Just last weekend, Russia seemed headed into a civil war with one of its prominent private armies ‘Wagner’ fighting in Ukraine rebelling against the official military and marching within 200 miles of Moscow. The mutiny was aborted with no officially stated reason yet with the founder of Wagner leading the rebellion, Yevgeny Prigozhin moving to Belarus. The move however has shown the Vladmir Putin regime at its weakest ever creating further geopolitical uncertainty. To that extent the events of last weekend are remarkable. So, who is Prigozhin and how did he come close to threatening Putin’s autocratic regime? The Guardian did a detailed feature on the man earlier this year, much before the rebellion.
The article shows his origins as a petty criminal robbing people in St Petersburg and eventually spending ten years in prison. Upon his release around the break up of the Soviet Union, he started as a hot dog salesman before building a successful catering business through which he got exposed to powerful people including Putin himself.
“…in 1995 he decided it was time to open a restaurant with his business partners. He found Tony Gear, a British hotel administrator who had previously worked at the Savoy in London and was now at one of St Petersburg’s few luxury hotels.
Prigozhin hired Gear to manage first a wine shop, then his new restaurant, the Old Customs House, on St Petersburg’s Vasilievsky Island.
Initially, the Old Customs House employed strippers as a way to drum up clientele, but soon word got out that the food was excellent, and the strippers were dismissed. Gear focused on marketing the eatery as the most refined place to eat in a city that was only just discovering fine dining. Pop stars and businessmen liked to eat there, as did St Petersburg’s mayor, Anatoly Sobchak, who sometimes came with his deputy, Vladimir Putin.
…“Putin saw that I wasn’t above bringing the plates myself,” Prigozhin has said. It was the start of a relationship with the Russian president that would grow and metastasise in unexpected ways.”
He then stepped up with a private army to help Putin which further strengthened his relationship:
“New opportunities arose when Russia annexed Crimea in March 2014 and intervened militarily in eastern Ukraine soon after. Putin denied that regular Russian troops had been involved in either case, despite a mountain of evidence to the contrary.
The Kremlin began to think about how to make the deniability slightly more plausible. Although private military companies were illegal in Russia, several groups appeared that seemed to coordinate their actions with the defence ministry but could operate at arm’s length. Prigozhin’s Wagner would become by far the most prominent of them.
…A key moment for Prigozhin came in late 2015 when Putin decided to intervene militarily in Syria to prop up the regime of Bashar al-Assad. Prigozhin won contracts for food and supplies, and also dispatched his Wagner troops there.
…As well as the real-life fighters, Prigozhin has been accused of running an army of keyboard warriors, first aimed at boosting Kremlin talking points in domestic discussion forums and later redirected to peddle Russian narratives abroad.
An indictment resulting from Robert Mueller’s investigation into Russian interference in the 2016 US election alleged Prigozhin and companies linked to him were behind a network of pro-Donald Trump Facebook and Twitter profiles, apparently part of a slew of Russian efforts to boost Trump’s candidacy.”
Putin has historically alluded to Prigozhin as Russia’s George Soros:
“Pressed on evidence of Prigozhin’s defence ministry contracts and allegations of electoral interference, Putin gave a revealing answer, comparing Prigozhin to George Soros, the financier and philanthropist who is the subject of numerous conspiracy theories, and whom Russian officials have accused of bankrolling revolutions on US government orders.
“There is such a personality in the United States: Mr Soros, who interferes in all affairs around the world … The state department will say that it has nothing to do with them, rather it is Mr Soros’s private affair. With us, it is Mr Prigozhin’s private affair,” said Putin.
In effect, Putin was admitting that Prigozhin for him was what he wrongly believed Soros to be for the US government: a tool to meddle abroad while retaining plausible deniability.”
What might have gone wrong with the Prigozhin-Putin relationship to cause the mutiny? Whilst we shall hear more in the coming weeks, the article presents a clue about Prigozhin’s personality and ambitions:
“For Prigozhin, those who know him speculate, neither money nor power has been the sole motivating factor, although he has accumulated plenty of both along the way. Instead, they say, he is driven by the thrill of the chase, the belief he is battling corrupt elites on behalf of the common man, and a desire to crush his rivals.
“It seems like he gets off from the process itself, not just the end result,” said the former defence official.
Over the years, Prigozhin has made many enemies: former business partners who feel cheated, army generals he has criticised as deskbound bureaucrats, and top security officials who fear he harbour ambitions to seize political power.
But so far, he has retained the favour of his most important backer: the man he calls Papa.”
If you want to read our other published material, please visit https://marcellus.in/blog/
Note: The above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. The information provided is intended for educational purposes only. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India (SEBI) and is also an FME (Non-Retail) with the International Financial Services Centres Authority (IFSCA) as a provider of Portfolio Management Services. Additionally, Marcellus is also registered with US Securities and Exchange Commission (“US SEC”) as an Investment Advisor.
