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Anatoly Sobchak never imagined that the quiet student who faded into the background of his law classes would someday become Russia's most powerful leader.

"He was just an ordinary student," the former law professor said, recalling a colourless teenager named Vladimir Putin.

"There were other students who shone more brightly than him. This is his characteristic feature -- not to stand out among others. It is his nature."

In the 28 years since that second-year law class at Leningrad State University, Mr. Putin has followed the same strategy. He has been discreet and secretive, easily overlooked and underestimated -- yet always watching and studying from the shadows.

Now he is not only Russia's Prime Minister and acting president, but also the odds-on favourite to be elected president next month.

(Yesterday, the election commission said 15 people had officially filed to run for president in the March 26 vote, including Mr. Putin, Communist Party chief Gennady Zyuganov, reformist Grigory Yavlinsky, and nationalist firebrand Vladimir Zhirinovsky.)

Mr. Putin's political career began in 1990, when he became a deputy to Mr. Sobchak, who left academia to become the globetrotting mayor of a notoriously corrupt city.

Critics say Mr. Putin's six years in St. Petersburg taught him to favour a closed system of private business deals, monopolies, state power, arbitrary decisions, and privileges for selected cronies.

"He was personally involved in constructing a system of corruption in St. Petersburg," said Alexander Belayev, former chairman of the city legislature. "He was involved in a closed, non-competitive system of distributing city property."

Mr. Putin joined Mr. Sobchak's government after working for 15 years as an agent in the KGB's foreign intelligence service -- mostly in East Germany, where he maintained contacts with Moscow's spies at the height of the Cold War. In some ways he was an ideal spy: anonymous in appearance, chameleon-like in his ability to blend into a crowd, fluent in foreign languages, a non-drinker and a devotee of physical fitness and judo. He retired from the KGB with the rank of lieutenant-colonel in 1990.

Mr. Sobchak, by then the popular mayor of St. Petersburg and a hero of Russia's democratic revolution, recruited his former student as an assistant, putting Mr. Putin at the heart of business and political dealmaking in Russia's second-largest city.

"It was very unusual for someone from the shadows to step into the power structures," Mr. Belayev recalled.

"He gave me the impression of being a clerk, a mid-level person who adopted the position of the authorities. He listened more than he talked. He was obviously more interested in getting information than in giving information. It was probably a legacy from his previous career."

After Mr. Sobchak lost the mayor's job in 1996, Mr. Putin moved to Moscow and became a senior aide in the Kremlin property department -- one of the most secretive and corrupt branches of the presidential administration. It used a closed bidding system to conceal its own business dealings, worth billions of dollars, and to award lucrative contracts to well-connected insiders.

Mr. Putin's boss was Pavel Borodin, who became notorious for allegedly accepting bribes in exchange for giving contracts to a Swiss construction company called Mabetex. Last month a Swiss magistrate issued a warrant for Mr. Borodin's arrest in connection with corruption charges.

Mr. Putin, however, seemed to escape unscathed from the Mabetex scandal. In 1998 he became the chief of the FSB, the main successor agency to the KGB.

Here again his backroom talents were evident. According to some reports, Mr. Putin and the FSB were instrumental in arranging a secret videotape of Yuri Skuratov, the Russian prosecutor-general, cavorting in bed with two prostitutes. The video was broadcast on television in an attempt to destroy the career of Mr. Skuratov, who was investigating the Mabetex scandal.

Last August, President Boris Yeltsin named Mr. Putin as his Prime Minister and designated successor. Within days, the former KGB agent was heavily embroiled in the Russian war in Dagestan and Chechnya -- the military campaign that fuelled his rapid rise in public opinion.

A closer look at Mr. Putin's six years in St. Petersburg shows that his method of operation was already functioning smoothly in the earliest years of his political career.

Although he was officially just a deputy in charge of foreign relations, he was soon running the day-to-day business affairs of the city.

"There was hardly a single piece of paper that didn't go through Putin's hands before reaching Sobchak," Mr. Belayev said.

One of the most revealing episodes of Mr. Putin's career was his involvement in a peculiar barter deal in 1991. The city, which was experiencing food shortages in the final months before the collapse of the Soviet Union, got special permission from the Kremlin to export oil and minerals to foreign clients in exchange for food. Mr. Putin was closely involved in choosing the private companies that would arrange the imports and exports. But much of the food never arrived.

City council appointed a committee to investigate the deal, and the evidence was sent to a Kremlin auditing department, where the probe quietly died.

"We couldn't understand why some companies were chosen and others were rejected," Mr. Belayev said.

"Some of the companies had no experience. Sometimes they didn't even have offices in the places where they were registered. And we couldn't figure out where the money went. Some of the money was sent to an Austrian bank, and the food was never delivered."

Mr. Putin also favoured a system of government monopolies to deal with crime-infested industries such as gambling and petrol retailing. He established a policy in which the city would own 51 per cent of every gambling casino, for instance.

"He wanted to push away the criminals and replace them with city structures," Mr. Belayev said. "But he failed to prevent the penetration of criminals into the casinos. It only helped them to have closer relations with the officials."

In an interview, Mr. Sobchak denied the corruption allegations. The former mayor had fled Russia in 1997 and sought exile in Paris for 20 months while police investigated him for corruption; the probe was eventually dropped and he returned to Russia last summer -- after Mr. Putin had become the FSB chief.

Mr. Sobchak defended the lack of open tenders in his administration. "Only a few companies were willing to do business with Russia," he said. "There weren't several competitors for each investment."

He also defended Mr. Putin's penchant for state involvement in the economy. "He is a moderate liberal, or perhaps a conservative liberal," Mr. Sobchak said. "The market is free, but the state controls it to prevent violations of the law and to defend its own interests."

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