Michael: Most of us think the Cold War ended with the fall of the Berlin Wall. But what if it didn't end? What if it just went underground, run by the same spies, but with trillions of dollars in cash instead of nuclear warheads? Kevin: Whoa, that's a heavy way to start. It sounds like the plot of a spy thriller, not something that could actually happen. But you're telling me there's a real story there? Michael: There is, and it’s the central, chilling question at the heart of Catherine Belton's book, Putin's People: How the KGB Took Back Russia and Then Took on the West. Kevin: And Belton is the real deal. She was the Moscow correspondent for the Financial Times for years. This book was so explosive it triggered five different lawsuits from Russian billionaires. That tells you she hit a nerve. Michael: A very, very rich nerve. And to understand how, we have to go back to the moment the Soviet Union died… or, as Belton argues, was pushed.

Kevin: Pushed? I thought it just collapsed under its own weight. Empty shelves, political chaos, the whole deal. Michael: That’s the conventional story. But Belton opens with a series of events that feel like something out of a crime novel. It’s August 1991. A hardline Communist coup against Gorbachev has just failed. The Soviet Union is officially dead. Days later, Nikolai Kruchina, the man who managed the Communist Party’s vast, secret finances—we're talking billions—is found dead on the pavement below his seventh-floor apartment. Kevin: Hold on. The Party’s main treasurer "falls" out of a window right after the whole system collapses? That sounds… convenient. Michael: It gets more convenient. A little over a month later, his predecessor, Georgy Pavlov, also falls to his death from his apartment window. And just eleven days after that, another key official in the Party’s international department, the one handling payments to foreign groups, also takes a fatal plunge from his balcony. Kevin: Okay, that's not a coincidence. That’s a pattern. That’s a cleanup operation. What were they trying to hide? Michael: They weren't just hiding something; they were launching something. Belton’s core argument is that progressive elements within the KGB saw the collapse coming years in advance. They knew the communist ideology was a dead end, but they had no intention of giving up power. So, they hatched a plan. Kevin: A plan for what? To go democratic? Michael: A plan to create what they called an 'invisible economy.' The idea was to move the Communist Party’s immense wealth—billions of dollars, properties, foreign firms—out of state hands and into a web of new, private companies. These companies would be run by 'trusted custodians.' Kevin: Trusted custodians? What does that even mean? Michael: It means ambitious young men, often from the Komsomol, the Communist youth league, who the KGB could control. They were handpicked to become Russia’s first capitalists. The KGB would give them access to state funds, let them build business empires, and in return, these new oligarchs would hold the money for the state—a state that didn't officially exist anymore. It was a massive, off-the-books slush fund. Kevin: So, the first wave of Russian oligarchs weren't just savvy entrepreneurs who got lucky in the chaos. They were, in a way, franchisees of the KGB? Michael: In many cases, yes. They were the chosen ones. A young Mikhail Khodorkovsky, who would later become Russia's richest man, got his start this way. The KGB was creating a new system from the ashes of the old one: a hybrid of spy-craft and capitalism. They weren't saving the Soviet Union; they were preparing for its controlled demolition to build something new in its place, something they would own. Kevin: That is a mind-bending way to reframe the entire end of the 20th century. It wasn't a victory for the West; it was a corporate restructuring by the KGB. Michael: Exactly. And to see how that restructuring played out on the ground, you have to look at one city, and one man, who was running the pilot program.

Kevin: I'm guessing this is where Vladimir Putin enters the story. At this point, he's a relatively unknown former KGB agent, right? Just returned from a post in East Germany. Michael: That's the common misconception Belton completely dismantles. He wasn't some minor bureaucrat who stumbled into power. He was running the laboratory. When Putin returned to Russia, he landed a job as deputy mayor of St. Petersburg. The city was in crisis, on the verge of starvation. So, the city government, with Putin in a key role, launched an 'oil-for-food' program. Kevin: Sounds noble. Export natural resources, import food for the people. A simple barter. Michael: It was simple, except for one detail: the food never arrived. A firebrand local politician named Marina Salye launched an investigation and what she found was staggering. Putin's committee had issued over $90 million in export licenses for oil, timber, and rare metals to a series of completely obscure front companies. The resources flowed out of Russia, but the money—and the food—vanished. Kevin: Vanished where? Michael: Into offshore bank accounts. It was a slush fund generator. A former KGB officer involved in the scheme later admitted to Belton that the program was never about food. It was designed to create a hard-currency slush fund to pay off old KGB networks and fund new operations. It was the 'invisible economy' plan in action, at a city level. Kevin: Wow. So while the city was starving, Putin was overseeing an operation to create a black cash fund for the security services. But you can't just take over a city's port and export millions in resources without some muscle. Michael: You can't. And this is where the blueprint gets really dark. Belton documents how Putin's City Hall forged a direct alliance with the most powerful organized crime syndicate in the city, the Tambov gang. The KGB men provided the political cover and the licenses; the mob provided the muscle to take over the port, the oil terminal, and other key assets. Kevin: So this is the model. The merger of state power, intelligence networks, organized crime, and a river of black cash. Michael: That is the St. Petersburg blueprint. It’s a system where the lines are completely blurred. Is it a state operation for strategic goals, or is it a criminal enterprise for personal enrichment? The answer is both. And this is the exact model that Putin, once he got to the Kremlin, would scale up to take over the entire Russian economy. Kevin: It’s terrifying because it’s so systematic. It’s not just random corruption; it’s a designed system of control. Michael: A system that, once perfected, they were ready to export.

Kevin: Okay, so they've consolidated power, they control the economy through this network of state-crime-business alliances. How do they take that global? Michael: They use the same playbook. The most famous case study is the takedown of Mikhail Khodorkovsky and his oil company, Yukos. Kevin: Right, I remember that. He was the richest man in Russia, a symbol of the new capitalism, and then suddenly he's arrested on a plane and ends up in a Siberian prison camp for a decade. Michael: Belton frames this as the moment the deal with the oligarchs was broken. Khodorkovsky, one of the original 'trusted custodians,' started to believe he was truly independent. He was funding opposition political parties, talking openly about building a pipeline to China, and negotiating a massive sale of Yukos shares to American oil giants like ExxonMobil or Chevron. Kevin: He was breaking the number one rule. Michael: He broke the number one rule: you can be rich, but the Kremlin owns you and your assets. So, Putin's men, led by his ruthless right-hand man Igor Sechin, used the state's power to crush him. They fabricated billions in back-tax claims, froze Yukos's assets, and orchestrated a sham auction. Kevin: And who conveniently ended up with the company? Michael: The state-owned oil giant Rosneft, controlled by Sechin. They took Russia's most efficient private company and absorbed it into the state machine. It sent a chilling message to every other oligarch: you are just a manager of our assets. But here’s where it connects to the West. Kevin: I'm waiting for it. How does a corporate raid in Russia reach us? Michael: Through the money. The same black cash networks that were used to control Russia were then funneled into the West. They exploited the West's own systems against it. They used London's lax financial regulations and army of lawyers and PR firms to launder money and reputations. The city became so saturated with Russian cash it earned the nickname 'Londongrad.' Kevin: So they're using our own free-market tools—our banks, our courts—as weapons. Michael: Precisely. And it goes even further. Belton traces how this network began to operate in the United States. She details how figures with deep ties to Russian intelligence and organized crime, like a man named Felix Sater, began doing real estate deals in the early 2000s with a developer who was financially vulnerable and couldn't get loans from Western banks: Donald Trump. Kevin: Wow. So you're saying the same nexus of KGB-linked money that was operating in St. Petersburg in the 90s eventually found its way into Trump's real estate projects? Michael: Belton lays out the connections. The deals provided a perfect vehicle for laundering money. It wasn't necessarily about direct collusion; it was about creating dependency, influence, and potential kompromat—compromising material. The goal wasn't just to make money. It was to erode Western institutions from the inside, to find the cracks in the system and exploit them.

Kevin: That is an absolutely staggering picture. When you connect all the dots Belton lays out, it's a single story that starts with a few mysterious deaths in Moscow in 1991 and ends with Russian influence operations targeting a US presidential election. It's one continuous thread. Michael: That's the profound insight of Putin's People. This isn't a series of random, chaotic events. It's a system. A system of 'KGB capitalism' where the lines between the state, business, intelligence, and organized crime are deliberately and completely erased. The ultimate goal is the preservation of power for a small group of men, and the projection of that power outwards. Kevin: It completely changes how you see world events. You read a headline about a Russian oligarch buying a British football club, or a former German chancellor taking a high-paying job on the board of a Russian energy company, and you realize it might not just be a business deal. It could be a move from the playbook. Michael: It's the weaponization of everything we consider normal: business, law, public relations, even sports. And Belton's work, which was so well-sourced and explosive that powerful people tried to sue it out of existence, forces us to ask a really uncomfortable question. Kevin: What's that? Michael: How much of our own system—our banks, our legal courts, our political processes—has been compromised by this weaponized cash? How deep does the influence go? Kevin: A chilling thought to end on. It suggests the battle Belton describes isn't over; it's just become harder to see. We'd love to hear what you think. Does this change how you see Russia's role in the world? Find us on our socials and join the conversation. Michael: This is Aibrary, signing off.