Case Officer: As much as Putin appreciated the virtues of private ownership, when he became president he faced an important dilemma: how to reconcile private ownership of key sectors of the economy with meeting the statist goals he had set for Russia's development. How could he control and direct industry without reverting back to the total state ownership of the Soviet period? Putin found the answer through his most important identity -- the case officer. During his time in St. Petersburg as deputy mayor -- a position he was initially encouraged to take by the KGB -- businessmen were Putin's targets, not his partners. In order to ensure that they delivered on their promises to the city government, he collected compromising financial and personal information and leveraged it against them. When he got to Moscow in 1996, he used these same tactics against another set of businessmen -- Russian oligarchs --who were preying on each other and the Russian state.
As a case officer in the KGB, Putin had learned how to identify, recruit, and run agents, and acquired the patience to cultivate sources. He also learned how to collect, synthesize and use information. These tools proved invaluable in bringing Russia's oligarchs to heel. In a televised roundtable meeting with Russia's oligarchs in July 2000, for example, Putin deployed textbook KGB tactics. He explained that the businessmen would retain their extensive assets, but they would have to agree to a new tax regime that would give the federal government more resources. He told them that they must also actively consider Russian national interests, as defined by Putin and the state, when engaging in economic activities abroad. This was private enterprise with strings attached. The property rights of business magnates were ultimately dependent on the goodwill of the Kremlin.
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