The Ukraine war is driving a wedge between Moscow and its mercenaries and the Kremlin knows it – CNBC

A repainted mural depicting the logo of Russia's Wagner Group on a wall in Belgrade, Serbia, on Jan. 19, 2023.

Darko Vojinovic | AP

The war in Ukraine looks to have created deep and lasting tensions between Russia's leadership in Moscow and its mercenary fighters on the ground, with acrimony between the two descending into openly hostile criticism and accusations of treachery this week.

Yevgeny Prigozhin, the head of Russia's Wagner Group, a private military company whose fighters have been engaged in intense battles in Bakhmut in eastern Ukraine for months, could barely contain his rage on Tuesday when he lambasted Russia's military and political leadership, saying that promised supplies of ammunition for his mercenary fighters had still not been delivered.

The latest rant came after Prigozhin threatened last Saturday to withdraw his forces from Bakhmut if ammunition was not forthcoming but the next day he withdrew the threat, saying he had received a promise that ammunition was on its way.

By Tuesday, however, Prigozhin was back on social media platform Telegram, delivering a stinging rebuke to Moscow on Victory Day, when Russia commemorates the Soviet victory against Nazi Germany, over a lack of ammunition deliveries.

"On the 7th, we were promised that ammunition would be given. At night on the 8th, a combat order was received saying [we should be given] everything. Today is the 9th. On the 8th during the day there was a meeting at which they decided to only give 10% of what we requested," he said, adding that the Wagner Group had been "deceived."

Prigozhin said his mercenary forces, making up the bulk of Russians fighting to seize Bakhmut, would remain there for a "few more days" to see if the situation would change. He noted, however, that he had been warned in a combat order that if the Wagner Group left its positions in Bakhmut, "it would be regarded as treason against the motherland."

He thundered back that "if there is no ammunition, we will leave the positions and ask who is really cheating on their homeland. Apparently, the one (betraying the Motherland) is the person who signed it [the order]."

Prigozhin's very public criticism of Russia's military leadership this week has made it impossible for the Kremlin to ignore, despite its de-facto position being to remain tight-lipped about internal matters.

Russian President Vladimir Putin's Press Secretary Dmitry Peskov was asked about the tense situation in Bakhmut on Wednesday and what he made of the Wagner Group's threats to withdraw from the town.

"Emotions are boiling over there," Peskov told a Bosnian Serb television channel ATV on Wednesday, in comments translated by Google.

"I will not mention anyone's last name, but I will say that, regardless of what they say and what statements they make, this is about the armed forces of the Russian Federation.These are all Russian forces.They are all the same forces, which always follow the same goal.We have no doubt that Artyomovsk [Russia's name for Bakhmut] will be brought under control, that it will be determined later," he said.

CNBC has contacted the Kremlin for further comment and is awaiting a response.

Among Prigozhin's usual tirades against Russia's military leadership was a more cryptic criticism that raised eyebrows among Russia watchers and led them to question whether he could have crossed the Rubicon and was now criticizing Russian President Vladimir Putin himself.

Prigozhin said Tuesday that while Russian soldiers were getting killed in Ukraine, the "happy grandpa thinks he's doing well" and warned that young Russians could soon discover the "happy grandfather" was hopeless.

"Instead of spending a shell and killing the enemy and saving the life of our soldier, our soldiers are getting killed, and the happy grandpa thinks he's doing well. If he turns out to be right, God bless everyone. What will the country do, our children, grandchildren who are the future of Russia, and how can we win this war if - by chance, and I'm just speculating here - it turns out that this grandfather is a complete ----head?," Prigozhin said.

The comments raised eyebrows among close followers of the Kremlin who speculated who the figure could be. Some noted it was likely to be either the Russian Defense Minister Sergei Shoigu or Valery Gerasimov, the chief of the General Staff,both of whom Prigozhin has openly criticized in the past, blasting their military tactics and overall strategy in Ukraine.

Russian President Vladimir Putin (C) speaks with Defence Minister Sergei Shoigu (R) and Chief of the Gen. Valery Gerasimov (L) after a meeting of the Russian Defence Ministry Board on December 21, 2022.

Mikhail Klimentyev | Afp | Getty Images

But analysts at the Institute for the Study of War said Tuesday that Prigozhin could have been leveling his criticism against Putin himself, saying Prigozhin had seized on the Victory Day holiday in Russia "as an opportunity to mock Putin and question his judgment," noting that Putin is often referred to as "grandfather" (or more specifically "Bunkernyi ded" or "bunker grandfather").

Still, even this thinly-veiled criticism would be a departure for Prigozhin, a figure who has refrained from public criticism of the president throughout the war and who is seen as benefitting from Putin's protection.

Not everyone is convinced Prigozhin was referring to Putin and, if not, it could save him from reprisals in Russia, where there is an almost zero tolerance policy toward criticism of the president.

After all, Prigozhin has been a supporter of Putin for many years and his position of relative safety on the periphery of the Russian establishment Prigozhin holds no formal position in the state but his Wagner Group's prominence has afforded him some influence and notoriety depends largely on Putin's largesse, making it more unlikely he would bite the hand that mostly feeds him.

"No, Prigozhin did not refer to Putin, it was just a clumsy statement and many observers decided that he [was] talking about Putin because it would be so attractive," Tatiana Stanovaya, senior fellow at the Carnegie Russia Eurasia Center and the founder of analysis firm R.Politik, told CNBC Thursday.

Businessman Yevgeny Prigozhin shows then-Russian Prime Minister Vladimir Putin his school lunch factory outside Saint Petersburg on September 20, 2010. Prigozhin was nicknamed "Putin's chef" because his company Concord catered for the Kremlin.

Alexey Druzhinin | Afp | Getty Images

She noted that Peskov's latest statement on the tensions in Bakhmut aimed to calm the situation down and to show that there is no political problem with Prigozhin, at least as far as the Kremlin was concerned.

"He shows that it's rather the situation that is incredibly challenging that provokes such emotions ... and emphasises that all forces are the same Russian forces fighting for the same goals he wants to show [that] for the Kremlin, be it Prigozhin or Gerasimov, they are all 'ours' even if they conflict," she said.

It appears on Thursday that the Kremlin believes the comments by Prigozhin this week were directed toward Russia's military leadership rather than the president himself.

When asked by reporters in Russia on Thursday what the Kremlin thought about Prigozhin's "critical statements ... against some generals during a special military operation," Russian news agency Interfax reported, the Kremlin's spokesman Peskov deflected the query, telling journalists: "I leave this question unanswered."

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The Ukraine war is driving a wedge between Moscow and its mercenaries and the Kremlin knows it - CNBC