THE FOREIGN SERVICE JOURNAL | MAY-JUNE 2026 55 grew during the twilight months of the Soviet Union. In late September 1991, Fred Zeder, president and CEO of the Overseas Private Investment Corporation (OPIC), planned a visit to St. Petersburg to discuss bilateral agreements. OPIC’s advance message said Zeder was “well aware of … Sobchak’s interest in commodity-based trade expansion concepts. … Post is requested to pave the way for meetings in St. Petersburg with the mayor and colleagues interested in private sector transactions (possibly including Vladimir Putin) to advance this process or U.S. investment in general.” In late October, when Deputy Secretary of Defense Donald Atwood came to tour Russian defense plants, Putin was again on the tarmac to greet the delegation. Agriculture Secretary Edward Madigan also visited and met with city officials, including Putin. In early December 1991, OPIC sent a three-person working delegation to follow up. In an informal note to the consulate, they asked for help setting up meetings with “Mayor Sobchak, privatization expert Vladimir Putin, and/or anyone else they recommend.” On December 8, 1991, Treasury Deputy Secretary John Robson came to discuss establishing a U.S. business school in the Soviet Union, but his meeting with Sobchak and Putin does not seem to have been a success. Sobchak spoke of the food crisis in the city and blamed problems on Ukrainian farmers and communist dead-enders. In the weeks prior, a Sobchak aide had given the consulate a readout of the chaos in the mayor’s office. The aide said Mayor Sobchak was circling the wagons and taking counsel only from Putin and the new deputy mayor, Georgy Khizha, describing them as the two strongest influences on the mayor. The privatization of state-run enterprises and real estate controlled by the mayor’s office provided ample opportunity for corruption, and Sobchak and his staff took advantage of the possibilities. In those days of a relatively free press, none of this was a secret. In a television interview broadcast February 24, 1992, Putin said that he had not taken bribes in his current post but had found means to “supplement” his income when serving in previous positions. Putin editorialized that he could hardly be blamed for such behavior, given his meager government salary and the fact that he had two children to feed and clothe. In a telegram sent four days later, the consulate reported: “A spate of articles have appeared in local newspapers detailing official allegations of corruption: both City Council deputies and high-ranking staffers in the mayor’s office have been accused of conflict of interest and are under investigation. Vladimir Vladimirovich Putin … and his deputy Oleg Markov are both under investigation for potential conflicts of interest in their involvement in a local tourism company.” A Rising Star The consulate followed up on March 3, 1992, with a 36-paragraph analysis of Sobchak’s performance and his Soviet leadership style, which it called opaque, secretive, and not very competent. Charges of corruption were laid, and Putin was included in the bill of particulars. The consulate did not find Putin easy to work with and a now-familiar picture of Putin emerged: “Another major player in the Sobchak administration is Vladimir Putin … through whom all foreign contacts must pass (we manage to avoid him). Although a young man, Putin comes from an ‘old guard’ background: an admitted former KGB agent. … Putin … has brought his own cronies into the administration, most of them former communists.” The U.S. government had plans for a “Russian American Enterprise Fund” for the newly renamed Russian Federation, and when a team led by then–State Department official Liz Cheney visited in October 1992, Putin was the highest-ranking official they met. He recommended U.S. businesses remain in St. Petersburg to provide management and technical expertise to Russians. He argued that the enterprise fund should be headquartered in St. Petersburg rather than Moscow because it had more international business, closer links to Europe, and was less bureaucratic than Moscow. Putin endorsed Cheney’s suggestion that enterprise funds be used for “spin-off” enterprises from former defense industries and encouraged U.S. government involvement in them. The enterprise fund could, Putin said, finance defense conversion and help economic development in the region. It would not be smooth sailing for U.S. investors in postSoviet St. Petersburg, however. In March 1993, the consulate sought Putin’s help because organized crime was threatening the managers of a joint venture. The American staff had hired bodyguards. Putin promised to help, and the consulate reported they would be following up with him, adding that crime was becoming a leading issue for the American and Western business community. Despite these concerns, official U.S. engagement with St. Petersburg only increased. In June 1993, the Coast Guard cutter Gallatin visited and hosted public tours for three days. Putin first appears in a consulate report of Mayor Sobchak’s inaugural reception in June 1991.
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