The Propaganda Proxy War, Broke Oligarchs, and Sanctions as a Weapon

A discussion with the Bloomberg News investigative reporter Stephanie Baker, author of "Punishing Putin: Inside the Global Economic War to Bring Down Russia"

Stephanie Baker, an investigative reporter at Bloomberg News and my guest on today’s PREVAIL podcast, began her career in Moscow in the tumultuous 1990s. She’s been writing about Russia ever since. With her deep knowledge of the country and its history, her high-level sourcing both in Russia and the West, her long experience as a business journalist, and her compelling writing style, Baker is uniquely qualified to write a book about how the West decided to combat Russia’s invasion of Ukraine by waging economic war; why it came to the momentous decision; what specific levers it pulled to impose sanctions on a such a grand scale; and what consequences these efforts had in Russia and beyond: on Russian oligarchs, on multinational corporations with business operations in Russia, on the global economy, and on the people of Ukraine. And so she has.

Punishing Putin: Inside the Global Economic War to Bring Down Russia, Baker’s first book, is, as so many of her blurbs declare, essential reading. In 282 riveting pages, she somehow manages to pack a history of the post-Soviet Russian landscape, a step-by-step chronicle of how the Western leaders banded together to thwart the Russian economy, a close look at the fate of the oligarchs (the Yeltsin-era and Putin-era ones both), the ripple effect in places like London and Dubai, the price cap the West imposed on Russian oil exports, Russia’s duplicitous efforts to work around the sanctions, and much more. It is the single best book I’ve read on the subject—both the first-of-its-kind look at the waging of economic war, and a primer on how we got here.

Here are three takeaways from our discussion:

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Boris Johnson lobbied harder than any other Western leader for sanctions to be imposed on Russia.

With his ridiculous hair, bombastic style, staunch support of an obvious Russian active measure (BREXIT, in his case), and close relationships with wealthy Russians close to Putin, Boris Johnson always struck me as the Trump of Britain—an obvious Kremlin shill. I was shocked to learn that he was probably the most vocal and persuasive of the Western leaders calling for imposing sanctions on Russia.

That part of the book, Baker tells me, “was one of the hardest bits to write. I did want to actually sit down with Boris Johnson. Instead, he agreed to answer questions by email. And I think it was probably because he didn’t want to be asked about the Lebedevs, which is this father-son duo that he become close to,” wealthy Russians who own the British newspapers the Evening Standard and the Independent.

Whatever his ties to Russia, Johnson was “incredibly important to the support for Ukraine. And it was partly because he had developed this incredibly close relationship with Zelenskyy,” Baker says. “And of course he probably saw this as his, you know, Churchill moment—his rise to be a wartime leader. He was facing all this flack for holding parties during lockdown. And I think he saw this as a part of his legacy.

“But, you know, he deserves credit where credit is due: for supporting Zelenskyy, [for] pushing hard for Russian banks to be expelled from the financial system, as Zelenskyy was asking him to do.”

This wasn’t a case of blowing with the political wind, either. Johnson “has remained steadfast in his support of Ukraine,” she says, “unlike a lot of the other sort of rightwing populists, as you have it, who’ve been questioning whether it’s worth it to continue supporting Kyiv.”

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The economic warfare has turned the Russian oligarch class away from the West and pushed them closer to Putin.

In March 2022, a few weeks after the invasion, Baker interviewed Mikhail Fridman, one of the owners of Alfa Bank and perhaps the most pro-Western Russian oligarch. Her article bore the wonderful title “Broke Oligarch Says Sanctioned Billionaires Have No Sway Over Putin.” (Sidenote: “Broke Oligarch” would be a great band name). In that interview, Fridman made the case that the effect of sanctioning rich Russians like him would be negligible on Putin’s military calculus. After all, he had not even bothered to tell him he was planning to invade Ukraine.

While we should not bust out the Stradivarii and play sad songs for these billionaires, Fridman was not exactly wrong. Oligarchs, Baker explains, are not

really in a position to go to Putin and say, “Hey, this war has been disastrous for us. You know, let’s get out.” Even though many of them early on thought it was a disaster, and never saw it coming….Russian billionaires that were thought to be very close to Putin, I think were surprised that he went ahead.

And I go into that in my book—that there’s one particular Russian oligarch, Roman Abramovich, who’s played quite a crucial role in some of the peace negotiations after the full-scale war started and some prisoner swaps subsequently, from what I reported. He was surprised. He thought it was all a threat—that Putin…would get what he wanted by massing troops and get a promise that Ukraine would never join NATO.

So I think the way power is structured in Russia right now is often misunderstood. I think some people thought the sanctions—by sanctioning some of these Russian oligarchs that would in turn force them to put pressure on Putin. I think that hasn't panned out. If anything, I think it’s made them more anti-Western.

I don’t think we should be lifting sanctions on these guys. I mean, I think they control huge swathes of the Russian economy. And if the sanctions are designed to weaken the Russian economy, these guys and their businesses should be under sanctions.

But I think the Russian state operates very much like the Russian mafia… [U]nlike the Italian mafia, [which] is dominated by families, the Russian mafia operates through opportunistic partnerships. And I think that’s very much the way Putin operates.

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Propaganda is a front in the war.

We recorded the interview on August 26—after the FBI raided the Virginia home of Dmitri Simes, but before the DOJ dropped sanctions on him, on the owners of Tenet Media, and on other Russian chaos agents for the “doppelgänger” active measure. I asked about how Simes and others like him might fit into the picture.

“It’s pretty clear that Putin is waging a propaganda war in the West,” Baker says. “And they can’t just sit by and let that happen without some sort of response.”

She continues:

Of course they’ve complained: This is against freedom of speech, et cetera, et cetera. But this is a crucial front in Putin’s war—this sort of proxy war in the West, to not only undermine democratic institutions, but transmit the Russian message, which you see everywhere….

You see it even with the sanctions debate. You know, when I was writing this book, everyone was like, “Sanctions, don’t work. What’s the point?” And I have to tell them, “You do realize you’re just parroting a page out of Putin’s propaganda book, right? Because that’s what he’s saying. That is what he’s saying because he wants the sanctions lifted. That’s the message he’s trying to get out there, to undermine support for sanctions in Washington.”

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PREVAIL host Greg Olear talks to Stephanie Baker about her superb new book, “Punishing Putin: Inside the Global Economic War to Bring Down Russia,” on the West’s financial warfare against Putin after the invasion of Ukraine. They discuss the oligarchs and their complex relationships with Putin, the challenges of implementing economic sanctions on an economy as big as Russia’s, Boris Johnson’s role in the push for sanctions, the unintended consequences and byproducts of the economic warfare, the role of Telegram, and the potential consequences of Moscow’s nuclear weapons. The conversation concludes with a discussion on the future of Putin's regime and potential actions that could be taken to support Ukraine.

Stephanie Baker is an award-winning investigative reporter at Bloomberg News. She began her reporting career in Moscow during the 1990s. She received her master’s at the London School of Economics and her work has been recognized by the Gerald Loeb Awards, the Overseas Press Club, the UK Society of Editors, the Society for Advancing Business Editing and Writing, and the UK’s Foreign Press Association.

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https://www.simonandschuster.com/books/Punishing-Putin/Stephanie-Baker/9781668050583

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Check out ROUGH BEAST, Greg’s new book:
https://www.amazon.com/dp/B0D47CMX17

ROUGH BEAST is now available as an audiobook:
https://www.audible.com/pd/Rough-Beast-Audiobook/B0D8K41S3T

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