Life After Putin: The Jared Kushner of Russia
WHY YOU SHOULD CARE
Because family ties sometimes prevail.
By Fiona Zublin
Picture this: Snow on the ground, laser lights and a faux Russian village, as the bride and groom are carried in a horse-drawn sleigh down the aisle. This is the stuff of royal weddings, pageantry played out for the people, and in Britain or Denmark or Monaco it’d be splashed over the front pages and talked about for weeks. But this snow-globe scene — allegedly the wedding of Vladimir Putin’s daughter Katerina to Kirill Shamalov — can’t even be confirmed.
That’s how they do it in Russia. And that’s why Shamalov, 35, identified by Forbes as Russia’s youngest billionaire, is referred to in the foreign press as Putin’s son-in-law even though officials refuse to confirm any details about his private life. With a dearth of independent media operating in Russia, privacy is actually possible for Putin. And while there are negatives to a lack of press scrutiny, it’s also allowed Putin’s family to have a private life, says Dr. Karen Dawisha, author of Putin’s Kleptocracy, who notes that over 30 years there are vanishingly few photos of his family. She pinpoints the president’s KGB training as the origin of his focus on personal secrecy.
The putative son-in-law is the son of Nikolay Shamalov, one of Putin’s longtime friends and hockey buddies. “Putin made Shamalov Jr. a billionaire and effected a transfer of wealth to the next generation,” Dawisha says. Nikolay is also a shareholder in Rossiya Bank — described by the BBC as the “personal bank” of Russian oligarchs — and was sanctioned by the U.S. and EU after tensions mounted over the annexation of Crimea in 2014, along with several other Russian banks and businessmen.
That family connection may well have helped Shamalov rise through the ranks: At age 20, two years before finishing his legal studies, he had a powerful counsel position at state-owned gas company Gazprom, and at 26 he was a vice president at SIBUR, a massive petrochemical firm. Vladimir Gelman, a professor of political science at European University at St. Petersburg and the University of Helsinki, says while crony capitalism is rampant around the world, Russia’s special for its plethora of state-owned businesses whose top management are closely linked to each other and state leaders. Gelman says personal profit is a motivation for seeding these jobs with the politically powerful and connected. But, he adds, “it’s not just a kleptocracy. Very often these companies are engaged in serving strategic purposes of the Russian state in terms of foreign policies.”
If Putin suddenly disappeared, could Shamalov, with his family connections and riches, have a shot at taking power?
Shortly after the alleged wedding, Shamalov bought a 17 percent stake in SIBUR, adding to his previous 4.3 percent stake to make him the company’s second-largest shareholder. Supposedly he’s no longer part of the SIBUR management, but selling a portion of his shares in 2015 reportedly made him a billionaire — though Putin’s alleged son-in-law has not commented on his personal net worth.
It’s all very Donald Trump and Jared Kushner — with no independent media or prosecutors to ensure they aren’t doing anything shady. “Mr. Shamalov,” Gelman says, “is not much bothered by these institutions.” Historically, Russia’s lack of a vigorous media, according to David E. Hoffman’s The Oligarchs, has encouraged average citizens to tune out from politics, business and the doings of the country’s elite. “The Kremlin … simply ignored any nettlesome questions,” he writes.
Unable to do anything about it, society has continued to function, albeit with more personal freedoms than during the Soviet era but an elite stranglehold on elections, power and the vast wealth that natural resources and banking bring into the country.
So if Putin suddenly disappeared, could Shamalov, with his family connections and riches, have a shot at taking power? Much would depend upon the circumstances under which Putin exited the stage. But looking at autocracies around the world, Gelman says Shamalov is unlikely to ascend. “Most leadership succession of this kind, because of family ties, is unsuccessful.” Gelman believes it’s more likely to be anything but a smooth transfer of power — “especially for not a son, but a son-in-law” — because autocracies with no official successor often get consumed by the squabbling of various elite groups competing to fill the power vacuum. But, that said, anything can happen: Ilham Aliyev, current president of Azerbaijan, after all, replaced his dad in office in 2003 and has ruled the country ever since.