Russia’s private armies

Jun 28, 2023

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GOOD MORNING and welcome to Global Insider, coming to you this Wednesday from Sydney, Australia. My name is Zoya Sheftalovich, and I’m POLITICO’s Ukraine-born, Australia-based editor of the Brussels and London Playbooks. As this newsletter hits your inbox, I’ll be listening to Vivaldi and Piazzolla’s Four Seasons at the glorious Great Synagogue, built in 1878, home to the oldest congregation in the Sydney Jewish community — and the city’s newest “secret” concert venue. It’s not Swan Lake — but I’ll take what I can get.

RUSSIA’S PRIVATE ARMIES

WAGNER ADMISSION: Russian President Vladimir Putin finally admitted on Tuesday that Yevgeny Prigozhin’s Wagner Group of private military contractors is in fact fully funded by the Kremlin and has received tens of billions of rubles of public money. From May 2022 to May 2023, the Russian state paid more than 86 billion rubles (approximately $1 billion) to the Wagner Group, Putin said.

Technically, PMCs have long been illegal in Russia — but what’s a little constitution-busting for an autocrat?

Tip of the iceberg: Wagner is by no means the only PMC with close links to those in the Kremlin. There’s the Patriot Group, which the U.S. State Department says is run by Russian Defense Minister Sergei Shoigu — one of Prigozhin’s bête noires, whose head the Wagner chief was calling for during his mutiny last weekend. Patriot operates in Ukraine and competes with Wagner, according to the U.S. State Department. Then there’s Convoy, a PMC founded by Sergey Aksyonov, the Moscow-appointed governor of annexed Crimea and run by former Wagner supervisor Konstantin Pikalov.

Oligarch Gennady Timchenko, a close Putin ally, owns Redut, which was ostensibly created as a security company for his gas empire. Redut forces were reportedly among the first to enter Ukraine, along with Wagner, when Putin launched his full-scale invasion in February 2022. The Don Brigade is affiliated with Redut, and is mostly made up of Cossacks. And Russian state oil giant Gazprom has multiple PMCs that have been fighting in Ukraine — the newest was authorized by Prime Minister Mikhail Mishustin earlier this year.

So why does Putin love PMCs? The contractors are cheap, flexible and expendable — when thousands of them die at the frontlines in Ukraine, there’s no need to bribe their families with apartments or cars. Plus, using PMCs allows the Kremlin to maintain plausible deniability for its shady activities and hybrid warfare, at home and abroad.

Divide and conquer: Over his two decades of ruling Russia, Putin allowed the various PMCs to run around the world doing Moscow’s dirty work, their activities overlapping and their bosses warring — meaning no one amassed enough power to challenge the czar.

Reining in Wagner: But Prigozhin's prodigious grasp of the power of social media (he is, after all, the man behind the shady Internet Research Agency troll farm), has seen the warlord amass unprecedented recognition and a huge fan base. With every macho man missive and video of sledgehammer beheadings, Prigozhin built a brand recondition and popularity that threatened Putin's own. Seeking to defang Prigozhin, Shoigu announced that Wagner mercenaries would have to sign contracts with the Ministry of Defense by July 1 — a move many have speculated is the real reason behind the weekend's mutiny.

Reminder: On Saturday, Prigozhin ordered his Wagner mercenaries to seize Russian cities and marched them to within 200 kilometers of Moscow, in a move Putin described as “treason.” The challenge to Putin’s regime has been viewed as evidence of his weakening grip on power in Russia. The fact he allowed Prigozhin and his men to escape across the border into Belarus is yet more fuel to the fire.

What happens to Wagner now? According to the Kremlin, Wagner — and Prigozhin — will live on (at least for now). Wagner forces are active in several African countries, including Mali and the Central African Republic, helping prop up anti-Western governments in exchange for access to natural resources, and Russia’s Foreign Minister Sergey Lavrov vowed they will keep working there.

And what happens to Russia? It’s clear that Putin is wounded. A succession fight involving nukes, a private military up for grabs, an ascendant Belarus — it’s all on the table in a post-Wagner mutiny world. My colleague Lili Bayer takes a look at the likely scenarios.

VIEW FROM THE CAPITOL: The Wagner turmoil is giving Ukraine’s allies on Capitol Hill new ammunition in the fight to secure more weapons and aid for Kyiv, report my Stateside colleagues. Lawmakers argue the schism between Putin and Prigozhin is a sign Western-supplied weapons are working, and that Washington needs to navigate skepticism in Congress to keep the tap open.

MEANWHILE, IN UKRAINE: Russia bombed a pizzeria in the eastern city of Kramatorsk on Tuesday night, killing eight people and injuring dozens, Ukraine’s emergency services said Wednesday.

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AUSTRALIA’S POLITICAL LABORATORY

LOOKING FOR INSPIRATION DOWN UNDER: Britain’s Conservatives have for years turned to rightwing Australian strategists Lynton Crosby and Isaac Levido to help them win elections. These consultants have been credited with masterminding the successful election campaigns of U.K. Prime Ministers David Cameron and Boris Johnson.

Us too! But now British left-wingers are looking for some Australian pixie dust too — with the U.K.’s Labour Party taking inspiration from the aggressive campaign run by Australia’s new Labor prime minister, Anthony Albanese, my colleague Stefan Boscia reports.

When they go low, you go even lower: The advice from Australia’s left-wing political strategists is simple: aim low and get personal. Local elections in England in April proved a testing ground for that Aussie-inspired approach, with Labour trialing a controversial ad accusing Prime Minister Rishi Sunak of being soft on sex offenders. Labour officials told Stefan the social media ad was clicked around 20 million times, and was the most viewed digital post ever created by the party.

GLOBAL RISKS AND TRENDS

EU CLINCHES DEAL ON DATA ACT: European Union legislators struck a deal Tuesday evening on a landmark bill that aims to regulate who can access and share data generated by connected machines and devices. The new law is a response to the untapped potential of industrial data in Europe, as 80 percent of machine or device-generated data is never used. My colleague Pieter Haeck has an explainer on the new law.

CONSERVATIVES VS. EU’S GREEN AMBITION: A right-wing campaign to put key elements of the EU’s Green Deal on ice is gaining momentum, leaving European Commission President Ursula von der Leyen in an awkward position. On Tuesday, von der Leyen’s own center-right European People’s Party (EPP) and its allies succeeded in blocking the EU’s landmark nature law from passing a key committee vote — part of a larger effort to press the pause button on environmental legislation.

Titans of industry: The conservatives argue Brussels risks overburdening industry and farmers with the dozens of proposals that make up the European Green Deal. The group has fought particularly hard against legislation aimed at greening agriculture, like new rules on pesticides and land use, reports my colleague Zia Weise.

WEST BANK WORRIES: U.S. Secretary of State Antony Blinken "conveyed concern" over escalating violence on the West Bank during a call with Israeli Foreign Minister Eli Cohen, the State Department said Tuesday. Earlier the same day, the U.N. Security Council had urged both sides to avoid actions that can further inflame tensions in the volatile region, amid escalating violence. Both the U.S. and Russia backed the statement, in a rare moment of unity. More here from AP.

COST OF CONFLICT: Deaths from conflict globally almost doubled in 12 months to the highest levels this century according to the Global Peace Index 2023, with 56 percent of the world’s countries involved in external conflict.

GLOBETROTTERS

EU COUNTRIES HELP ITALY INSTALL CONTROVERSIAL FINANCIAL CRIME PROSECUTOR: Italy’s government helped install Andrea Venegoni as a new prosecutor at the EU’s financial crime-fighting agency over the recommendation of outside experts, prompting criticism that Rome is threatening the body’s credibility. Prime Minister Giorgia Meloni’s government pushed for Venegoni despite an independent panel of judiciary experts ranking him last among Italy’s three candidates.

Why this is raising eyebrows: EPPO is the independent body responsible for investigating and prosecuting crimes against EU financial interests. Italy’s prosecutor, while part of EPPO, would have significant powers with regard to investigations conducted in his country of origin. POLITICO’s Elisa Braun has the details.

NZ IN CHINA: New Zealand’s Prime Minister Chris Hipkins visited Beijing to promote trade, meeting China’s leader Xi Jinping on Tuesday evening. After the meeting, Xi told reporters through an interpreter: “I myself attach great importance to our relations with New Zealand,” and “China always views New Zealand as a friend and a partner.”

JAMON BARRELING: Spanish Prime Minister Pedro Sánchez pledged to extend a package of subsidies and tax cuts as he seeks support ahead of the country’s July 23 snap election, which he called after his party’s miserable showing in regional and local elections last month. According to POLITICO’s Poll of Polls, Sánchez’s Socialists are 7 points behind the center-right People’s Party of Alberto Núñez Feijóo, who expected to win the election and form a coalition government with far-right Vox.

BORIS REVELATIONS: Former U.K. Prime Minister Johnson stayed at the Lebedev family villa in Tuscany while it was under surveillance by the Italians due to fears it was being used for spying, Channel 4’s Dispatches reports. Johnson, who was the U.K.’s foreign secretary at the time of the trip in 2018, made press baron Evgeny Lebedev a lord in 2020 — a move government officials wanted the late Queen Elizabeth II to block, according to the doco.

NOT WELCOME IN D.C.! The i newspaper reports that a Russian government plane flew to Washington, D.C. to bring key diplomats back to Moscow due to increasing tensions with Western countries.

MOVES

Italy is set to pick Fabio Panetta, currently a member of the European Central Bank’s executive board, as the next governor of the Bank of Italy (h/t Ben Munster).

OpenAI has recruited Sandro Gianella, a former fintech lobbyist, as its new head of European policy and partnerships, he announced in a tweet.

BRAIN FOOD

TORTURED HISTORY: A Reuters investigation discovered President Joe Biden and every living former U.S. president is a direct descendant of slaveholders — apart from Donald Trump.

FOCACCIA? I HARDLY KNOW ‘ER! Archaeologists have discovered a fresco featuring what looks like a pizza among the ruins of ancient Pompeii. Alas, the experts say that because the dish doesn’t feature mozzarella or tomatoes (which were only introduced to Europe from the Americas a few hundred years ago), it’s a focaccia. Judge for yourself here.

Thanks to editor Tim Ross and producer Sophie Gardner.

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