It’s been a tense couple of weeks for Yevgeny Prigozhin, the businessman and founder the of Wagner Group of mercenaries. Russian troops and Prigozhin’s mercenaries have been closing in on the strategic town of Bakhmut in eastern Ukraine, capturing territories around it. On 10 January, Prigozhin boasted that his forces had ‘taken control’ of Soledar, even as fighting continued inside the town and Ukraine disputed the claims. Two days later, Russia’s defence ministry announced that the ‘liberation’ of Soledar was complete. In a separate statement that same day, claiming to respond to various media inquiries, the ministry clarified that the urban territories of Soledar had been captured thanks to the “courageous and selfless actions” of the Wagner Group.

Apparently, Prigozhin, who attributed Soledar’s capture exclusively to his own forces, felt he wasn’t getting enough love. The ministry’s nod to the Wagner Group came just hours after Prigozhin complained about ‘infighting, corruption, bureaucracy and officials clinging to their seats’ and attempts to ban any mention of the group in the media – an indirect jab at the defence ministry. It didn’t help that on 11 January, the ministry appointed Valery Gerasimov, the head of Russia’s general staff, as the top commander of the country’s forces in Ukraine. He replaced Prigozhin’s alleged ally, Sergei Surovikin.

The competition between the mercenaries and the defence ministry is heating up, leading some, like the Institute for the Study of War in the US, to speculate that Vladimir Putin has ‘decided to turn away… from Prigozhin’. In such uncertain times, turning to Kremlinology (that practice of reading the tea leaves of staff appointments and statements) is understandable. But claims that Putin has ‘decided’ on anything are notoriously unsubstantial – especially when the only evidence is the actions of his vassals.

Prigozhin isn’t going anywhere – but his competition with the defence ministry could get more vicious

Prigozhin isn’t going anywhere – but his competition with the defence ministry could get more vicious as he seeks to demonstrate his utility.

Indeed, there is a much simpler explanation for Prigozhin’s behaviour, one often overlooked by western observers. Despite the personalist nature of Putin’s regime, where the favour of and direct access to the boss decide so much, institutions still matter. And the reality is that the defence ministry is a powerful institution, while Prigozhin is not an institution at all – just a private citizen running a business. In fact, mercenary activity is still illegal under Russian law, and while politicians have lobbied to change that so groups such as Wagner can be better regulated, the Kremlin has so far resisted the attempts. Simply put, the Wagner Group (despite Prigozhin’s recent announcement of himself as its proud founder) is still an illegal entity – one that the Kremlin has relied on substantially for nearly a decade while deliberately keeping it in the legislative shadows.

Putin has not sidelined Prigozhin, he is merely treating him like he has always treated the non-state actors he has relied on throughout his tenure: as an expendable resource, the less official the better. Incentivise them to make their own capital, whether financial (Wagner is allegedly profiting off diamond and gold mines it guards in Africa and is eager to capitalise on Bakhmut) or political (Prigozhin’s success can translate into more Kremlin favour and thus more covert funds). But it suits Putin to keep them in a legal grey area so that they can be disavowed if things go awry. Indeed, one reason why the Russian President avoided launching a full-scale invasion of Ukraine for eight years, relying instead on separatist proxies, nationalist volunteers and private military companies is because it is exceedingly difficult to disavow one’s entire defence ministry once it has failed to implement orders that were unrealistic from the start.

But now, in the context of mounting losses in Kharkiv, Lyman and Kherson, the modest and still-disputed gains made around Bakhmut will inevitably spur competition as the actors involved struggle to avoid being scapegoated.

Prigozhin is the more vulnerable actor here – and this is precisely why his bark has been the loudest. Not only does he have to sing for his supper but, despite his popularity among the pro-war camp, he has much less protection than Russian defence minister Sergei Shoigu or any of Putin’s generals were he to fall out of favour. Surovikin could be demoted or fired – but far worse things can happen to a private citizen with a shady past and lots of enemies.

But that isn’t happening – yet. Putin still needs Wagner’s mercenaries to fill in the gaps where his ill-equipped military lacks capabilities and, increasingly, morale. Indeed, one of the reasons the volunteers and ex-convicts recruited and paid for by Prigozhin are better motivated is because they have less to lose, and more to gain. But Putin needs Prigozhin for another, more political reason – the same reason he has always leaned on non-state actors. He can bask in their lustre so long as they are showing gains, but deflect the blame onto them if all else fails; away from his government, his defence ministry and, ultimately, himself.