136. ANALYSIS: Catrina Doxsee on Wagner mutiny, Prigozhin’s relationship to Putin, and the future of the Wagner group
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Welcome to the War in Ukraine update from Kyiv podcast. I'm Jessica Gnauer, a senior lecturer in international relations at Flinders University in Australia. And I'm talking today with Katrina Doxey. Katrina is an associate director and associate fellow for the Transnational Threats Project at the Centre for Strategic and International Studies.

The Transnational Threats Project focuses on international and domestic terrorism and the irregular activities of countries such as Iran, Russia and China. Now, Katrina and I have recorded a previous episode, that was episode number 124, if listeners want to go back and have a look, where we discussed terrorism.

broadly, what the Wagner Group is and how they operate. Today, Katrina is back to unpack for us a little more about what's actually been happening with the Wagner Group in the last month, relations between the Wagner Group and the Russian state, and what might be trajectories of the group going forward. So thanks for joining me on the podcast again today, Katrina.

Thanks for having me back. So first of all, could you help to clear up for myself and for listeners? I'm somewhat unclear about the relationship between the Wagner Group and the Russian state, and in particular, how that relationship operates financially. So as I understood it, Wagner activities in countries in Africa, such as Syria, Mali or Libya, were essentially run as

private operation in the sense that Wagner operatives would be paid by foreign governments or other actors to carry out certain activities. And Yevgeny Progozhin was running that as a for-profit business. In this regard, I'm a little bit confused about what happened once Wagner fighters started to operate more seriously within Ukraine after Russia's full-scale invasion, but

Were they then being entirely paid by the Russian state, as Putin has since claimed? And if yes, was that really a step beyond the way in which the Russian state and the Wagner Group had been linked prior to that? Yeah, so it's a great question. And the answer is complicated. And it still, frankly, has holes in it.

I'll talk through basically what my best understanding is based on the evidence available, based on analysis that has been done in the open source. But I think for this question and frankly for our whole conversation today, I think it's really important to keep in mind that there are

many more things unknown than things that we know at this point in time. There are a lot of questions about the future of Wagner, the future of Prigozhin, the truth about all of the details that happened with this agreement between Prigozhin and Putin, this mystery second meeting that the two of them allegedly had, not to mention all of the remaining questions about the inner workings of Wagner that have always been shadowy by design.

So in terms of the funding, we know that for most of these operations abroad in places like Sub-Saharan Africa, Wagner receives a contract with the local host state, which often includes some kind of monthly service fee.

But the bulk of their profits end up coming not from that payment, but from various other activities that they carry out, including resource exploitation, things like mining for gold and gemstones in places like the Central African Republic, access to energy resources, and pursuit of other resources such as timber and coffee.

They also pursue various other commercial activities, oftentimes with other political benefits. So, for example, we see some of these shell companies in the Wagner orbit that have purchased media stations, ranging from local radio stations to building up online platforms that provide information and news in local languages.

Across all of this, they generate a lot of profit. The majority of that, of course, is coming from the natural resource exploitation and is achieved by smuggling these resources into loosely regulated markets in places like the UAE and Turkey, where they can be sold without any record on paper. Now, at that point, it's very hard to track exactly where that money goes.

We know that at least some portion of that goes into continuing to fund Wagner operations, including allowing them to actually pay their troops better than they would be paid were they a member of the regular Russian military. We know that some of it is certainly profit for Prigozhin and others in Wagner leadership, and it's suspected that other amounts of that money do go back to Putin and the Russian government.

This has been especially important for Russia since the war in Ukraine began in February of 2022 because Russia has been hit with so many sanctions from the West that these other means of income that can be done off the books that rely on raw goods

actually help to soften the impact of some of those sanctions by allowing profit to continue to some extent. We've seen operations for gold and gemstones increasing over the past year in places like the Central African Republic, and we expect that they still continue to see this as a heavily profitable business.

In terms of funding from Russia, we've seen most directly in places where Wagner has been working directly as a combat force multiplier for Russia, in a place like Ukraine, that there is funding from the Russian government directly to their operations. This is something that Putin famously claimed credit for shortly after the mutiny, as he tried to position Wagner as being always in service to the Ministry of Defense.

and actually made some snide cuts in there as well about Prigozhin's financial management, including with his broader Concord Services company. This is his catering business and the wider network of commercial entities linked back to that, kind of laying the groundwork for potentially accusing him of defrauding the Russian government. And so there we see Putin claiming that Russia had always funded Wagner,

It was unclear, though, in how he framed that statement, if he was just talking about Wagner operations in Ukraine, or if he was talking about Wagner operations overall. I think

On the overall front, looking at their activities in the Middle East, in Africa, in Latin America, we certainly see a good amount of profit being generated by Wagner, not just being funded from the Russian government. And we certainly see payments coming from those host governments where they've signed contracts.

And I think another piece of it there is that we've always had these links to the Russian government, not just because Wagner was helping to achieve their goals, whether that's political and diplomatic, military, economic.

but also because they're actually helping to carry out the terms of some of the security cooperation agreements that Moscow has with these host governments. And that includes things like equipment sales, arms transfers. And so many of the things that Wagner is providing

may come from the Russian military. If Russia is selling arms to Mali or to the Central African Republic, Wagner may be facilitating that. And so in that way, you could say that they're receiving direct financial or material support from the Russian government.

But I think that once you get away from the direct battlefield in Ukraine where they're working or they've been working for the mutiny alongside Russian forces, I think it gets a lot murkier to say that everything is solely funded by the Russian government because we see them actually turning such a profit themselves. Yeah, that makes sense. And

It somewhat confuses me that private military companies are actually illegal within Russia. So how then does Putin come out and claim that the Russian state is funding the Wagner activities? As you said, not quite clear whether he meant only within Ukraine or whether he meant more broadly than that. But how does Putin navigate that line between

private military company actually being illegal and then claiming a direct relationship with the Russian state? That is also a fantastic question. And I think it points to some of these loopholes that Putin has long used to be able to justify the existence of companies like Wagner, but also PMCs that predated Wagner, PMCs that are associated with some of the major energy companies, including Rosneft and Gazprom,

And actually that latter group is one of the major reasons that we actually have this loophole in the Russian legal code to allow these security operations to be ongoing. But I want to take us back to a tension that I think we started to see in the legality of PMCs last fall. So as you mentioned, PMCs are technically illegal at this point in time under Russian legal code.

That said, they of course continue to operate, although it's debatable if PMC is even the right term for something like Wagner that is not fully private because it reports to the Russian government and not a company. It's really this kind of murky network of different commercial entities and financial intermediaries. But taking that on face value, calling it a PMC because it's our closest approximation, we've long had...

groups like Wagner operating in this shadowy space where they don't exist on paper in Russia, but because they are technically a private military company associated with Russia and they are technically illegal, if they were to step out of line, if they were to work against

Russia's interests abroad, they could theoretically be dissolved overnight, their leadership could be arrested, and Putin is able to maintain that leverage over them. We started though last fall to see them playing with this definition as regards to Wagner.

So prior to the fall of 2022, Progozhin would vehemently deny any connection to Wagner. He even went so far as to bring lawsuits against researchers or journalists who would accuse him of leading the group. Then we get an about face in the fall of 2022, where Progozhin comes out and publicly admits that he leads the Wagner group. He begins to appear in propaganda videos, but

both alleging to be on the front lines, of course he was not on the front lines in Ukraine, he was somewhere much safer, and also in videos recruiting, including in prisons. About a month after all of that, we see Wagner open up their first official headquarters in St. Petersburg, which is notable not just because it's a headquarters building for them, but because it's on Russian soil, despite this murky legality.

And so we started to see at that point first that Prokofiev was feeling more confident in the security of his position and the dependence that Wagner had fostered on it by the Russian government.

But also we saw that Wagner was starting to walk this line where they wanted to be more open about their existence, where Russia was acknowledging them in terms of the Ukrainian battlefield. But they were still operating in this old shadowy, deniable model in Africa, in Syria, in Latin America, in these other further abroad locations.

And back at that time, we knew that that wasn't going to be sustainable for them. And now with things like Putin's statement coming out and talking about how the Russian government had funded them, acknowledging their existence, all of this in Ukraine, which already had been kind of acknowledged over that period of time, you once again have this

strong dichotomy between the recognized operations in Ukraine and in the European theater versus these more deniable activities abroad. And I think that that's something that Russia and Wagner never really squared the circle on. And I think that just further complicates now matters as they try to sort out who controls what and how Russia will continue to reap the benefits of Wagner and all that it's built.

going forward, even after the events of last month. Yeah. Looking more closely now at this sort of strange attempted insurrection that took place on June 23rd, how did you evaluate what motivated Progosian's actions around that weekend? Yeah. So I'm

in the camp of believing that he really did view it more as a mutiny against the Ministry of Defense, rather than a coup or a real challenge to Putin's political power. I think that he was used to being able to openly criticize and challenge the Ministry of Defense. We had seen for months that he was becoming more and more open in the press,

and on his various social media channels where he had a big platform criticizing Gerasimov, criticizing Shoigu, and criticizing the way the MOD was executing the war. And

It was speculated many times that no one else would be able to get away with saying the things that Prigozhin was saying. But it appeared that Putin was allowing the different factions to play off of one another in some sense as a way of limiting all of them without himself having to step in and choose sides or stake out a position that could be proven to be wrong down the line.

I think that Prigozhin hit a point, though, in June when the Ministry of Defense released a July 1st deadline for Wagner troops to sign contracts with the Ministry of Defense that would effectively make them members of the Russian military as opposed to part of this quasi-independent organization. And at that point, Prigozhin perceived this as an existential threat.

It wasn't just a matter of how much equipment or ammunition or money they could get for operations. It wasn't just a matter of how the war was being strategically planned. This was suddenly a question of whether or not Wagner would continue to exist as it currently did, if he could remain in control of it.

with all of the power and prestige and political potential that that has granted him, especially since the beginning of the war in Ukraine, as they've received this higher profile role.

And I think it was up in the air at that point if the Ministry of Defense was only intending to draw in the members of Wagner who were fighting in Ukraine, or if this would also potentially be a backdoor to the government taking control of some of the other Wagner Group activities further abroad, including these lucrative mining opportunities and other ways of exploiting natural resources.

So this was an existential threat to the entire business and the entire means of operations and power that Progrosian had built. And so he led this mutiny, I think is maybe the easiest term to use, mutiny or uprising against the Ministry of Defense as a way of coercing an outcome where Wagner could remain independent. It's unclear what exactly his end goal was.

If it was toppling Shoigu and forcing someone new to come in as the head of the Ministry of Defense, whether by force or by coercing Putin to make that decision and replace him. If it was simply to scare them into backing down on this July 1st deadline or the requirement for contracts altogether, unclear.

But I believe what happened was that perhaps Prigozhin miscalculated how far he could go while being perceived as only challenging the Ministry of Defense rather than Putin as well. And it appears that Putin also didn't expect Prigozhin to take this kind of action that could be perceived as being against his own rule rather than just criticizing the Ministry of Defense.

We do have evidence that Putin had intelligence that this was going to happen sometime in advance. No action was taken. And when he did come out and speak after Prigozhin was killed,

already publicly criticizing his entire rationale for the war, a criticism that had particular impact because Rogozhin is not a typical left-wing critic of the regime, but is actually, he's on the political right. He's someone who has been trusted by Putin and someone who has been in that inner circle helping to carry out the war. And then here he is criticizing Putin's entire rationale. After that, Putin comes out with his response to

And that response is extreme. If you look at his remarks from that Saturday, Putin comes out and first he condemns the actions of Wagner as they march toward Moscow. He promises swift and extreme punishment to all those involved.

And he's the one who actually makes the comparison to 1917. Of course, 1917 is the revolution that ended the regime of the Tsar. Notably, it was heavily rooted in a military mutiny.

Now, if I'm Putin, that's the last comparison I want anyone to be making. The fact that he was the one who put that analogy out there tells me that he was shaken up by this. That is, in some ways, a sign of weakness itself to start calling upon that comparison. And that was just one of many signals, both domestically and internationally at that point in time, that there was tremendous weakness in his regime and the Russian government. And

And all of that was then paired with shortly afterward, after promising this extreme punishment, suddenly coming to what was a relatively lenient deal. This agreement, which we still don't have full knowledge if there are other terms and conditions that were not made public.

But this agreement where Prigozhin could go to Belarus, Wagner troops who had participated in this mutiny could go to Belarus with him and wouldn't have to sign contracts with the Russian MOD, and none of them would be punished for their role in the mutiny. Of course, it was later publicized that the case against Prigozhin himself had not been closed, but there would be amnesty for all of the troops and Wagner personnel who had participated. This is a big about-face from Putin.

And while there's no denying that it came at incredibly high cost for Prigozhin and for the future of Wagner broadly, ultimately Prigozhin did sort of achieve his goal. If we believe that his goal was to secure some form of continued independence and autonomy for Wagner and keep it under his control, he effectively got that with this Belarus deal. So we have this ongoing

ongoing relationship between Putin and Prokosian themselves, that we know these two men have had some kind of friendship slash business relations for many decades. And Putin did meet with Prokosian a few days after

after that sort of attempted mutiny, which came out later somewhat as a surprise. Prokofiev seems to have gotten off relatively lightly at this stage, as you said, although we, of course, don't know what might happen in future. You talked about this a little bit already, but how do you see Putin's response to what happened and the ongoing response

relationship between these two men? Yeah. So this is probably not a satisfying answer, but I truly don't know. My sense of the ongoing relationship is that it is weird and it is incredibly difficult to understand from the outside, particularly lacking some of the cultural context as we in the West look on and try to understand

First of all, the unknowable minds of two very complicated figures, but also are looking into this political system that doesn't work the way we're used to in the West. It very much relies on this mafia style, gangland style politics, the views of the strong men and the people that they can use and the people that they need to keep close to them to control.

It's very difficult to say. And I think that as we follow the news of what's going on, and as we try to understand what we can expect to have happen next, it's important to be upfront with the things that are frankly unknowable at this point. We can certainly speculate, but I think most...

What I find more helpful at this point is just to acknowledge, frankly, it is shocking that Prokofiev reportedly went back to Russia after he left, that he reportedly had yet another meeting with Putin.

And I think a lot of us are surprised now to see evidence that Prigozhin has arrived in Belarus, that he appears to be alive and well and continuing to encourage on his troops that they're going to do work in Belarus, as well as really turn their attentions more heavily back to Africa. So I think that it's helpful to just, first of all, acknowledge that there are a lot of unknowns.

But then within those unknowns, to really think about what motivations and interests each of those players has. We can't know why they've done the things they've done so far, but we do know some of the things that are their unshakable interests. So for Prokosian, we know that his livelihood, his reputation, his stature, all highly depends on maintaining control over the Wagner network.

This is the core paramilitary function, as well as the various other companies linked to it, including the smuggling network, resource extraction companies, companies involved in information operations and media influence. All of that has made him his fortune and secured him tremendous power. And he's unlikely to let that go.

For him at this point in time, I think while we, of course, always have to take with a grain of salt the things he says publicly because he knows that he has a wide international audience trying to understand everything he's thinking, I think that there is something rational in what we heard from him in the video that he released last week in Belarus.

saying that they didn't have an immediate goal now in Ukraine, although they may return at some point in time. They were going to do work in Belarus and they were going to ramp up their focus once again where the heart of their operations are in Africa.

That is pretty consistent with what we see just even looking at their business networks. The bulk of his profit is coming from Africa. And the most successful of Wagner's operations, the ones where they've really become tightly entrenched in the functioning of different states, that's in Africa, and particularly in sub-Saharan Africa with cases like the Central African Republic.

In that region, they also have the potential for new deployments to places like Burkina Faso that are facing similar challenges to places like Mali, where they're already present.

This has the most potential for expansion and continued success building off of what they've already done. And so I expect that for Prigozhin, at this point, it's really about his survival, both personally and politically, and maintaining control of that business network. On Putin's side and thinking about the Russian government more holistically, I think that it's helpful to look at two different questions as we look to the future.

There's the question, of course, of what is Wagner's future, but there's also the question of what is the future of the Russian private military company model. Over the past about almost 10 years now, since Wagner was created in 2014, after the 2014 invasion of Ukraine, it's really been at the forefront of spreading Russian influence and achieving objectives

in regions further abroad and places like Africa, getting into Latin America, the Middle East. And it has done so basically at very low cost.

and with very little sense of accountability, either on the international stage or to the domestic population. That is a very lucrative model, especially as Russia faces ongoing dissent at home, the pains of trying to operate a long war in Ukraine, including the drain on resources and personnel to even fill out the ranks of their military,

And it's something that has been, for what it is, relatively successful in spreading Russian influence to an extent that it hasn't enjoyed since the end of the Cold War. It's created dependencies on the Russian government in some of these fragile states.

And I frankly don't see much of a reason that Russia would abandon that model of operations, even if what Wagner looks like changes, even if it has a new name, a new banner, a new person in charge, or splits into a few different sub factions with different leaders. I don't see the overall use of private military companies as a tool of irregular warfare to spread influence and achieve goals. I don't see that going anywhere.

In terms of Wagner's future itself, I think that while it's very possible that as we look to the medium and long term, Russia could look to put new leadership in charge, particularly new leadership that it could keep on a shorter leash, have more direct control over, and potentially even split up into a few different entities rather than just having them all networked under one owner.

in part because we've seen the dangers of having one person, Prigozhin, with a monopoly over that much influence and that much power. But I don't think that they'll actually gut the operational infrastructure that Wagner has built up. So the challenge to Russia at this point really is with the top level leadership,

and the ability to control the strategy of the Wagner Group to make sure that profits continue to come in for the Russian government as well as Prokhorin himself.

and to ensure that their operations, both in places that they currently are located and places they're looking to adventure into next, remain in line with Russia's various geopolitical goals. What they don't want to do is have to reinvent the wheel. Wagner, in the time that it's been in these countries, has built up a tremendous amount of institutional knowledge. Its troops have gained experience.

They've built personal relationships. They've come to understand systems and they've built up ways of operating. Particularly, I'm thinking of countries like the Central African Republic, where they've become deeply integrated into the way the state functions, even beyond just providing military assistance or training. And

Number one, that's going to be extremely difficult to replicate, especially without a clear successor to Wagner. And number two, if you try to dismantle that infrastructure or fully remove the operational level Wagner personnel from these countries,

you're going to have a very dangerous for Russia period of transition where there's potentially a vacuum that others could fill, or you simply risk some replacement not successfully integrating in as well as Wagner has done. And so when I think about Putin's interests and Russia's interests, I think that it logically makes sense that they want to keep that infrastructure in place.

They just want to adjust the management so that they can ensure loyalty and ensure control. And so that's what we'll likely see them pursuing. I think understanding those interests, even if we can't really get inside the mind of Putin or Prigozhin,

helps us to contextualize why they might do the things that they do and what sorts of things they'll be prioritizing as they look to the future and as they look to continue to balance this relationship with one another and respond to one another's actions while still trying to reap all of the benefits that they've each gotten from Wagner's operations. So interesting. Thank you.

Thank you so much, Katrina. This has been a fascinating and really illuminating discussion for me and I'm sure for listeners as well. I appreciate your time today. Thank you so much for having me and...

I know that many questions remain, but I think it is important just to recognize the tremendous number of unknowns that we're currently facing. And this will be an issue that we continue to watch in the coming weeks and months as we see what happens next. Yeah. And it's certainly helped me to start to disentangle some of the complexities. So thank you so much for that. Thank you. Thanks for listening. And thanks to Gonca Varol for our theme music.