Putin’s People

We may never know if Putin took his hunt further afield into the West. We cannot trust the authorised accounts of his KGB contemporaries. He himself has insisted he’d never done so, while his colleagues liked to tell instead of the long, lazy ‘tourist’ trips they took to neighbouring East German towns. But one of Putin’s chief tasks was gathering information on NATO, the ‘main opponent’,[27] and Dresden was an important outpost for recruiting in Munich and in Baden-Württemberg five hundred kilometres away, both home to US military personnel and NATO troops.[28] Many years later a Western banker told me the story of his aunt, a Russian princess, Tatiana von Metternich, who’d married into the German aristocracy and lived in a castle, near Wiesbaden, West Germany, where the US Army had its main base. She’d told her nephew how impressed she’d been by a young KGB officer, Vladimir Putin, who had visited her in her home and taken confession religiously, despite his background in the KGB.[29]

While Putin operated under the radar, in the background, the ground was beginning to shift beneath his feet. Parts of the KGB leadership were becoming ever more cognisant of the Soviet Union’s flagging capacity in the struggle against the West, and had quietly begun preparing for a different phase. Soviet coffers were running on empty, and in the battle to procure Western technology, despite the extensive efforts of the KGB and the Stasi, the eastern bloc was always on the back foot, always playing catch-up and lagging ever further behind the technology of the West. In an era when US president Ronald Reagan had announced a new initiative to build the so-called ‘Star Wars’ system that would defend the United States from nuclear-missile attack, the Soviet bloc ploughed ever greater efforts into securing Western technology, only to become ever more aware of how behind they were.

Since the early eighties, a few progressive members of the KGB had been working on a transformation of sorts. Ensconced in the Institute for World Economy in Moscow, they began working on reforms that could introduce some elements of the market to the Soviet economy in order to create competition, yet retain overall control. When Mikhail Gorbachev took office as General Secretary of the Communist Party in 1985, these ideas were given impetus. Gorbachev launched the political and economic reforms of glasnost and perestroika, which aimed for a gradual loosening of control over the country’s political and economic system. Throughout the eastern bloc, the mood of protest was rising against the repression of Communist rulers, and Gorbachev pressed his colleagues across the Warsaw Pact to pursue similar reforms as the only way to survive and stay ahead of the tide of resentment and dissent. Aware that a collapse could nevertheless be on its way, a small handful of KGB progressives began preparing for a fall.

As if seeing the writing on the wall, in 1986 Markus Wolf, the Stasi’s venerated Spymaster, resigned, ending his reign over East Germany’s feared foreign-intelligence unit, the Hauptverwaltung Aufklärung, where for more than thirty years he’d ruthlessly run operations for the Stasi, known for his ability to relentlessly exploit human weaknesses to blackmail and extort agents into working for him. Under his watch the HVA had penetrated deep into the West German government, and had turned numerous agents thought to be working for the CIA. But now he’d somehow suddenly dropped all that.

Officially, he was helping his brother Konrad write his memoirs of their childhood in Moscow. But behind the scenes he too was preparing for change. He began working closely with the progressive perestroika faction in the KGB, holding secret meetings in his palatial Berlin flat to discuss a gradual liberalisation of the political system.[30] The plans they spoke of were similar to the glasnost reforms Gorbachev had launched in Moscow, where informal political movements were gradually being allowed to emerge and media constraints were being relaxed. But though the talk was of democracy and reform, the plan was always for the security services to remain in control behind the scenes. Later it turned out that Wolf had secretly remained on the Stasi payroll throughout.[31]

Ever more aware of the risks of Communist collapse, in the mid-eighties the KGB quietly launched Operation Luch, to prepare for a potential regime change ahead. Wolf was kept fully aware of it, but his successor as head of the Stasi foreign-intelligence arm was not.[32] In August 1988 the KGB sent a top official, Boris Laptev, to the imposing Soviet embassy in East Berlin to oversee it.[33] Officially, Laptev’s mission was to create a group of operatives who would work secretly in parallel with the official KGB residency to penetrate East German opposition groups. ‘We had to collect information on the opposition movement and put the brakes on any developments, and prevent any moves towards German reunification,’ he later said.[34] But in fact, as the anti-Communist protests grew and the futility of such efforts became ever clearer, his mission became almost the opposite of that. The group instead began to focus on creating a new agent network that would reach deep into the second and third tier of political circles in the GDR. They were looking for agents who could continue to work undercover for the Soviets even in a reunified Germany, untainted by any leadership role before the collapse.[35]

The signs are that Putin was enlisted to play a part in this process. In those days he served as Party secretary,[36] a position that would have put him in frequent contact with Dresden’s SED chief Hans Modrow. The KGB appear to have hoped that they could cultivate Modrow as a potential successor to the long-serving East German leader Erich Honecker, apparently even believing he could lead the country through modest perestroika-like reforms.[37] Vladimir Kryuchkov, the KGB foreign-intelligence chief, paid a special visit to Modrow in Dresden in 1986.[38]

But Honecker had refused to step down until the bitter end, forcing the KGB to dig deeper to recruit agents who would continue to act for them after the fall of the eastern bloc. Kryuchkov would always insist that he never met Putin then, and to deny that Putin played any part in Operation Luch, as did Markus Wolf.[39] But the West German equivalent of MI5, the Bundesamt für Verfassungsschutz, believed the reverse. They later questioned Horst Jehmlich for hours on what Putin had been up to then. Jehmlich suspected that Putin had betrayed him: ‘They tried to recruit people from the second and third tier of our organisation. They went into all organs of power, but they didn’t contact any of the leaders or the generals. They did it all behind our backs.’[40]

Other parts of the Stasi also began secretly preparing. In 1986, Stasi chief Erich Mielke signed off on plans for a squad of elite officers, the Offiziere im besonderen Einsatz, to remain in power in case the rule of the SED suddenly came to an end.[41] The most important phase of securing the Stasi’s future began when they started moving cash via their smuggling networks through a web of firms into the West, in order to create secret cash stores to enable them to maintain operations after the fall. A senior German official estimated that billions of West German marks were siphoned out of East Germany into a string of front companies from 1986.[42]

Putin’s Dresden was a central hub for these preparations. Herbert Kohler, the head of the Dresden HVA, was closely involved in the creation of some of these front companies – so-called ‘operative firms’ – that were to hide their connections with the Stasi and store ‘black cash’ to allow Stasi networks to survive following a collapse.[43] Kohler worked closely with an Austrian businessman named Martin Schlaff, who’d been recruited in the early eighties by the Stasi. Schlaff was tasked with smuggling embargoed components for the construction of a hard-disc factory in Thüringen, near Dresden. Between the end of 1986 and the end of 1988 his firms received more than 130 million marks from the East German government for the top-secret project, which was one of the most expensive ever run by the Stasi. But the plant was never finished. Many of the components never arrived,[44] while hundreds of millions of marks intended for the plant, and from other illicit deals, disappeared into Schlaff front companies in Liechtenstein, Switzerland and Singapore.[45]

These financial transfers took place at the time Putin was serving as the main liaison officer between the KGB and the Stasi in Dresden, in particular with Kohler’s HVA.[46] It’s not clear whether he played any role in them. But many years later, Schlaff’s connections with Putin became clear when the Austrian businessman re-emerged in a network of companies in Europe that were central cogs in the influence operations of the Putin regime.[47] Back in the 1980s Schlaff had travelled at least once to Moscow for talks with Soviet foreign-trade officials.[48]

Most of what Putin did during the Dresden years remains shrouded in mystery, in part because the KGB proved much more effective than the Stasi at destroying and transferring documents before the collapse. ‘With the Russians, we have problems,’ said Sven Scharl, a researcher at the Stasi archives in Dresden.[49] ‘They destroyed almost everything.’ Only fragments remain in the files retrieved from the Stasi of Putin’s activities there. His file is thin, and well-thumbed. There is the order of Stasi chief Erich Mielke of February 8 1988, listing Major Vladimir Vladimirovich Putin as receiving a Bronze Medal of Merit of the National People’s Army. There are the letters from the Dresden Stasi chief Horst Böhm wishing Comrade Putin a happy birthday. There is the seating plan for a dinner celebrating the seventy-first anniversary of the Cheka, the original name for the Soviet secret police, on January 24 1989. There’s the photograph marking the visit of more than forty Stasi, KGB and military officers to the First Guards Tank Army Museum. (Putin peeps out, almost indistinguishable among the grey mass of men.) Then there are the photographs, uncovered only recently, of a loutish and bored-looking Putin in light-grey jacket and bright suede shoes holding flowers and drinking at an award ceremony for the Stasi intelligence unit’s top brass.

The only trace of any operative activity connected to Putin is a letter from him to Böhm, asking for the Dresden Stasi chief’s assistance in restoring the phone connection for an informant in the German police who ‘supports us’. The letter is short on any detail, but the fact of Putin’s direct appeal to Böhm appears to indicate the prominence of his role.[50] Jehmlich indeed later confirmed that Putin became the main KGB liaison officer with the Stasi on behalf of the KGB station chief Vladimir Shirokov. Among the recent finds was one other telltale document: Putin’s Stasi identity card, which would have given him direct access to Stasi buildings and made it easier for him to recruit agents, because he would not have had to mention his affiliation with the KGB.

Many years later, when Putin became president, Markus Wolf and Putin’s former KGB colleagues took care to stress that he had been a nobody when he served in Dresden. Putin was ‘pretty marginal’, Wolf once told a German magazine, and even ‘cleaning ladies’ had received the Bronze Medal awarded to him.[51] The KGB colleague Putin shared an office with on his arrival in Dresden, Vladimir Usoltsev, who was somehow permitted to write a book on those times, took care to emphasise the mundanity of their work, while revealing zero detail about their operations. Though he admitted that he and Putin had worked with ‘illegals’, as the sleeper agents planted undercover were called, he said they’d spent 70 per cent of their time writing ‘senseless reports’.[52] Putin, he claimed, had only managed to recruit two agents during his entire five years in Dresden, and at some point had stopped looking for more, because he realised it was a waste of time. The city was such a provincial backwater that ‘the very fact of our service in Dresden spoke of how we had no future career’, Usoltsev wrote.[53] Putin himself claimed he’d spent so much time drinking beer there that he put on twelve kilos.[54] But the photographs of him in those days do not suggest any such weight gain. Russian state television later proclaimed that Putin was never involved in anything illegal.

But one first-hand account suggests the downplaying of Putin’s activities in Dresden was cover for another mission – one beyond the edge of the law. It suggests that Putin was stationed there precisely because it was a backwater, far from the spying eyes in East Berlin, where the French, the Americans and the West Germans all kept close watch. According to a former member of the far-left Red Army Faction who claimed to have met him in Dresden, Putin had worked in support of members of the group, which sowed terror across West Germany in the seventies and eighties: ‘There was nothing in Dresden, nothing at all, except the radical left. Nobody was watching Dresden, not the Americans, not the West Germans. There was nothing there. Except the one thing: these meetings with those comrades.’[55]

*

In the battle for empire between East and West, the Soviet security services had long been deploying what they called their own ‘active measures’ to disrupt and destabilise their opponent. Locked in the Cold War but realising it was too far behind technologically to win any military war, ever since the sixties the Soviet Union had found its strength lay in disinformation, in planting fake rumours in the media to discredit Western leaders, in assassinating political opponents, and in supporting front organisations that would foment wars in the Third World and undermine and sow discord in the West. Among these measures was support for terrorist organisations. Across the Middle East, the KGB had forged ties with numerous Marxist-leaning terror groups, most notably with the PFLP, the Popular Front for the Liberation of Palestine, a splinter group of the Palestine Liberation Organisation that carried out a string of plane hijackings and bomb attacks in the late sixties and seventies. Top-secret documents retrieved from the archives of the Soviet Politburo illustrate the depth of some of these connections. They show the then KGB chief Yury Andropov signing off three requests for Soviet weapons from PFLP leader Wadi Haddad, and describing him as a ‘trusted agent’ of the KGB.[56]

In East Germany, the KGB actively encouraged the Stasi to assist in its ‘political activities’ in the Third World.[57] In fact, support for international terrorism became one of the most important services the Stasi rendered to the KGB.[58] By 1969 the Stasi had opened a clandestine training camp outside East Berlin for members of Yassar Arafat’s PLO.[59] Markus Wolf’s Stasi foreign-intelligence unit became deeply involved in working with terrorist groups across the Arab world, including with the PFLP’s notorious Carlos Ramirez Sanchez, otherwise known as Carlos the Jackal.[60] Stasi military instructors set up a network of terrorist training camps across the Middle East.[61] And when, in 1986, one Stasi counter-intelligence officer, horrified at the mayhem that was starting to reach German soil, tried to disrupt the bombing plots of a group of Libyans that had become active in West Berlin, he was told to back off by Stasi chief Erich Mielke. ‘America is the arch-enemy,’ Mielke had told him. ‘We should concern ourselves with catching American spies and not bother our Libyan friends.’[62] Weeks later a bomb went off at the La Belle discothèque in West Berlin, popular with American soldiers, killing three US servicemen and one civilian, and injuring hundreds more. It later emerged that the KGB had been aware of the activities of the bombers, and knew exactly how they’d smuggled their weapons into Berlin.[63] Apparently all methods were to be permitted in the fight against the US ‘imperialists’.

One former KGB general who defected to the US, Oleg Kalugin, later called these activities ‘the heart and soul of Soviet intelligence’.[64] The former head of Romania’s foreign-intelligence service, Ion Mihai Pacepa, who became the highest-ranking eastern-bloc intelligence officer to defect to the US, had been the first to speak openly about the KGB’s operations with terrorist groups. Pacepa wrote of how the former head of the KGB’s foreign intelligence, General Alexander Sakharovsky, had frequently told him: ‘In today’s world, when nuclear arms have made military force obsolete, terrorism should become our main weapon.’[65] Pacepa also stated that KGB chief Yury Andropov had launched an operation to stoke anti-Israeli and anti-US sentiment in the Arab world. At the same time, he said, domestic terrorism was to be unleashed in the West.[66]

West Germany had been on edge ever since the far-left militant Red Army Faction – also known as the Baader-Meinhof Group after its early leaders Andreas Baader and Ulrike Meinhof – launched a string of bombings, assassinations, kidnappings and bank robberies in the late 1960s. In the name of toppling the country’s ‘imperialism and monopoly capitalism’, they’d killed prominent West German industrialists and bankers, including the head of Dresdner Bank in 1977, and had bombed US military bases, killing and injuring dozens of servicemen. But by the end of the seventies, when the West German police stepped up a campaign of arrests, the Stasi began providing safe haven in the East to members of the group.[67] ‘They harboured not just one but ten of them. They lived in cookie-cutter buildings around Dresden, Leipzig and East Berlin,’ said the German security consultant Franz Sedelmayer.[68] The Stasi had provided them with false identities, and also ran training camps.[69] For four years, from 1983 to 1987, one of their number, Inge Viett, had lived under a false name in a Dresden suburb, until one of her neighbours travelled to West Berlin and saw her face on a wanted poster there. She was one of West Germany’s most wanted terrorists, known as the ‘grandma of terrorism’, accused of participating in the attempted assassinations of a NATO commander-in-chief and the commander-in-chief of US forces in Europe, General Frederick Kroesen.[70]

Initially, after the fall of the Wall, the West German authorities believed the Stasi had provided only refuge and false identities to the Red Army Faction members. But as prosecutors continued to investigate the Stasi’s role, they found evidence of a much deeper collaboration. Their investigation led to the arrest and indictment of five former Stasi counter-terrorism officers for conspiring with the group to bomb the US’s Ramstein army base in 1981, and attempting to kill General Kroesen.[71] Stasi chief Erich Mielke was indicted on the same charges. One former Red Army Faction member emerged to tell how the group would frequently be used by the Stasi to transport weapons to terrorists in the Arab world.[72] Another former member spoke of working in the eighties as a handler for the notorious Carlos the Jackal,[73] who had lived for a time under Stasi protection in East Berlin, where he lived it up in the city’s most luxurious hotels and casinos.[74] Inge Viett later confessed that she’d attended a training camp in East Germany to prepare for the 1981 attack on General Kroesen.[75]

But amid the tumult of German reunification, there was no political will to root out the evils of the GDR’s past and bring the Stasi men to trial. The five-year statute of limitations on those charged with collaboration with the Red Army Faction was deemed to have passed, and the charges dropped away.[76] The memory of their crimes faded, while the KGB’s involvement with the Red Army Faction was never investigated at all. But all the while the Soviets had overseen the operations of the Stasi, with liaison officers at every command level. At the highest level KGB control was so tight that, according to one former Red Army Faction member, ‘Mielke wouldn’t even fart without asking permission in Moscow first.’[77] ‘The GDR could do nothing without coordination with the Soviets,’ said a defector from the senior ranks of the Stasi.[78]

This was the environment Putin was working in – and the story that the former Red Army Faction member had to tell about Dresden fitted closely with that. According to him, in the years that Putin served in East Germany, Dresden became a meeting place for the Red Army Faction.

Dresden was chosen as a meeting place precisely because ‘there was no one else there’, this former Red Army Faction member said.[79] ‘In Berlin, there were the Americans, the French and the British, everyone. For what we needed to do we needed the provinces, not the capital.’ Another reason the meetings were held there was because Markus Wolf and Erich Mielke wanted to distance themselves from such activities: ‘Wolf was very careful not to be involved. The very last thing a guy like Wolf or Mielke wanted was to be caught red-handed supporting a terrorist organisation … We met there [in Dresden] about half a dozen times.’ He and other members of the terrorist group would travel into East Germany by train, and would be met by Stasi agents waiting in a large Soviet-made Zil car, then driven to Dresden, where they were joined in a safe house by Putin and another of his KGB colleagues. ‘They would never give us instructions directly. They would just say, “We heard you were planning this, how do you want to do it?” and make suggestions. They would suggest other targets and ask us what we needed. We always needed weapons and cash.’ It was difficult for the Red Army Faction to purchase weapons in Western Germany, so they would hand Putin and his colleagues a list. Somehow, this list would later end up with an agent in the West, and the requested weapons would be dropped in a secret location for the Red Army Faction members to pick up.

Far from taking the backseat role often ascribed to him during his Dresden years, Putin would be among the leaders in these meetings, the former Red Army member claimed, with one of the Stasi generals taking orders from him.

As the Red Army Faction sowed chaos across West Germany in a series of vicious bomb attacks, their activities became a key part of KGB attempts to disrupt and destabilise the West, the former member of the terror group claimed. And, as the end loomed for Soviet power and the GDR, it’s possible that they became a weapon to protect the interests of the KGB.

One possible such attack came just weeks after the Berlin Wall’s fall. It was 8.30 in the morning on November 30 1989, and Alfred Herrhausen, chairman of Deutsche Bank, was setting off from his home in Bad Homburg, Frankfurt, for his daily drive to work. The first car in his three-car convoy was already heading down the road that was his usual route. But as Herrhausen’s car sped to follow, a grenade containing 150 pounds of explosives tore through his armoured limousine, killing him instantly. The detonator that set off the grenade had been triggered when the limousine drove through a ray of infrared light beamed across the road.[80] The attack had been carried out with military precision, and the technology deployed was of the highest sophistication. ‘This had to be a state-sponsored attack,’ said one Western intelligence expert.[81] Later, it emerged that Stasi officers had been involved in training camps at which Red Army Faction members had been instructed in the use of explosives, anti-tank rockets and the detonation of bomb devices through photo-electric beams just like the one used in the Herrhausen attack.[82]

Herrhausen had been a titan of the West German business scene, and a close adviser to West German chancellor Helmut Kohl. The attack came just as reunification had suddenly become a real possibility. This was a process in which Deutsche Bank could stand to gain massively from the privatisation of East German state enterprises – and in which Dresdner Bank, where Putin’s friend the Stasi officer Matthias Warnig would soon be employed, was to battle with Deutsche for the spoils. According to the former Red Army Faction member, the attack on Herrhausen was organised for the benefit of Soviet interests: ‘I know this target came from Dresden, and not from the RAF.’[83]

For the former Red Army Faction member those days now seem long ago and far away. But he can’t help but remember with regret that he was no more than a puppet in Soviet influence games. ‘We were no more than useful idiots for the Soviet Union,’ he said with a wry grin. ‘This is where it all began. They were using us to disrupt, destabilise and sow chaos in the West.’