fund's actions, yet the text implies that the scandal contributed to his departure. The US Congress sent a delegation led by James Leach to investigate misappropriation of IMF funds, accompanied by the FBI. Vaknin's evidence is drawn from public records and interviews, such as former Finance Minister Boris Fedorov's statement to Radio Free Europe that central bank schemes allowed friends to earn 'handsome profits' through commissions. The author does not claim to have uncovered new facts but assembles existing sources to highlight a pattern of unaccounted funds and institutional resistance to transparency.

Readers should approach this book as a collection of investigative essays rather than a unified narrative. Vaknin's strength lies in assembling concrete data—salaries, fees, dates, and quoted statements—to support his arguments. The excerpts do not cover later developments in Putin's era, so the title's promise of a comprehensive analysis may be partially fulfilled. Pay attention to the footnotes and sources cited; the author's credibility rests on their verifiability. The tone is polemical but grounded in specific cases, making it a useful resource for understanding the economic underpinnings of Russia's post-Soviet transformation.

Reading about the FIMACO scandal, I remembered sitting with my grandfather as he explained how financial leaks can erode trust faster than any military defeat. That same quiet dread returned when I later picked up The Problem of Foreign Policy A Consideration of Present Dangers and the Best Methods for Meeting Them — Context and Discussion—both books circle the same uncomfortable truth about unseen power moving behind closed doors.