Traber had always worked closely with the city’s KGB, without whose assistance it wouldn’t have been possible for him to smuggle antiques. ‘It was clear he had deep ties with the city’s law enforcement,’ said a former senior official from the city parliament.[60] He was also ‘in business with the Tambov group’, said a former FSB officer who worked in the St Petersburg contraband division.[61]
Soldier
At that time, the Tambov was becoming the city’s most powerful organised-crime group. Its leader, Vladimir Kumarin, had served time in jail in 1991 following a violent battle with another of the city’s mafia groups. After he emerged from prison, with the help of Putin, Traber and his men, the Tambov began taking control of St Petersburg’s entire fuel and energy business. The battles with rival gangs continued: in 1994, Kumarin lost one of his arms in a bomb attack. By that time, however, he was creating the St Petersburg Fuel Company, or PTK, which became the city’s monopoly domestic oil distributor, while Ilya Traber was taking over control of the sea port and the oil terminal on the Tambov’s behalf.[62] (Later, Spanish prosecutors described Traber as a co-owner with Kumarin of PTK.[63]) Kumarin became so powerful that he was known as St Petersburg’s ‘night governor’. In essence, he was the dark side of City Hall.
Putin seemed to be central to these manoeuvrings, the point man providing logistical support from the mayor’s office. Together with his trusted deputy Igor Sechin, who towered over a lectern in an anteroom outside Putin’s office vetting all who entered, he was the one who issued the licences that allowed Traber to control the port and the oil terminal. He was the one who granted Kumarin’s PTK an exclusive contract to supply fuel for the city’s ambulances, buses, taxis and police cars.[64] The first sign of his cooperation with the Tambov group came late in the summer of 1992, when his Foreign Relations Committee registered a Russo–German joint venture, the St Petersburg Immobilien Aktiengesellschaft, or SPAG, for investing in the city’s real-estate business. Much later, German prosecutors would allege that SPAG was a vehicle for laundering illicit funds for the Tambov group, as well as for a Colombian drugs cartel.[65] During his stint as St Petersburg’s deputy mayor, Putin served on SPAG’s advisory board. The Kremlin said this was no more than one of many such ‘honorary’ positions he held as deputy mayor. But one of SPAG’s co-founders said he met Putin five or six times to discuss SPAG’s St Petersburg business.
Trader
For Gennady Timchenko, the alleged former KGB operative who’d apparently known Putin since their days studying spycraft together at the Red Banner Academy, gaining access to the oil terminal had also always been key. He prided himself on his powers of persuasion and, in later interviews, he’d often explain his success with a nod and a wink about his ability to sell anything to anyone.[66] Since childhood he’d been part of the Soviet elite. His father held a senior rank in the armed forces, and he spent some of his early years in East Germany. His knowledge of German helped secure him a job in Soviet foreign trade and, according to former associates, propelled him into the ranks of the KGB, where he allegedly worked undercover as a trade representative in Vienna and Switzerland. Through his connections he forged a partnership with a former senior KGB officer, Andrei Pannikov, a thick-set man with a broad grin and hands as big as dinner plates. Pannikov had studied offshore finance at the Soviet Trade Institute, and then, with the blessing of the KGB’s foreign-intelligence chief Leonid Shebarshin, set up the first joint venture to be licensed to export oil products outside the Soviet monopoly.[67] Timchenko’s Kirishineftekhimexport oil trader formed a partnership with Pannikov’s Urals Trading – and for a time, from 1990, Timchenko headed Urals’ branch in Finland. According to a report by French intelligence, the company had initially been set up by the KGB in the eighties as part of a network of firms to transfer assets for the Communist Party[68] – a claim Timchenko denied.
Even with all their connections, for at least two years Timchenko and Pannikov were unable to gain access to the St Petersburg oil terminal.[69] Not only was it part of Kharchenko’s fiefdom, but as the power of the Soviet Union fractured, it became a vicious battleground for the city’s warring criminal groups. The oil trader Timchenko co-founded had ready access to supplies as the in-house trading arm of the nearby Kirishi refinery, part of the Surgutneftegaz oil company. But without access to the St Petersburg terminal, it was forced to export its oil by rail to neighbouring ports in Estonia or Finland, a much costlier route.[70]
Gaining control of exports through the St Petersburg terminal became so important that Timchenko turned to Putin for assistance. In January 1992, together with Pannikov’s Urals Trading, Timchenko set up a joint venture with Putin’s Foreign Relations Committee called ‘Golden Gates’.[71] They aimed to bypass the existing terminal, beset by rival gangs and under Kharchenko’s ultimate control, and raise Western financing to build a new, upgraded terminal.[72]
This was the first time the ties between Putin and Timchenko had emerged into the open. For almost a year, Putin led discussions with France’s BNP Paribas on a credit facility for the new oil terminal, backed by exports through Urals Trading.[73] But the talks fell apart when one of the key negotiators, a former KGB officer operating in Paris named Mikhail Gandorin, died just before the loan was to be approved.[74] ‘It looked like he’d been given something,’ one former Timchenko partner involved in the process said. ‘He called me two days before he died, and he couldn’t speak.’[75] That summer another member of the Golden Gates group, Sergei Shutov, was threatened and told to stay away from the project.
The project was under severe attack, with St Petersburg’s mafia groups, including the Tambov, battling each other to gain control of revenues from the existing terminal. The pressure mounted to such a degree that, according to two senior Western bankers, Putin sent his two young daughters away to Germany for their safety.[76] There is no indication Timchenko had any involvement in the violent struggles that accompanied Traber’s takeover of the port and oil terminal. But eventually, instead of building a new terminal, the way was opened for him to win a monopoly on exports through the existing terminal.[77]
One former Traber associate, a former Timchenko partner and a former KGB associate claimed Timchenko would only have been able to gain such a monopoly through forging some kind of working relationship with Traber. ‘Traber always had good relations with Timchenko,’ said one of Traber’s former associates. ‘The monopoly Timchenko won on exports would only have been possible through such ties.’[78] ‘If you need to ship oil and the port is full of bandits, then you need to agree,’ said a former senior KGB officer who worked with Putin in the nineties. ‘There was no way to go through without their agreement.’[79]
Lawyers for Timchenko said the relationship was no more than a ‘commercial, arm’s-length’ one, while any suggestion Timchenko had any involvement with organised crime, corruption or any other improper or illegal activity in St Petersburg, whether ‘via Mr Traber or in any other way’, was false and libellous. In 2011, a Timchenko representative told Russia’s Novaya Gazeta Timchenko was acquainted with the co-owner of Traber in the sea port and oil terminal, Dmitry Skigin, but the two men had not engaged in any joint business projects.[80]
At the same time, Timchenko was drawing on a network of KGB-linked foreign bankers to finance his trading operations. First, there was Dresdner Bank, headed in St Petersburg by one of Putin’s former Stasi comrades, Matthias Warnig, who’d worked with him in Dresden as part of a KGB cell.[81] Then there was Andrei Akimov, who’d worked with Yevgeny Primakov at the Institute of World Economy before becoming