Publication of the Panama Papers in April 2016 acted as the trigger for the chain of events now known as the Russian hacking scandal, according to two leading Russian investigative journalists.
The Panama Papers, a trove of leaked documents detailing offshore money movements, named Sergei Rodulgin, a close friend of Russian President Vladimir Putin, as being involved in a string of murky financial transactions involving hundreds of millions of dollars. Rodulgin’s alleged involvement in the transactions heightened speculation that Putin was stashing billions of dollars in illicitly obtained funds in offshore accounts.
Based on painstaking research and extensive interviews, the two investigative reporters, Andrei Soldatov and Irina Borogan, contend that Putin saw the Panama Papers’ release as a direct attack on his leadership, and part of a conspiracy to destroy him involving Hillary Clinton, the financial firm Goldman Sachs and a consortium of investigative journalists.
Feeling a need to “fight back,” the Kremlin mounted a counter-attack against Clinton, who in the spring of 2016 was the leading contender for the Democratic Party’s presidential nomination.
The hacking of the email accounts of leading Democratic Party figures actually started out as a “conventional espionage” operation,” Soldatov asserted during an October 18 appearance at Columbia University’s Harriman Institute. But he said the Panama Papers’ release prompted the “Kremlin’s weaponization” of the information obtained via hacking, in the form of leaks specifically designed to undermine Clinton’s credibility and damage her presidential aspirations.
Clinton had been a bête noir of the Kremlin since her stint as secretary of state during the Obama administration. Putin has long believed that she was responsible for stoking the mass protests in Moscow and elsewhere over his controversial presidential election victory in 2012. According to Soldatov, Putin saw Goldman Sachs as the financial power behind Clinton.
A full account of Soldatov’s and Borogan’s investigation into the hacking scandal is included in a new edition of The Red Web, a book originally published in 2015 that traces Kremlin efforts to establish control over the Internet in Russia.
In conducting its hacking campaign, the Kremlin relied heavily on “patriotic hackers” who acted as freelancers, according to Soldatov and Borogan. Doing so gave the Kremlin plausible deniability of government involvement. In addition, they were able to produce faster and better results.
“The [outside] hackers are much more skilled than FSB guys,” Soldatov said, referring to Russia’s Federal Security Service, the successor organization to the Soviet-era KGB.
The hacking campaign has turned out to be counterproductive for Russian national interests. Its discovery has caused a spike in tension in US-Russian relations at a time when Russia could benefit from stable ties so that it could address serious economic weaknesses. Despite this, Borogan believes Russian cyber operations probably will not end anytime soon. That is because the Kremlin decision-making process is often reactive and based on emotional responses, rather than reason.
“These people are extremely emotional,” Soldatov said, referring to the Kremlin leadership. “They feel under attack … and don’t feel properly respected.”
There is still a line that Russian hackers are probably unwilling to cross – mounting an attack against critical infrastructure in the United States, such as a power grid, Soldatov said. But that is not because of any ethical constraint: Russia’s likely reluctance is rooted in concern about its own weakness against a counter-attack.
“The Russian Internet is built on American technology, especially Cisco,” he said. “Thus, Russian critical infrastructure is vulnerable.”