top of page
  • Writer's pictureThe Paladins

Estate planning in the Russian Federation

Russian President Vladimir Putin is a man who takes his personal security seriously. He has his own personal praetorian guard, known as the National Guard of the Russian Federation, that on some estimates amounts to approximately 400,000 troops. They report directly to him. Their purpose is not foreign military adventurism but to enforce his personal writ inside the borders of Russia; to crush and destroy any other branch of government that might challenge his personal rule; and to serve as his personal bodyguards and enforcers - in addition to his official bodyguards who he does not entirely trust. This force exists in addition to the Russian Armed Forces, which it is estimated has approximately 1,200,000 troops in active service and another 2,000,000 reservists. Vladimir Putin is, to put matters mildly, extremely paranoid.

Mr Putin has reason to be paranoid. He is 70 years old. Although the mean age of death in Russia is 71, there is a huge disparity - possibly one of the biggest in the world - between women who on average die at the age of 75 and men who on average die at the age of 64. So Mr Putin is well past his sell-by date; and he knows that the vultures are circling over his head, waiting for him to have a medical accident. Just to ensure that there may not be any unfortunate imminent medical accidents, Mr Putin retains a personal defence force of 400,000 troops to deter potential malfeasors against his interests.

Indeed we have heard a rumour that each one of Mr Putin's personal body guards is themselves guarded and monitored constantly by a coterie of FSB officials and members of the National Guard, as are their families. So just in case any of Mr Putin's official bodyguards might get some strange ideas about assassinating him, they and their families will be assassinated instead. Mr Putin has taken Juvenal's Latin adage, quis custodiet ipsos custodes (who guards the guardians?), to new extremes.

When we are considering the impenetrable question of governmental succession in the Russian Federation after the demise of Mr Putin's regime, there are a number of points we should bear in mind.

  1. Given his massive personal standing army directly loyal to him and that has no clear purpose other than to protect his regime and destroy any threats to it; and given his massive and insidious apparatus of state control over every aspect of people's lives, it is probably unrealistic to hope either that he is going to resign under political pressure; be elected out of office; be murdered; or be overthrown in a coup d'état. He simply has the entire country locked down. He is a true sociopath, and he has thought through every last scenario to depose him from office, and he has made provision to thwart all of them.

  2. Therefore we are going to have to wait until he dies of natural causes, although as he gets ever older and the Russian elites perceive this eventuality as ever more imminent the politics of the Russian Federation will become ever more wild and out of control, including Russian foreign policy.

  3. There are and have been for a long time rumours about the health of Mr Putin and relatively little is known about the state of his health. On the one hand he likes to project himself as of impeccable strong health: muscular, fit for his age and a remarkable sportsman. He likes to appear bare-topped in public and an infamous calendar displayed a series of images of him engaged in sportsmanlike acts. On the other hand, Moscow was awash with rumours for years that he had suffered from prostrate cancer and he once disappeared entirely from public view for ten days for reasons unknown but that were presumed to be to receive medical treatment. Mr Putin takes meticulous efforts to avoid contraction of Covid-19, notoriously requiring foreign dignitaries who meet him to sit at the other end of an absurdly long table. He is not known to be a heavy drinker (unlike many Russian men) or a smoker. He certainly intends to live for as long as possible and he is seemingly much healthier than Stalin was when he died at the age of 72, assumed to have been murdered by his doctors. On the other hand Mr Putin appears to have visibly gained weight in the last couple of years. The truth is that we have no reliable information about Mr Putin's health at all and we can make no accurate predictions about how long he is likely to live.

  4. Mr Putin is believed to be the wealthiest man in the world. This author has heard the estimate that his personal wealth is some US$150 billion, although there seems no reliable way of actually assessing his wealth. It is virtually all of it owned through a complex web of offshore structures; he is believed to hold much of his investments and money through a network of Swiss bank accounts which use what the Russians euphemistically call "nominee ultimate beneficial owners": in other words, they lie about the identity of the actual ultimate beneficial owner of an account (that banking regulation regimes in virtually every country in the world require you to declare) and there is an (illegal) contract by which someone else agrees fraudulently to sign the ultimate beneficial owner declaration documents on your behalf. Incidentally, this practice - reinforced by a wealth of fictitious paperwork justifying money transfers - is one reason why contemporary financial sanctions targeted against individuals may not be as effective as the western governments imposing them hope. The names of the sanctioned individuals often appear nowhere in the paperwork relating to the bank accounts being used to hold assets.

  5. Another complication is that although the formal legal names in which companies are purportedly owned or assets held can be virtually anything in Russia (the mercenary organisation Wagner Group just made up its own corporate form, "PMC" or "private military company", that does not exist under Russian corporate law at all), Mr Putin is the de facto owner of virtually the entirety of the Russian national infrastructure and industry. Even the assets formally owned by the Oligarchs are not really controlled by him; they serve as his vassals, and if they step out of line and do not do as he wishes with Russia's national infrastructure assets then he threatens them, incarcerates them or, ultimately, murders them. The principal question that arises upon the death of Vladimir Putin in terms of the welfare of Russia, her economy and her people, and all the possibilities for regional and global instability caused if Russia collapses, is who will serve as overseer of Russia's infrastructure and industrial assets, including her considerable military infrastructure and the world's largest stockpile of nuclear weapons, after he is gone? Nobody has any idea what the answer might be to this question.

  6. We saw the same thing in the 1990's, when Russia's infrastructure and industrial assets ceased to be under any leadership and were taken over by a series of criminals under an ill-fated voucher privatisation scheme. The entire country ground to a halt. The streets were filled with bandits. The prison system collapsed. Petrol was not available at the pumps. Conscripted soldiers through decommissioned nuclear warheads into the harbour at Vladivostok. About the only thing that did not collapse completely was the national railway system, because that was never "privatised" and the old Soviet structures that regulated one of the world's largest (and certainly the world's most extensive) railway networks remained in place. Indeed they have remained in place even during the Russian invasion of Ukraine, with some limited cooperation between Ukrainian and Russian railways services even during the Russian occupation of parts of Ukraine, something we have observed elsewhere. The Soviet railway system is one thing that it has always proven hard to dismantle. But everything else is in jeopardy.

  7. Vladimir Putin is the leader of the United Russia Party. This political party is essentially a continuation of the Communist Party of the Soviet Union. It dominates every legislature in the country. We are not aware of any regional or provincial legislature anywhere in Russia where the United Russia Party does not have an absolute parliamentary majority. All its members always vote the same way: that is to say in accordance with the wishes of Vladimir Putin. When he dies, the entire legislative system of the Russian Federation (and, as befits the largest country in the world, it is a very complex one with manifold complex federal layers) will presumably grind to a halt.

  8. Russia is divided into a series of federal regions, called oblasts. Each oblast has a governor, responsible for executive authority in that oblast. In this regard, the system is a little like the system of Governors of US states. But there is one important difference. In Russia, all the governors are appointed by one man: Vladimir Putin. If you fall out of Mr Putin's favour, he may appoint you governor of a remote Siberian oblast. The entire system of executive government across the largest country in the world is controlled effectively by a single man.

  9. There is often a lot of talk of who is in Vladimir Putin's inner circle. But nobody really knows. Journalists enjoy producing lists of candidates for this questionable privilege, but a lot of their work is speculation. Yevgeny Prigozhin was often assumed to be in Vladimir Putin's inner circle, until on 24 June 2023 he mysteriously initiated a 24-hour coup d'état against Mr Putin and then even more mysteriously disappeared to Belarus pursuant to the extraordinarily speedy mediation efforts of Mr Putin's ally Belarusian President Alexander Lukashenko. (This has happened once before; another apparent Putin ally, former Ukrainian President Viktor Yanukovich, mysteriously disappeared to live in Rostov after the mediation efforts of Mr Lukashenko, and was never seen or heard of again. Having Mr Lukashenko serve as mediator in your personnel disputes with Mr Putin would appear an unfortunate habit.)

  10. One person often touted as a member of Vladimir Putin's inner circle is the Head of the SVR, Russia's Foreign Intelligence Service. But as we have already written, Mr Putin harbours grave reservations about the effectiveness of the SVR and is generally of the view that they are a bunch of bumbling, corrupt fools who should be merged into the FSB. (Traditionally, the SVR has been responsible for recruiting and running foreign double agents to serve the interests of the Russian Federation but this role appears to be undertaken ever less by the SVR these days and more by other branches of the Russian intelligence apparatus.)

The point illustrated by the list of extraordinary features of the Russian Federation listed above is that the whole country is effectively run by a single person and while virtually the entire world wants rid of Vladimir Putin, the danger is that this nuclear-armed state, with a massive army and enormous industrial and natural resources capacity, collapses into a globally catastrophic mess upon his death - which must come sooner or later.

This author has his own theory about Vladimir Putin's succession plans. The hypothesis we cautiously entertain is that Mr Putin intends to give the Presidency to his sometime Prime Minister Dmitriy Medvedev, who now holds the position of Deputy Chair of the Russian Security Council (Mr Putin is himself of course the President). Precisely what the Security Council does is far from clear; it has a purported statutory mandate but it is framed in vague terms and we understand it basically to be the modern version of what in Soviet times would be called the Politburo. In other words, it is the standing committee that makes all final decisions regarding every aspect of government both inside the Russian Federation and outside. So it determines all matters of both domestic and foreign policy, and indeed defence policy.

Mr Medvedev is a liberal, intellectual St Petersburg lawyer and one of the more moderate figures in Mr Putin's government. He would certainly be a better bet than Mr Putin, when Mr Putin finally goes. However Mr Putin has apparently been giving Mr Medvedev some sort of tutelage as to how to act in order to grow into the role of Russian President. He now dresses and appears ever more like an FSB official, with extremist rhetoric about virtually any subject in which Russia is involved. He never used to do this, so he would appear to be under some sort of training regime from his mentor.

Whether Mr Medvedev can slide into Mr Putin's role after Mr Putin steps back or dies remains a wide open question. There are various other people close to Mr Putin and with a huge amount of power in the upper echelons of the Russian Federation, some of whose names we know and some of whom are mostly unknown. Some of these people support a transition of power to Mr Medvedev; others do not. On balance the West may take the view that Mr Medvedev is the least bad successor to Mr Putin. However it is very important that the West does not express any opinions about this matter; we must remain entirely neutral and even silent. That is because were the West to make any public statements about Mr Medvedev, that would surely lend succour to the incomprehensible and interminable political infighting that exists at the highest levels of the government of the Russian Federation.

Russian government is just a remarkable, and remarkably dark, affair. As Winston Churchill observed, only the Russians themselves can really work out how to manage transitions of power within Russia. Western attempts to intervene within the process have generally come to naught or have even been counter-productive. All we can do is to watch with great care, prepare for a variety of different possible scenarios, and be ready to act quickly if and when Mr Putin dies or something else happens to him and Russia suddenly lurches into a period of potentially catastrophic political uncertainty.


bottom of page