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The (Geo-)Political Aspects of Austrian-Russian Business Relations, Part II

The first part of this article is available here.
This article is a part of the first issue of the Kremlin’s Influence Quarterly.

You can also download this piece as a PDF.

5. Austria’s Role in the Nabucco and South Stream Pipeline Projects

The Nabucco pipeline was the EU’s flagship project with regard to the energy resources of the Central Asia and Caucasus Region. It could have brought gas from the Georgian-Turkish and/or Iraqi-Turkish border, respectively, to the gas hub in Baumgarten without passing through Russia. OMV was the head company of this project; the other partners were the Bulgarian Energy Holding, Turkey’s Botas, Germany’s RWE, Hungary’s FGSZ (a 100 percent subsidiary of the oil and gas group MOL), and Romania’s Transgaz. As initially assumed, Nabucco would cost an estimated EUR 8 billion, a figure revised to EUR 12–15billion. The 3,300-kilometer-long pipeline should have gone into operation in 2013 and reach a capacity of 31 billion cubic meters of gas (10 percent of EU-27 gas imports in 2005) by 2020. But especially since the fall of 2011, prospects for Nabucco appeared to be dwindling due to several reasons. Thus, the amount of non-Russian gas needed to fill Nabucco did not materialize; so several alternative projects, with a reduced Nabucco West pipeline among them, were under consideration.

Moscow did not want Nabucco to be built from the very beginning and did its best to derail it. An important initiative in this context was the South Stream pipeline, intended to transport gas from the Central Asian and Caucasus region. This pipeline, with a capacity of 63 billion cubic metres of gas per year, is proposed to run from southern Russia under the Black Sea to Bulgaria, then bifurcate to cross several other countries for Italy and Austria.

Russia’s opposition to Nabucco was, of course, well known throughout the entire EU. Austrian Federal Chancellor Werner Faymann (Social Democratic Party) assured then Prime Minister Vladimir Putin in November 2009 in Moscow that Nabucco is not directed against Russia.

Moscow wanted to involve Austria in South Stream at all costs, and Vienna did not take long to be persuaded. In April 2010, an Austrian-Russian intergovernmental agreement and a Gazprom-OMV cooperation agreement to bring Austria into the project were signed. Putin made it clear in Vienna it would be “realized no matter what.”[1] At the occasion of Austria’s accession to South Stream, Russian news agency RIA Novosti highlighted a “big victory for Russia and a major blow to Nabucco”[2]—which, again, left no doubt that South Stream was, above all, planned as a “Nabucco-stopper.” On 21 February 2011, Gazprom’s CEO Aleksey Miller announced in Moscow that his company and OMV had officially registered a joint venture to build and operate the Austrian section of South Stream. Its planned Austrian route practically duplicated Nabucco’s (and therefore the EU’s) envisaged route, from Hungary to the Nabucco terminal at Baumgarten.

The main supply planned for Nabucco was to be Shah Deniz natural gas field in the South Caspian Sea, off the coast of Azerbaijan. But after the Shah Deniz consortium took the decision to prefer the Trans-Adriatic Pipeline over Nabucco for its exports, the Nabucco plan was finally aborted in June 2013.

South Stream was expected to cement Gazprom’s influence over south eastern European gas deliveries. EU member-states Bulgaria and Greece are heavily dependent on Russian supplies. In 2014 the European Commission challenged South Stream on the basis of the EU’s Third Energy Package (according to this legislation, adopted in 2009, a gas company cannot own a pipeline that supplies its gas) and threatened legal action against Bulgaria. This led to the cancellation of South Stream. The Commission accused South Stream of violating EU law regarding the access of competitors to the pipeline. After the cancellation, Gazprom quickly unveiled an alternative route. The new pipeline, called TurkStream, was designed to deliver 33.5 billion cubic meters of natural gas—half of which is intended for the Turkish market while the other half is slated for the Balkans and further to Central Europe. The new Russian pipeline through the Black Sea to Turkey was inaugurated on 8 January 2020 at a lavish ceremony in Istanbul. Austria’s Baumgarten gas hub could be a key European transit point for Russian gas that flows through the TurkStream pipeline to Turkey (circumventing Ukraine) and on to the EU. Before TurkStream gas can end up in the continent, however, Gazprom will have to build a pipeline that connects this pipeline to the EU network.

6. RosUkrEnergo, Firtash, Mogilevich, and Raiffeisen

In 2004, the Centragas Holding AG, registered in Vienna and controlled by the pro-Russian Ukrainian oligarch Dmitry Firtash, teamed up with Gazprom to establish Swiss-registered RosUkrEnergo, or RUE, to exclusively import Central Asian gas to Ukraine. Firtash and Gazprom roughly split the ownership of RUE. Firtash’s share was held in trust for some time by the Austrian Raiffeisen Investment AG, or RIAG (a subsidiary of Raiffeisen Zentralbank). Given that Gazprom was then and still is controlled by the Russian Government, observers speculated that Firtash had cultivated strong ties to Putin’s inner circle in order to make RUE operational.

RUE then bought billions of dollars’ worth of cheap natural gas mainly from Turkmenistan, mixed it with expensive gas from Russia and resold it at significantly marked-up prices inside Ukraine. Critics, however, pointed out there was no purely economic reason to use the services of an intermediary in the gas trade between the former Soviet republics. It soon became clear that RUE was nothing more than a shell to siphon off profits. And the press started to speculate about ties of alleged gangster boss Semion Mogilevich to RUE. In April 2006, Raiffeisen International CEO Herbert Stepic “strictly” denied that “we came close to organized crime.” According to him, there was no “proximity [of Raiffeisen] to Mr. Mogilevich.” At this occasion, Stepic, however, declined to say for whom RIAG held its share in RUE. But he insisted that all relevant authorities in the Ukraine and Russia would know who was behind it.[3]

Raiffeisen had RUE checked by Kroll Inc., a renowned US consulting firm with good links to the intelligence community. The bank had been certified that the business relationship was unobjectionable. But finally, Raiffeisen severed all ties with RUE. As to the “relevant authorities” in Ukraine, Oleksandr Turchinov, head of the Security Service of Ukraine, or SBU, was convinced that RUE was indirectly controlled by Mogilevich. Ukraine’s then Prime Minister Yulia Tymoshenko (a gas-business insider in her own rights) said after 2006 repeatedly that she had “documented proof that some powerful criminal structures are behind RUE company.”[4] In 2009, Ukraine and Russia agreed to stop using intermediaries, referring to RUE, which was liquitated between 2014 and 2016.

The contacts between Firtash and Mogilevich were discussed for a while in some Austrian and international media outlets. According to a cable from the US Embassy in Kyiv on 10 December 2008, Firtash admitted at a meeting with Ambassador Bill Taylor, which had taken place shortly before, that he had “ties” with Mogilevich, but they were “not close.”[5] Later Firtash denied having said this and assured that he had been “misunderstood.” Be that as it may, in 2010, Ukraine elected pro-Russian Viktor Yanukovych president. Firtash was one of the main Ukrainian oligarchs who had financed Yanukovych’s campaign, which was also supported by the notorious US lobbyist and political consultant Paul Manafort.

In 2013, Firtash was charged by the US Justice Department with having overseen a criminal enterprise which paid millions in bribes to both state and central government agencies in India in order to obtain mining licenses. He was arrested by Austrian police in Vienna weeks after Yanukovych had fled Kyiv on 22 February 2014. Firtash’s contacts in the Kremlin must have been excellent because the bail of EUR 125 million, which was due for his release, came from Russia: it was within a few days (!) paid by Russian billionaire Vasily Anisimov.Therefore, it was not really surprising that Firtash remained pro-Russian also in view of Putin’s war against his homeland Ukraine.

Firtash is still in Vienna after six years and fighting against his extradition to the United States—with the assistance of a “cohort of attorneys, PR consultants and lobbyists on both sides of the Atlantic.”[6] The best-known jurist working for Firtash is Dieter Böhmdorfer (2000–2004 Austria’s Minister of Justice, nominated by the Freedom Party, of which he was not a member).

7. Former Austrian Top Politicians and Managers at the Service of Russia

On 14 February 2005 then German Federal Chancellor Gerhard Schroeder (Social Democratic Party) received Oleg Deripaska for a dinner with German and Russian entrepreneurs, although the German Foreign Intelligence Service (Bundesnachrichtendienst, or BND) had expressly warned against the Russian oligarch. An official of the German Federal Chancellery noted: “According to BND reports there are indications of [Deripaska’s] links with organized crime that go beyond the ‘normal level of dubious business methods’ for top representatives of the Russian economy.”[7] In 2007 Deripaska, who at times was Russia’s richest person and is noted for his close ties with Putin, acquired a large stake in Vienna-based Strabag, one of the largest construction companies in Europe. Its then boss Hans Peter Haselsteiner responded very emotionally to the question about Deripaska’s—benevolently formulated—controversial reputation: “Europeans and Americans have no reason whatsoever to point the finger [at Russia]: Russia has completely redistributed its national wealth in less than twenty years, without bloodshed. America has needed three generations of lawlessness and a great civil war for this; Europe has needed two revolutions and two world wars.” And addressed to the then US vice president (who wasn’t actually up for discussion at all), Haselsteiner declared: “I’d rather do business with Oleg Deripaska than with Dick Cheney,”[8] who, however, has not been known to have wanted to cooperate with Haselsteiner. Haselsteiner’s position regarding Putin’s Russia was also, and especially, fuelled by his desire to do profitable business there. Strabag then built the Olympic Village and the airport for the 2014 Winter Olympic Games in Sochi, among many other things in Russia. According to figures from 1 January 2019, 25.9 percent of Strabag was owned by Cyprus-registered Rasperia Trading, which belongs to the Deripaska-controlled diversified industrial group Basic Element.

The Chairman of Strabag’s Supervisory Board is Austria’s former (2007–2008) Federal Chancellor Alfred Gusenbauer (Social Democratic Party), who had no experience in the construction business prior to this appointment in 2010. Another interesting member of this Supervisory Board is (since June 2018; he will leave in 2020) the Russian national Oleg Kotkov, a Soviet and Russian military officer-turned-banker. He graduated from two Soviet Military Academies. From 2003 to 2007, he was Military Adviser at the Permanent Mission of Russia’s Mission to the Organization for Security and Cooperation in Europe, or OSCE, in Vienna. From 2016 to 2018, he was adviser to the Chairman of the Supervisory Board of the Russian PJSC Asian-Pacific Bank.

Haselsteiner was a MP for the Liberal Forum from 1994 to 1998 and financed it afterwards, as well as the liberal party NEOS, which is represented in the National Council since 2013. The ideology of these parties was and is respectively very far away from Putin’s or Deripaska’s. Nevertheless, Haselsteiner declared to “admire” Putin, whom he has met several times. Haselsteiner’s willingness to converge on opinions that he considered to be widespread in Russia was reflected, among other things, in his statement about a “Jewish network” among Russian oligarchs in which he “did not want to interfere.”[9] Such statements, which were largely ignored in Austria, can hardly be read otherwise than by the intention to “fish for compliments” in Putin’s Russia. In Austria, at least publicly nobody noticed that Haselsteiner and then Freedom Party leader Heinz-Christian Strache, regardless of the enmity between them (Haselsteiner believes that for Strache he represents an “enemy image”[10]), share the same—largely favorable—opinion about Putin’s rule.

In interviews Haselsteiner considered it a serious mistake that the EU had “allowed” NATO’s “rapid eastward expansion.” Instead, an attempt should have been made to bring Russia into the EU. “Putin could have been won over. That would have made Europe great.” But all this, Haselsteiner believed, had been thwarted by “the Americans and NATO,” and “the Europeans” had followed suit “in their naivety.” For the United States, there were two very bad scenarios: “A united Europe including Russia” and a functioning euro.[11] Haselsteiner thus disclosed a complete ignorance of even the basic concepts of Russian foreign and integration policy, distorted the facts (for example, EU and NATO are completely different organizations, so one cannot prevent the enlargement of the other; and post-Soviet Russia has at no time shown any interest in joining the EU, which would be completely unrealistic anyway due to the size of the country), and propagated conspiracy theories. But at least, one learned from such interviews what Haselsteiner “geopolitically dreamed” of—namely a “united Europe together with Russia,” which is opposed to the US. And coincidence or not, this is also one of the most important goals of Putin’s foreign and military policy.

Only exceptionally did Haselsteiner express somewhat more sceptical views about Russia: “I very much regret that the Putin regime is moving further and further away from the rule of law [. . .] and leaves us no choice but to impose sanctions.” But “nevertheless Russia remains an important European nation and a promising market for the construction industry.” Haselsteiner continued that this is in his interest and has “nothing to do with Russian efforts to strengthen the [political] right in Europe, destabilize Europe and denigrate the EU.” This was, according to Haselsteiner, reprehensible despite the economic interests.[12] And he, of course, maintained his cooperation with Deripaska.

Siegfried Wolf is one of the most internationally renowned Austrian managers. For him, Deripaska is an “upright, obliging and good entrepreneur.”[13] Wolf had introduced Deripaska to Strabag in Vienna. And at Deripaska’s request, Wolf became a member of Strabag’s Supervisory Board in 2007 and remained there until 2015. Also in 2007, Deripaska joined Magna International Inc. of the Austrian-Canadian industrialist Frank Stronach (who met Putin personally and gave him the highest praises), but already the following year—officially due to the financial crisis—he had to sell his share (20 percent of the stocks with 43 percent of the voting rights) to those banks that had previously helped him to handle the 1.5 billion dollar deal. In 2010 Wolf moved from Magna to the industrial conglomerate Russian Machines (which belongs to Basic Element): He became Chairman of the Board of Directors there (where he remained until 2018) and had to cooperate with Colonel General Valery Pechionkin, (in Soviet times he was a staff member of the Soviet Committee for State Security, or KGB, and from 1997 to 2000 Deputy Director of the Russian Federal Security Service, or FSB), who in 2018 became Basic Element’s CEO. Wolf is also chairman of the Supervisory Boards of GAZ, located in Nizhny Novgorod and part of Basic Element, and of Vienna-based Sberbank Europe AG, a European subsidiary of Sberbank.

In interviews Wolf always defends Putin against any criticism. Thus, Wolf said that human rights violations occur not only in Russia, but “also in other countries.” Russia, according to him, needs a “strong leadership.” And: “I can only report positively what I have experienced with Mr. Putin.” Wolf declared at the beginning of 2014 that in Russia “a more liberal society will emerge in the next few years” (in reality, exactly the opposite happened, M.M.). According to Wolf, Europe needs a “very, very close relationship with Russia.”[14] Needless to say, he is massively opposed to EU sanctions against Russia.

Wolfgang Schuessel, from 1995 to 2007 was head of the People’s Party, during and after his tenure as Austrian Federal Chancellor (2000–2007), repeatedly praised Putin. In June 2019 Schuessel (who occasionally devoted his spare time to Russian icon painting) joined the eleven-member Board of Directors of Russian Lukoil, one of the largest publicly traded, vertically integrated oil and gas companies in the world. In 2018, Schuessel became one of nine members of the Board of Directors of the largest mobile operator in Russia and the other post-Soviet republics, Mobile TeleSystems, or MTS, with 110 million clients; it belongs to the Russian conglomerate AFK Sistema,headed by CPSU-member-turned-billionaire Vladimir Yevtushenkov. At the end of May 2019, however, it became known that Schuessel would lose this mandate: His name was missing from the list of candidates for reappointment. On it, however, there was another well-known person: Valentin Yumashev, who from 1997 to 1998 (under President Boris Yeltsin) was Head of the Presidential Executive Office.[15] He and his wife were granted Austrian citizenship in 2009, which was what the Magna Group had stood up for.

The leader of the Social Democratic Party Christian Kern, during his short tenure as Austrian Federal Chancellor (2016–2017), made himself popular in the Kremlin by polemicizing against the EU’s Russia sanctions, for example, at the St Petersburg International Economic Forum in 2017. Kern has been CEO of the Austrian Federal Railroads from 2010 to 2016. In this position, he spoke out in favor of a broad-gauge (1,520 mm) railroad project to Vienna initiated by Russia. In July 2019 Kern joined the Board of Directors of the state company Russian Railroads, where he currently is the only foreigner. One of Austria’s best-known political journalists, Hans Rauscher, commented on this, referring to Putin’s military campaign against Ukraine: “This is not a good time for a former Austrian Chancellor and Social Democrat to become a lobbyist for Russian interests.”[16] But such statements, of course, did not change anything about Kern’s financially rewarding commitment in Russia.

Austrian banks have always been strongly committed to Russia. As of 2014, Raiffeisen Bank International and Bank Austria[17] alone had EUR 36 billion in loans in Russia. Raiffeisen remained strongly represented on the Russian market even as many other Western banks have pulled back due to the impact of EU sanctions and assertiveness of Russian state-owned competitors. Deripaska’s companies had been Raiffeisen clients in Moscow for many years before he and the (1994–2012) Advocate General of the Austrian Raiffeisen Association (in German: Generalanwalt des Österreichischen Raiffeisenverbandes; an important position in the Austrian banking landscape) Christian Konrad met personally; Haselsteiner had introduced them to each other. In 2007 Konrad said: “I have no fear of contact with Russians: Raiffeisen is active in many business areas in Russia. [. . .] Deripaska has my respect. As far as I know so far, he is an incredibly direct and straightforward guy, acting in an understandable way with comprehensible reactions.”[18]

Stepic, who met Putin personally and was head of the Austrian-Russian Friendship Society from 2001 to 2003, resigned as head of Raiffeisen Bank International in 2013 and then acted as Senior Adviser to the Board of the bank. He continued to give interviews in which he (as before) made no secret of his political views mixed with conspiracy theories. For example, in June 2014 (i.e., shortly after the Russian annexation of Crimea and the start of the fighting in Donbass) said that he would “continue to defend Putin,” because “the media coverage of the conflict [in Ukraine] was totally one-sided, the formation of opinion is determined by New York and London.” The EU had wanted to conclude an Association Agreement with Ukraine “quickly,” “without talking to the Russians” (as when Russia “talks” to Ukraine before concluding any agreements, including with the EU). Stepic also justified the Russian military intervention against Ukraine with a US antimissile system in the Czech Republic and Poland (which, however , had less than nothing to do with the Russian war against Ukraine). Under “Yushchenko and Tymoshenko” a “pigsty” (Saustall) had ruled in Ukraine, but “successor Yanukovych had stabilized the country.” At least Stepic confessed that Yanukovych, at the same time, had “stolen everything so that nothing remained.” And for Stepic, the annexation of Crimea could be explained by the fact that “the West has annexed Ukraine” (!) “Russia’s goal was not to get NATO to its borders. This is the main concern.” And Putin is “light years ahead of the EU in implementing his plans—quite simply because he can decide for himself.” The EU, as Stepic supported Haselsteiner’s views, should have “moved closer to Russia”—because “the US never liked the EU as a structure.” One does not need to speculate about the main reason for such opinions, as Stepic spoke out: According to him, over the past two decades Russia had been the market where the most money could be made worldwide.[19]

8. Austria and the EU Sanctions Against Russia

The Austrian Economic Chamber constantly lamented the impact of the EU sanctions on the business of its members in Russia, although it was and is limited.[20] And the homepage of the Austrian Embassy in Moscow literally states: “Austrian-Russian trade has developed extremely dynamically in recent years.”[21] Therefore, EU sanctions do not stand in the way of this “dynamic.”

The head of the Economic Chamber from 2000 to 2018, Christoph Leitl (People’s Party), always gave Putin a very warm welcome in Vienna. Leitl, since 2009 a knight of the Russian Order of Friendship, from the very beginning opposed the EU sanctions against Russia (the Austrian public was not really interested in the fact that he was involved in two companies in Russia that produce insulation materials). And Christoph Matznetter, Deputy Head of the Economic Chamber (2005–2007 and since 2009), Deputy Head of the Austrian-Russian Friendship Society and long-standing Member of the National Council, has made it repeatedly clear that he, as well as a “broad majority” in his Social Democratic Party, wants to see the sanctions terminated[22]—as wants the EU-skeptical Freedom Party both in the opposition and, between December 2017 and May 2019, in the government.[23] Notwithstanding this, Freedom Party-nominated Foreign Minister Karin Kneissl during her tenure always agreed to the six-monthly extension of EU sanctions against Russia.

According to statistics from the National Bank (Austria’s central bank), Russian direct investments in Austria have increased two and a half times since 2013 to around EUR 25 billion in 2018, which made Russia the second-largest investor in Austria. This gave some observers reason to suspect that the EU sanctions were being circumvented via Austria: “Given Russia’s limited corporate footprint and the lack of tangible projects that would necessitate these investments, it appears Austria is used mostly as a hub or throughput for Russian investments across Europe and as a point of repatriation of capital from Russian subsidiaries in Europe.”[24]

In May 2019, Austrian President Alexander Van der Bellen noted that Austria is participating in the sanctions against Russia as a loyal member of the EU—“regardless of what the Austrian position really is.”[25] Translated into plain language, this means that “in reality,” “Austria” is against the sanctions. And Leitl in his capacity (since 2017) as president of Eurochambres (the Association of European Chambers of Commerce and Industry, representing over 20 million companies) went on to demand an abolition of the EU sanctions. According to him, they “had no use whatsoever.” Russia is “a partner with whom Europeans should engage in dialogue on economic, political, cultural and sporting issues.”[26]

9. Conclusions and Outlook

Austrian politicians and managers find it difficult to say “no” to Russian officials and/or to find critical words about its domestic, foreign, security, and foreign trade policy. Austrian media outlets have paid some attention to increasing authoritarianism and the huge corruption under Putin, but Viennese politicians and businessmen rarely raise this issue. Instead, it is a widespread argument that Russia is “too important” as a power—and especially as a supplier of energy resources—so relations must not be “spoiled” under any circumstances.

There are no significant political forces in Austria which could be labelled as “anti-Russian” by Moscow-based politicians and/or media. Truly, nobody in Austria’s political elite wants to “argue” with Moscow. The governments in Vienna and Moscow like to emphasize that they are “very close” in most of the issues of international politics, that there are very few (if any) differences between them, that their relations are “trouble-free,” “cordial” etc. It is therefore not surprising that representatives of most parties and important interest groups (as the Economic Chamber) have been calling for the lifting of EU sanctions against Russia practically from the day they were imposed.

Natural gas and oil are “nonrenewable” resources which are imported into the EU and to Austria to a considerable extent from conflict regions and/or undemocratic states (such as Russia). There is no resistance whatsoever in Austria’s politics, media, and public against the fact that OMV portrays an increasing dependence of Austria and the EU on energy source supplies from Russia as a “guarantee of supply security.” Russia does not grant a “stable and secure gas supply” for Austria and the EU, but just the opposite: Moscow, especially since 1999 when Putin rose to power, has on several occasions demonstrated its capabilities and willingness to use gas and oil supply as a political leverage and a “geopolitical weapon” in order to subdue and/or punish “disloyal” states. It is irresponsible in the sense of a sustainable energy policy to make oneself dependent on the whims of the Kremlin.

If one wanted to give a very brief forecast on Austrian-Russian relations, it is totally obvious that there will be no change in the conditions described—regardless of the composition of the Austrian Government. The opposition hardly offers any alternatives with respect to the policy towards Russia, as all the major political forces in Austria have so-called Putin understanders (Putin-Versteher) among their ranks. And what all Austrian parties and special interest groups have in common is a total lack of understanding for the functional mechanisms of Russian domestic, security, foreign, and economic policy.


[1] “Putin Hails Russia’s Gas Reserves as Austria Joins South Stream Project,” Sputnik, April 24, 2010, https://sptnkne.ws/3BcY.

[2] Andrei Fedyashin, “Vladimir Putin Goes to the Land of Strauss and Schnitzel,” Sputnik, April 23, 2010, https://sptnkne.ws/pacK.

[3] Christine Zeiner, “Raiffeisen steigt aus russischer Gasfirma aus [Raiffeisen Withdraws from Russian Gas Company],” Wiener Zeitung, April 25, 2006, https://www.wienerzeitung.at/archiv/117286-Raiffeisen-steigt-aus-russischer-Gasfirma-aus.html.

[4] Luke Harding, “WikiLeaks Cables Link Russian Mafia Boss to EU Gas Supplies,” Guardian (US edition), December 1, 2010, https://www.theguardian.com/world/2010/dec/01/wikileaks-cables-russian-mafia-gas.

[5] “Ukraine: Firtash Makes His Case to the USG,” WikiLeaks, December 10, 2008, https://wikileaks.org/plusd/cables/08KYIV2414_a.html.

[6] Stefan Melichar, Michael Nikbakhsh, and Christoph Zotter, “All the President’s Men,” Profil, no. 43 (2019): 35.

[7] “Schröder empfing 2005 dubiose Gäste aus Russland [Schröder Received Dubious Guests from Russia in 2005],” Spiegel Online, May 4, 2015, https://www.spiegel.de/spiegel/vorab/schroeder-empfing-2005-dubiose-gaeste-aus-russland-a-967403.html.

[8] Renate Graber, “Die russische Wende [The Russian Turnaround],” Der Standard, June 4, 2007, https://derstandard.at/2857801/Die-russische-Wende.

[9] Christa Zöchling, “Ein Freigeist als Milliardär [A Free-Spirited Billionaire],” Profil, no. 8, (2008): 27.

[10] Renate Gruber, “Da lachen ja die Hühner, Herr Hofer” [“That’s a Good Laugh, Mr. Hofer”] [interview with Hans Peter Haselsteiner]. Der Standard, June 29–30, 2019, 23.

[11] “Haselsteiner: Russland in der EU ‘hätte Europa groß gemacht’ [Haselsteiner: Russia in the EU ‘would have made Europe great’] [interview],” Die Presse, September 20, 2017, https://www.diepresse.com/5288922/haselsteiner-russland-in-der-eu-hatte-europa-gross-gemacht.

[12] “Haselsteiner will sich Auftragsvergabe bei Westbahn anschauen [Haselsteiner Wants to Take a Look at Contract Awards for Westbahn],” Die Presse, May 20, 2019, https://www.diepresse.com/5631337/haselsteiner-will-sich-auftragsvergabe-bei-westbahn-anschauen.

[13] Jakob Zirm, “Siegfried Wolf wechselt von Magna zu Oleg Deripaska [Siegfried Wolf Moves from Magna to Oleg Deripaska],” Die Presse, September 14, 2010, 15.

[14] Miriam Koch and Andreas Lampl, “Putin ist der richtige Mann” [Putin’s the man] [interview with Siegfried Wolf],” Format, no. 5, (2014): 22–25.

[15] Yumashev’s daughter from his first marriage, Polina, in 2001 had married (and in 2018 divorced) Deripaska.

[16] Hans Rauscher, “Neuer Job für Kern: Russian Connection. Es sind bereits etliche ehemalige Top-Politiker in Putins Reich engagiert [New Job for Kern: Russian Connection. Several Former Top Politicians are Already Employed in Putin’s empire],” Der Standard, May 1, 2019, https://www.derstandard.at/story/2000102353840/neuer-job-fuer-kern-russian-connection?fbclid=IwAR3eeZ4VLlmX3-h87hpnMKPAZftnO0NOr3A2FGpdV1lETGjxCM2r7NbQ5X0.

[17] The headquarters of UniCredit Bank Austria AG (which is its full name) is located in Vienna, but it has not been “Austrian” for a long time, as it is almost entirely owned by the UniCredit Group based in Milan, Italy.

[18] “Deripaska ist ein gerader Bursche [Deripaska is a straight guy] [interview with Christian Konrad],” Der Standard, June 4, 2007, https://www.derstandard.at/story/2859447/deripaska-ist-ein-gerader-bursche.

[19] Martina Salomon, “Stepic: ‘Putin ist EU um Lichtjahre voraus’ [Stepic: ‘Putin is light years ahead of the EU’] [interview],” Kurier, December 6, 2014, https://kurier.at/wirtschaft/stepic-putin-ist-eu-um-lichtjahre-voraus/70.074.860.

[20] Cf. Otmar Lahodynsky, “Schwein gehabt [Had Good Luck],” Profil, no. 12, pp. 56-60.

[21] Österreichische Botschaft Moskau, Wirtschaftsbeziehungen zwischen Österreich und Russland [Austrian Embassy Moscow, Economic relations between Austria and Russia], https://www.bmeia.gv.at/oeb-moskau/bilaterale-beziehungen/russische-foederation/wirtschaft/ (accessed 30 May 2020).

[22] “The Winner is: Zar Wladimir [The Winner is: Czar Vladimir],” Trend, no. 46 (2016): 21.

[23] Cf. “Strache fordert Ende von Russland-Sanktionen [Strache demands end to Russia sanctions],” Die Presse, June 2, 2018, https://diepresse.com/home/ausland/aussenpolitik/5439865/Strache-fordert-Ende-von-RusslandSanktionen.

[24] Heather A. Conley et al., The Kremlin Playbook II. The Enablers, Center for Strategic & International Studies, (New York: Rowman & Littlefield, 2019), 50, https://csis-prod.s3.amazonaws.com/s3fs-public/publication/190327_Conley_KPII_interior_v3_WEB.pdf (accessed 30 May 2020).

[25] Jutta Sommerbauer, “Van der Bellens und Österreichs ‘wirkliche’ Russland-Position [Van der Bellen and Austria’s ‘real’ position on Russia],” Die Presse, May 15, 2019, 4.

[26] Christoph B. Schiltz, “Europäische Wirtschaft ruft zur Abschaffung von Sanktionen auf,” Die Welt, December 9, 2019, https://www.welt.de/politik/ausland/article204148482/Europaeische-Wirtschaft-ruft-zur-Abschaffung-von-Sanktionen-auf.html?fbclid=IwAR0cMRb_u5mEhqAsdqNihEliLnzmfQLaSKl9KR4jl65L9SjS3_XN8Ub8Pvo.

Russian Gas and the Financing of Separatism in Moldova

This article is a part of the first issue of the Kremlin’s Influence Quarterly.

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Introduction

Over the last 200 years, the main part of the territory that today constitutes the Republic of Moldova switched sovereignties six times between the Russian Empire, the USSR, the Ottoman Empire, and Romania, which explains why Russia treats it as a less loyal territory, compared to Ukraine or Belarus. With the last change in 1991, the Republic of Moldova proclaimed its independence and, on March 2, 1992, gained official recognition by the UN, in the borders of the former Moldavian Soviet Socialist Republic, including the Transnistrian region, inhabited by a more pro-Russian population as compared to the rest of the country. On the day of official recognition of the Republic of Moldova within UN, a military conflict sprang in the Transnistrian region, initially involving police forces and civilians and later the regular army. The Russian Army stationed in Transnistria (the former Soviet 14th Guards Army) supported the Transnistrian side, first unofficially then officially, which determined the outcome of the war. The war ended by a cease-fire agreement signed between Presidents of the Russian Federation and the Republic of Moldova—Boris Yeltsyn and Mircea Snegur, reconfirming the direct involvement of Russia in the Transnistrian conflict.[1]

Since 1991, the goal of Russian policy towards Moldova was to prevent Moldova from fleeing the Russian sphere of influence, and especially to maintain the Russian military base in Tiraspol and prevent Moldova’s adherence to NATO. Transnistrian authorities served as proxies for Russia in pursuit of its foreign policy objectives, Russia’s control over Transnistria being juridically recognized by the European Court for Human Rights.[2] However, maintaining the “statehood” of Transnistria required major financial support, and the energy sector played a crucial role in Russia’s financing of separatism in the Republic of Moldova.

During Soviet times, the energy infrastructure was constructed in such a way that the energy system in the former Moldovan Soviet Socialist Republic was dependent on critical infrastructure placed in the Transnistrian region:

  • the largest power plant—Moldovan State Regional Power Station (aka Kuchurgan Power Station, also known under the Russian acronym MGRES), with total installed capacity over 2.5 GW
  • six out of seven interconnection points between Moldova and Ukraine on high-voltage (330 kV) lines, four of these lines being tied up in a transformer substation on the territory of MGRES
  • four out of five entry points on gas transmission pipelines of regional importance, including all three entry points on the Trans-Balkan pipeline system
  • the main gas compressor station on the Trans-Balkan pipeline system between Ukraine and Bulgaria, located near Tiraspol (the administrative center of Transnistrian region)

Thus, by 1992, the energy security of the Republic of Moldova almost entirely depended on Russia and its proxy regime in the Transnistrian region. Less than 10 percent of the country’s needs could be covered by electricity generation located outside the Transnistrian region. Import of electricity from Ukraine could not avoid high-voltage lines and transformation stations located in the breakaway region. Moreover, even the limited amount of generation controlled by constitutional authorities was mainly based on natural gas as fuel, while Gazprom was the only gas supplier and physical continuity of gas supply depended on infrastructural elements located in the Transnistrian region.

Since then, Russia has taken advantage of its energy leverage in relation to Moldova several times, generating crises, some of them politically reasoned[CD1] . Thus, electricity supply to the main part of Moldova was limited or even halted in 1998,[3] 2004,[4] and 2005,[5] while natural gas supply was interrupted in 2000.[6]

How Gazprom took control of Moldovas gas infrastructure

The gas price has long been used by Russia as a political tool in promoting its foreign policy in the countries largely dependent on Russian gas. The former Soviet countries are particularly vulnerable due to poverty, corruption, and weak regulation of the energy market. The Kremlin administration exploited these weaknesses to gain control of gas supply systems via Gazprom, as it happened in countries like Moldova (1995), Armenia (1997), and Belarus (2007), and only partly succeeded in other countries.[7] The energy sector has always been a copious source of illegal enrichment for corrupt politicians. In the case of Moldova, during 1994–1998 [CD2] the gas supply complex was twice exposed to hostile takeovers. Following a series of actions such as artificial debt swelling and undervaluation of assets, undertaken in conspiracy with Moldovan government officials, Gazprom gained control over companies that owned critical gas transmission and distribution infrastructure.

The trans-Balkan pipeline that crosses Ukraine and Moldova (including the breakaway Transnistrian region) has been used by Gazprom to supply about 20–25 bcm of gas annually to Balkan countries. The gas transit was one of—if not the only—negotiating tools for Moldova in relation to Gazprom. However, the corruptibility and lack of vision of Moldovan political elites allowed the Russian holding to acquire, at derisory prices, the majority stake in Moldova’s gas transmission system (1995) and distribution pipelines (1998) via debt-to-equity swaps. Prior to the acquisition, Gazprom had used its dominant position as a sole gas supplier to impose discriminatory conditions on the Moldovan side, thus artificially increasing the gas debt, as thoroughly analyzed in our 2007 research.[8] Beginning in 1994, Gazprom increased the gas price for Moldova from USD 38.5 to USD 80 for one thousand cubic meters. During that period, Gazprom supplied gas on the European market at an average price of USD 72.8,[9] although the share of transportation costs in the final price for EU countries was higher than for Moldova. At the same time, Gazprom supplied gas to the neighbouring Ukraine at a price of USD 50, which remained unchanged until 2005[10] for political reasons, aimed at retaining Ukraine in Russia’s sphere of influence. Besides the abusive price increase for Moldova, Gazprom requested advanced payments and imposed a fine of 0.35 percent per day on the amounts due (equivalent to 127.8 percent per annum in hard currency), which was seventeen times more than for other countries of the former USSR. Moldova’s debt was further increased by the fact that the Transnistrian separatist region stopped paying for gas consumption after the 1992 Transnistrian conflict, when the separatists were backed by the Russian [CD3] 14th Guards Army. Consequently, in 1994 alone, Moldova’s gas debt increased from USD 22 million to USD 291 million, including USD 100 million in fines and USD 91 million of debt from the separatist region. Moldova was under threat to remain without [CD4] gas supply due to the immense debt. In order to avoid this, in 1995 the government agreed to cede in favor of Gazprom a 50 percent+1 share of the newly formed company Gazsnabtranzit, in whose capital the transportation pipelines were transmitted. The transaction was made both with deviations from the legal norm and to the detriment of the public interest, and as a result Moldova was prejudiced with over USD 416 million for the benefit of the Russian concern.[11]

The government of Moldova admitted similar abuses in 1998 at the founding of JSC [CD5] Moldovagaz, in which Gazprom received a 50 percent share.[12] The equity of the newly created enterprise was determined on the basis of the so-called preliminary estimate of both transmission and distribution pipelines. In 1999, the assets of the gas complex were to be revalued in order to rectify the ownership quotas in the share capital of Moldovagaz, with the corresponding correction of the gas debt. However, this provision has not been executed by the government. The share capital and the gas liabilities remained the same. These and other frauds were investigated in 2000–2001 by the Moldovan Court of Accounts (Supreme Audit Institution in Moldova) at the request of the Parliament. However, following Parliamentary elections on February 25, 2001, the pro-Russian Party of Communists of the Republic of Moldova (PCRM) took over power,[13] and already in March 2001 the team leader of auditing team, Mr. Tudor Șoitu, was ordered to finalize the investigation ahead of schedule.[14] Despite the report containing pertinent proofs of frauds committed by high-level government officials and management of gas companies in favor of Gazprom, it has not been heard in the Parliament. Moreover, Mr. Șoitu was placed under accusation by the Prosecutor’s office and fired from the Court of Accounts. The data and confirmative documents that constituted the base for the report were partially published later, within policy papers produced by IDIS “Viitorul” think tank in 2007,[15] 2017[16] and in Watchdog.md in 2019.[17]

Gas debt and the financing of separatism

The supply of Russian gas to both Moldova and the self-proclaimed Transnistria has been carried out under contracts signed by Gazprom with entities registered in Moldova and officially recognized (initially it was Gazsnabtranzit, afterwards—Moldovagaz). Under such a contractual scheme, the gas debt of the separatist region is accumulated by the Moldovan side.[18] This was possible due to the fact that Transnistria’s gas infrastructure was included in the capital of the Moldovan gas supplier under the pretext of paying the gas debt. Thus, Gazprom supplies gas to Moldovagaz, while the latter supplies gas to Moldovan consumers and to Tiraspol-Transgaz from Transnistria. De jure Tiraspol-Transgaz is a subsidiary of Moldovagaz, but de facto its assets were nationalized by the separatist authorities.[19] Currently the outstanding amount owed by Moldovagaz to Gazprom at the end of 2019 totalled USD 7860.6 million[20] (including USD 1201.2 million to its subsidiary Factoring-Finans).[21]

Tiraspol-Transgaz resells the gas at subsidized tariffs to local Transnistrian households and enterprises, including to MGRES (Молдавская ГРЭС) power plant that supplies Moldova with electricity. The obtained revenue is accumulated on the so-called special gas account and is transferred directly to the separatist budget as loans from Tiraspol-Transgaz. Between 2007 and 2016, the separatist region received a USD 6 billion “gas subsidy,” out of which USD 1.3 billion was converted into budgetary funds. In this way the self-proclaimed Transnistrian authorities covered 35.3 percent of the total budgetary expenditures for the respective ten-year period.[22] The amount of “gas subsidy” generously provided by Gazprom is equivalent to 48 percent of the self-proclaimed Transnistria’s GDP for that period. These findings point out that the unconstitutional regime in Tiraspol would not be sustainable without the permanent support of the Russian Federation. Given the subsidized tariffs, many people in Transnistria are unwilling to rejoin Moldova because they would have to pay more for gas consumption.[23]

The largest gas consumer in Transnistria is MGRES power plant (generation capacity of 2520 MW), controlled by Russian energy holding Inter RAO UES. MGRES generates electricity from gas provided by Tiraspol-Transgaz and supplies 80 percent of Moldova’s electricity consumption. Using Moldova’s dependence on Russian gas, including for electricity generation, the Russian Federation has imposed a contractual scheme whereby Moldovan consumers are forced to finance separatism in their own country by purchasing energy from MGRES located in Transnistria and accumulating gas debts.

Although Gazprom mentions in all its financial reports that Transnistria does not pay for gas consumption and it leads to the increase of Moldova’s gas debt, gas supply to the region still continues.[24] From an economic point of view, the supply of gas without recovery of value is in fact a subsidy. In other words, Gazprom’s activity in Moldova does not have an economic purpose, because it would never recover the gas debt from Moldovagaz, whose assets are below 20 percent of the total gas debt. In fact, Gazprom and senior Moldovan officials compel Moldovagaz to legalize the financing of the unconstitutional regime in Transnistria by supplying gas “on credit” and passing the debt to Moldovagaz. Moreover, according to contract provisions, Moldovagaz cannot interrupt the gas supply to the Transnistrian region without the written agreement of Gazprom.[25] It is probably the only case in history when legalization services of financing the separatism are not paid, but are provided in exchange for debt accumulation.

Even if Gazprom takes over all Moldovagaz assets to recover the debt, we estimate their value at almost USD 1.4 billion, which is under 20 percent of total gas debt.[26] Therefore Gazprom’s activity in Moldova has nothing in common with genuine economic interests, but rather serves as a tool to promote the strategic agenda of the Kremlin administration in Moldova. This geopolitical agenda can be summarized as follows: strengthening Russian influence in Moldova by financing separatism and maintaining the role of mediator of the Transnistrian conflict in its own interest.

Russiangas subsidyconverted into benefits for Russian businesses

Since the 1990s, consumers in the Transnistrian region have benefited from heavily subsidized gas prices. The main beneficiaries were the large industrial enterprises—MGRES and the Moldovan metallurgical plant, also known under its Russian acronym MMZ. These companies consume a lot of energy and gas, and have been, or continue to be, controlled by Russian capital. Subsidized gas and energy tariffs provided them with significant competitive advantages compared to other companies in the region. At the same time, they exported the production at market prices, collecting strong currency. Respectively, the subsidies obtained by these factories through Russian gas were converted into real income.

The MGRES power plant is 100 percent owned by the Russian concern Inter RAO UES. As mentioned, the power plant is the main consumer of gas in the separatist region, using it as a basic source for electricity production.[27] MGRES benefited from a subsidized tariff that covered between 28 percent and 68 percent of the real cost of gas. Based on the financial reports of Inter RAO UES, during 2008–2015, the Russian investors obtained a profit of USD 291.8 million only through MGRES.[28]

The separatist authorities have established subsidized tariffs for the MMZ metallurgical plant as well, through secret decisions. In the period 2005–2015 MMZ was part of the MetalloInvest holding controlled by the Russian oligarch Alisher Usmanov. The plant paid only 11.5 percent of the real gas price and was sometimes generally exempt from paying for gas. In the period 2007–2015, the plant reported sales of over USD 2.3 billion according to the data published by the so-called central bank of Transnistria. However, the real market prices for metallurgical production in Ukraine were 65–85 percent higher. We assume that this margin is explained by the fact that MMZ sold its production through traders affiliated to the MetalloInvest group, where the group accumulated most of its profits. Based on this assumption, we estimated that in the period 2007–2015, the profit related to MMZ production, accumulated by MetalloInvest traders, amounted to over USD 1.5 billion.

The so-called gas subsidy and respectively the subsidized electricity price in self-proclaimed Transnistria continue to be exploited by Russian cryptocurrency businesses as well. Igor Chaika, the son of the Russian ex-Prosecutor General, not only expressed openly his interest to invest in mining farms in Transnistria,[29] but also his organization Delovaya Rossiya (Business Russia) helped the separatist government to develop the legislation on blockchain technology.[30] At least a part of the mining equipment was supplied through Moldovan customs. In December 2018 the separatist authorities announced their plans to increase the output capacity of MGRES power plant by 100 MW by suppying energy to the mining farms.[31]

Cryptocurrency and Russian subversive operations overseas

Cryptocurrency has been used by Russian hackers for various cyber attacks in recent years as a part of the “hybrid warfare,” following the rise of the political tension between Russia and Western countries after the annexation of Crimea. Cryptocurrency transactions are difficult to trace and this fact allowed the perpetrators to hide their identity and the source of funds, in order to circumvent the sanctions or the Know-Your-Client (KYC) procedures applied by commercial banks. The GRU-linked hackers used cryptocurrency to attack the German parliament in 2015,[32] and the US Democratic National Committee (DNC) in 2016.[33] Cryptocurrency-funded cyber operations also targeted FIFA, WADA (World Anti-Doping Agency), and the Court of Arbitration for Sport in 2016.[34]

Hard-to-trace cryptocurrency became a common tool in Russian subversive operations. In October 2017 Russian president Vladimir Putin even issued five presidential orders on the legal framework for digital currencies and mining.[35] Shortly after that, a spike in cryptocurrency mining activities has been observed in several pro-Russian breakaway regions. Besides Transnistria, the mining of virtual currency has also expanded to Donbass[36] and Abkhazia,[37] with the aim of creating a virtual trading platform in Crimea and providing services to the unrecognized pro-Russian territories.[38] Moreover, acccording to Ukraine’s Deputy Prosecutor General Anatoliy Matios, cryptocurrency mined in Ukraine has been used to buy military equipment, weapons, and ammunition for the separatist groups fighting in the regions of Donetsk and Luhansk.[39] Given that, the trace of the cryptocurrency mined in the pro-Russian breakaway regions becomes necessary to prevent and expose the subversive operations conducted by the Kremlin in its attempt to achieve political goals in other countries.

Russian gas “subsidy” stimulating corruption of Moldovan political elites

Although Moldova was ruled by parties of different geopolitical orientations, since its incorporation in 1998, Moldovagaz remained a dangerous territory for control bodies. Throughout this period, Gazprom along with Moldovan decision-makers tolerated and even facilitated fraudulent schemes in the energy sector to the detriment of the national interests of Moldova.[40] At the same time, investigations of alleged fraud in the gas sector turned against their initiators and none of them finalized with proper prosecution of decision makers from Moldovagaz or Moldovan officials. Moreover, despite catastrophic dynamics in Moldovagaz’s financial situation, two of its top officials were decorated with the Glory of Work presidential award: Mr. Alexandr Gusev, President of the Administration Council (2012)[41] and Mr. Iacov Cazacu, Vice President of the Administration Council (2017).[42] This suggests that some of the illicit proceeds from these schemes were used to bribe Moldovan politicians. Thus, each of the parties pursues its own interest: Moldovan political decision-makers aim for personal enrichment from corruption schemes, while Gazprom executes the Kremlin’s agenda on financing separatism and increasing Moldova’s dependence on the Russian Federation.

As mentioned above, the Court of Accounts’ attempt to verify the activity of Moldovagaz in 2001 resulted in an open criminal investigation against the head of the audit team, Tudor Soitu.[43] However, the situation did not change even after the so-called pro-European coalition came to power in 2009. In 2012, the National Energy Regulation Authority (ANRE) issued four inspection reports on procurement irregularities at Moldovagaz’s subsidiary. Frauds worth MDL 243 million (approximately USD 20 million at that time) were found in the purchase of goods at prices that exceeded 3–4 times the market price. This time the control ended with the assasination attempt on one of ANRE directors[44] just two weeks after the first inspection report was issued. Despite its odiousity—the explosion of a grenade under the car of a senior official, appointed by Parliament—this assassination attempt remains uninvestigated until present.

In 2014, following a conspiracy between Moldovan oligarch Vladimir Plahotniuc and self-proclaimed Transnistrian President Yevgheny Shevchuk, the electricity produced by MGRES (owned by Russian Inter RAO UES) was supplied to Moldova through an intermediary company, Energokapital. The electricity was supplied at the same price as previously, while the internal gas tariffs for electricity generation in self-proclaimed Transnistria were decreased by 15 percent.[45] The illicit margin was syphoned off via Energokapital, whose beneficiaries are hidden behind a Scottish limited partnerships.[46] An investigation conducted by the Blacksea.eu revealed that Energokapital has a complex series of off-shore owners connected to the “theft” of a billion dollars from three Moldovan banks. Undoubtedly the energy supply scheme via Energokapital was coordinated at the highest levels in Gazprom and the Russian government, given the visit of the Deputy Prime Minister Andrian Candu to Moscow in September 2014,[47] just two weeks before the incorporation of Energokapital.[48] Moreover, in 2016 civil society watchdogs publicly presented[49] copies of payment orders for transfer of dividends by Energokapital to its offshore mother company worth over USD 19 million[50] and solicited the Prosecutor’s office to verify whether these were made in compliance with anti-money laundering legislation. Instead of investigating the facts, after just 2 weeks, the Prosecutor’s office issued a press release claiming that “experts did not present any documents that would confirm the illegalities.”[51]

In March 2019 Moldova’s Prime Minister Pavel Filip secretly sent a letter to his Ukrainian counterpart, in which he called for the removal of the Transnistrian metallurgical plant MMZ from the sanctions list and the termination of the antidumping investigation against MMZ.[52] Why would the Moldovan prime minister lobby for the metallurgical plant located in the separatist region? The reason is obvious if we follow the money. MMZ is the main customer of the state-owned company Metalferos, which has a monopoly on the collection and export of scrap metal from Moldova.[53] In 2015–2019, the payments from MMZ to Metalferos amounted to at least USD 127 million, a part of which was embezzled to offshore companies directly controlled by Moldovan oligarch Vladimir Plahotniuc,[54] the former leader of the Democratic Party to which Pavel Filip belongs. The Prosecutor’s office started the investigations at Metalferos only after Plahotniuc left the country.[55] In exchange for insignificant personal benefits and acting to the detriment of national interests, Moldovan political elites ensured the temporary registration of MMZ in Moldova and allowed its exports to be made through Moldovan customs[56] and the state-owned Railway company.

The large-scale corruption in the energy sector poses a real threat to economic and energy security, and even the territorial integrity of Moldova. Even today the Moldovan government continues to support the large energy-consuming enterprises in Transnistria, despite the fact that it leads to the increase of the gas debt. In March 2020 the Commission of Emergency Situations canceled the energy procurement tender and the state-owned trader Energocom signed a new agreement with MGRES power plant from Transnistria.[57]

How to take a country hostage for USD 1 billion in 27 years

As mentioned above, by the end of 2019 the total debt of Moldovagaz to Gazprom and its subsidiary Factoring Finans Ltd amounted to USD 8 billion, including about USD 7.5 billion related to gas supplied to the Transnistrian region. These figures are based on contract prices of gas, however the cost of natural gas supplied by Gazprom in the Transnistrian region via Moldovagaz is much lower than the invoiced amounts. According to Gazprom’s officials, in 2016 the average cost for natural gas extraction was around USD 20 per one thousand cubic meters, including taxes.[58] Before switching to the “European price formula” in 2006, Gazprom supplied natural gas to Ukraine at USD 50 for the same amount,[59] which included the cost of transmission services to the border.

Between 2007 and 2016, the average gas consumption in the Transnistrian region was 1.8 billion cubic meters per year. Taking into consideration the cost of transit services on Ukrainian territory, one thousand cubic meters of natural gas delivered to the Ukrainian-Moldovan border (Transnistrian segment) cost Gazprom approximately USD 65 per one thousand cubic meters. Thus, the total costs incurred by Gazprom with financing the Transnistrian separatism over twenty-seven years are slightly more than USD 3 billion. In the mean time, at least around USD 2 billion have been recovered by just two Russian corporations (Metalloinvest and Inter RAO) by benefiting from subsidized gas prices in the Transnistrian region. Thus, the bottomline costs for Russia with maintaining Transnistria as its main instrument of influence in Moldova was at most USD 1 billion—not too expensive for twenty-seven years of influence in a European country of 3 million people.

Thus, by exercising its monopolistic position as a natural anti-dumping gas supplier to Moldova and by loyalizing corrupt political elites from Chișinău, Gazprom served as the main instrument of financing the Russian foreign policy agenda in Moldova.

This malign influence can only be countered by consolidating Moldova’s energy security and eliminating dependency on critical energy infrastructure controlled by Russia via its Transnistrian proxies. However, little has been done in this respect since 1991, despite the fact that the need for diversification has been acknowledged and even included in all energy strategies. Thus, the Energy Strategy until 2010 adopted in 2000[60] mentions diversification of energy supply sources and routes five times, while the Energy Strategy till 2020 adopted in 2007[61] mentions it six times and the Energy strategy till 2030 adopted in 2013[62] refers to it nine times. De facto, despite strong political and financial support provided by the European Union and other international development partners, no major progress has been achieved until the second half of 2019!

In terms of natural gas supply diversification, the largely publicized Iași-Ungheni interconnector started in 2014 still cannot be operated at its full capacity. Moreover, even after finalization of all works around this interconnection route, its capacity (1.5 bcm per annum) won’t be sufficient to cover the winter peak consumption in Moldova even except Transnistrian region. Also, the southern part of Moldova would still remain fully dependent on the traditional natural gas supply route—the Trans-Balkan pipeline system—where the flow of gas could be disrupted by Transnistrian authorities. In the mean time, Gazprom has finalized the Turkish Stream project and is able to supply natural gas to Turkey and other Balkan countries bypassing the Ukrainian and Moldovan part of the Trans-Balkan pipeline. The breakthrough in terms of natural gas supply options for Moldova has been achieved only in the second half of 2019, and mainly due to external factors. Uncertainties around the gas transit contract through Ukraine after 2019 forced Gazprom to look for alternative scenarios for supplying gas to the Balkans. The only feasible emergency alternative was to upgrade the Trans-Balkan pipeline system to be able to operate in reverse mode, which would enable Gazprom to supply gas to Bulgaria, Macedonia, Romania, and Moldova via Turkey. Thus, in just about six months, this project of strategic importance was implemented. It is worth mentioning that civil society experts signalled the strategic importance of the reverse flow on the Trans-Balkan pipeline system and its priority compared to the Iași-Ungheni interconnector since at least 2014.[63]

The implications of the Trans-Balkan reverse flow for Moldova cannot be overestimated as it also reverses the balance of power between Moldovan constitutional authorities and the Transnistrian proxies of Russia in the gas sector: presently, should Moldovagaz solicit Gazprom to supply natural gas to Moldova’s southern border (instead of the eastern, as previously) the Russian supplier would have to comply with it. In this case, if Transnistrian authorities maintain the practice of nonpayment, the supply of natural gas to the secessionist region could be physically limited or even completely interrupted at Căușeni measurement station. The main risks associated with this scenario is on the electricity side: not only would it leave Moldova without its largest source of electricity, which is MGRES fueled by natural gas, but it is also highly likely that Transnistrian authorities would respond by shutting down high-voltage (330 kV) lines that would become critical for importing electricity from Ukraine thus leaving the entire country dependent on a single high-voltage line. Therefore, the next and the last logical step on the path of eliminating the risk of energy blackmail on behalf of Russian proxies in Transnistria is securing the electricity supply by interconnecting with the Romanian electricity transmission system in an asynchronous mode.

Similar to “diversification” efforts on the gas side, construction of electricity interconnections with Romania are being long delayed. Civil society experts have already lost track of all technical and feasibility studies commissioned in the last more than ten years around interconnection options. So far, despite about 250 million euros allocated for these purposes by international partners (World Bank, European Investment Bank, European Bank for Reconstruction and Development), including a 40 million euro grant from the European Union, construction has not even been started. The only plausible explanation is that the entire process is being sabotaged by Russian agents of influence among Moldovan decision makers.

In conclusion, consolidation of Moldova’s energy security by diversification of energy supply options and integration into European energy markets is not only vital for countering Russian malign influence in Moldova, but also key to solving the Transnistrian conflict, which affects regional security.


[1] For more details on historical background and evolution of transnistrian war see Christopher Borgen, “Thawing a Frozen Conflict: Legal Aspects of the Separatist Crisis in Moldova: A Report from the Association of the Bar of the City of New York,” Record of the Association of the Bar of the City of New York, Vol. 61, 2006, pp. 13-24.

[2] “Case Ilașcu and others vs Moldova and Russia. (Application no. 48787/99)”, European Court of Human Rights (website), July 8, 2004, http://hudoc.echr.coe.int/eng?i=001-61886.

[3] https://www.mold-street.com/?go=news&n=8275

[4] https://www.rbc.ru/politics/05/08/2004/5703b64e9a7947783a5a599c

[5] https://www.ng.ru/cis/2005-11-11/5_endoftheworld.html

[6] https://www.vedomosti.ru/newspaper/articles/2000/03/03/moldova-sdalas

[7] Gazprom profile by Steve Thomas, May 2006, PSIRU, Greenwich University, https://www.epsu.org/sites/default/files/article/files/Gazprom_profile_May.pdf.

[8] IDIS Viitorul, “The gas industry in Moldova: The burden of ignorance and the cost of errors”, 2007, https://bit.ly/37IL3L5

[9] М.М. Судо, Э.Р. Казанкова, ”Энергетические ресурсы. Нефть и природный газ. Век уходящий”, 1998

[10] Slovoidilo.ua, ”Как менялась цена российского газа для Украины на протяжении 24 лет?”, 2016, https://bit.ly/2S8lPiP

[11] IDIS Viitorul (2007), Supra note 8 at page 10

[12] IDIS Viitorul (2007), Supra note 8, §2.6

[13] http://www.e-democracy.md/elections/parliamentary/2001/

[14] https://www.watchdog.md/wp-content/uploads/2019/09/Studiu-Moldovagaz-09-2019_compressed-1-1.pdf

[15] IDIS Viitorul (2007), Supra note 8

[16] IDIS Viitorul, “Energy and politics: the price for impunity in Moldova”, Apr 2017, https://bit.ly/2Nss3Yh

[17] Community Watchdog.MD, “Moldovagaz – 20 years of massive fraud under the protection of shareholders and state institutions”, Sept 2019, https://bit.ly/37M7z5P

[18] IDIS Viitorul (2017), Supra note 16 at chapter 3

[19] Order no. 723 from Oct 13, 2005, of the self-proclaimed President of Transnistria, https://bit.ly/2YgkDgO

[20] Gazprom financial report for Q4/2019 at page 83, https://www.gazprom.ru/f/posts/77/885487/gazprom-ifrs-2019-12m-ru.pdf

[21] Gazprom financial report for Q4/2005 at page 47, http://www.gazprom.ru/f/posts/91/747099/repiv_2005.doc

[22] IDIS Viitorul (2017), Supra note 16 at page 15.

[23] ECHR, case Ilascu v. Moldova and Russia, Annex: Witness Y, §261, http://hudoc.echr.coe.int/eng?i=001-61886

[24] Gazprom financial report for Q1/2020 at page 55, https://www.gazprom.ru/f/posts/05/118974/gazprom-emitent-report-1q-2020.pdf

[25] Rise.md, (2016) „Confidential contract: Gazprom empire in Moldova”, Agreement no. 1 to the Contract of gas supply no. 1GM-07-11, §2.8, https://www.rise.md/contract-confidential-imperiul-gazprom-in-moldova/

[26] IDIS Viitorul (2017), Supra note 16, chapter 4.

[27] MGRES technical indicators for 2019, https://bit.ly/2BtiV2t

[28] IDIS Viitorul (2017) Supra note 16, §2.4.1

[29] Kommersant.ru, ”Приднестровье примайнивает инвесторов”, Feb 2018, https://bit.ly/2UYnoS0

[30] Novostipmr.com, ”Начало большого пути. […]”, Dec 2017, https://bit.ly/3didSPC

[31] Anticoruptie.md, “The cryptorepublic”, Apr 2019, https://bit.ly/2YhYjUc

[32] Netzpolitik, “Digital Attack on German Parliament”, Jun 2015, https://bit.ly/3155DT7

[33] Mueller indictment from Jul 13, 2018, https://bit.ly/2NPPpGf

[34] Indictment of the Western District of Pennsylvania, § 21 and 22, https://bit.ly/30hnE1t

[35] Kremlin press release from Oct 21, 2017, http://kremlin.ru/acts/assignments/orders/55899

[36] BBC, “”Морячок” из ДНР купил биржу криптовалют и начал охоту на сокровища Винника”, Dec 2018, https://www.bbc.com/russian/features-46444479

[37] Abkhazia signed a memorandum of cooperation with the Russian Association of Crypto Industry and Blockchain (RACIB), Bitfeed.ru, “Абхазия разрабатывает нормативную базу для регулирования майнинга”, Dec 2018, https://bit.ly/2UZ92Rl

[38] Supra note 36

[39] Politico.eu, “How Ukraine became the Wild East of cryptocurrencies”, Mar 2018, https://politi.co/3fiZEPM

[40] Community Watchdog.MD, “Moldovagaz – 20 years of massive fraud under the protection of shareholders and state institutions”, Sept 2019, https://bit.ly/37M7z5P

[41] http://lex.justice.md/index.php?action=view&view=doc&lang=1&id=344965

[42] Presidential decree 362 from Sept 03, 2017, https://www.legis.md/cautare/getResults?doc_id=100273&lang=ru

[43] ECHR, case 18835/08 Tudor Șoitu vs Moldova, http://hudoc.echr.coe.int/eng?i=001-191880

[44] ANRE press release, Apr 2012, https://bit.ly/2YZpxOy

[45] Press release of self-proclaimed Transnistria Government, Jul 2016, http://gov-pmr.org/item/7269

[46] Blacksea.eu, Bird, M. and Cotrut, A., “Moldovan energy intermediary company linked to “billion-dollar bank theft” scandal”, Mar 2016, https://bit.ly/2NhyzAK

[47] Ministry of Economy press release, Sept 2014, https://bit.ly/2V4iQtb

[48] Energokapital incorporation agreement, Oct 2014, https://bit.ly/310nxIj

[49] https://www.ipn.md/en/economie/77740

[50] https://sergiutofilat.files.wordpress.com/2016/08/plati-energokapital.pdf

[51] http://procuratura.md/md/newslst/1211/1/6723/

[52] Rise.md, “Rescuers of the Transnistrian metallurgic plant: Filip and Poroshenko have helped Transnistria earn mmillions”, May 2019, https://bit.ly/39Whff7

[53] Newsmaker.md, “Люди бьются за металл. Кому выгодна продажа Metalferos и сколько денег там украли”, Jan 2020, https://bit.ly/3fxcZE2

[54] Zdg.md, “Дело Metalferos: Эпизод с Владимиром Плахотнюком”, Aug 2020, https://bit.ly/33sQZYv

[55] Tv8.md, “В ходе обысков на предприятии Metalferos задержано 7 человек”, Dec 2020, https://bit.ly/2Prjgqd

[56] Commission Regulation (EC) No 112/2009 at (48) and (109), https://bit.ly/39Y169i

[57] TV8.md, “Контракт на поставку энергии с Молдавской ГРЭС продлен до 30 июня”, March 2020, https://ru.tv8.md/2020/03/31/kontrakt-na-postavku-energii-s-moldavskoj-gres-prodlen-do-30-ijunya/

[58] Vedomosti.ru (2016), ”Газпром назвал текущую себестоимость добычи газа”, https://bit.ly/2BtkCgl

[59] Supra note 10

[60] https://www.legis.md/cautare/getResults?doc_id=73726&lang=ru

[61] http://lex.justice.md/viewdoc.php?action=view&view=doc&id=325108&lang=2

[62] http://lex.justice.md/ru/346670/

[63] http://www.vedomosti.md/news/viktor-parlikov-gazoprovod-yassy-ungeny-sam-po-sebe-ne-imeet


 [CD1]Another word that will also work here is motivated.

 [CD2]Number ranges are separated by an en dash. Hereafter this change will be made silently (i.e. without track changes on).

 [CD3]On p. 1 you describe this army as former Soviet. For consistency, and to avoid confusion for the reader, it helps to be consistent with terms. Please make the necessary changes so that these terms match.

 [CD4]Was Moldova already not having gas supplied (as is suggested by the word, remain)? If this is correct, leave as is.

If this is not the case, this phrase could be simplified to of losing

 [CD5]Please spell out this abbreviation (joint-stock company?) and insert the before it. E.g. …the joint-stock company…

Since it is only used once it is unnecessary to include the abbreviation in parentheses.

Russian Lawfare and other malign influence operations in Spain

This article is a part of the first issue of the Kremlin’s Influence Quarterly.

You can also download this piece as a PDF.

Introduction

Relations between Russia and Spain at the end of the late twentieth and early twenty-first centuries were not a priority for either of these countries. They were not completely friendly: Spain is a member of NATO and took part in the sanctions campaign against the Russian regime after the invasion of Ukraine in 2014. On the other hand, they did not become directly hostile, and their relationships could be called “favorably neutral.”[1] Spain continues to trade with Russia, and the export of clothes, olive oil, wine and some other products that have not been subject to “import substitution sanctions” is worth mentioning. Spain also imports oil from Russia. The countries continue cooperating in the military sphere: for instance, Spain recently provided its ports for Russian military ships for the needs of Russian military operations in the Middle East. In addition, tourism is developed (or was, before COVID-19 struck), and a significant number of citizens of the Russian Federation own real estate in Spain and show business activity.

Some citizens of the Russian Federation who have chosen Spain as their main place of residence are representatives of organized crime. Having settled in Spain, they have not retired at all, but, on the contrary, have developed a wide network of criminal business.

Until a certain point, Russian actors (affiliated with both the state and the underworld) did not carry out large-scale interventions in the activities of the Spanish democratic institutions. However, the onset of the crisis associated with the escalation of separatism in Catalonia provided them with an opportunity not only to interfere on the state level in Spain but also to destabilize the development of the European Union as a whole.

The malign influence of the Russian regime on the democratic and market institutions of Spain, is most clearly reflected in several areas of public life. First of all, it concerns the provision of Russian organized crime in Spain. Representatives of the Russian criminal community, deeply integrated into the power structures of the Russian regime, have resided continuously in this country since the 1990s and influence trade, launder money, and involve representatives of Spanish politicians and officials in corruption relations. To provide comfortable conditions for their “business,” the Russian criminals need to work simultaneously in two main directions.

On the one hand, they need to establish cooperation between the police and the judiciary in the criminal law sphere in Spain itself. On the other hand, they need to constantly maintain close cooperation with the power structures of the Russian Federation (for example, the head of the Investigative Committee of the Russian Federation is a protege of the Russian mafia in Spain). This, among other things, allows them to have a “safe airfield” in Russia and to receive the necessary official conclusions about themselves and their activities from the Russian authorities. They successfully use such judgments and certificates to prove their innocence in Spanish courts.

Since the greatest threat to the activities of the Russian mafia in Spain is the development of European integration, they put most of their effort into obstructing the democratic progress.

Overview of relations between Spain and the Russian Federation

Relations between Spain and Russia have traditionally developed in the most comfortable format for the latter. As some researchers rightly point out: “Spain drive toward closer relations with Moscow has been made within and outside the EU.”[2] For Russia since the beginning of the 2000s, the development of relations with the European Union as a supranational organization has been a great difficulty. First of all, in our opinion, this is due to the inability to understand the essence of the EU integration method, the nature and structure of relations between the organization and its members. Thus, the foundation of relations between the Russian Federation and the EU remains the Partnership and Cooperation Agreement.[3] It was supposed to terminate in 2007, but instead, it has been automatically extended every year to the present. A draft of a new treaty was being prepared, but negotiations were unsuccessful.

Meanwhile, bilateral relations were thriving. The Spanish government has consistently supported Russian attempts to build a new “multipolar world” and attempts to counter US “hegemony.” This was especially pronounced during the government of Jose Luis Zapatero.[4] Spain presented itself as the ‘heart of Europe’ and developed closer relations with France and Germany. In addition, Spain was more actively included in the work of the Second Pillar of the European Union. Russian-Spanish relations have developed in the field of combating the threat of terrorism, cultural cooperation, and other areas important to the Russian Federation. At the same time, Spain supported the international policy of the Russian Federation; mutual visits at the highest level were regularly made.

Like Russia, Spain still refuses to recognize the independence of Kosovo, even after the decision of the International Court of Justice[5] (among EU countries only Slovakia, Greece, Cyprus and Romania hold this position), although this has to do more with Spain’s own problem with separatism, rather than with Russian foreign policy. Support for separatism in Spain is a particularly important area of activity for Putin’s regime. Unable to do this openly, Russia acts with the help of its criminal representatives and, apparently, with the help of its special services.

It is significant that Spain, together with Austria, Bulgaria, Cyprus, Greece, Italy, Luxembourg, Malta, and Portugal, was opposed to sanctions against Russia for the invasions of Russia in neighboring countries.[6] In these countries, Russia’s informal influence is very strong.

In general, Spain acted as a full-fledged partner of Russia. There are several main aspects worth discussing: the cooperation in the fight against terrorism and regional security (this was especially evident in the 2000s, after 9/11), economic cooperation, mutual investment, and cultural exchange.

Mutual trade relations developed rapidly. Spanish companies entered Russian markets, Russian companies invested in the Spanish economy and exported natural resources. Russia became the second, after Saudi Arabia, oil exporter to Spain. Russian tourism has become a significant phenomenon: by 2010, more than a million Russians visited Spain every year. In 2008, Gazprom tried to conclude a deal to acquire 20% of the Spanish energy company Respol. A major share in Repsol could increase Russia’s weight in Latin America’s energy market, where most of the company’s oil and gas production was centered.[7]

Spain only reluctantly supported EU sanctions against Russia, which had limited economic impact on Spain. Some of Spain’s food exporters were affected, but leading exports[8] were not included in Russia’s counter-sanctions.[9]

In the military sphere, Spain’s policy towards Russia is somewhat inconsistent. On the one hand, as a member of NATO and the EU, Spain is taking part in strengthening its military presence in Eastern Europe. First of all, this concerns the Baltic countries.[10] On the other hand, Spain provides Russia with the opportunity to take full advantage of its Ceuta base in the Mediterranean.

In 2016, eleven members of the European Parliament, including representatives from the Baltic states, Poland, and the Catalan politician Ramon Tremosa, filed a High-Representative for Foreign Affairs and Security Policy Federica Mogherini request for the Ceuta naval base. In particular, they were interested in whether she knew that these naval operations were “the key to maintaining the position of the Russian army in Ukraine,” emphasizing that this could violate EU sanctions against Moscow. “The frequency with which Russian navy ships call into the port—at least 10 times a year—have turned the Spanish exclave into the main base of the Russian fleet in the western Mediterranean. The Russian army has an official base in Tartus (Syria), although its ships have also docked in Maltese and Greek ports.”[11] The supply of Russian warships brings significant revenue to the Spanish treasury, Russia systematically uses this base to refuel its vessels to date, which causes indignation among representatives of the UK and the USA.[12] The only exception was 2017, when Russia itself withdrew a request for three warships.[13]

Russian mafia in Spain

In the early 1990s, a significant number of representatives of the Russian criminal world chose Spain as their main place of residence. It would be an exaggeration to say that this was due to Spanish corruption or other objective reasons. It can be assumed that the determining factors were, on the one hand, the climate (the most influential Russian mafiosi came from cold St. Petersburg and its environs), and on the other, positive image of Spain in the Russian collective historical memory. Spain (unlike, for example, France) is associated with the image of masculinity—which is also a painful issue for the rigid hierarchy of criminal circles in Russia. At the same time, Spain is associated with Ernest Hemingway, which for the Soviet Union of the 1960s (namely, the childhood and youth of the influential representatives of the criminal world), was a cult hero and, in a certain sense, a symbol of freedom. On the whole, the most likely, reason for choosing Spain as one of the main countries where the Russian criminal world is based abroad was a combination of random factors and a generally positive image of Spain in Russia.

The most influential criminal group in Russia by the end of the 1990s was the Tambov-Malyshev organized crime group. It remains so to the present; however, its members have changed their official statuses, from bandits to business representatives and large lobbyists.

They were a part of a criminal structure that was located in Spain since 1996 and consisted of immigrants from Russia who already had a criminal record or were under a trial either in Russian Federation, US, or other EU countries. Residing in Spain, they controlled the activities of the respective criminal groups in their home country. According to the records of the preliminary investigation No. 321/06 of the Spanish Prosecutor’s Office, these activities included murders, arms trafficking, extortion (under duress), fraud, document forgery, communications, bribery, illegal transactions, smuggling, drug trafficking, crimes against the Treasury, fraudulent decapitalization of companies, beatings and threatening conditions. The profits obtained through these illegal activities were sent to Spain with the help of legal and financial consultants, who eventually became a part of the Tambov-Malyshev criminal group. As stated in the records, their “main goal in our country is to conceal illegally obtained funds by legitimizing them and integrating them into the regulated financial system by increasing the authorized capital of “companies” and inter-partner loans, financial transfers from / to offshore zones and investments in other countries, for example, to Germany.” [14]

The central figures in the investigation of the Spanish prosecutor’s office were Gennady Petrov, Alexander Malyshev, Vladislav Reznik (a member of the Russian State Duma since 1999) and dozens more. The community leaders, Petrov and Malyshev, have been directly associated with Vladimir Putin since he was deputy mayor of St. Petersburg for external affairs. The materials of the Spanish case contain retellings of wiretapping of dialogues between the participants of this criminal group. Among other things, there is a conversation between Viktor Gavrilenkov (one of the leaders of the Velikiye Luki criminal group) and a certain “Sergey,” which took place in 2007. They discuss investments in the Spanish economy, possible problems from the “blue” (FSB of the Russian Federation), especially logistics, and this phrase also slips into the conversation: “Victor says that there are several hotels in Alicante, Putin’s house is not too far from here, in Torrevieja.” The Insider conducted a special investigation into this matter and found out that, according to the memoirs of local residents, in 1994 Putin came to Torrevieja and stayed there in the La Mata area.[15] At that time, Torrevieja was the “Russian capital in Spain,” this was the place where the shootings took place, and “the money was carried in backpacks.” According to The Insider, it was in this city that the deputy mayors of St. Petersburg, Vladimir Putin, Alexey Kudrin, and Mikhail Manevich (assassinated in 1997[16]), and their “partners,” through controlled companies, acquired several real estate properties. Both Russian and Spanish specialists were involved in these operations, and the then leader of the criminal community of St. Petersburg Viktor Kumarin (Barsukov) controlled the money laundering process. Subsequently, after a fierce struggle, control over most of Kumarin’s area of responsibility was seized by Petrov. Kumarin went to prison, where he remains to the present.

A lot of investigations are devoted to the analysis of the materials of the Spanish prosecutor’s office, and the activities of Petrov and his entourage. In particular, he was involved[17] in the appointment of Alexander Bastrykin as the head of the Investigative Committee of the Russian Federation, Igor Sobolevsky as his deputy, Anatoly Serdyukov as the Minister of Defense of the Russian Federation and many other personnel decisions in the Russian Federation.[18] Spanish mafiosi constantly supported communication with partners at home.[19]

The work of the Spanish prosecutor and investigative journalists[20] from all over the world was not left without attention. In particular, in the January 2018 report from the Committee on Foreign Relations of the United States Senate , more than half of the chapter on Spain is devoted to the activities of Petrov and his colleagues.[21] The report uses the Sebastian Rotella study published in ProPublica as one of its primary sources.[22] Spanish prosecutors met with Alexander Litvinenko, a former Russian intelligence officer. Litvinenko was to advise Spanish investigators and share information on the activities of the Russian mafia in Spain. As an officer of Russia’s intelligence services, Litvinenko specialized in working with organized crime and apparently possessed a lot of classified information regarding Russian organized crime in Spain. However, Litvinenko was killed before he could testify at a trial. As was told in an inquiry by the UK’s House of Commons the order to kill Litvinenko was “likely approved by Putin.”[23] Jose Grinda Gonzalez, Spain’s leading law enforcement expert on Russian organized crime, told ProPublica, “We had accepted the idea that the world of the Russian mafia was like that. But it’s true that the case made other people think this gentleman had told the truth because now he was dead.’’

During an investigation into the activities of the Petrov’s gang, the Spanish law enforcement authorities were able to find a large amount of evidence showing that “that they named over a dozen of them in the indictments, including the former defence minister.”[24]

Petrov was arrested in 2008 during a major operation by the Spanish authorities against Russian organized crime, which ultimately led to the pretrial indictments of 27 suspects on charges of creating a criminal community and money laundering. Among the main actors of the criminal group was Vladislav Reznik, a senior Duma member and member of Putin’s United Russia party, and the indictment alleges that he operated at ‘‘the highest levels of power in Russia on behalf of Mr. Petrov and his organization.”

Before the start of the trial, Petrov left Spain and settled in Russia. Russian authorities did not take any action to return him to Spain. Moreover, they interfered with the investigation by sending false information to Spain or using opportunities to delay the process. Thus, the consideration of the Petrov case lasted more than ten years.

Nevertheless, despite Petrov’s flight, the investigation continued in 2008. In 2009, while pursuing a lead from the case, Spanish police entered the office of a lawyer suspected of money laundering, only to see him grab a document from his desk, crumple it up, and begin to eat it.[25] The document, after being forcibly spat out, led investigators to a new group of alleged money launderers in Barcelona who have suspected ties to Kremlin-linked organized crime.[26] The efforts of the Russian mafia in Spain were aimed at creating an effective and secure money-laundering machine in Catalonia. Representatives of Russian organized crime, themselves and through the experts they hired, have for years strengthened their influence on Catalan politicians and businessmen. One important tool for this disruptive influence was the use of rivalry between regional and national law enforcement agencies.[27]

Grinda’s investigation has been so productive and informative over the years, that it garnered the attention of the FBI who reportedly directed years ago that an FBI agent was to be embedded into the Spanish investigation to obtain further information with regard to Russian organized crime and corruption.[28]

Thanks to the efforts of Jose Grinda, the investigation into the activity of the Russian criminal network in Spain entered the international level:

Criminal activities including drugs, counterfeiting, extortion, car theft, human trafficking, fraud, fake IDs, contract killing, and trafficking in jewels, art, and antiques. This was done on an international scale. Not just in Russia. Solntsevskaya[29] has also demonstrated active cooperation with other international criminal organizations, like Mexican mafias, Colombian drug cartels, Italian criminal organizations (particularly with the Calabrian ’Ndrangheta and the Neapolitan Camorra), the Japanese yakuza, and Chinese triads, among others.[30]

Then one of the most senior leaders of the Russian criminal world, Zakhariy Kalashov (“Shakro the Young”) was taken under arrest.

If the fugitives were intimidated, Rueda [a former Spanish police commander] saw little sign of it. Law-enforcement officials in Georgia told him that Oniani [Tariel Oniani—one of the leaders of the Russian criminal world] was threatening to kill Spanish investigators […] Rueda spent weeks preparing a secret operation with the help of law-enforcement officials from several nations […] in what was one of the most important convictions overseas of a gangster from the former Soviet Union. But the Spanish fight did not end there. Kalashov, considered the most dangerous inmate in the country’s prison system, bombarded courts with appeals, plotted repeatedly to escape, and did his best to corrupt any officials he could reach, investigators say. In 2012, the FBI passed along a formal warning that the mafia was prepared to spend a million dollars to bribe a Spanish official for Kalashov’s release, a confidential FBI document indicates.[31]

After several unsuccessful attempts to assassinate the prosecutor, in 2017, the representatives of the Russian criminal world started to spread a rumor about Grinda allegedly being a pedophile through a Spanish lawyer.[32] In one of the interviews Grinda quoted a Spanish saying coined by the king of the Colombian narcos Pablo Escobar, plata or plomo, which literally translates to “silver or lead”: “Do you know what I mean if I say plomo or plata? With them it is like this: either take the plata, the money, or there is civil death.”[33] Fortunately, the process on charges of pedophilia against the prosecutor was not started, but in 2017 after French police intercepted a phone call from a Georgian mafia member ordering a hit on Grinda, he started using bodyguards to protect himself and his family.[34]

Despite all the efforts of the investigation, the accused were acquitted. During the process, the name of Vladimir Putin sounded many times and his direct relationship with the accused was not in doubt.[35]

The result of the trial of the Russian mafia in court can be an example of disruptive Russian influence that destroys the institution of justice and the inevitability of punishment. A massive team of lawyers and other professionals acted with the direct support of Russian law enforcement agencies. The Spanish court was obliged to accept the findings of Russian law enforcement without criticism, a priori recognizing the conclusions of the Russian authorities as real. (Possibly this follows from the spirit of the agreement on legal assistance between Russia and Spain in 1996).[36]

As a consequence, the Spanish judges even acquitted two defendants who acknowledged themselves to be guilty of money laundering and organized crime, Mikhail Rebo and Leon (Leonid) Khazine, stating the court is allowed to do so.

Spanish investigators complained to El País that courts have been too ready to grant bail to the numerous alleged Russian mafia members they have detained. “We had gained a lot of prestige in Europe for our operations against the Russian mafias and these decisions have thrown part of that work into the dustbin.”[37]

These drawbacks of the Spanish justice system can be clearly illustrated by Petrov’s case. The Spanish judges seem to have such faith in the reports of Russian FSB that any information provided there undermines all investigation efforts. As mentioned in Transborder Corruption Archive, “the Spanish sentence pretends that Petrov was not involved in organized crime, based on two reports from the Russian FSB and several more letters from different Russian law enforcement bodies, as well as on the conviction for defamation of a Russian media outlet for linking Gennady Petrov and Ilias Traber to organized crime.”[38]

Intervention in the Catalan referendum

However, the troubles of the leaders of the Russian criminal world in Spain did not end there. They turned out to be participants in Russia’s interference in the referendum in Catalonia.

Gennady Petrov was involved in financing radical parties. It seems reasonable to assume that he did this not so much on his own initiative, but rather at the request of his partners in Moscow. And in 2013, the Catalan regional government appointed Xavier Crespo, a former mayor belonging to the Romano Codina i Maseras (CiU) party, to the post of security secretary, which controls the Catalan police.[39] The appointment was cancelled when intelligence services in Madrid provided evidence that Crespo was involved in money laundering, and in 2014 he was charged with bribery from Petrov. As it was discovered during an investigation known as Operation Clotilde, the CiU also received money laundered by Russian crime syndicates through Catalan banks and shell companies.[40]

Part of the CiU teamed up with two left-wing parties to form a coalition that held a referendum on the independence of Catalonia from Spain on October 1, 2017. The referendum has been advancing for many years on domestic political, cultural, and economic issues. Still, it also gave Moscow many opportunities to develop a result that would weaken one of the central EU states. And now there is growing evidence that the Kremlin, at least through state-owned media, has launched a large-scale disinformation campaign aimed at a referendum.

The U.S. State Department reported that Russian state news outlets, such as Sputnik, published a number of articles in the run up to the poll that highlighted alleged corruption within the Spanish government and driving an overarching anti-EU narrative in support of the secessionist movement. These Russian news agencies, as well as Russian users on Twitter, also repeatedly promoted the views of Julian Assange, the founder of WikiLeaks, who has taken to social media to call for Spanish authorities to respect the upcoming vote in Catalonia. Spanish newspapers have also reported that Russian bots attempted to flood social media with controversial posts in support of Catalonian independence prior to the referendum.[41]

In November 2017, the Instituto Elcano research center published a report by Mira Milosevich-Juaristi on Russia’s alleged role. They registered a 2,000% increase in Russian digital activity related to Catalonia during September that reflected another Russian attempt “to influence the internal political situation of another country, to sow confusion and to proclaim the decline of liberal democracy.”[42]

According to the report, the main goals of malign influence in Catalonia were the following:

  • Discrediting Spanish democracy and alienating Spain from its EU and NATO partners;
  • Destroying credibility of European institutions and sowing confusion;
  • Compromising the liberal order created and maintained by the US;
  • Distracting the attention of Russia’s own citizens from internal problems.

The work of Russian communications media, including RT, Sputnik, Russia Beyond the Headlines and many state TV stations, social networks (Facebook and Twitter) by trolls (online profiles created to disseminate pre-fabricated information), bots (dissemination of information by autonomic processes) and sock puppets (online profiles created with the objective of generating and transmitting false news)[43] loudly declared itself to the world and various political and expert communities have developed a large number of recommendations to combat fake news.

It is important to note that Catalonia’s gaining or not gaining independence was by and large indifferent to Russian propaganda channels. The main goal was to balance the Catalan events in the public mind with the “referendum” in Crimea and thus push Europe’s public opinion to the idea of lifting international sanctions from Russia.[44]

At the end of 2019 Spain’s High Court, the Audiencia Nacional, opened an investigation into the alleged activities of a group linked with the Russian intelligence service during the 2017 Catalan breakaway bid.[45]

The Russian foreign ministry spokeswoman, Maria Zakharova, said that some media organizations seem obsessed with bringing back “a half-forgotten issue,” and she talked about “an anti-Russia campaign.”[46]

Apparently, not only the Russian disinformation forces and representatives of the criminal world, but also the Russian special services took part in the Catalan campaign. A Spanish court has already sentenced members of extremist groups[47] to plan various acts of violence.[48] Representatives of Russian special services, including agents of GRU Unit 29155, could take part in coordinating and supporting the activities of these organizations.

The investigations of malign Russian influence will bring more evidence. Unofficial sources increasingly point to the direct impact of Russian intelligence services in Spain. We can safely assume that Russia uses Spain as a “recreation center” and “operational space” for Russian security services. In the course of official and journalistic investigations of the murders in Britain by the representatives of the Russian authorities, it became possible to conclude that the special GRU unit 29155[49] was responsible for these acts. It is still impossible to undeniably confirm the direct connection between this unit and the Russian mafia, but new evidence gives more reasons for this. For example, an agent of the Unit 29155 “Fedorov” (Denis Sergeev) visited Catalonia just before the referendum.[50]

“While the referendum did not result in Catalonia’s independence from Spain, it showed that Spain is a growing target of the Kremlin’s malign influence operations. Spain can strengthen its resiliency by studying the experiences of and cooperating with other similarly-targeted European countries, and the U.S. government should take steps to help shore-up ongoing effort.”[51]

Extradition problems and problems of cooperation

The Spanish authorities had trouble handling thriving Russian criminal groups, the population of which was steadily growing in Spain since the 1990s when citizens of the former Soviet Union started arriving in the country, residing primarily in three areas: Costa del Sol, Valencia (including already mentioned Torrevieja), and the Catalonian coast. In his article on transnational organized crime in Spain, Carlos Resa Nestares claims that weak government and administrative institutes of Russia and general reluctance of Russian authorities to cooperate were the primary reasons why attempts to stop growth of Russian mafia influence were unsuccessful: “In many cases, the Russian mafias take advantage of the lack of co-operation of the Russian police with Spanish investigations. The collapse of governmental structures, which has decimated the police force, is one reason for this lack of co-operation. Others are the pervasive corruption which plagues the Russian police as well as their spotty training in new types of criminality.”[52]

It is obvious that it was the refusal of the Russian investigation to cooperate with the Spanish investigating authorities that later became the main official argument justifying the difficulty of investigating the activities of Russian criminal groups and officials all over the EU.

So, for example, this argument is regularly used in the Indictment of the Special Prosecutor Against Corruption and the Organized Criminality to the Court.[53]

It can be concluded with certainty: the Russian prosecutors are directly (at least passively) opposing the Spanish investigation. The case of Tariel Oniani clearly demonstrates the level of Russian cooperation. In June 2005, Oniani fled to Russia just hours before he was to be arrested in Spain, and in April 2006, despite the fact that he was wanted by the Spanish authorities, Russia granted him citizenship. Obtaining Russian citizenship is a complicated and bureaucratic procedure. However, in Oniani’s case, it went surprisingly quickly. It is doubtful that Oniani was just lucky, and Jose Grinda Gonzalez alleges that such a generous gesture from the authorities suggests “an example of Russia putting crime lords to work on behalf of its interests.” Grinda is also sure that the Russian Interior Ministry and the FSB were protecting Oniani even while he was held in prison. Later, in June 2009, following Oniani’s arrest in Russia, Spain requested his extradition for charges related to Operation Avispa. However, the Russian authorities denied this request, claiming it was his Russian citizenship that prevented extradition. As Grinda concluded, “A virtue of the Russian government is that it will always say and do the same thing: nothing.”[54]

Despite the efforts of Spanish authorities to investigate and prosecute illegal activities of Russian criminal groups and eliminate the effect of their malign influence on internal affairs, the results are still underwhelming. As stated in “Defining and Prosecuting Transborder Corruption,” “a major problem preventing European law enforcement bodies from investigating transborder corruption is the absence of agreements on legal assistance between Russia and European countries.”[55]

In conclusion, it is safe to say the Russian authorities are directly affiliated with criminal groups in Europe. With their help, they launder their incomes, provide themselves and their loved ones the opportunity to live comfortably in developed countries. In addition, as it has become clear recently, criminal groups, together with the Russian special services, are systematically working on destroying the institutions of democracy and justice. This activity so far is proceeding quite successfully and with impunity.


[1] Alexander Dunaev, “Why Spain Doesn’t Fear the ‘Russian Threat,’” Carnegie Moscow Center, March 5, 2018. https://carnegie.ru/commentary/75698

[2] Maxine David, Jackie Gower, and Hiski Haukkala, eds., National Perspectives on Russia: European Foreign Policy in the Making? (Routledge, 2013), 111.

[3] “EU–Russia partnership and cooperation agreement 1994,” Official Journal of the European Communities (November 28, 1997): L 327/3, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:21997A1128(01)

[4] Maria Shagina, “EU Sanctions Policy Towards Post-Soviet Conflicts: Cases of Crimea, Eastern Ukraine, South Ossetia And Abkhazia,” Revista UNISCI / UNISCI Journal, no. 43 (Enero/January 2017); and David, Gower, and Haukkala, National Perspectives on Russia, 109.

[5] Hannah Jamar and Mary Katherine Vigness, “Applying Kosovo: Looking to Russia, China, Spain and Beyond After the International Court of Justice Opinion on Unilateral Declarations of Independence,” German Law Journal 11 no. 7-8 (August 2010): 921–922, https://www.cambridge.org/core/journals/german-law-journal/article/applying-kosovo-looking-to-russia-china-spain-and-beyond-after-the-international-court-of-justice-opinion-on-unilateral-declarations-of-independence/8A9AAA20549A0A2A70611F43090CCB56

[6] Shagina, “Eu Sanctions Policy”

[7] Giles Tremlett, “Gazprom seeks 20% of Spanish oil group,” Guardian (US edition), November 4, 2008, https://www.theguardian.com/business/2008/nov/14/oil-russia-gazprom-spain-repsol

[8] “Russia’s import in 2017,” The Observatory of Economic Complexity, https://oec.world/es/profile/country/rus/#Exportaciones

[9] Dunaev, “Why Spain Doesn’t Fear ‘Russian Threat’”

[10] Aurora Mejía “Spain’s contribution to Euro-Atlantic security,” The Elcano Royal Institute, http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_es/zonas_es/defensa+y+seguridad/ari60-2017-mejia-spain-contribution-euro-atlantic-security

[11] Miguel González “Ceuta: an unofficial Russian naval ‘base’ in the Strait of Gibraltar? Right-wing groups in the US and UK criticize frequent stopovers in the Spanish exclave,” El Pais, March 28, 2016. https://english.elpais.com/elpais/2016/03/28/inenglish/1459157481_130448.html

[12]George Allison “Spain complains about British military while refuelling Russian warships,” UK Defence Journal, (June 2019), https://ukdefencejournal.org.uk/spain-complains-about-british-military-while-refuelling-russian-warships/

[13] “Russian warships: Spain says refuelling request withdrawn,” BBC News, October 26, 2016, https://www.bbc.com/news/world-europe-37779204

[14] Fiscalia Especial Contra La Corrupción Y La Criminalidad Organizada, Protocols of the preliminary investigation No. 321/06, http://www.compromat.ru/files/51434.pdf

[15] Anastasiya Kirilenko, “Dom sen’ora Putina. Den’gi merii Peteburga otmyvalic’ v Ispanii?” The Insider, November 9, 2015, https://theins.ru/korrupciya/15823

[16] “Gangland-Style Slaying of Russian Official” New York Times By Associated Press, Aug. 19, 1997, https://www.nytimes.com/1997/08/19/world/gangland-style-slaying-of-russian-official.html

[17] Anastasiya Kirilenko, “Dom Russkoy Mafii: ‘tolik’ ‘sasha’ ‘tsar,’” The New Times November 30, 2015, https://newtimes.ru/articles/detail/104858

[18] Anastasiya Kirilenko, “Mafiya na goszakaze. Kak novye kremlevskie oligarkhi svyazany s prestupnym mirom,” The Insider, July 2, 2015, https://theins.ru/korrupciya/10407

[19] Anastasiya Kirilenko, “Primaya liniya s Tambovskoy OPG. Kak mafiya druzhit s glavoy Sk, ministrami I prochim okruzheniem Putina (proslushki),” The Insider, November 6, 2018, https://theins.ru/korrupciya/125116

[20] Sebastian Rotella, “Gangsters of the Mediterranean. The story of the Russian mob in Spain—and the detectives who spent years trying to bring them down,” The Atlantic, November 10, 2017, https://www.theatlantic.com/international/archive/2017/11/russian-mob-mallorca-spain/545504/

[21] “Putin’s Asymmetric Assault On Democracy In Russia And Europe: Implications For U.S. National Security,” A Minority Staff Report Prepared For The Use Of The Committee On Foreign Relations United States S. Doc. No. 115-21 (January 10, 2018), https://www.foreign.senate.gov/imo/media/doc/FinalRR.pdf

[22] Sebastian Rotella, ‘‘A Gangster Place in the Sun: How Spain’s Fight Against the Mob revealed Russian Power Networks,’’ ProPublica, Nov. 10, 2017, https://www.propublica.org/article/fighting-russian-mafia-networks-in-spain

[23] An inquiry by the UK’s House of Commons concluded that order to kill Litvinenko was likely approved by Putin. United Kingdom House of Commons, “The Litvinenko Inquiry: Report into the Death of Alexander Litvinenko,” at 244 (March 2015), https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/493860/The-Litvinenko-Inquiry-H-C-695-web.pdf

[24] While mentioned in court documents, the officials were not actually charged.

[25] Rotella, “Gangsters of the Mediterranean;” and Rotella, ‘‘Gangster Place in the Sun”

[26] Rotella, “Gangsters of the Mediterranean;” and Rotella, ‘‘Gangster Place in the Sun”

[27] “Putin’s Asymmetric Assault On Democracy In Russia And Europe: Implications For U.S. National Security,” A Minority Staff Report Prepared For The Use Of The Committee On Foreign Relations United States S. Doc. No. 115-21 (January 10, 2018), https://www.foreign.senate.gov/imo/media/doc/FinalRR.pdf

[28] Martin Sheil, “Is Russian Organized Crime the link between the Danske Bank money laundering scandal and the Novichok poisoning of ex-Russian spy Sergei Skripal?” Medium, Sep 20, 2018, https://medium.com/@sheil51/is-russian-organized-crime-the-link-between-the-danske-bank-money-laundering-scandal-and-the-cc431f1c2de6

[29] Criminal group from Moscow. Many members of this group were arrested in Spain in 2017. “Two Main Russian Mafia Groups Dismantled In Spain With Europol’s Support” Europol Press Release, September 28, 2017, https://www.europol.europa.eu/newsroom/news/two-main-russian-mafia-groups-dismantled-in-spain-europol%E2%80%99s-support

[30] Melissa Rossi “Spain’s Robert Mueller takes on the Russian mob,” Yahoo News, January 19, 2018, https://www.yahoo.com/news/spains-robert-mueller-takes-russian-mob-202248019.html

[31] Rotella, “Gangsters of the Mediterranean”

[32] Rossi “Spain’s Robert Mueller”

[33] Il Fatto Quotidiano “Mafia russa, su Fq MillenniuM l’intervista esclusiva al giudice Grinda: C’è Mosca dietro le accuse di pedofilia contro di me” June 13, 2017, https://www.ilfattoquotidiano.it/2017/06/13/mafia-russa-su-fq-millennium-lintervista-esclusiva-al-giudice-grinda-ce-mosca-dietro-le-accuse-di-pedofilia-contro-di-me/3655094/

[34] Rossi “Spain’s Robert Mueller”

[35] Anastasia Kirilenko, “The top man says he’ll consider it.” Vladimir Putin in wiretapped calls of Tambovskaya gang, The Insider, April 27.04.2018, https://theins.ru/uncategorized/100981?lang=en

[36] “Dogovor mezhdu Rossiyskoy Federatsiey i Korolevstvom Ispaniya ob okazanii pravovoy pomoshchi po ugolovnym delam. Moskva, 25 marta 1996 goda. Ministerstvo yustitsii RF,” https://to14.minjust.ru/ru/dogovor-mezhdu-rossiyskoy-federaciey-i-korolevstvom-ispaniya-ob-okazanii-pravovoy-pomoshchi-po

[37] González “Ceuta: unofficial Russian naval ‘base’”

[38] Transborder Corruption Archive; “Sentence, Troika criminal case, Spain,” October 19, 2018, https://tbcarchives.org/sentencia-operacion-troika/

[39] Martin Arostegui, ‘‘Officials: Russia Seeking to Exploit Catalonia Secessionist Movement,’’ VOA News, November 24, 2017, https://www.voanews.com/europe/officials-russia-seeking-exploit-catalonia-secessionist-movement

[40] Arostegui, ‘‘Officials: Russia Seeking to Exploit”

[41] Chris Sampson, “Introduction” in Putin’s Asymmetric Assault on Democracy in Russia and Europe Implications for U.S. National Security (Simon and Schuster: 2018), https://www.simonandschuster.com/books/Putins-Asymmetric-Assault-on-Democracy-in-Russia-and-Europe/Chris-Sampson/9781510739888

[42] Mira Milosevich-Juaristi, “The ‘combination’: an instrument in Russia’s information war in Catalonia,” The Elcano Royal Institute, November 11, 2017, http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/defense+security/ari92-2017-milosevichjuaristi-combination-instrument-russia-information-war-catalonia

[43] Milosevich-Juaristi, “The ‘combination’”

[44] David Alandete How Russian news networks are using Catalonia to destabilize Europe. Media stories in English, Russian and German equating crisis in Spain with conflicts in Crimea and Kurdistan,” El Pais September 25, 2017, https://english.elpais.com/elpais/2017/09/25/inenglish/1506323273_063367.html

[45] Óscar López-Fonseca and Fernando J. Pérez, “Spain’s High Court opens investigation into Russian spying unit in Catalonia. Judge Manuel García-Castellón is probing whether an elite military group known as Unit 29155 carried out actions aimed at destabilizing the region during the separatist push,” El Pais, November 21, 2019, https://english.elpais.com/elpais/2019/11/21/inenglish/1574324886_989244.html

[46] María R. Sahuquillo, Russia denies interference in Catalonia or in Spain’s domestic affairs. A week after it emerged that the Spanish High Court is probing the activities of an elite military group, the Foreign Ministry is talking about an anti-Russia campaign by the media,” El Pais, November 29, 2019, https://english.elpais.com/elpais/2019/11/29/inenglish/1575016033_266352.html

[47] Rebeca Carranco and Marta Rodríguez, “Authorities in Catalonia clear protests on AP-7 freeway near Girona. Supporters of independence for the northeastern region have been trying to block the road, which links Spain with France, since Monday,” El Pais, November 13, 2019, https://english.elpais.com/elpais/2019/11/13/inenglish/1573644554_106668.html

[48] Reyes Rincón, “Prosecutors uphold prison requests for Catalan separatist leaders. Oriol Junqueras faces 25 years in jail for his involvement in the 2017 secession drive after four months of hearings that did not alter the legal teams’ positions,” El Pais, May 20, 2019, https://english.elpais.com/elpais/2019/05/30/inenglish/1559199477_834254.html

[49] Michael Schwirtz. “Top Secret Russian Unit Seeks to Destabilize Europe, Security Officials Say,” New York Times, October 8, 2019, https://www.nytimes.com/2019/10/08/world/europe/unit-29155-russia-gru.html

[50] López-Fonseca and Pérez, “Spain’s High Court opens investigation”

[51] “Putin’s Asymmetric Assault On Democracy In Russia And Europe: Implications For U.S. National Security,” A Minority Staff Report Prepared For The Use Of The Committee On Foreign Relations United States S. Doc. No. 115-21 (January 10, 2018), https://www.foreign.senate.gov/imo/media/doc/FinalRR.pdf

[52] Carlos Resa Nestares. “Transnational Organized Crime in Spain: Structural Factors Explaining its Penetration,” in Global Organized Crime and International Security, ed. Emilio C. Viano, 47-62, https://www.researchgate.net/publication/330288240_Transnational_Organized_Crime_in_Spain_Structural_Factors_Explaining_its_Penetration

[53] Fiscalia Especial Contra La Corrupción Y La Criminalidad Organizada, Protocols of the preliminary investigation No. 321/06, http://www.compromat.ru/files/51434.pdf

[54] Luke Harding, “WikiLeaks cables: Russian government ‘using mafia for its dirty work.’ Spanish prosecutor alleges links between Kremlin and organised crime gangs have created a ‘virtual mafia state,’” Guardian (US edition), Dec 1, 2010, https://www.theguardian.com/world/2010/dec/01/wikileaks-cable-spain-russian-mafia

[55] Harry Hummel and Christopher Starke, “Defining and Prosecuting Transborder Corruption,” in Failed in Action Why European Law Enforcers Are Unable to Tackle EU-Russian Transborder Corruption, EU-Russia Civil Forum. Expert Group “Fighting Transborder Corruption,” Report, 2017, 8-11, https://www.researchgate.net/publication/322519997_Defining_and_Prosecuting_Transborder_Corruption

The (Geo-)Political Aspects of Austrian-Russian Business Relations, Part I

This article is a part of the first issue of the Kremlin’s Influence Quarterly.

You can also download this piece as a PDF.

1. Introduction

This article focuses on the political framework conditions, side effects and consequences of Austrian-Russian economic relations over the past two decades. The supply of natural gas and crude oil from Russia to and via Austria has a special role to play here, since it accounts for the lion’s share of Moscow’s exports; it is also relevant for other EU countries which likewise purchase Russian gas. And it is a matter of common knowledge that the production and export of energy sources are at the heart of Russia’s economy, without which the country would be negligible in global political terms, regardless of its size.

Vladimir Putin has been at war since the day he took office as Prime Minister in August 1999 (at that time in the breakaway North Caucasian Republic of Chechnya). Between 1999 and 2008 the oil price rose sharply, which Putin took advantage of in his military policy. Without or with significantly less oil and gas revenues, Putin would not have been able to finance the secret services (the backbone of his power), the modernization of his army, several de facto states in former Soviet republics (Donetsk People’s Republic and Lugansk People’s Republic in Ukraine, Transnistria in Moldova; Abkhazia and South Ossetia in Georgia) and his wars (currently against Ukraine and in Syria) to the same extent as before, not to mention the funding of occupied Crimea peninsula, which has cost Moscow the equivalent of around USD 20 billion since 2014. Russia’s reliable oil and gas customer—Austria—also contributes to this state of affairs, but without this being the subject of any attention from the country’s politicians, press, or political scientists. Hardly anyone in Western Europe and North America cares about the undeniable fact that Putin’s world power ambitions are financed by Western oil and gas customers, not to mention that someone wants to change this.

This article cannot deal with the “export” of Russian corruption to Austria; the operations of Russian oligarchs, and the activities of the “Russian Mafia” in Austria. This has reasons of space alone and is not due to the author’s assumption that this would be insignificant in the context of Austrian-Russian (economic) relations. Thus, the Russian opposition politician Aleksey Navalny said: “Everyone [in Russia] loves Austria—especially the crooks and thieves.”[1]  Thus, the trade relations between Russia and Austria also, to a certain extent, advance Russia’s malign influence. In addition, an ideological moment was always present in the Austrian-Soviet and then Russian business relations (even if most, if not almost all, of the Austrian and probably also Soviet/Russian politicians and managers involved would strongly deny this). The political background for this is Austria’s neutrality (which has existed since 1955), the observance of which Moscow monitored “with Argus eyes” in both Soviet and post-Soviet times. And for the Austrian side, neutrality was and is a good excuse to show itself “as friendly as possible” towards Putin’s Russia. This can be demonstrated by numerous events. So, in June 2014 Austria was the first EU member country to receive Putin after the annexation of Crimea; and the politicians meeting him in Vienna seemed to be very proud of this.

Austrians sometimes console themselves about the low international importance of their country by quoting Friedrich Hebbel: “This Austria is the little world in which the big one holds its rehearsal” (in German it rhymes: Dies Österreich ist eine kleine Welt, in der die große ihre Probe hält.”) When these words were spoken in 1862, Austria was territorially much larger than it was after 1918 and up to the present day: It was a major European power then and is now a small state. Russia, on the other hand, was then and is now a great power, and the character of its political system at that time was by no means dissimilar to that of Putin’s Russia today: authoritarian, with a ruler who cannot be voted out of office; very nationalistic, ambitious, and self-confident; with an (almost) powerless society; and with a political class that is also and especially concerned with self-enrichment. These are the real starting conditions for any proper analysis of Russia’s domestic, foreign, military, security, and economic policy—and therefore also for an approach to its relations with Austria in general and in the field of trade in particular.

2. Russia as Austria’s Trade Partner—an Overview

During each of his stays in Vienna, Putin visited the Austrian Federal Economic Chamber, which is dominated by the Austrian People’s Party and claims to represent the interests of business and foreign trade. Putin also collects his standing ovations there. Thus, an uninformed person, watching such TV coverage, could gain the impression that Russia is the most important or at least a very significant trade partner for Austria. But what is the truth? In 2018, 35.8% of Austria’s import came from Germany; 6.4% from Italy; 5.8% from China; Switzerland and the Czech Republic each account for 4.4%; 3.8% came from the US; France, the Netherlands, Poland and Hungary each account for 2.7%; 2.2% came from Slovakia and only 2.1% from Russia. Among Austria’s top export partners are (1) Germany, (2) US, (3) Italy, (4) Switzerland; Russia with a share of 1.4% occupied only 17th position.[2] However, “such economic data show only part of the story. […] Austrian economic players dealing with Russia are more important than the aggregate trade numbers might suggest. Some key business sectors linked to Russia have ties to the state, strong corporate lobbies, or both.”[3]

Austrian imports from Russia continue to consist mainly of energy sources (oil, natural gas), followed by metals. According to the Austrian Embassy in Moscow, the largest share of exports from Austria is attributed to the manufacturing industry, especially mechanical engineering and plant construction. Approximately 500 Austrian companies are active in Russia, particularly in the wood and paper industry, mechanical and plant engineering, construction, and banking.[4]

3. Austria in the EU Context as a Customer of Russian Oil and Gas

Since 2013 (until January 2020, when the UK left) all 28 member states of the EU are net importers of energy. In 2017, 55% of the EU’s energy needs were met by net imports. Russia has maintained its position throughout the period 2007–2017 as the leading supplier to the EU of the main primary energy commodities—natural gas, crude oil, and hard coal.

The EU’s natural gas dependency reached 77.9% in 2018, up from 74.4% in 2017. In 15 member states natural gas dependency was higher than 90%. For Austria, this dependence was 91% in 2017 and 88.4% in 2018.[5] Russia’s share of EU imports of natural gas between 2007 and 2017 did not change (38.7%). The lowest level was recorded in 2010 (31.9%), the peak of 41.1% occurred in 2013. Russia was and is also the principal supplier of EU crude oil imports: Its share stood at 33.7% in 2007 and fluctuated between 34.7% (2011) and 29% (2015). In 2017, its share was 30.3%, in 2018—27.3% (for comparison: Norway—11.2%, Nigeria—8.1%, Kazakhstan—7.8%).[6] As to hard coal, in 2017 38.9% of the EU’s imports came from Russia.

The EU has known for many years that “the security of the EU’s primary energy supplies may be threatened if a high proportion of imports are concentrated among relatively few partners.”[7] However, no decisive action was taken: In 2017, almost three quarters (74.6%) of the EU-28’s imports of natural gas originated from Russia, Norway, and Algeria. The same year, close to three quarters (72.7%) of the EU-28’s hard coal imports originated from Russia, Colombia, and the United States, while imports of crude oil were less concentrated among the principal suppliers, as Russia, Norway, and Iraq accounted for roughly half (49.9%) of the EU-28’s imports.

With regards to the origins of imports in 2017–2018, Norway was the source of 30.2% of the natural gas entering the EU (intra-EU trade and entries from Switzerland both excluded), followed by Russia (20.5%), Ukraine (16.3%), and Belarus (10.3%). However, considering that most gas entering the EU from Ukraine and Belarus initially comes from Russia, the dependency on gas imports from this country is in practice much higher than on gas from Norway.[8]

As to Austria, it has long-standing links in the energy sector with Moscow. In 1968 (when the ostentatiously anti-communist Austrian People’s Party was the sole political force in power), the Vienna-based oil and gas group OMV became the first non-communist European company to conclude a natural gas supply deal with the Soviet Union. The consequences of this decision are still felt strongly today. Other Western European countries followed suit, and Austria enjoyed its role as a major hub for Soviet and, after 1991, Russian gas exports across Europe.

During his talks with Putin in November 2009, Austrian Federal Chancellor Werner Faymann (Social Democratic Party) mentioned that Austria has no nuclear power plants; Putin laughed calling this a “very good decision for Russia as well.”[9] Indeed, Austria has to buy Russian gas in the foreseeable future and, therefore, remains dependent on Moscow to a great extent.

The OMV today is 31.5% state-owned and forms the single biggest integrated petroleum company in Central Europe. It undertakes petroleum exploration and production, refining, as well as wholesale and retail sales on domestic and international levels. OMV also operates Austria’s only refinery (based in Schwechat, a suburb of Vienna) and three natural-gas-storage facilities. OMV and Russian natural gas giant Gazprom cooperate in gas production, transportation, and supplies. In June 2018, an Agreement was signed to extend until 2040 the existing contract between Gazprom Export and the OMV Gas Marketing & Trading GmbH for Russian gas supplies to Austria. In October 2018, Gazprom and OMV signed a Memorandum on Strategic Cooperation, which envisages the creation of a Joint Coordinating Committee on collaboration in the natural gas sector, both upstream and downstream, in the area of science and technology, as well as staff training. OMV called this “strengthening the partnership” with Gazprom.[10] Its CEO Rainer Seele presents any such “strengthening” as “diversification of supply” and “support to ensure security of supply”[11]—in manifest contradiction of the facts. There are even Austrian politicians, as Karlheinz Kopf (People’s Party), who stated that with OMV providing Gazprom “access to Europe,” Austria “is once again performing its role as mediator in some way.”[12] This was an example of the skill of many Austrian politicians (and managers) in presenting the business of Austrian companies and banks with Russia as an “expression of traditional Austrian neutrality.” Kopf is also Secretary General of the Economic Chamber (since 2018) and Chairman of the Parliamentary Group Austria—Russia.

In the past there have been repeated speculations about Gazprom’s entry into OMV. The Russian side has usually been evasive or, for example, claimed that “at present no talks are being held.” This, of course, leaves all options open for the future. Sometimes rumors appeared that Gazprom might try to take over OMV. Former Austrian oil industry manager Wolfgang Schollnberger, who had worked for OMV (among others), commented with “black humor” in January 2016 that this was not even necessary if Gazprom had “enough followers” on the OMV Management Board itself, the OMV Supervisory Board, the Supervisory Board of the Österreichische Bundes-und Industriebeteiligungen GmbH (ÖBIB) (which managed the state shares in several companies from 2015 to 2019 before it was transferred to the Österreichische Beteiligungs AG, or ÖBAG), or in the relevant Austrian federal ministries. From Schollnberger’s point of view, it had to be assumed that “some of these submissive people know exactly what is at stake, but others are short-sighted followers.”[13]

According to the latest yearbook of the Austrian statistics authority, only 5.6% of crude oil demand and 11.6% of gas consumption originate from domestic production. Since the closure of the Styrian lignite mining facilities in 2005, Austria’s foreign dependence on coal has been 100%. Furthermore, the yearbook states unequivocally that Austria’s dependence on foreign energy supplies is “continuously” increasing.[14]

In 2018, Gazprom delivered to Austria 12.3 billion cubic meters of gas, an increase of 34.8% against 2017 (9.1 billion cubic meters). In 2018, OMV imported a total of 8.3 million tons of crude oil to Austria, an increase of 13.5% over the previous year. Crude oil was procured from fourteen countries in very different quantities. Kazakhstan was in the lead with almost 3.1 million tons, followed by Libya with 1.9 million tons, Iran with 988,000 tons and Azerbaijan with 782,000 tons.[15] In this context, however, it usually goes unmentioned that the oil from Kazakhstan is transported viapipelines which also pass through Russian territory.

Practically all Austrian and Western European advocates and supporters of an “extended cooperation” with Gazprom in general and of the Nord Stream pipeline projects in particular justify this as an “interdependence” and “mutual intertwining”: the Kremlin would not be able to blackmail the EU with gas supplies because it is massively dependent on these revenues itself. This is, however, “pseudo-plausible”: there is no doubt that in a theoretical massive political conflict situation Moscow could “endure” much longer without these funds than many EU states could last without Russian oil and gas. Fortunately, the leaders of (most) EU states are accountable to their respective populations, which is completely absent in Putin’s case. Thus, Mikhail Korchemkin, founder and head of the Pennsylvania-based consulting firm East European Gas Analysis, said: “The Kremlin is ready to abandon revenues at any moment in order to achieve some political goals. I have no doubt that if the Kremlin doesn’t like something—the decision of some court, the actions of some German companies—then gas supplies will be immediately cut and stopped. Although normal practice suggests that one should go to an arbitration court.”[16]

It is, however, unlikely that Austria alone would become the victim of (howsoever motivated) political blackmail by Russia by refusing to supply energy sources, including natural gas; this would also affect other EU states. A historical example of such a scheme is the oil boycott against Western countries by the Organization of the Petroleum Exporting Countries (OPEC) in 1973, which also affected Austria, although it had nothing to do with the Middle East conflict and was, of course, not militarily involved at all; its then Federal Chancellor (Prime Minister) Bruno Kreisky (Socialist Party)[17] was also considered very critical of Israel, but that did not “help” either.

Austria can also suffer “collateral damage,” and this has already happened. For example, in January 2006 and January 2009 Russian natural gas supplies to Austria and some other European countries were temporarily cut off because the Kremlin wanted to put political pressure on Ukraine (whose President Viktor Yushchenko, elected in 2004, was despised in Moscow). There were no supply shortages in Austria, as the country was able to draw on stored reserves. But such events should have severely damaged Moscow’s reputation as a “reliable supplier” to the EU; for some mysterious reasons, this did not happen.

But the Austrian Ministry for European and International Affairs, which usually selects its phrasing very carefully, wrote in its annual report for 2007: “Russia uses its energy policy as a mighty tool of its foreign policy.”[18] In May 2007, the Austrian Minister for Economic Affairs Martin Bartenstein (People’s Party), who also co-chaired the Austrian-Russian Joint Commission for Trade and Economic Cooperation, was aware that Putin pursued a “foreign policy” using Gazprom. Bartenstein said, “with its huge gas reserves Russia is playing back into the power poker of world politics,” but he immediately put this into perspective by claiming that “many [other] states […] also make world politics with energy.” However, Bartenstein (wo had received the Russian Order of Friendship in 2002) did not mention such “other” examples here, so that it remained open whom he meant specifically.[19] Such “whataboutism” is typical for Putin’s defenders in the West and in Austria as well: they constantly refer to different events that often have nothing at all to do with Russia under discussion and which cannot explain or justify its behavior; nevertheless, many politicians and media consumers (and even many political scientists) are impressed and influenced by this. In February 2014, Austrian banker Herbert Stepic did not even deny that Putin was making “politics” with gas supplies, but found nothing wrong with that—Putin wanted to “simply build his Great Russia.”[20] And Stepic had no intention to criticize this or ask why Austria should participate in the realization of Putin’s ambitions.

During the 2009 gas supply crisis Austrian politicians and managers rescued themselves into veritable “verbal contortions.” For example, OMV‘s then head Wolfgang Ruttenstorfer (who had been State Secretary in the Ministry of Finance for the Social Democratic Party from 1997 to 1999) declared that Russia “will continue to be a reliable supplier of natural gas after the end of the bilateral conflict with Ukraine.”[21] And of course, Austrian politicians “nobly restrained” criticism of Putin because of the supply stops. It was left to Austrian satirist Rainer Nikowitz to use a fictional interview with “Putin” to announce findings that Western European politicians, managers, and political scientists (with “Russia experts” among them) were unwilling to make public: “If I [‘Putin’] only blackmail the Ukrainians, it will take endlessly for them to give in. But if I blackmail the mollycoddled EU as well, I’ll get my way much faster.”[22]

Austria has taken some steps to prepare for a gas emergency, notably by enabling the physical reversibility of a large number of its gas pipelines with neighboring countries (Germany to Austria and Italy to Austria) in 2011. But that would be of little or no help if these countries themselves were affected by massive gas shortages.

Most of the Russian gas that serves Europe comes from the Urengoy and Bovanovenskoe reservoirs. Urengoy has been one of the world’s most productive fields for four decades, but the gas closer to its surface is running out. Gazprom has decided to hire international partners for the expensive, more complicated drilling needed to remove gas from Urengoy’s depths. Thus, on 7 June 2019, OMV signing an Amendment Agreement to a Basic Sale Agreement from 3 October 2018, with which it will acquire a quarter of the Urengoy gas field on Yamal Peninsula. The agreement for 905 million euro will give OMV 24.98% ownership of Blocks 4A and 5A at Urengoy. Gazprom will retain majority control of this gas field—50.01%.[23] This, as an Austrian daily called it, “Siberian adventure”[24] shows once again that OMV is not thinking of easing its already very close ties with Gazprom in the foreseeable future.

Gazprom’s, OMV’s and other natural gas lobbyists’ presentation of the “environmental friendliness” of burning natural gas is contradicted by practically all serious experts. They also try to create the impression that natural gas is the lesser evil compared to coal or oil, why Nord Stream 2 must be built at any costs and why the connection with Gazprom (i.e. Putin’s Kremlin) must not only be maintained, but even expanded. But all this is wrong. Although natural gas really produces comparatively few greenhouse gases when burned, leaks occur frequently in gas production plants and pipelines. Large quantities of unburned methane gas escape from these leaks. And methane is a particularly dangerous greenhouse gas: it has a much greater greenhouse effect than carbon dioxide. Ralf Sussmann from the Karlsruhe Institute of Technology (Germany) has proven by measurements on the Zugspitze mountain (on the German-Austrian border) that the methane concentration in the atmosphere is rising sharply and that natural gas leaks are mainly responsible for this (leaks from gas wells and pipelines, for example). If these leaks are taken into account, it is doubtful whether natural gas still has any advantage over coal.

Environmental associations used to see natural gas as a “bridging technology,” i.e. as a transitional solution on the way to a much more climate-friendly economy. However, this has changed since. The German Association for the Environment and Nature Conservation, for example, draws a clear conclusion: “Natural gas is not an answer to the climate crisis. […] It makes no sense to invest in new gas infrastructure projects that are expected to be in operation for more than half a century.”[25]

4. The Nord Stream Gas Pipelines and Austria

The entire Austrian political and business elite—including the current (since January 2020) Government under Federal Chancellor Sebastian Kurz, consisting of the People’s Party and the Greens—promote the Nord Stream 2 gas pipeline between Russia and Germany. This is a Russian geopolitical project that is harmful to the energy security of the entire EU and, therefore, also of Austria. It is intended to drive a “wedge” into the EU—namely between those countries that support it (Austria, Germany, etc.) and those that reject it (Poland, Baltic States). The Kremlin hopes that this will weaken the EU as a “geopolitical competitor” for power and influence in the world. But nevertheless, OMV is expected to account for about 10% of the total cost of 9.5 billion euro (according to the operators; “project-unrelated” observers expect much more) for Nord Stream 2. Its head since 2015, when Austria was governed by a coalition of Social Democrats and People’s Party, is the German national Rainer Seele. His pro-Russian (and anti-Ukrainian) views, which appear in every interview he gives,[26] were, of course, already known then and posed no obstacle, and were possibly even a prerequisite for his appointment as OMV’s General Director. The company believes that there is a chance that a part of the natural gas that will land in the East German coastal town of Lubmin could be forwarded to the Baumgarten transmission facility on the Austrian-Slovak border. Between a quarter and a third of the export volume from Russia destined for Western Europe is handled via Baumgarten: The gas is transported from this hub via large transit pipelines to Germany, Italy, France, Slovenia, Croatia, and Hungary and via the primary distribution system to the Austrian provinces.

It is noteworthy that former (2014–2017) Austrian Finance Minister Hansjörg Schelling (a confidant of Seele) from the People’s Party is an official lobbyist for Nord Stream 2 since 2018. Matthias Warnig, who clearly enjoys Putin’s trust (which is evident from the very jobs he got in Russia),[27] was the Managing Director of the Nord Stream AG (formally in Zug, Switzerland) from 2006 to 2016 and is Chief Executive Officer of the Nord Stream 2 AG since September 2015. None of the (former and active) politicians and businessmen in Austria, Germany or other project participating countries who promote this pipeline were ever bothered by the fact that Warnig was an employee of the Ministry for State Security of the GDR.

At a meeting with Putin in Sochi in mid-May 2019, Austria’s Federal President Alexander Van der Bellen spoke out strongly in favor of Nord Stream 2. According to Van der Bellen, the gas from Siberia is significantly cheaper for European consumers than the imported liquid gas from the US. According to him, OMV “does not intend to withdraw from the ‘Nord Stream 2’ project.” Putin accepted this with visible satisfaction.[28] The EU sanctions against Russia, imposed for the annexation of Ukraine’s Crimea in 2014, obviously, never affected this project.

For many years, the US, EU, and Austria did nothing at all to disrupt or block Nord Stream (which became operational in November 2011) and/or Nord Stream 2. It was not until December 2019, when only about 300 kilometers were left to complete Nord Stream 2, that the US imposed sanctions on the companies involved. In Germany and Russia, there was great indignation, and in Austria (apart from OMV, of course), the tabloid press and (in its own understanding) the quality press demonstratively and loudly sided with the Russian project initiators, blasting Washington for its “unilateral action,” attempts to “sell their own expensive shale gas” to Europe.[29] On this occasion, many Austrian politicians and managers also reiterated their long-standing opinion that Nord Stream represents a “diversification of energy supply”—without explaining how this would be achieved if the supplier of natural gas, namely Russia, remains the same.

Rather unbiased analysts and observers of energy policy gave other reasons for the Kremlin’s stubbornness in sticking with Nord Stream 2. Thus, Korchemkin referred to the billion-dollar contracts for the companies of Putin-friendly oligarchs Arkadiy Rotenberg and Gennadiy Timchenko. The second main reason, according to Korchemkin, is Putin’s desire to “punish” Ukraine, which will lose transit fees (about USD 2 billion annually) because of Nord Stream 2. Indeed, long before the 2013–2014 Maidan protests in Kyiv, Putin expressly told Faymann that Nord Stream 2 will offer the possibility of “disciplining unruly transit countries” such as Ukraine.[30] Faymann did not object, although he could have asked why Austria (and other EU member countries) should assist Russia in its attempts to “discipline” other countries.

It is, of course, economically absurd to spend billions to construct pipelines on the bottom of the Baltic Sea in order to transport roughly the same amount of natural gas to Central and Eastern Europe as that which can be (and has been) pumped through Ukraine’s pipeline network (which is nevertheless in need of modernization), but Nord Stream is not about economics, but Russian geopolitics. As the vast majority of politicians, officials, and managers in Vienna, Berlin, and Brussels failed to understand this, they took nothing but wrong decisions about Nord Stream—and this will affect the EU’s energy security over the decades to come when all politicians active today will be long out of office.

Nord Stream (and especially Nord Stream 2) is also a major problem for Kyiv because Russia would become completely “independent” of the pipelines across Ukrainian territory and thus, according to some observers (for example, Andreas Umland)[31] could more easily wage a “large-scale” war (i.e. far beyond the Donbass) against Ukraine, which would undoubtedly trigger another huge wave of refugees (parallel to Syria), affecting not “only” Ukraine itself but also the EU. The responsible officials and authorities in Vienna, Berlin, and Brussels do not want to deal with such a possibility nor with information that Russian prisoners were being forced to work on Nord Stream 2 (which should at least have been checked).

To be continued in the next issue of the Kremlin’s Influence Quarterly.


[1]. Quoted after: Simone Brunner, Alexej Nawalny: “Alle lieben Österreich – Gauner und Diebe besonders.” [Aleksey Navalny: “Everyone loves Austria – especially the crooks and thieves.”] [interview]. Profil, July 25, 2019, https://www.profil.at/ausland/alexej-nawalny-kreml-kritiker-putin-10877723 (accessed March 26, 2020). Hereinafter, all translations from German and Russian are made by the author.

[2]. Wirtschaftskammer Österreich, “WKO Statistik Österreich. Österreichs Außenhandelsergebnisse. Jänner bis Dezember 2018. Endgültige Ergebnisse” [Austrian Federal Economic Chamber, “AFEC Statistics Austria. Austria’s foreign trade results. January to December 2018. Final results”]. Juli 2019, pp. 1, 10, http://wko.at/statistik/Extranet/AHstat/AH_12_2018e_Bericht.pdf (accessed 10 March 2020)

[3]. Andrew S. Weiss, “With Friends Like These: The Kremlin’s Far-Right and Populist Connections in Italy and Austria.” Carnegie Endowment for International Peace, February 27, 2020, https://carnegieendowment.org/2020/02/27/with-friends-like-these-kremlin-s-far-right-and-populist-connections-in-italy-and-austria-pub-81100?fbclid=IwAR3ydNVxJR6voQAsBvAR7quAEZEVjZdMDz4wMh3IEMxGk6MQOXfJkToiz_8 (accessed March 26, 2020).

[4]. Österreichische Botschaft Moskau, “Wirtschaftsbeziehungen zwischen Österreich und Russland“ [Austrian Embassy Moscow, “Economic relations between Austria and Russia“], https://www.bmeia.gv.at/oeb-moskau/bilaterale-beziehungen/russische-foederation/wirtschaft/ (accessed March 25, 2020).

[5]. Eurostat, “Natural gas supply statistics,” p. 4, https://ec.europa.eu/eurostat/statistics-explained/pdfscache/10590.pdf (accessed March 25, 2020).

[6]. Eurostat, “EU imports of energy products – recent developments. Statistics Explained,” November 2019, p. 5, https://ec.europa.eu/eurostat/statistics-explained/pdfscache/46126.pdf (accessed March 16, 2020).

[7]. Eurostat, “Energy production and imports. Statistics Explained,” June 2019, https://ec.europa.eu/eurostat/statistics-explained/index.php/Energy_production_and_imports#The_EU_and_its_Member_States_are_all_net_importers_of_energy (accessed March 25, 2020).

[8] Eurostat, “Natural gas supply,” p.4.

[9] Quoted after: Christian Ultsch, “Putin drängt Wien zu Beteiligung an ‘South Stream’” [“Putin urges Vienna to participate in “South Stream’”]. Die Presse, November 12, 2009, p. 7.

[10]. OMV, Annual Report 2018. “7 reasons why we‘re are excited about tomorrow,” Vienna, 2019, p. 66.

[11]. Quoted after: Günther Strobl and André Ballin, “Sibirien-Abenteuer kostet OMV 905 Millionen” [“Siberia adventure costs OMV 905 million”]. Der Standard, June 8–10, 2019, p. 28.

[12]. Raja Korinek, “OMV-Deal ist politisch interessante Lösung” [“OMV deal is politically interesting solution”] [interview with Karl-Heinz Kopf]. Die Presse, April 13, 2016, p. 16. At the time of this interview Kopf was Deputy Speaker of the National Council, which added weight to these words.

[13]. Wolfgang Schollnberger, “Sicheres Gas aus Russland? Um welchen Preis?” [“Reliable gas from Russia? At what price?”]. Die Presse, January 19, 2016, p. 22.

[14] Statistik Austria (ed.), Österreich: Zahlen, Daten, Fakten [Austrian statistics authority (ed.), Austria: figures, data, facts]. Wien 2020, p. 82.

[15] Wirtschaftskammer Österreich, “Die österreichische Mineralölindustrie 2018“ [Austrian Economic Chamber, “The Austrian Mineral Oil Industry 2018“]. July 23, 2019, https://www.wko.at/branchen/industrie/mineraloelindustrie/die-oesterreichische-mineraloelindustrie.html (accessed 11 March 2020).

[16] Dmitrii Malyshko, “Kreml v lyubuyu minutu gotov perekryt tranzit gaza v Evropu – Mikhail Korchemkin” [“The Kremlin is ready to stop gas transit to Europe at any minute – Mikhail Korchemkin”] [interview]. Apostrof, October 13, 2019, https://apostrophe.ua/article/politics/2019-10-13/kreml-v-lyubuyu-minutu-gotov-perekryit-tranzit-gaza-v-evropu—mihail-korchemkin/28415?fbclid=IwAR1CeDXrt4-HtqI7VwWQIfE7iD4QJDIrVQ6RrkhZxF_Q97GfMjxyqhWrE-8 (accessed 25 March 2020).

[17] It was re-named the Social Democratic Party in 1991.

[18] Thomas Schlesinger etc. (eds.), Außenpolitischer Bericht 2007. Jahrbuch der Österreichischen Außenpolitik [Foreign Policy Report 2007, Yearbook of Austrian Foreign Policy]. Wien 2007, p. 44.

[19] “Russische Investoren willkommen“ [“Russian investors welcome“] [interview with Martin Bartenstein]. Die Presse, May 23, 2007, p. 16.

[20] Reinhard Göweil, “Die Lösung liegt bei Russland“ [“Russia is the solution“] [interview with Herbert Stepic]. Wiener Zeitung, February 1–2, 2014, p. 5.

[21] Quoted after: Abgedreht, “Gas-Lieferung nach Österreich komplett eingestellt“ [“Turned off: Gas supply to Austria stopped completely“]. Die Presse, January 7, 2009, https://www.diepresse.com/441904/abgedreht-gas-lieferung-nach-osterreich-komplett-eingestellt (accessed 11 March 2020). Italics by the author, M.M.

[22] Rainer Nikowitz, “Gasreizung” [“Gas Irritation”]. Profil, no. 3, 2009, p. 102.

[23] OMV und Gazprom unterzeichnen “Amendment Agreement” zum “Basic Sale Agreement” betreffend den möglichen Erwerb einer 24,98% Beteiligung an den Blöcken 4A/5A der Achimov-Formation durch OMV [OMV and Gazprom sign “Amendment Agreement” to the “Basic Sale Agreement” concerning the possible acquisition by OMV of a 24.98% stake in blocks 4A/5A of the Achimov Formation]. OMV Newsroom, June 7, 2019, https://www.omv.com/de/news/190607-omv-und-gazprom-unterzeichnen-amendment-agreement (accessed March 24, 2020).

[24] Strobl and Ballin, p.28.

[25] “Erdgas ist keine Antwort auf die Klimakrise. EU muss Investitionen in fossile Energien beenden” [“Natural gas is not an answer to the climate crisis. EU must stop investment in fossil fuels”]. Bund – Friends of the Earth Germany. November 7, 2017, https://www.bund.net/service/presse/pressemitteilungen/detail/news/erdgas-ist-keine-antwort-auf-die-klimakrise-eu-muss-investitionen-in-fossile-energien-beenden/ (accessed March 25, 2020).

[26] Cf. Heike Göbel and Niklas Záboji, “Kritik von Polen und Ukrainern ist vorgeschoben,“ Frankfurter Allgemeine Zeitung, February 18, 2019, https://www.faz.net/aktuell/wirtschaft/unternehmen/nord-stream-2-omv-chef-rainer-seele-im-gespraech-16046206.html (accessed April 10, 2020).

[27] Cf. Nordstream-Boss Matthias Warnig: “Herr Putin hat kein Handy” [“Mister Putin has no cellular phone”] [interview]. Die Presse, Februar 8, 2018, https://www.diepresse.com/5368277/nordstream-boss-matthias-warnig-herr-putin-hat-kein-handy (accessed April 10, 2020).

[28] Quoted after: Jutta Sommerbauer, “Durchs Reden sollen Österreich und Russland näher zusammenkommen,“ Die Presse, May 16, 2019, p. 5.

[29] Cf. Christian Ultsch, “Europa braucht keine US-Zwangsnachhilfe,“ [“Europe does not need US forced tutoring“] Die Presse, December 21, 2019, https://www.diepresse.com/5742444/europa-braucht-keine-us-zwangsnachhilfe (accessed April 10, 2020); “US-Sanktionen gegen Nord Stream 2 sind in Kraft,“ [“US sanctions against Nord Stream 2 are in force“]. Kronen Zeitung, December 21, 2019, https://www.krone.at/2066127 (accessed April 10, 2020).

[30] Quoted after: Christian Ultsch and Eduard Steiner, “Faymann im Kreml: Zwischen Kalaschnikow und Erdgas,“ [“Faymann in the Kremlin: Between Kalashnikov and natural gas“] Die Presse, November 10, 2009, http://diepresse.com/home/politik/aussenpolitik/520903/index.do?_vl_backlink=/home/politik/aussenpolitik/index.do (accessed March 25, 2020).

[31] “The Geopolitical Impact of Nord Stream 2.0 on European Energy Security,” (panel discussion, Diplomatic Academy of Vienna, February 26, 2020).

Russian Malign Influence Operations in Coronavirus-hit Italy

This article is a part of the first issue of the Kremlin’s Influence Quarterly.

You can also download this piece as a PDF.

Introduction

Pandemics always provided fertile soil for conspiracy theories, as facing global disasters often disempowers people and makes them susceptible to conspiratorial explanations of the sources of calamities. Global disasters are also often used by world powers to advance political objectives either domestically or vis-à-vis other nations.

In the 1980s, when AIDS started to spread across the globe and became the “the first postmodern pandemic,”[1] the Soviet Union ran a covert international campaign to convince the world that AIDS was a result of the Pentagon’s experiments aimed at creating new biological weapons.[2] At that time, while the Soviet leadership was convinced that the US was preparing a nuclear strike against the country, the Soviets realized that they could not compete with the West in the technological and military spheres. However, political warfare was a much cheaper means of competition with the West, and the Soviet Union became especially active in this particular area.

Today, observing the confrontation between Russia and the West, one can see similarities and dissimilarities with the Cold War, but one analogy with the later period of the Cold War is obvious: due to its economic weakness, Russia is unable to match Western technological advances and increasingly relies on various instruments of political warfare in order to damage the West by subverting transatlantic relations, undermining trust in the EU and NATO, and sowing discord between Western nations.

As COVID-19 spread from China to the rest of the world and became a pandemic, Moscow used the disaster to intensify its political war against the West. Despite the fact that the pandemic hit Russia too, Vladimir Putin’s regime seems to have refused an opportunity to scale down political confrontation with the West by ending aggression against Ukraine and discontinuing attempts to destabilize Europe. On the contrary, the Kremlin decided to exploit the pandemic and target European countries that suffered the most from the deadly virus. Italy became one of these countries.

From Russia with love

On March 21, 2020, Putin spoke with Italian Prime Minister Giuseppe Conte,[3] and the same day Putin ordered the Russian Ministry of Defence to form “an air grouping for a prompt delivery to Italy of help for fighting Coronavirus.”[4] The help, as the press release of the Ministry of Defence read, would consist of “eight mobile brigades of expert virologists and military medics, automobile systems for aerosol disinfection of transport and territories, as well as medical equipment.”[5]

At that time, there were over 42 thousand active cases of COVID-19 in Italy and almost 5 thousand people had died of the virus.[6] Of all European states, Italy was hit the hardest, and, already on 10 March, Maurizio Massari, Italy’s permanent representative to the EU, made an appeal for help and European solidarity.[7] According to Massari, in February Italy asked the European Commission to activate the EU Mechanism of Civil Protection “for the supply of medical equipment for individual protection”; the Commission forwarded the request to the EU Member States but by the time Massari wrote his article, no EU nation had responded to the Commission’s call.[8]

At the same time, China had responded bilaterally and on 12 March, a Chinese aircraft brought to Italy nine medical experts and unloaded “31 tons of medical supplies including intensive care unit equipment, medical protective equipment, and antiviral drugs”—they were sent by the Chinese Red Cross.[9] For the Chinese Communist Party (CCP), which had been accused by some Western experts, journalists and politicians, for mishandling of the COVID-19 outbreak,[10] the help to Italy was clearly an attempt to shift the international focus from blame to humanitarian response.

With Putin’s offer of help, the Kremlin apparently did not want to miss out on demonstrating its seeming goodwill against the background of the allegedly selfish EU countries. In the period between 23 and 25 March, fifteen Russian aircrafts landed on the Pratica di Mare military airbase delivering military experts and special equipment.[11] At the same time, Russian Defence Ministry “made an extraordinary effort to communicate the mission”: it sent 18 press releases on the subject between 21 and 24 March.[12] On 25 March, the Russian military formed a convoy consisting of 22 military vehicles—carrying stickers saying “From Russia with love” in Russian, English, and Italian—as well as buses with military experts.[13] The convoy travelled 600 kilometers to the Orio al Serio airport in Bergamo, “where the joint Italian-Russian headquarters for the fight against coronavirus infection will be stationed.”[14]

For Russian state-controlled international media such as RT and Sputnik, Moscow’s help to Rome was the beginning of a long anti-EU campaign. With headlines saying “Italians praise Russia, deride EU after Vladimir Putin sends in coronavirus aid,”[15] or “EU left Italy ‘practically alone’ to fight coronavirus, so Rome looked for help elsewhere, incl Russia,”[16] “With united Europe MIA in its Covid-19 response, worst-hit nations turn to ‘evil’ Russia & China for help,”[17] the message was clear: the EU showed no solidarity with Italy, while Putin’s Russia demonstrated its goodwill despite the fact that Italy—along with the other EU nations—imposed economic and political sanctions on Russia. In the eyes of the Western audience, videos and pictures showing Russian military vehicles flying Russian flags and driving through Italy apparently had to project an image of Russia as a self-avowed savior of Italy and a mighty military force rushing to the rescue where NATO was feeble. And there were other Russian specialists who were in charge of promoting such an image: Russian journalists from the Zvezda TV network run by the Russian Defence Ministry who arrived in Italy together with the Russian military.[18]

The entire operation appeared to be a successful publicity coup for the Kremlin. Italy’s Foreign Minister Luigi Di Maio personally welcomed the Russian aid at the Pratica di Mare airbase. Italian Chief of the Defence Staff General Enzo Vecciarelli was present at the airbase too and “thanked the Russian people for lending a helping hand.”[19] Former Prime Minister Silvio Berlusconi sent a letter to his personal friend Vladimir Putin saying that the Russian aid was “a real sacrifice made for friendship and love for Italy and the Italians,” adding that Italians would “not forget it.”[20]

The visuals were important too. Russia’s Ministry of Defence published a photo, which was later republished by dozens of media outlets across the world, in which Russian General Sergey Kikot, who led the Italian operation, showed something on the map of Italy to the representatives of the Italian military thus creating an impression that Russians had command power in a NATO member state.[21] Russian media resources also talked about ordinary Italians replacing EU flags with Russian ones and showed a video of an Italian engineer who did this while showing a piece of paper thanking Putin and Russia.[22]

However, soon after the arrival of the Russian aid, details started to emerge suggesting that the operation “From Russia with love” had much more to do with political theatrics rather than with Moscow’s philanthropy.

The darker side of Russian gifts

The logistics of the delivery of the Russian aid alone pointed to a hidden agenda of the operation: why had the aid been delivered first to the Pratica di Mare airbase and then driven 600 kilometers to the Orio al Serio airport if the Russian airplanes could have delivered the aid directly to any of the four airports around Bergamo capable of receiving Russian military cargo airplanes? There are two possible explanations for this. First, the Russian military wanted to impress the public and the media with a long convoy of over 20 military vehicles symbolically conquering a NATO member state. Moscow would not have achieved such an effect had the aid been delivered straight to the destination point. Alexander Sladkov, a Russian military journalist working for the All-Russia State Television and Radio Broadcasting Company, called the operation “‘a humanitarian axe’ run into NATO’s chest.”[23] He also likened the Russian operation in Italy with the forced march of Russian forces to the Pristina International Airport in the aftermath of the Kosovo War in June 1999: the Russian military arrived in the airport ahead of the NATO forces and occupied it.[24] Yet another possible explanation for the apparently unreasonable 600 kilometer drive from the Pratica di Mare airbase to Bergamo is that the Russian mission to Italy was “a front for intelligence gathering,” so the trip could, indeed, be used by the Russian military to collect intelligence “at the heart of NATO.”[25] Of course, one can argue that it was cheaper for the Russian military to deliver the aid to the Pratica di Mare airbase than all the way to the Orio al Serio airport. However, the distance between the two airports is insignificant in comparison to the distance between Russia and Italy, and, furthermore, the Russian military anyway charged the Italians for the fuel and the flights of their cargo airplanes.[26]

Furthermore, Italian expert Massimiliano Di Pasquale argued—with a reference to Italian specialists—that “there was no need at all in the disinfection of the streets” in Bergamo.[27] Andrea Armaro, a former spokesperson for Italy’s Defence Ministry, also “questioned the need for Russian military medics to disinfect areas when there were already nuclear, biological and chemical military teams in Italy capable of doing the job.”[28]

According to the investigation by Italian investigative journalist Jacopo Iacoboni, high-level political sources told La Stampa that 80% of the Russian aid was either useless or of little use to Italy, as the Russian delivery mostly consisted of disinfection and sterilization equipment. The same sources argued that Putin was pursuing “geopolitical and diplomatic” interests, while Conte had to play along as he needed any help in the situation of the severe crisis.[29]

Moscow immediately and angrily responded to Iacoboni’s article. Russia’s Ambassador to Italy Sergey Razov called the Russian aid “a selfless desire to help a friendly people in trouble” and slammed the assertions made in the article as “the product of a perverse mind.”[30] The Russian Defence Ministry joined the campaign too. Its spokesman Major General Igor Konashenkov called Iacoboni’s article in La Stampa an attempt “to discredit the Russian mission” and added, in awkward English:

Hiding behind the ideals of freedom of speech and pluralism of opinions, La Stampa manipulates in its materials the most low-grade Russophobic fakes of the Cold War, referring to so called certain “opinions” of anonymous “high-ranking sources. At the same time, ‘La Stampa’ does not disdain to use literally everything that the authors manage to invent on the basis of recommendations from apparently not decayed textbooks on anti-Soviet propaganda. […] As for the attitude to the real customers of the Russophobian media campaign in La Stampa, which we know—we recommend that you learn the ancient wisdom—Qui fodit foveam, incidet in eam (He that diggeth a pit, shall fall into it). And to make it clearer: Bad penny always comes back.[31]

Reacting to Konashenkov’s “ancient wisdom,” Iacoboni said: “It is a threatening and intimidating phrase […] not only towards me but also towards my newspaper. In Italy we do not let ourselves be intimidated; freedom of criticism exists here. We are not Chechnya.”[32] In their turn, the editorial board of La Stampa expressed its “outrage upon the serious attack” of the Russian Defence Ministry on the newspaper and Iacoboni.[33]

What Moscow did not realize was that its vicious attacks against Italian journalism ruined much of the positive effect of the Russian mission in Italy. In their joint notice, Italy’s Defence Ministry and Foreign Ministry declared that Italy was grateful for the Russian aid, but, at the same time, they could not “help but blame the inappropriate tone of certain expressions used by the spokesman of the Ministry of Russian Defence against some articles published the Italian press. Freedom of speech and the right to criticize are fundamental values for Italy, as well as the right to reply, both characterised by formality and substantial fairness. In this moment of global emergency, the control and analysis task of the free press is more essential than ever.”[34] Mayor of Bergamo Giorgio Gori tweeted: “Solidarity with @jacopo_iacoboni and La Stampa subjected to the intimidation from a Russian defence spokesman. We are grateful to have Russian doctors and nurses in #Bergamo who help us treat our patients, but no threat to free information is acceptable.”[35] Many other politicians and journalists expressed their solidarity with Iacoboni too.[36]

However, Russian officials and state-controlled international media continued their attack on La Stampa and Iacoboni.

Russian Foreign Ministry Spokeswoman Maria Zakharova declared that a company registered in London was behind Iacoboni’s article in La Stampa. She did not provide either the name of the company or any other details, but vaguely noted: “When we began to study it [the article], it turned out that this is a purely commercial operation that some foreign structures attempted to stage using non-transparent methods.”[37] While it is unclear what British “commercial operation” Zakharova had in mind, a fringe Russian-language website, Foundation for Strategic Culture, ran a story that claimed that “Anglo-Saxons” were behind La Stampa’s “provocative attack” referring to the incorrect information that the newspaper was owned by Chrysler whose chairman John Elkann was from New York and CEO Michael Manley was from Britain.[38]

The Italian edition of Sputnik published an article written by now late Giulietto Chiesa, a long-time pro-Kremlin activist and associate of Russian fascist Alexander Dugin,[39] who claimed that La Stampa was a “notoriously Russophobic newspaper” (ironically, Chiesa wrote for La Stampa in 1991-2000), while Iacoboni allegedly “specialized in spreading the germs of an apparently very infectious disease of Russophobia.”[40]

Chiesa was not the only Italian “friend of Russia” who was directly or indirectly mobilised by the Russian state and non-state actors in Moscow’s attempts to generate “hype” around the Russian aid to Italy. On April 14, 2020, the Russian Defence Ministry issued a press release stating that Professor Maria Chiara Pesenti from the University of Bergamo sent a letter of appreciation to the Russian military. Pesenti, due to her specialization in Russian language and literature, is a frequent visitor of Russia, and, in November 2019, Putin awarded her with a Medal of Pushkin.[41] And already in March 2020, Italian far-right activist Gian Luigi Ferretti, who was part of the politically biased election observation mission[42] at the Russian 2018 presidential election,[43] uploaded a video on YouTube on which a recording of the Russian anthem was played from the headquarters of the Italian fascist organization CasaPound.[44] (Uninitiated viewers would, however, hardly recognize the headquarters of CasaPound and just see Italian flags and hear the Russian anthem).

Furthermore, Italian newspaper La Repubblica reported that Russian citizens were sending requests to their Italian friends and acquaintances offering €200 (approximately $217) for thank-you videos on Facebook, Instagram or Twitter. The requests allegedly came from the Russian media, but no name was given. In order to earn money, Italians were supposed “to say something good” about the Russian aid offered to Italy: “better videos or texts with photos, but for videos they pay 200 euros, for text they give less.”[45] However, La Repubblica was cautious about linking these practices to the activities of the Russian state actors.

Far-right freeloading

The Russian aid to Italy offered an opportunity to a number of pro-Kremlin actors to pursue their own political and personal interests. On 23 March, Alexey Pushkov, a Russian senator who is prone to self-promotion through provocative tweets related to foreign policy, tweeted that Poland had “not let Russian aircraft carrying aid to Italy pass through its airspace.”[46] Pushkov is also one of the most cited politicians in the Russian media space, and several Russian media outlets—including various editions of Sputnik—quickly picked up Pushkov’s message that generally fed into the Kremlin’s animosity towards Poland.[47] However, Poland’s Foreign Ministry promptly refuted Pushkov’s claim, and Sputnik had to amend its reports on the issue,[48] while Pushkov deleted his tweet. Nevertheless, his claim permeated into the milieu of Italian conspiracy theorists and anti-EU activists.[49]

While Pushkov’s tweet was hardly underpinned by any other reason apart from the Russian senator’s proclivity for provocative political utterances, some other developments around the Russian aid to Italy had complex agendas behind them.

On 20 March, Ulrich Oehme, a member of the German parliament from the far-right party Alternative for Germany (Alternative für Deutschland, AfD), sent letters to two Russian contacts. One letter was addressed to the Chairman of the State Duma Committee on International Affairs Leonid Slutsky and the other—to a member of the Moscow City Duma, Roman Babayan. The letters seem to be practically identical and, in particular, read: “Today, Mr. Paolo Grimoldi, a member of the Council of Europe from the Northern League (Lombardy), turned to us with a desperate cry for help via the WhatsApp group of European Conservatives. The situation with the hospitals in Lombardy is extremely critical. They urgently need doctors. For this reason, I ask you to see whether the Russian Federation can help people of Lombardy with doctors and ventilators. I have just talked with Mr. Grimoldi on the phone and he is excited about my idea to talk to you about help.”[50] When the media reported about Putin’s decision to provide aid to Italy, the AfD claimed that “the Russian leadership responded to a request from the Bundestag member Ulrich Oehme concerning Northern Italy severely affected by the coronavirus.”[51]

The background of the above-mentioned figures suggests that Oehme’s letters were most likely part of an elaborate influence operation.

The AfD’s foreign policy positions very often coincide with those of the Kremlin, and this far-right party is extremely critical of the EU’s sanctions imposed on Putin’s Russia. The AfD’s members often pay visits to Moscow to meet Russian officials, and, in February 2017, the AfD’s leadership discussed cross-party cooperation with a number of Russian politicians including Leonid Slutsky—one of the two Russian politicians to whom Oehme addressed his letters. Oehme himself was involved in pro-Kremlin activities. In March 2018, he illegally visited Russia-annexed Crimea where he “observed” the illegitimate Russian presidential election.[52] Furthermore, he tried to promote the interests of the Russia-controlled “Donetsk People’s Republic” and “Lugansk People’s Republic” in the Council of Europe in 2019.[53]

Paolo Grimoldi’s party Northern League (Lega Nord, LN) is known for its pro-Kremlin foreign policy positions too, and signed, in March 2017, a coordination and cooperation agreement with the ruling United Russia party. Grimoldi himself contributed to the development of the relations between his party and Russian state and non-state actors. In October 2014, he announced the creation of the cross-party group, Friends of Putin, in the Italian parliament.[54] Although there is no evidence that this group eventually took off or was successful in promoting rapprochement between Italy and Russia, the Russian media widely reported on this initiative attempting to show—against the backdrop of the Western sanctions against Putin’s Russia—the alleged growth of pro-Kremlin sentiments in the West.

In his turn, Slutsky—as chairman of the parliamentary committee on international affairs—coordinated several important contacts between the European far right and Russian state actors. For example, it was Slutsky who officially invited Marine Le Pen, the leader of the French far-right National Front (later renamed into National Rally) to meet Putin in March 2017, a month before the first round of the French presidential election.[55] Slutsky also supervised several politically biased international election observation missions that included many European far-right politicians.[56]

According to the German media outlet Bild, in parallel to Oehme’s efforts, the LN essentially forced a difficult choice on Conte: either accept aid from Moscow and grant Russia a publicity stunt, or reject it and suffer an outrage from the suffering Italian population.[57] From this perspective, Oehme’s letters to Russian politicians seem to be not only an attempt to advance political interests of the AfD and LN, but also an endeavour to put additional pressure on Conte.

Like Slutsky, Grimoldi and Oehme are members of the Council of Europe, and—given this fact, as well as Grimoldi’s engagement with the pro-Kremlin activities—he did not really need Oehme to be an intermediary between him and Slutsky. The involvement of Oehme can be simply explained by his desire to secure Russian favors not only for the LN, but also for the AfD—by displaying servility before Russia. Slutsky was an obvious choice as the first addressee of the letter coordinated by Grimoldi and Oehme, due to his membership in the Council of Europe and coordination of the relations between European politicians and Russian state actors. Unlike Slutsky, however, Roman Babayan has little in common with European politicians or Russian malign influence operations in Europe, but he seemed to be a good choice as a second addressee of the letter because of his connections with the Russian media. Babayan is a chief editor of the Govorit Moskva radio station and cooperates with the functionally state-controlled NTV television channel, so his task was to spread the word about Italy’s “cry for Russian help” in the media, and so he did.[58] The outcome of the operation was obvious: Oehme and Grimoldi strengthened pro-Kremlin foreign policy positions of their parties in order to seek further favors from Moscow, while contributing to the domestic pressure on Conte and consolidating the international image of Putin’s Russia as the true friend of Italian people.

Conclusion

It would be wrong to argue that the Russian aid delivered to Italy was completely useless. However, it would be equally wrong to assume that this aid was primarily driven by humanitarian considerations, because the main objective of the “From Russia with love” operation was to demonstrate to the Italian people that it was Russia, rather than the EU or NATO, that was the true friend of Italy.

The relevance of such an operation could only become possible due to the initial confusion in European capitals in the face of the unfolding crisis. As President of the European Commission Ursula von der Leyen said in the middle of April 2020, “too many were not there on time when Italy needed a helping hand at the very beginning.”[59] Von der Leyen offered “a heartfelt apology” for the lack of European solidarity with Italy at the start of the crisis,[60] but neither her apology nor the fact that EU states eventually rendered much greater assistance to Italy than China or Russia could undo what had been done: the erosion of Italians’ trust towards the EU.

The Kremlin readily helped to erode this trust as Italy was “perceived by Moscow as the weak link in the EU.”[61] By launching its malign influence operation, Putin’s regime hoped that—by undermining Italy’s trust in the EU—the Kremlin contributed to strengthening Italy’s opposition to the EU’s sanctions policy on Russia. At the end of April 2020, Moscow decided to covertly test the efficiency of its tactics in Italy. On 27 April, Russian Ambassador Sergey Razov forwarded to Vito Rosario Petrocelli, chairman of the Italian Senate’s Foreign Affairs Committee, an appeal by Slutsky, and asked his addressee to inform Italian senators of its contents.[62] In his appeal, Slutsky called upon the international community—without singling out any particular nation—to support Russia’s resolution at the United Nations that would make it easier to lift sanctions imposed on Russia.[63] Razov forwarded Slutsky’s appeal in two versions: an original Russian version and a translation into Italian. Curiously, Razov specified in his cover letter that the Italian version was an unofficial translation which implies that his efforts took place behind closed doors and was yet another malign influence operation.

Russia was not the only beneficiary of its influence operations in Italy: representatives of German and Italian far-right parties, known for their pro-Kremlin foreign policy attitudes, had an opportunity to showcase their allegiance to Russia by reinforcing its self-imposed image of a well-meaning global power, and, therefore, seek support from Moscow in the future.


[1] Lars O. Kallings, “The First Postmodern Pandemic: 25 Years of HIV/ AIDS,” Journal of Internal Medicine, 263, no. 3 (2008): 218-243.

[2] Thomas Boghardt, “Operation INFEKTION: Soviet Bloc Intelligence and Its AIDS Disinformation Campaign,” Studies in Intelligence, 53, no. 4 (2009): 1-24.

[3] “Telephone Conversation with Italian Prime Minister Giuseppe Conte,” Events. President of Russia (website), March 21, 2020, http://en.kremlin.ru/events/president/news/63048.

[4] “Minoborony Rossii sozdaet aviatsionnuyu gruppirovku dlya operativnoy dostavki pomoshchi Ital’yanskoy respiblike v bor’be s koronavirusom,” Ministerstvo oborony Rossiyskoy Federatsii (website), March 22, 2020, https://function.mil.ru/news_page/country/more.htm?id=12283218@egNews.

[5] “Minoborony Rossii sozdaet…”.

[6] “Italy,” Worldometer (website), https://www.worldometers.info/coronavirus/country/italy/

[7] Maurizio Massari, “Italian Ambassador to the EU: Italy Needs Europe’s Help,” Politico, March 10, 2020, https://www.politico.eu/article/coronavirus-italy-needs-europe-help/.

[8] Elisabeth Braw, “The EU is Abandoning Italy in its Hour of Need,” Foreign Policy, March 14, 2020, https://foreignpolicy.com/2020/03/14/coronavirus-eu-abandoning-italy-china-aid/. Following Massari’s criticism, Germany suspended the controversial decree that had prohibited the export of masks, protective suits, etc. abroad, and declared that it would supply one million masks to Italy, see Tonia Mastrobuoni, “Coronavirus, la Germania invierà un milione di mascherine all’Italia,” La Repubblica, March 13, 2020, https://www.repubblica.it/esteri/2020/03/13/news/coronavirus_la_germania_invia_un_milione_di_mascherine_all_italia-251219227/. Later, Germany was joined by France in providing one million masks to Italy, see Michel Rose, “Europe Failing to Communicate Its Response to Coronavirus Crisis, France Says,” Reuters, March 25, 2020, https://www.reuters.com/article/us-health-coronavirus-europe-france/europe-failing-to-communicate-its-response-to-coronavirus-crisis-france-says-idUSKBN21C3DT. On the European solidarity in action see Coronavirus: “European Solidarity in Action,” European Commission, https://ec.europa.eu/info/live-work-travel-eu/health/coronavirus-response/coronavirus-european-solidarity-action_en.

[9] Braw, “EU is Abandoning Italy”; “Coronavirus, Di Maio: ‘Se sei solidale, ricevi solidarietà,’” ANSA, March 13, 2020, https://www.ansa.it/lazio/notizie/2020/03/12/coronavirus-arrivati-gli-aiuti-dalla-cina-anche-9-medici-specializzati_1a56ddbc-7bae-4f5a-8353-f0d15ba3a465.html.

[10] Paul D. Miller, “Yes, Blame China for the Virus,” Foreign Policy, March 25, 2020, https://foreignpolicy.com/2020/03/25/blame-china-and-xi-jinping-for-coronavirus-pandemic/; David Gitter, Sandy Lu, and Brock Erdahl, “China Will Do Anything to Deflect Coronavirus Blame,” Foreign Policy, March 30, 2020, https://foreignpolicy.com/2020/03/30/beijing-coronavirus-response-see-what-sticks-propaganda-blame-ccp-xi-jinping/.

[11] “Pyatnadtsaty Il-76 VKS RF dostavil v Italiyu sredstva dlya bor’by s koronavirusom,” Ministerstvo oborony RossiyskoyFederatsii (website), March 25, 2020, https://function.mil.ru/news_page/country/more.htm?id=12283692@egNews.

[12] “Coronavirus – Russische Hilfsoperation in Italien bisher vor allem PR,” Austria Presse Agentur, March 24, 2020.

[13] “Spetsialisty Minoborony Rossii pristupili k soversheniyu marsha s aviabazy VVS Italii v g. Bergamo dlya okazaniya pomoshchi v bor‘be s rasprostraneniem koronavirusnoy infektsii,” Ministerstvo oborony Rossiyskoy Federatsii(website), March 25, 2020, https://function.mil.ru/news_page/country/more.htm?id=12283714@egNews.

[14] “Voennye spetsialisty Minoborony Rossii pribyli na aerodrom Orio-al’-Serio v gorode Bergamo,” Ministerstvo oborony Rossiyskoy Federatsii(website), March 26, 2020, https://function.mil.ru/news_page/country/more.htm?id=12283835@egNews.

[15] “Watch: Italians Praise Russia, Deride EU After Vladimir Putin Sends in Coronavirus Aid,” Sputnik, March 24, 2020, https://sputniknews.com/europe/202003241078693863-watch-italians-praise-russia-deride-eu-after-vladimir-putin-sends-in-coronavirus-aid/.

[16] “EU left Italy ‘practically alone’ to fight coronavirus, so Rome looked for help elsewhere, incl Russia – ex-FM Frattini to RT,” RT, March 24, 2020, https://www.rt.com/news/483897-italy-eu-coronavirus-solidarity-russia/.

[17] Damian Wilson, “With United Europe MIA in Its Covid-19 Response, Worst-hit Nations Turn to ‘Evil’ Russia & China for Help,” RT, March 23, 2020, https://www.rt.com/op-ed/483865-europe-coronavirus-russia-china/.

[18] Konstantin Khudoleyev, “Iz Rossii s lyubov’yu: kak okhvachennaya koronavirusom Italiya vstretila rossiyskikh spetsialistov,” Zvezda, March 23, 2020, https://tvzvezda.ru/news/vstrane_i_mire/content/20203231327-JqrfK.html.

[19] “Russian Military Planes with Medics & Supplies Land in Coronavirus-hit Italy,” RT(VIDEO), March 22, 2020, https://www.rt.com/russia/483796-russian-military-coronavirus-aid-italy/.

[20] Giorgia Baroncini, “Coronavirus, Putin invia aiuti all’Italia. Il Cav: ‘Non lo dimenticheremo,’” Il Giornale, March 23, 2020, https://www.ilgiornale.it/news/politica/coronavirus-putin-invia-aiuti-allitalia-cav-non-1845152.html.

[21] “The Use of Russian Military Specialists in the Fight against the Coronavirus Pandemic Was Discussed in Rome,” Ministry of Defence of the Russian Federation (website), March 24, 2020, https://eng.mil.ru/en/news_page/country/more.htm?id=12283590@egNews.

[22] It later turned out that the person was “personally fond of Russia and of President Putin” and had “done some business with Russian companies,” see “Coronavirus: What Does ‘from Russia with Love’ Really Mean?” BBC, April 3, 2020, https://www.bbc.com/news/world-europe-52137908.

[23] Alexander Sladkov, “Kuzhugetych Zhzhet!” Sladkov + (Telegram channel), March 22, 2020, https://t.me/Sladkov_plus/1916.

[24] Sladkov, “Kuzhugetych Zhzhet!”

[25] Natalia Antelava and Jacopo Iacoboni, “The Influence Operation behind Russia’s Coronavirus Aid to Italy,” Coda, April 2, 2020, https://www.codastory.com/disinformation/soft-power/russia-coronavirus-aid-italy/.

[26] Jacopo Iacoboni and Paolo Mastrolilli, “Nella spedizione dei russi in Italia il generale che negò i gas in Siria,” La Stampa, April 16, 2020, https://www.lastampa.it/topnews/primo-piano/2020/04/16/news/nella-spedizione-dei-russi-in-italia-il-generale-che-nego-i-gas-in-siria-1.38722110.

[27] Natal’ya Kudrik, “Ital’yanskiy obozrevatel’: rossiyskaya ‘pomoshch’ – eto operatsiya propagandy,” Krym.Realii, April 4, 2020, https://ru.krymr.com/a/italianskiy-obozrevtel-rossiyskaya-pomoshch-operaciya-propagandy/30529765.html.

[28] Angela Giuffrida and Andrew Roth, “Moscow’s Motives Questioned over Coronavirus Aid Shipment to Italy,” Guardian (US edition), April 27, 2020, https://www.theguardian.com/world/2020/apr/27/moscow-motives-questioned-over-coronavirus-aid-shipment-to-italy.

[29] Jacopo Iacoboni, “Coronavirus, la telefonata Conte-Putin agita il governo: ‘Più che aiuti arrivano militari russi in Italia,’” La Stampa, March 25, 2020, https://www.lastampa.it/topnews/primo-piano/2020/03/25/news/coronavirus-la-telefonata-conte-putin-agita-il-governo-piu-che-aiuti-arrivano-militari-russi-in-italia-1.38633327.

[30] “Posol v Italii otsenil soobshcheniya o ‘vystavlenii scheta’ za pomoshch,’” RIA Novosti, March 25, 2020, https://ria.ru/20200325/1569157787.html.

[31] “Statement by the Spokesman of the Ministry of Defence of the Russian Federation Major General Igor Konashenkov,” Facebook, April 2 2020, https://www.facebook.com/mod.mil.rus/posts/2608652339377506.

[32] Monica Rubino and Concetto Vecchio, “Russia contro il giornalista de ‘La Stampa’ Jacopo Iacoboni. Esteri e Difesa: ‘Grazie per aiuti ma rispettare libertà di stampa,’” La Repubblica, April 3, 2020, https://www.repubblica.it/politica/2020/04/03/news/iacoboni_la_stampa_russia-253020378/.

[33] “Le accuse di Mosca e la nostra risposta,” La Stampa, April 3, 2020, https://www.lastampa.it/lettere/2020/04/03/news/le-accuse-di-mosca-e-la-nostra-risposta-1.38672825.

[34] “Nota congiunta del Ministero della Difesa e del Ministero degli Affari Esteri e della Cooperazione Internazionale,” Ministero degli Affari Esteri e della Cooperazione Internazionale (website), April 3, 2020, https://www.esteri.it/mae/it/sala_stampa/archivionotizie/comunicati/nota-congiunta-del-ministero-della-difesa-e-del-ministero-degli-affari-esteri-e-della-cooperazione-internazionale.html.

[35] Giorgio Gori, “Solidarietà a @jacopo_iacoboni e alla Stampa per le intimidazioni ricevute da portavoce della Difesa russo,” Twitter, April 3, 2020, https://twitter.com/giorgio_gori/status/1246008841755668480.

[36] Rubino and Vecchio, “Russia contro il giornalista de ‘La Stampa’ Jacopo Iacoboni.”

[37] “UK Company behind La Stampa’s Article Claiming Russian Aid to Italy Useless – Diplomat,” TASS, April 2, 2020, https://tass.com/politics/1139323.

[38] Vladimir Malyshev, “Uchebniki po antisovetskoy propagande eshche ne sgnili”, Fond strategicheskoy kultury, April 9, 2020, https://www.fondsk.ru/news/2020/04/09/uchebniki-po-antisovetskoj-propagande-esche-ne-sgnili-50575.html.

[39] Andreas Umland, “Aleksandr Dugin’s Transformation from a Lunatic Fringe Figure into a Mainstream Political Publicist, 1980–1998: A Case Study in the Rise of Late and Post-Soviet Russian Fascism,” Journal of Eurasian Studies, 1, no. 2 (2010): 144-152.

[40] Giulietto Chiesa, “Quelli che sparano sulla Croce Rossa,” Sputnik, April 7, 2020, https://it.sputniknews.com/opinioni/202004078943748-quelli-che-sparano-sulla-croce-rossa/.

[41] “Putin v Den’ narodnogo edinstva vruchil nagrady v Kremle,” RIA Novosti, November 4, 2019, https://ria.ru/20191104/1560560522.html.

[42] Politically biased international election observation is a form of political activity performed by international actors with the aim of advancing interests of certain politicians and political forces by imitating credible election monitoring during electoral processes.

[43] See Anton Shekhovtsov, “Politically Biased International Election Observation at the 2018 Regional Elections in Russia,” European Platform for Democratic Elections, October 5, 2018, https://www.epde.org/en/documents/details/politically-biased-international-election-observation-at-the-2018-regional-elections-in-russia.html.

[44] Gian Luigi Ferretti, “25 marzo 2020: Inno russo da CasaPound a Roma”, YouTube, March 25, 2020, https://www.youtube.com/watch?v=rIOK4gQKtxc.

[45] Fabio Tonacci, “‘200 euro se ringrazi la Russia per gli aiuti’: quello strano arruolamento su WhatsApp,” La Repubblica, April 12, 2020, https://www.repubblica.it/esteri/2020/04/12/news/russia_propaganda_a_pagamento-253794264/.

[46] Alexey Pushkov, “Pol’sha ne propustila rossiyskie samolety s pomoshch’yu dlya Italii cherez svoe vozdushnoe prostranstvo,” Twitter, March 23, 2020, http://archive.is/fdk6R.

[47] See, for example, “Russian Planes Carrying Aid to Italy Blocked from Using Poland Airspace – Russian Lawmaker,” Sputnik, March 23, 2020, https://web.archive.org/web/20200324003727/https://sputniknews.com/world/202003231078687190-russian-planes-carrying-aid-to-italy-blocked-from-using-poland-airspace—russian-lawmaker/.

[48] See “Poland Says Its Airspace Open for Russian Planes Carrying Aid to Italy,” Sputnik, March 23, 2020, https://sputniknews.com/world/202003231078687190-russian-planes-carrying-aid-to-italy-blocked-from-using-poland-airspace—russian-lawmaker/.

[49] “Russia Exploits Italian Coronavirus Outbreak to Expand Its Influence,” Medium, March 30, 2020, https://medium.com/dfrlab/russia-exploits-italian-coronavirus-outbreak-to-expand-its-influence-6453090d3a98.

[50] “Oehme: Europaratsmitglieder bilden Phalanx zur Bewältigung der Corona-Krise in Italien”, Fraktion der AfD im Deutschen Bundestag, March 23, 2020, https://www.afdbundestag.de/mdb-ulrich-oehme-europaratsmitglieder-bilden-phalanx-zur-bewaeltigung-der-corona-krise-in-italien/; “Deputat Bundestaga obratilsya k Rossii za pomoshch’yu okhvachennoy koronavirusom Italii,” Govorit Moskva, March 21, 2020, https://govoritmoskva.ru/news/228659/.

[51] “Oehme: Europaratsmitglieder bilden Phalanx zur Bewältigung der Corona-Krise in Italien.”

[52] See Anton Shekhovtsov, “Foreign Observation of the Illegitimate Presidential Election in Crimea in March 2018,” European Platform for Democratic Elections, April 3, 2018, https://www.epde.org/en/news/details/foreign-observation-of-the-illegitimate-presidential-election-in-crimea-in-march-2018-1375.html.

[53] “Predstaviteli ORDLO vstretilis’ v Minske s deputatom PASE,” Naviny, December 16, 2019, https://naviny.by/new/20191216/1576476063-predstaviteli-ordlo-vstretilis-v-minske-s-deputatom-pase.

[54] Anton Shekhovtsov, Russia and the Western Far Right: Tango Noir (Abingdon: Routledge, 2018), 185-186.

[55] “France’s Le Pen, on Russia Visit, Heads to Kremlin for Exhibition,” Reuters, March 24, 2017, https://www.reuters.com/article/us-russia-france-lepen-idUSKBN16V12E.

[56] Anton Shekhovtsov, “Politically Biased Foreign Electoral Observation at the Russian 2018 Presidential Election,” European Platform for Democratic Elections, April 16, 2018, https://www.epde.org/en/documents/details/politically-biased-foreign-electoral-observation-at-the-russian-2018-presidential-election-1423.html.

[57] Julian Röpcke, “Wie die AfD Putins Militär in Italien einschleuste,” Bild, March 26, 2020, https://www.bild.de/politik/ausland/politik-ausland/corona-krise-wie-die-afd-putins-militaer-in-italien-einschleuste-69638656.bild.html.

[58] “Deputat Bundestaga obratilsya k Rossii za pomoshch’yu okhvachennoy koronavirusom Italii.”

[59] “Speech by President Von der Leyen at the European Parliament Plenary on the EU Coordinated Action to Combat the Coronavirus Pandemic and Its Consequences,” European Commission, April 16, 2020, https://ec.europa.eu/commission/presscorner/detail/en/speech_20_675.

[60] “Speech by President Von der Leyen.”

[61] Luigi Sergio Germani, “The Coronavirus Pandemic and Russian Information Warfare Activities in Italy,” Centre for Democratic Integrity, April 28, 2020, https://democratic-integrity.eu/the-coronavirus-pandemic-and-russian-information-warfare-activities-in-italy/.

[62] Razov’s cover letter and Slutsky’s appeal can be found here: https://www.linkiesta.it/wp-content/uploads/2020/05/Lettera-nr.1072-del-27.04.2020.pdf.

[63] The appeal appeared on several websites of Russian diplomatic institutions, see, for example: Leonid Slutsky, “An Appeal by Mr L. Slutsky, MP, to Abandon the Sanction Policy in the Face of COVID-19 Pandemia,” The Embassy of the Russian Federation in the Republic of India, April 24, 2020, https://india.mid.ru/en/press-office/news/an_appeal_by_mr_slutsky/.

Covid-19 is a Threat to Putin

Interview with Denis Sokolov conducted by Lidia Mikhalchenko.

On April 20, 2020, a spontaneous protest took place in North Ossetia. Official statements by the government described them as violation of public order aimed to subvert the quarantine measures. Is this an accurate description?

– Well, the protest was not so spontaneous in reality. Vladimir Cheldiev, an opera singer usually residing in St. Petersburg, published a call to the residents of Vladikavkaz to gather and protest quarantine.

Vadim has recently returned to Ossetia to tend to family matters and over the past few months has emerged as the face of protests in Ossetia. Two days prior to the protest, he was detained on charges of either “willingly spreading false information on the coronavirus”, or for “exerting physical violence against law enforcement representatives.” (Cheldiev is now facing charges under part 1 of article 381 of the Criminal Code of the Russian Federation, use of mild violence against a government representative).

Vadim Cheldiev rose to fame in 2018, in the aftermath of a fire at the Elektrotsink (Электроцинк) factory. Using his social media accounts, he issued calls to close the factory, started conducted negotiations with the Region’s Head Bitarov, criticized local officials as being “anti-people” and vented about global consipracies.

Vadim Cheldiev’s videos resonate with a widespread folk mythology that all evils (from environmental degradation, loss of respect for elders, dishonorable conduct by women) stem from departure from the original “Indo-European” traditions.  Cheldiev’s accounts in Telegram and Instagram have tens of thousands of subscribers and readers. Cheldiev has an incredible charisma. During protests, one of the demands voiced by the crowds was Cheldiev’s release from detention.

This activist and defender of traditional values believes that there is no pandemic; that Covid-19 is a conspiracy concocted to enslave simple people; that the Russian government has turned the country into a colony for the West.

What’s different about the Ossetian protests is that here, out of the blue, a deeply traditional ethnos, whose worldviews and believes have been long overlooked and dismissed by officials, experts and journalists – started a riot. This is an ethnos living in a harsh reality, full of inconvenient and even outlawed beliefs: extremism, conspiracy theories, inciting hate toward other social and ethnic groups, condoning Stalinism, hatred of the elites. Of note, Russian riot police from OMON, Rossgvardiya, FSB operatives and many other officials live in the same exact world. If you pose a question on fears of having a microchip implanted during vaccination, the percentage of affirmative responses among the protesters and among those dispersing the protest, both on the streets and by issuing decrees from cushy offices, would be about the same.

The coronavirus quarantine measures and the accompanying administrative chaos have achieved something that opposition politicians and civil activists had failed to achieve 20 years ago, – they have awakened and mobilized the people.  Of course, this didn’t happen overnight. The incomes have been falling for several years straight; the quality of governance has been declining for several decades; regional officials, local businesses and even criminal networks have degraded. All of these factors have contributed to the shrinking opportunities for social advancement for ambitious youth.

Financial flows and oil exports, that have previously supported the system, have collapsed.  Cab drivers, small business owners, their employees, all those who had been living hand-to-mouth, are now left without any means to support themselves. All of this is happening against the backdrop of two restaurants that continued their operation even during quarantine, and both, not surprisingly, belong to the head of the Republic.

The Vladikavkaz protest is a protest against the elite and against modernization (as modernization in the minds of the people aims to advance the elites’ interests).  This is an uprising not only against the region’s head Vyacheslav Bitarov, but also against the current system as a whole.

This protest cannot be stopped by arrests (according to the official statistics, 69 people have been detained at the April 20, 2020 protest), puny handouts (159 families have reportedly received cash aid the day after the protest). Such half-measures only further enrage the people. It is possible, however, that rescinding the quarantine measures would temporarily dampen the wave of dissatisfaction.

The police, Rossgvardiya and the Cossacks that can be successfully unleashed against “foreign agents” and “unhappy urban dwellers” are not effective against a people’s uprising. One of the Rossgvardiya divisions from the Krasnodar Kray outright refused to dispatch units for the dispersal of the Ossetia protest; and after their shifts ended, the Vladikavkaz OMON had to be transported from the protest square to the barracks and not their homes, out of fear that they might  join the protesters.

Are any influential political leaders directing the protests or emerging from them?

– There were no influential political leaders among the protesters in Vladikavkaz. Of course, there are many politicians who overtly or secretly oppose Bitarov inside the Republic’s parliament, and at various municipal government offices, and among Ossetia’s representatives in the Russian State Duma and in the Federation Council. Most regional influencers and opinion-leaders are also in opposition to the head of the Republic. However, this protest is against all elites. So, the political intrigue is focused on discrediting potential candidates that may vie for the post of the head of the region whenever it becomes vacant. Ossetian legislators in Moscow have taken a huge political hit for their vote for (or not voting against) the initiative to move the Victory Day parade to September 3, which is not only the end of the World War II but is also the day of mourning for the Beslan tragedy victims.  However, all of these political games have lost their relevance for the time being. If the protest continues to grow, someone may attempt to reign it in, but that’s a different topic for discussion.

Is it fair to say that small businesses have taken the biggest hit from the quarantine?

– Yes, it is fair to say so. Small business is the source of sustenance for many in Ossetia. Small private cattle farms, vegetable gardens, orchards; and in urban areas – hair salons, markets, shops, restaurants, coffee shops. Protection racket income from these small businesses also supported criminal groups and the law enforcement. So those two groups are now in total alignment with the people.

Here, we have a situation where supposedly everything was shut down to fight the virus. At the same time, the restaurants owned by President Bitarov continue to operate.

Those with access to the administrative resource, levers, connections, take as much as they can without thinking twice. Federal chains such as “Pyatyorochka” or “Magnit” continue to operate; federal home goods stores remain open. Such businesses, by the way, are also perceived as part of the elite conspiracy against the people.

Why has Ossetia spawned so many coronavirus-deniers and corona-skeptics?

– The opera singer Cheldiev, whom we have discussed earlier, uncovered a story about a woman who died in a hospital from causes not related to the pandemic. The hospital administrators attempted to falsify the cause of death, even offered a bribe to the family of the deceased for their silence. Region’s doctors and health care workers are severely underpaid, the entire system is very corrupt, and in this situation they anticipated a direct benefit: 50,000 roubles for working with a coronavirus patient for the nurse, double that sum for the doctor, and there have been several nurses and doctors who have been handling the patient. But it’s a small city, so the ruse was debunked.

But that’s not all. The Kremlin propaganda can say what it wants on Russia Today. It can discuss how Russia is better than Europe and America in addressing the coronavirus; it can send formidable anti-virus dispatches to Italy and Serbia; it can sound outrage about the mass graves in Brooklyn; it can show the nightmare of the pandemic in the United Kingdom. But none of this would turn Russia into a developed country. None of this would restore the health care system that has been destroyed. Virus is a great fact-checker. The Russian government is unable to control the pandemic in our country or the number of victims neither organizationally, nor technologically. It is more likely to exacerbate the situation with sawing panic, or banning planned surgeries and providing health care to non-coronavirus patiens.

Russia is oftentimes favorably compared to Italy where there is a great proportion of recorded deaths. But in Italy, an average life expectancy is 85 years, and the average age of those perished from the virus is 82. In Russia, an average life expectancy is 72, so the majority of the Russian citizens die even before becoming a risk group for the virus at the age of 65-70.

North Ossetia, by the way, has the lowest life expectancy in the Northern Caucasus- 75 years. Therefore, Russia as a whole, and North Ossetia specifically, lack a real social infrastructure to impose strict quarantine measures. This is in contrast to the developed countries, where hundreds of millions of socially active citizens find themselves in the prime risk category. In Ossetia, sustaining a household economy is a much more acute of a problem than an abstract risk to die from pneumonia with lethality rate of 0.22%, if one goes by the estimates from the Bonn University. So, corona-skepticism fits within the anti-elite and even anti-Western narratives in Ossetia. And this can quickly spread throughout other regions of Russia.

How would you interpret the demand of Vladikavkaz protesters to appoint a new temporary government headed by Vitaly Kaloev? (Kaloev is an architect, a deputy in the Vladikavkaz Council of Representatives. He came to fame in 2004, when he murdered a swiss air controller whom he thought responsible for the plane crash that killed his wife and two children.)

– Again, this is consistent with the anti-elite nature of this movement. Kaloev is perceived as a people’s person.  This is also consistent with the anti-Western and anti-modernization tendency of the protest. Kaloev has punished those responsible for the death of his loved once in accordance with the tradition, while breaking the laws of a European country and then had to serve a prison term for it. In the spirit of ethnic traditions, he did the right thing, prioritizing vendetta over the law. So, in essence, he purveys the spirit of the riot even better than Vadim Cheldiev.

Kaloev himself did not support this demand. Was he pressured by someone?

–  I don’t want to speculate on his motives, you should ask him personally. But he is more of a symbol of the anti-elite movement and not a bureaucrat. He belongs to the streets and not at an office.

What specific initiatives of the federal government evoked such a explosive response from the people?

– The Russian government response to the pandemic has been inadequate and inconsistent.  By default, they tried to emulate European initiatives. However, in Europe, the government provides support to people who lose their jobs. Russia, currently, is suffering severe financial losses due to the drop in energy prices and an unfortunate attempt by Igor Sechin to play poker with the Saudis. While I think it is too early to proclaim the end of the Putin’s era, it is definitely the beginning of the end. This is the end of the time when Putin was extolled as national leader, when he functioned as an effective arbiter for competing elite clans and groups, when he was in charge of doling out and distributing the oil rent, the times when power and money contributed to his charisma. All of that is over, along with the oil revenues and the love of the people. He is a scared and confused 67-year old, disconnected from reality retired colonel, who is in fact in the main group for dying from Covid-19.

The fact that this truth has become so exposed, is not so much a mistake, but an insurmountable challenge for the Kremlin. The people stopped seeing the great leader in Putin; now they see a helpless crook. People, of course, knew all of this before, but their optics were different. All of this “unitarian federation” is crumbling down, the regions are forced to improvise, without direction, funding or experience. And this time it’s impossible to simply throw money at the problem, since there is no money left.

Putin announced that he has granted discretion to governors in addressing the threat of the pandemic, since, according to him, everyone knows better what is going on in their own regions.

– This crisis has exposed just how rotten and insolvent is the Russian power vertical. Previously, there was an illusion of a powerful state. But the inside is rotten through and through. The pandemic is a tough test for the regime. Similar to a war that demonstrates what is the potential of a military force, this pandemic shows the potential of the Russian state. Of course, this is not a problem just for Russia; other weak states throughout the post-Soviet space are going through the same challenge.

So, Russia is in the midst of a constitutional crisis, an oil crisis and now the coronavirus pandemic. It’s a triple hit.

– Yes, this has amounted to the perfect storm. Even somehow the federal government could come up with money for social relief, they would not be able to get to the people. This is because the entire bureaucracy understands that the material wealth of the state is depleted, and they would pillage and syphon off whatever comes their way. The situation would be similar to that during the collapse of the Soviet Union, when funds are disbursed, but “the soil does not hit the bottom of the pit”- it is stolen mid-fall. We can anticipate that officials will start stealing all they can, without any limitations. Together with those who are supposed to catch them.

Ossetia has more monuments to Stalin than other regions. It is a region with many supporters of communism. It is not rare to see the red Soviet flag or seal on houses or as car stickers. Is there a possibility that the protesters would espouse this ideology?

– I think it will remain as it is now.  It will be a hodgepodge of traditionalism, communism, anticommunism,  anti-globalism, Stalinism and anti-Stalinism, because severe hardship is experienced by people of many different worldviews. And those worldviews are not so important. Again, I would like to stress that this is an anti-elite protest in its essence. The mythology behind is secondary. The people don’t trust local authorities and the current state system. Entrepreneurs whose revenues used to be supported by good relationships with government officials, have lost them. They are aggressively crowded out by large players and chain retail, including by taking away the land. This is a situation similar to what has happened in Kislovodsk. Three thousand cab drivers have been quarantined, and two hundred of “insiders” continue to drive, with a special dispensation from the regional administration. And the situation is the same in almost all of the Russian regions.

Do you anticipate that the Ossetian protest will grow? What is your prognosis?

– I don’t think that it will grow, but it won’t die out either. Protest sentiments will grow.  People’s incomes have been taken away, government showed their ineptitude. Other regions also feature protest sentiments. Local authorities are not in a position to rescind the quarantine, they are not so brave. However, we should anticipate the weakening of the quarantine measures, otherwise there will be an explosion.

Is there a protest potential in Chechnya?

– Absolutely, there is; but it has not manifested yet. The head of Chechnya Kadyrov has its own military and several hundreds of people embedded throughout various divisions of law enforcement and intelligence agencies. His people understand fully well why he is holding his position, and anyone from Kadyrov’s inner circle can be easily arrested. The Chechen leadership has a very fine infrastructure which controls financial flows through support network created by Kadyrov Sr. This not a state structure, but a criminal one. It controls the money flows, state institutes and public figures.

What we have ahead of us are huge budget losses. This summer, tens of thousands of Chechens living in Europe come to Chechnya for traditional vacations, but this time, they won’t bring their usual remittances. Kadyrov is also in a more precarious position in Moscow, where he is involved in a skirmish brewing against the backdrop of the “perfect storm”.

So you think all those who have been forced to publicly apologize under Kadyrov would go to the streets with new messages and attitudes?

– Those who had to apologize would probably be more radical. This would not be tomorrow but can happen at any time. And I don’t think a mass protest in Chechnya will be peaceful.

In Dagestan, using quarantine violation as an excuse, authorities have detained an activist and broke his nose, which was even video recorded. Why has this abuse not caused any protests?

– The political and civil society field has been “mopped up”. The people are not prepared to defend activists, activists are not perceived as “of the people”. It is very unfortunate.  If, in the near future, a mass protest takes place in Dagestan or another Russian region, it will not be one similar to the peaceful marches through the Bolotnaya or Sakharov Squares, it will look more like the April 20 protest in Vladikavkaz. It will not be about democratic values, but about revenge and about redistribution, sadly.

Events in Vladikavkaz can be described as mass unrest. What would you call other similar events throughout the Caucasus?

– In Russia, by and large, there are no riots, there are only civil and corporate peaceful protests. In the North Caucasus, each of such events has a regional flavor. Street rallies in Ingushetia, protests in Dagestan, Cherkessian marches, congress in Ossetia.

Ingushetia used to have a group of civil activists, all of whom were detained; the leaders were put in prison with long terms, with the exceptions who has managed to immigrate. Such people are not under the control of the government, and the government does not understand how to interact with them. They express their civic positions.

Protests in Kabardino-Balkaria and Ossetia are very archaic, they include historic myths, the agenda is different there. At the same time, in Kabardino-Balkaria a year ago we didn’t see the same level of anti-elitism that we observe in Ossetia today. Traditionalism serves different purposes.

What options does the Russian government have for solving this problem?

– I don’t think the government has any options. It has deprived itself of a maneuver space. The bureaucracy has degenerated to the point where it’s not able to solve any political problems.  Moscow can try to end quarantine very quickly. This may give the government some time. The transformation of the Russian political system is unavoidable, but Putin and his circles decided to fortify their grip on power by force, so they don’t have anywhere to retreat. They won’t give up without a fight. The big question is what would come out of this storm.

How can the civil society provide support?

– With solidarity. For example, the activists in St. Petersburg and Moscow should not view so negatively the differences between them and civil activists from the Caucuses. Maybe it makes sense, by using Caucasus as a case study to perform some self-assessment, — what’s going on in our own regions, what key agendas and interests are behind the leaders and people in Moscow and St. Petersburg. Now is a good time for such evaluation. And, of coutse, some of the civil society activists should be prepared to transform into politicians.

What can the West do to help activists in Russia?

– Perhaps by supporting the “new urbanites”, which are now present not only in cities but also in rural areas due to social media and access to smartphones and internet connection. This is a fairly new social group. It has already brought to power Nikola Pashinyan in Armenia and continues to support him through very challenging circumstances. They were also a critical part of the Ukrainian Revolution of Dignity.

The Summer 2019 protests in Moscow have scared and paralyzed the government. “New urbanites” value independence from corporations and the corporate state, they want to be in charge of their own lives, they already are a part of the globalized world, they don’t want to work in the government, because they don’t see any politics, just a very depressing bureaucracy.

The new urbanites are at the same time the commissioner and the executor of constructive societal changes. They are the main lever which can organize the deeply post-Soviet ethnos with all of their phobias and conspiracy theories, into a modern state. No Putin with his technocrats and bureaucrats can do such a thing.

In 2018-2019, the Ingush people have demonstrate quite well the creative potential of youth incorporated into the modern globalized world. There, civil society activists managed to transform into an alternative political elite.

I recommend we pay close attention to these people. They have not gone through the enlightenment programs of the 90’s and 00’s, they were just born then, and they are have only recently become adults. But they don’t want to remain in the passenger seat, they want to steer. They are not content with repeating the lives of their parents. We have to find new ways to work with this new cohort, as well as for the new circumstances that we are finding ourselves.

What’s Behind the Coronavirus Aid to Serbia

International aid in response to natural and manmade emergencies is a well-established practice. It demonstrates good will and solidarity, and helps victims overcome hardships. However, it can also be used to flaunt power, wealth and advanced technologies for political purposes.

Aid provided by Russia internationally, frequently amounts to nothing more than a demonstration of power, with materiel being of little practical use to the recipient. What is worse, the Russian government sends help to other countries without regard for the desperate need of its own people. This is, sadly, the case with the current Russian international coronavirus aid initiatives. In the past few weeks, Russia has dispatched and promoted its aid to the US, Italy, Serbia and other countries, as tragedy unravels throughout its own regions whose medical infrastructure is clearly not ready to effectively fight with the virus Covid-19.

On April 3 and 4, 2020, Russia sent eleven planes with 87 military officers including military medical personnel, special equipment and military transport for disinfection to  Serbia from to confront the spread of the virus Covid-19. The value of aid delivered to a country with about 7 million inhabitants was just below to what Russia sent weeks prior to Italy, a country with 60 million people. With this help, Russia sent a strong message on how important Serbia was. With a message posted on his twitter account, Serbian President Aleksandar Vucic profusely thanked Putin for the help: “Very good conversation with Russian President Vladimir Putin. Confirmed friendship, and significant help will arrive in Serbia. Thank you, Vladimir Putin and the Russian people!”

The contents of the dispatch were the same as those shipped to Italy. “It seems to me to be the same package that it was for Italy, and it requires our full gratitude to Russia because it shows how much they care about Serbia when it is not easy for them either”, Vucic said. Russian effort backfired when public reports emerged that help sent to Italy was not really useful, with its equipment designed for chemical attacks and not viral outbreaks. One can presume that the delivery to Serbia  also turned out to be more of a symbolic act.

Russia is not the only country taking advantage of the coronavirus pandemic for political purposes. China has also been very public with its relief efforts, sending help internationally. On March 21, 2020, for example, a Chinese medical team arrived in Serbia to join the fight against the virus. They brought six medical professionals, ventilators, medical masks, test kits and other medical supplies. China has also provided financial support to Serbia for building test labs and other medical facilities. Two labs, – one in Belgrade and one in Nis, are expected to be ready by mid-April.

For the Serbian government, Russian and Chinese help is useful both, economically and politically. Dimitar Bechev, Director of the European Policy Institute, feels that the Serbian government is leveraging Russian and Chinese attention to advance its own standing within the EU. Alarmed by the prospect of Serbia falling under the influence of these authoritarian regimes, the EU may feel the urge to prioritize Serbia in exchange for its loyalty to the “European family”.

Indeed, in the aftermath of the March coronavirus aid dispatch from China,  the European Union announced a 93 million euros worth of support to Serbia. Even after this announcement, President Vucic continued his negotiations with Emanuel Macron for additional help from France.

Located midway from Asia to Europe, Serbia is strategic locale for both Russia and China. By becoming a part of the Chinese Belt and Road initiative, Serbia has secured over $4 billion in direct investments from China and another $5 billion through loans and infrastructure projects. Serbia and China have also moved to deepen their security cooperation and have agreed on a technological partnership with a Chinese telecommunications giant Huawei.

Russian influence is historically strong in Serbia. Russia dominates the Serbian energy sector and seeks tirelessly to strengthen its position in the region even more. 80% of natural gas and 70% of crude oil imported to Serbia comes from Russia.  Gazprom owns 56.15% of NIS, the largest oil and gas company in Serbia. One of the legs of the TurkStream pipeline is planned to go through Serbian territory.

Sustaining political support among Serbian authorities is of critical importance to the Kremlin, which sees it as a zero-sum game. Seeking to preserve this support, the Kremlin attempts to retard and derail the Serbian integration into the EU and minimize the NATO influence on the country. Russia works to deepen its bilateral military relations through joint training and military sales to the Serbian Army; it is aggressive in its support for pro-Russian politicians and disinformation campaigns. Media outlets financed by pro-Kremlin forces spreads narratives advancing the Russian government agenda and undermining trust in the European Union and support of its values.

For the time being, Serbia shrewdly takes full advantage of  this international contest for influence by accepting benefits from all three sides – Russia, China and the EU – and by praising Putin, preparing for joining the EU and letting Chinese investments flow in.

NGOs Responses to Coronavirus Pandemic Spell Lasting Changes for the Sector

Alexey Kozlov is a veteran of the non-profit sector with over 25 years of experience focused on civil society, human rights and democratic development projects. He has been involved in establishing and developing NGOs in Russia, Lithuania and Germany. In Russia he worked at the Moscow Helsinki Group; participated in creation and coordinating the work of the Russia-EU Civil Society Forum, coordinated an international network of over 20 organizations from throughout the EU, Ukraine and Belarus. In this article, he shares his preliminary insight and some forecasts, based on an informal survey of ways NGOs in his sector have responded to the coronavirus pandemic of 2020. 

Quarantine measures and other limitations imposed or suggested to various degrees all around the globe have pushed NGOs to adjust their modes of operations. The forced adjustments, however, are likely to be sustained even after the quarantine is lifted.

For some NGOs who had regularly used teleworking and online meeting tools prior to the pandemic, the transition has been fairly seamless.  For others, whose work mainly consisted of public events, partner facility visits, workshops and lectures – the pandemic turned out to be if not a catastrophe, then a serious challenge structurally, financially, as well as in tactical and strategic senses.

What are some of the key shifts that will characterize the NGO sector post-Coronavirus?

Notionally, we can divide most NGOs into three groups:

  1. NGOs with preexisting experience of doing the majority of their work remotely (with over 50% of its work meetings done by teleconference and other online tools, as well as relying on webinars for most of their outreach). This group is the smallest of all three. Out of the 50 partner organizations surveyed, only 2 belong to this group.
  2. NGOs with limited previous experience working remotely, but those who did so ad hoc, not in a systematic manner; however, this group has a general idea of how to organize and conduct this type of work.
  3. NGOs with no previous experience of telework.

Clearly, it is the NGOs from the second and third group that are facing the steepest learning curves and now have to quickly make a number of important calls on approaches, tools, their ability to work effectively in the new mode, as well as about the readiness of their workforce to transition to telework.

Employees and volunteers who are able to teach teleworking tools, offer technology troubleshooting assistance will take the spotlight and be high demand. For all NGOs the transition to working remotely has become a great stress-test of the quality of their IT support and computer literacy.

Trends with the Staying Potential:

  1. Higher proportion of employees and volunteers who mostly work remotely

Even after the quarantine measures are lifted, we should expect that a higher proportion of employees will continue to work remotely either some of the time or full-time. These are the employees and volunteers whose effectiveness has increased due to ability to telework, who find telework more convenient, but had been simply too afraid to try it before. Of course, there is still a risk that the work ethics, effectiveness and productivity of employees will decrease; the motivation of volunteers will drop; and organizational team cohesion will be affected negatively. Telework introduces new challenges related to the process of assuring quality of work and other management functions.  The coronavirus pandemic has offered an opportunity to test a new format, and for many it has been a reassuring experience that has dispelled the worst fears.

  1. Ability to Optimize Organizational Budgets through Cuts to Office and Travel Expenses

If all employees, or a larger portion of them, chose to continue working remotely after the pandemic, many organizations will be able to reduce their needs for physical office space. They would have an opportunity to lower their expenses related to renting office space, electrical and utility bills, cleaning and maintenance costs.  We are also likely to see a decline in the number of in-person meetings, both internal to organizations as well as among organizational partners, again allowing NGOs to optimize their business trip budgets and cut travel expenses.

  1. Selection Processes Transition Online

Many NGOs had moved the bulk of their selection processes online prior to the pandemic. This includes interviews of prospective employees, fellows, training workshop participants.  However, there has been a deep-seated distrust of virtual interviews and a perception that they do not offer the same ability to evaluate a candidate thoroughly.

Today, there is simply no other option. Even final interviews now are taking place remotely. It is likely that having tried it once, many managers will appreciate the convenience of teleconference interview and will be more trusting of this method moving forward. This, in turn, will allow to shorten the decision-making cycle for HR purposes, since a remote interview is much easier to set up than an in-person meeting.  Moreover, interviews conducted remotely significantly cut costs. Of course, further research is required to determine the impact on the quality of decisions, and some in-person meetings on sensitive and critically important issues will be reinstated. Nevertheless, the proportion of interviews done remotely will undoubtedly increase for the long-term.

  1. Better Regional Representation and Improved Participation for Activists from Rural and Remote Areas

As the telecommuting becomes more prevalent, activists’ ability to make a contribution or participate in important NGO processes will increase. Candidates from rural and remote areas who are unable or unwilling to relocate will see a palpable improvement in their options for employment or participating in term-projects. For the budget-sensitive NGO sector that rarely pays for relocation expenses, this is an especially poignant shift. Clearly, this does not apply to all NGOs, and there are exceptions.

  1. Growth in Importance of IT Support to Key NGO Functions

The development of IT support, its reliability and quality, will grow in importance for most NGOs. It is already possible to state with confidence that many NGOs will not be able to execute this transition independently, and we will see an increase in demand for outsourced support for digital transformation of non-profits. Likewise, the demand for expertise in digital transformation for NGOs will also grow.

  1. Growing Importance of Social Media and Online Branding

Most NGOs had been aware of the importance of their online positioning, branding and engagement throughout various social media platforms. In the post-pandemic world, 100% of organizations who work with external audiences will understand that a placeholder website is simply insufficient. It is likely that we will also see growth in the importance of online presence and engagement by NGO heads, leadership and project managers.

  1. Educational Projects and Training Moves Online

Within a year, a significant portion of training processes and educational programs will move online. The quarantine has already severely restricted in-person gatherings and forced institutions to aggressively pursue development of platforms and programs for distance education. It is likely that online schools will outgrow their current marginal status and emerge as a new prominent vector within the NGO sector.

  1. Emergence of New Remote Communication Systems and Methods, Remote Teambuilding

In the pre-Coronavirus world, colleagues connected over lunch, coffee, networked at events, attended exhibits and presentations.  Organizations held regular teambuilding exercises and socials. Now is the time to review many of these activities. In the near term, we are likely to witness the emergence of innovative, original approaches to organizing interaction among employees. NGO leaders will have to get very creative. Today, we already see the proliferation of channels in Telegram, groups in WhatsApp, Facebook – to gather colleagues, volunteers, and provide them with socialization platforms. Zoom meetings evolve into Zoom parties. Everyone is forced to learn and adopt new digital tools.

Recommendations

There are some obvious steps that NGOs can take now to mitigate the organizational risks posed by the pandemic and its aftermath:

  • Evaluate the shift in its processes and activities to an online mode. Which ones have transitioned successfully, and which have floundered, and why?
  • Assess losses – financial, reputational, operational. Which losses are related to an inability to transition to remote and online operations?
  • Assess work tools and instruments (new ones, as well as those used pre-pandemic). Identify gaps in functions and unmet requirements. Come up with a list of possible solutions.
  • Prepare for a comprehensive restructuring of online assets.
  • Prepare a plan for work after the end of the quarantine regime.
Image by Tobias Lindner from Pixabay
Who Is Behind the Renewed Effort to Push Nord Stream 2 on Europe?

The PR Campaign:

April 2020 has witnessed a conspicuous uptick of publications in Western and Russian media in support of the Nord Stream 2 project:

All of these publications reference the release of results of an opinion poll and in English.

Who Paid for the PR Campaign? 

The poll was commissioned by the German Eastern Business Association (Ostausschuss – Osteuropaverein der Deutschen Wirtschaft, OAOEV)

OAOEV is a fairly new NGO that promotes German business in “Eastern” countries – from Russian to China. It was founded in 2018 through the partnership of the German Committee on Eastern European Economic Relations (Eastern Committee) and the Eastern Europe Business Association of Germany.

In December 2019, several OAOEV members met with Vladimir Putin. Following the meeting, OAOEV published a press release.

The press contact for the Nord Strom 2 Survey listed on the OAOEV website is Andreas Metz. Metz is described by Politico Europe as “member of Berlin-based lobbying group Committee on Eastern European Economic Relations, which supports the pipeline Nord Stream 2.”

This OAOEV survey coincided with the November 1, 2019 appointment of Mario Mehren as the new spokesperson of its Russia working group. Mehren is a member of the shareholders committee of Nord Stream 2.

Mr. Mehren is also the Chairman and CEO of the natural gas and crude oil company Wintershall Dea – one of the two German companies involved in the Nord Stream 2 project (the second is E.On). It is a joint venture of a German concern BASF (67%) and LetterOne (33%) co-owned by Russian oligarchs with strong ties to the Kremlin, – Mikhail Fridman, Petr Aven and German Khan.

There is overwhelming evidence suggesting that these oligarchs have close ties with the Putin’s regime and its intelligence services.

Wintershall Dea owns stakes of gas reserves in Russia and chemical factories in Germany that rely on the export of that gas.

In this role as the head of Wintershall Dea, Mario Mehren met with the CEO of Gazprom Alexei Miller numerous times:

Mr. Mehren has been on the record lobbying for Nord Stream 2 for a few years now. For example, he is a co-author of a 2018 disinformation piece about Nord Stream 2 in a US outlet.

Given the above connections of the oligarchs to the Kremlin and conflicted interests of the Wintershall Dea shareholders and top leadership, it is reasonable not to be believe in the independent nature or objectivity of this research poll.

Who Executed the Polls?

The Nord Stream 2 survey was executed by an infamous commercial polling agency Forsa Politik- und Sozialforschung AG, which had been accused of data manipulations in several of its past projects. In 2009, for example, the firm was involved in a scandal concerning a methodologically flawed survey whose cooked results claimed disapproval of the 2007 railroad operators’ strike and approval of privatization of the railway. It was uncovered that the biased study had been secretly funded by Deutsche Bahn.

Survey Claims:

Forsa’s Nord Stream 2 poll is based on a phone interview of 1,006 Germans and purports them to reflect the attitudes of the entire German population.

While neither the full Nord Stream 2 survey data nor its methodology have been made public, the Wintershall Dea website features the most extensive write-up of the Forsa Nord Stream 2 survey.

The Wintershall Dea website highlights the interpretation of data according to which the majority of German people do not see the U.S. as a reliable partner and juxtapose it to Putin’s Russia. Its title is “Forsa: less and less confidence in the U.S.

The survey’s other published findings also reinforce the anti-US and pro-Russian narrative through claims such as:

  • Only 10% of Germans regard the United States as a reliable energy supplier. That puts the U.S. behind the Middle East (with 14% of German citizens having confidence in the Middle East as a reliable energy supplier);
  • Over half (55%) of German citizens want closer economic ties with Russia;
  • More than three quarters (77%) of respondents say that the Nord Stream 2 pipeline construction should continue despite US opposition.

What Are the Prospects for Nord Stream 2?

With just a hundred miles of seabed pipeline construction remaining, the work on the Nord Stream 2 project was abruptly halted by US sanctions introduced in December 2019. The sanctions threaten to blacklist any foreign companies collaborating on the construction of the pipeline. This caused all foreign partners to pull-out from the construction and left Russia with no foreign vessels willing to complete the pipe-laying, according to analysis by Benjamin L. Schmitt published by the Jamestown Foundation.

Neither the sanctions, the Coronavirus Pandemic nor the perturbations on the global energy market seem to have any affect, as Putin vowed to finish the pipeline no later than the first quarter of 2021. Such a timeline, however, seems overly optimistic, for two reasons.

Firstly, Russia needs to receive a permit from Denmark to deploy in its territorial waters. Such a permit (given Denmark’s appreciation for the true nature and purpose of Nord Stream 2) is far from certain, and even if granted, may be issued with a significant delay. The Danish Energy Agency (DEA) had spent two and a half years evaluating Gazprom proposals before finally granting permission to build the pipeline in its waters in October 2019.

In February 2020, the Danish Energy Agency said it began negotiations with Nord Stream 2 AG regarding the unfinished Nord Stream 2 gas pipeline, but the involvement of any specific new vessels has not yet been discussed.

Secondly, Russia currently has no vessels equipped to carry on the construction. According to a European energy expert and Jamestown Foundation Senior Fellow Margarita Assenova, Russia has two ships it may potentially use to complete the project: Akademik Chersky and Fortuna.

Akademik Chersky, a vessel owned by a Moscow-based construction firm with a loan from Gazprombank, set sail from Russia’s Far East toward the Suez Port in Egypt in March 2020 and after several peculiar route diversions headed to Las Palmas in early April. It possesses dynamic positioning stipulated by Danish authorities. Chersky, however, requires a technology upgrade to be able to lay pipes. An upgrade can potentially be performed in two to three months. It would then take additional time for Akademik Chersky to reach the Baltic, said Assenova.

Fortuna, located in the Baltic Sea, does not have dynamic positioning. As explained by a CEPA report, “dynamic positioning is a computer-controlled system that automatically maintains the vessel’s position and heading, without the need to use anchors to maintain its course in deep waters. Avoiding anchors in the Baltic Sea is a key environmental and security requirement of Danish authorities for drilling platforms, research ships, and cable-laying and pipe-laying vessels.” Gazprom has floated an idea of attaching a tugboat with dynamic positioning to Fortuna, as reported in the Russian media.

Even if either of these schemes is successful, the vessels would still have to be insured, and its insurers would fall under the US sanctions. Russia has been developing its own instruments for insuring vessels under the new sanctions regime, according to Mikhail Korchemkin from East European Gas Analysis group.

What are the Objectives of this PR Campaign?

With its publicity campaign, Wintershall Dea has attempted to improve the political and social dynamics in Europe to facilitate the quickest completion of the Nord Stream 2 pipeline so badly wanted by the Kremlin.

While revenues from gas exports are not essential for the Russian federal budget, the sector has become the primary instrument of expropriating state resources and channeling them into the accounts of Putin’s’ cronies. As such it is one of the key factors to the ability of Putin to remain in power.

Putin’s regime simply cannot afford to lose its market share to a highly competitive US LNG. Gas price manipulation has proved an effective strategy for Gazprom in the past decade. By completing Nord Stream 2, Gazprom is hoping to brainwash European consumers in its ability to sustain high volumes of affordable gas supply for the long term while in reality Russian gas has always come with the political strings attached, bringing corruption and subversion of democratic institutions.

With this PR campaign, the Kremlin attempts to shift the focus away from its track-record of price manipulation and to the commercial aspects of this partnership with the EU, as well as convince the society that the Nord Stream 2 is a purely commercial project and not a political weapon of the Kremlin.

Kremlin’s Efforts to Sow Uncertainty and Distrust in Germany Fall Short

A special report by the EEAS on Coronavirus Disinformation offers a thorough analysis of tactics, strategies and vectors of effort by  Kremlin-controlled media on the issue of Coronavirus. During the past three months, the agency has documented over 110 instances of disinformation (i.e. excluding reposts and secondary materials citing them). Such a significant volume suggests that the Kremlin has a strategy and a plan on how to use the pandemic to advance its political agenda in Europe.

How is this strategy manifested and executed in Germany? And who are the prime targets for the Kremlin-controlled media in Germany?

In Germany, there are in essence two main target audiences – the German-speakers and the Russian-speakers. A great volume of German-language materials is generated by outfits such as RT Deutschland и Sputnik DE. Their level of activity is so massive (for RT Deutschland, for example, – up to 10 new videos per day and for Sputnik DE up to 30 published stories per day) that the German law enforcement now has several formal efforts dedicated to addressing their challenge. In March 24, 2020, the Federal Criminal Police and the Federal Office for the Protection of the Constitution announced the start of programs to monitor fake news materials “whose spread may pose a threat to the societal order and security.”

Organic audiences (in German Top-100 in social nets) cultivated by RT and Sputnik as part of Russian campaigns to interfere in the EU in 2019 and German Parliamentary elections in 2017, today are used to spread the coronavirus disinformation throughout the German society. For the most part, they are people with far-right political orientations, those who support populist leaders, harbor anti-American sentiments and embrace conspiracy theories of various sorts.  Many of them have voted for the AfD party. This is not surprising, given that RT served as a de-facto party channel during the 2017 Bundestag elections campaign – it provided AfD candidates unrestricted publicity with an opportunity to discuss any issue, while completely ignoring all other parties and candidates.

Germany’s Russian-speaking community, of course, is also an important audience for the Kremlin propaganda outlets.  According to various statistics, Germany is home to between 3-5 mln Russian-speakers:

– About 3 mln arrived through the repatriation programs for Soviet Germans;
– About 300,000— are refugees of Jewish ethnic origins;
– About 300,000 ethnic Ukrainians;
– According to the official information published by the Russian Embassy in Germany — 500,000 remain citizens of the Russian Federation;
– Additionally, citizens from various former Soviet republics such as Moldova, Latvia, etc.

This amounts to a sizeable audience for whom Russian is the primary language used at home, as well as the main language for receiving important information and the news.

In addition to the Russian-language media outlets, the Kremlin aggressively employs social media platforms to shape opinion among the Russian-speaking audience in Germany. The Russian Odnoklassniki (translates as “classmates”) has at least 2.6 mln accounts based from Germany;  an online group “Russian Germans for AfD” has over 20,000 members; and the pro-AfD and pro-Putin group “Russian Germany” has more than 60,000 members.

Four narratives dominate within the continuous barrage of coronavirus-related disinformation and manipulation advanced by the Kremlin-controlled media in Germany:

1. Lack of unity in Europe and the absence of collective support and plan dealing with the coronavirus among the EU states.

In a weekly program Vesti Nedeli (which has about 5.7 mln viewers) broadcast by Russia’s First Channel on March 22, 2020, Dmitry Kiselev is speculating on the geostrategic ramifications of the COVID-19 pandemic: 

“The Schengen Area regime was the first one to collapse.  Germany, Switzerland, Austria, Hungary, the Czech Republic, Denmark, Poland and Lithuania have reinstated control of their national borders. That means that the Schengen Area with the freedom of movement between its 26 members states no longer exists. Those are just the first few steps in the direction of giving up the spoils of civilization in favor of reinstating sovereign nation-states. In fact, this is the crash of the European Idea and transition to a new political culture with a different value system.

All the lip-service to solidarity, collective assistance, shared values, human rights and humanism, has gone with the wind the moment when Italy, who lost more people to coronavirus than China, asked the EU for help, and was rebuffed. Italy requested personal protection items and medical equipment, specifically lung ventilators. In response, Germany and France curbed their exports of medical masks.”

One would be hard-pressed to find “analysis” with a comparable concentration of lies.  Firstly, the Schengen agreements include clauses governing possible limitations and temporary moratoriums on travel, as well as governing the travel of non-EU citizens. Secondly, the European Commission urgently appropriated 50 million euros to help Italy.  Finally, France and Germany limited their national exports of medical masks due to their domestic deficits.

Similar materials and reports surfaced on the German-language Sputnik DE on March 19, 2020 and RT Deutschland on March 30, 2020. Some outlets have gone further and proclaimed the end of the European Union.

Alexander Nosovich commented in his March 13, 2020 editorial published by RuBaltic.Ru: “The Coronavirus response has demonstrated that the European Union does not exist in the minds of Europeans. When it is time to act, the Union ceases to exists as a political reality.”

VestiFM (ВестиFM) went even further and in all seriousness discussed the inevitable exit of Italy and Germany from the EU.

The nexus between the German right populists politicians and the Russian medical envoy to Italy deserve a special mention, as it played a key role in Putin’s decision to do so.

Turns out, the impetus was the March 20, 2020 letter penned by the Bundestag AfD member Ulrich Oehme (infamous for his pro-Russian stance and his travel to the occupied Crimea) and his Italian colleague, ultra-right populist from the Lega Nord party Paolo Grimoldi (who founded a “Friends of Putin” Caucus in the Italian Parliament) addressed to Roman Babayan (a Moscow City Duma Deputy and an anchorman of the NTV show “Your Own Truth”) and to Leonid Slutskiy (Chair of the Duma Foreign Affairs Committee, PACE delegate, member of the Russian right-wing Liberal-Democratic Partyparty, and named on the international list of sanctions adopted by the US, EU and Canada for his official legislative role in the Russian annexation of Crimea).

Babayan read the letter during a live broadcast of his show, which received wide coverage throughout the Russian media. For the Russian audience, a spectacle was played out where a teary plea from the Europeans was met with an immediate and gracious response from Russia.  It’s important to acknowledge that this narrative may be aimed more at the Russian domestic audience, as opposed to the Russian diaspora in Europe, though it permeates both.

2. Germany moves to rescind sanctions against Russia due to the pandemic.

Calls by three marginal Bundestag Members – Robby Schlund, AfD (who became famous for his effort to open an AfD office in Russia), Anton Friesen, AfD, and Alexander Noy, Left – are presented by the Kremlin media as the onset of a serious discussion to end sanctions against Russia. It has been peddled most actively by RIA News and Izvestia (and then reprinted by dozens of less prominent outlets such as regnum.ru, Rossiyskaya Gazeta, gazeta.ru and among the German-language outlets, such as  Sputnik, RT and Junge Welt who also touted that the tiny German Communist Party called to end sanctions against Cuba, Venezuela and Russia. It is important to clarify that such statements and calls are made by individual members of the Bundestag and fractions several times a day and do not amount to a formal legislative discussion or movement.

Against this backdrop, a significant reactivation of the Nord Stream 2 lobbying efforts have taken place. The pretext of this campaign was the publication of survey results prepared by Forsa, a leading German market research and opinion poll agency, and dealing with German attitudes on energy policy issues. Rossiyskaya Gazeta, whose editorial focus usually echoes the sentiments inside the Kremlin, immediately reported on the study: “Against the difficult economic situation related to coronavirus, the support for construction of the Nord Stream 2 pipeline has grown. Three quarters of respondents (77%) support the most expedient completion of the Russian-European project, despite the limitations announced by the United States.”

In Germany itself, however, this information has been ignored by prime outlets and only featured only by marginal portals covering economic beats (such as finanzen.net.)

3. German lack of preparedness for the Coronavirus pandemic and shortage of doctors.

One would assume that the Kremlin propaganda machine would not waste time on spreading lies that are easily factchecked and quickly dismissed as disinformation. Nevertheless, an entire program on Vesti FM on February 29, 2020, did exactly that. Other peddled themes include the so-called “negative pandemic scenario” projecting that 50 million Germans will inevitably become infected and 1 million will die, which at this point is a mere hypothesis. Some Russian outlets such as Nezavisimaya Gazeta engage in despicable speculation on the circumstances of the suicide of a German state minister with headlines such as “The German Hysteria”.  Again, here, it is the Russian domestic audience that may have been the primary target, though the Russian-language audiences in Europe have been also been affected.

While most Kremlin-controlled media outlets have advanced the narrative of the German panic, Alexander Rahr, the darling of the Russian propaganda and an expert on all possible issues, offered an extensive commentary: “ It is improper to say that one does not feel the panic here.”

4. Refugees and Quarantine.

Russian disinformation outlets have been pushing a narrative that refugees in Europe violate quarantine.  Komsomolskaya Pravda has hired an AfD activist  Eugen Schmidt who has churned out several reports supporting this theme. Such narratives target Russian audiences with anti-migrant and racists views.

An anti-migrant publication germania.one is also advancing a similar line. On the other hand, Sputnik DE is vocal in its criticism of the failure of the German government to sustain safety and enforce quarantine measures inside refugee camps and asylum-seekers’ housing.

What are some of the preliminary conclusions and observations that could be made from the review of the fake, half-truth and misleading materials?

It is clear that the Kremlin-controlled outlets seek to sow uncertainty, fear of the future and distrust among the German population toward its government. At the same time, materials aired and published frequently contradict each other.  RT Deutschland, for example, is criticizing the German government for harsh restrictions, while Sputnik DE is criticizing it for lack of preparedness and inability to enforce quarantine. However, this is precisely the mechanism used by the Kremlin to execute its strategy of sowing uncertainty and even panic. Once the environment is right, it aims to push for the removal of sanctions under the pretext of helping the German economy recover. To shift attention away from its own fake news, RT Deutschland is claiming  that prominent Western outlets such as Tagesspiegel , FAZ, AFP  и DW  are spreading fake news against RT Deutschland.

Despite all of these efforts by the Kremlin-controlled media, the rating of the ruling coalition continues to grow, and the majority of Germans approve of measures taken by state and federal governments. According to a recent poll conducted by ARD-Deutschlandtrend (02.04.2020), 72% are satisfied with the crisis management measures adopted by the government in response to coronavirus pandemic. Likewise, the support is strong for the overall performance of the ruling coalition of parties (government): 63% are satisfied with its work (which is a 28% from a similar poll 02.03.2020)

Politics in the Regions: The Reasons for Decline and Paths to Rebirth

At the present time, the political life of Russia’s regions is all but destroyed. There are no organizational or financial resources for it and such a state of affairs is the result of a deliberate strategy to destroy democracy in Russia which has been implemented throughout the last 20 years.

Despite the fact that various regions of Russia have their own nuances and special features, on the whole, the situation is the same everywhere: the head of the region and the heads of the major municipalities are approved, and de facto appointed by the presidential administration, and all the rest of the regional leadership is appointed and approved by the governor. Those who disagree with this state of affairs are forced out of official politics.

On the whole, it should be acknowledged that after the presidential elections of 2018, political life in the regions was completely sterilized; so in that sense, there is only a point in discussing the reasons which led to this state of affairs and to think about the prospects for Russia to get back on track to democracy and federalism. Obviously, without radical changes in the leadership of Russia, the situation will not change, and as long as the laws, and most importantly, the president of Russia remains unchanged, any sort of revival of regional politics cannot be expected.

Democracy and Federalism in Russia

Democracy and federalism in Russia turned out to be powerless before the onslaught of autocracy in the early 2000s, because they had no real support either in the government itself or among citizens – and such a state of affairs had been programmed by the creators of the political system of Yeltsin’s Russia.

Even those government agencies which were formed directly by citizens had no real autonomy from the higher levels of government, primarily at the federal level, because the president was able to rid himself of inconvenient regional leaders and the regional leaders were able to oppress the municipalities. Naturally, in such circumstances the level of citizens’ trust in municipal and regional government was rather low, so the Kremlin was not afraid that some mayor or governor would be bold enough to argue with it, that they relied on the real support of the people, rather than on fixed elections. The local elites wasted so much effort on fighting among themselves that they were gladly ready to agree to the federal center’s terms, just to get rid of their rivals. In the end, a tactical alliance with the federal center became a trap; once they fell into it, local elites lost their political agency. This is what Putin exploited when he set about sterilizing regional politics completely.

The current state of affairs and its incorporation into the renewed text of the Russian constitution is the result of a constant and consistent attack on democracy and federalism. This has been under way for the entire 20 years of Putin’s rule, but as has been noted, it began much earlier. Essentially, the system created by Yeltsin in 1993-1996 had to guarantee the president that even if he had a minority in parliament and his personal rating was low, and if members of the opposition come to power in a number of regions and major cities, he could still remain in power and successfully block all the efforts of his critics.

Precisely within the framework of this concept, the prospects for local and regional self-government were in fact destroyed. Since all real powers were concentrated in the president, and all the other branches of government (parliament, the courts, the regions, and local self-government) were intentionally weakened, the deliberate course of the new President Putin enabled him to destroy both federalism and democracy in several years, without encountering any real resistance.

The Attack on Self-Government

Thus, as has already been said, the constitution of 1993 was written not so much to create a firm foundation for democracy and federalism in Russia, but rather to serve the interests of Russian President Boris Yeltsin. Its authors were motivated by fear of a communist revanche, which they expected “from below.”

Obviously, local elites fully shared that fear of Yeltsin’s entourage, or rather exploited it for solving their own tactical problems. The presence in Russia in the 1990s of the so-called “red belt,” that is, the regions where the Communist Party of the Russian Federation (CPRF) traditionally garnered many votes, forced the Yeltsin team to search for any allies for themselves who were prepared not to allow a victory of the CPRF and in exchange for that, forgive them any abuses.

Thus, emerged the phenomenon of “electoral reservoirs,” that is, regions guaranteed to show a high turn-out at all elections with high indicators for the party of power and its candidates. Essentially, a number of local leaders simply changed their loyalty for financial bonuses and impunity. This is exactly what defined the nature of interrelations between the federal center and the regions. Therefore, when Putin took the line of restricting the real powers of local bodies of government, the elites of the regions were already rather isolated from the citizens and did not have high authority among them which would have enabled them to rely on the support of voters in opposition to the Kremlin’s policy – if they even had such a wish at all.

Nevertheless, under Yeltsin, political life in the regions was preserved – among other reasons because the Kremlin played on the contradictions of the local elites, in each case wishing to find a counterweight to an ambitious governor through the head of a regional center or in some other way. Taking into account that Yeltsin’s ratings were extremely low all through the second half of the 1990s, the Kremlin was forced to reconcile itself to a certain level of political freedom in the regions, in the wealthiest of which quite interesting political systems had been formed and operated relatively successfully. For example, in Sverdlovsk Region there was a bicameral regional parliament where the upper house was elected every two years through elections in the districts, and the lower house by party lists; in fact the main fight was usually among the regional parties, whereas the federal party did not have significant influence. But all of this was possible because Sverdlovsk Region was relatively wealthy, which enabled numerous regional industrial groups to exist, which were interested in political representation among other things.

This is why we must not forget that Alexei Kudrin’s tax reform finally put to death the prospects for political life in the regions, the result of which led to the total financial dependency of the regions on the center and made struggling for power in their regions pointless; if the center distributes cash and everything comes from the center, then it is quite logical that a person appointed from the center is at the head of the region.

The local elites accepted the rules of the game and instead of resistance to the changing viceroys, tried to cooperate with each new governor because any other strategy is fraught with serious problems and losses.

Local Elites

We cannot overlook the quality of the local elites as well; in the absolute majority of cases, already by the mid-1990s, power in the regions had wound up in the hands of the Soviet nomenklatura. On the one hand, it preferred the administrative-command methods of leadership and leaned toward the necessity of taking part in honest and competitive elections, but that is why it was prepared to obtain powers from the leadership and not the public. On the other hand, it turned out to be involved in corrupt schemes which enabled the federal government to control any local leader by the kompromat [compromising material] compiled on him. In many cases, it was these people who kept power in their hands all through the 1990s and 2000s, until the Putin administration gradually, but methodically, got rid of them.

The situation in Sverdlovsk Region was illustrative, where Arkady Chernetsky, mayor of the regional center, remained in his post from 1992-2010, but Eduard Rossel, governor of Sverdlovsk Region, had in one way or another headed the region from 1991-2009 (with a break from 1993-1995). Both of them came out of the Soviet nomenklatura, and despite the undoubted political talents and readiness for participation in competitive politics, both were drawn to authoritarian methods and were not ashamed of using manipulative techniques in the elections.

All the years they were in their posts, these politicians and their teams waged an unceasing war, but in the end both of them gave up their power, not by losing elections, but by subordinating themselves to order. Now both of these rivals represent Sverdlovsk Region in the Federation Council without any real weight in regional politics.

It is noteworthy that even after the departure of Chernetsky from the post of head of Ekaterinburg, his team resisted pressure from the regional government for several years, which created a certain space of political struggle and even enabled the non-system politician Evgeny Royzman to win the elections to head of Ekaterinburg (by that time, this position had already become symbolic). But this resistance had purely economic reasons and in no way presupposed criticism of the federal government and its policy. On the eve of the 2018 presidential elections, the city team finally capitulated, and with that, politics in the region ended. In May 2018, Evgeny Royzman was forced to give up his powers as head of Ekaterinburg prematurely, and the city charter no longer stipulated new direct elections. Despite the specific nature of the situation in Ekaterinburg and Sverdlovsk Region, in the end even there, the Kremlin achieved its aims – as in all other regions of Russia, rich and poor, national republics and ordinary regions and territories.

What Is to Be Done?

What can and should be done, so that democracy is returned to Russia and cannot be so simply overthrown? As was said at the very outset, without changes at the federal level, we should not expect a flourishing of politics in the regions. But it is important not to repeat the mistakes of the past and not create the prerequisites so that democracy and federalism in Russia could be overthrown some time again.

First, it is necessary to have the constitutional transfer of the maximum number of political, legal, and financial powers to the level of local self-government. Even the regional level of government must be not be as influential as the municipalities. Essentially, the regional administrations must be involved only in the creation and maintenance of the general infrastructure and coordination of the efforts of local communities. It is much harder to take control of thousands of municipalities with great powers, elected by direct elections, than several dozen regional governments. This is exactly why the municipalities must become the foundation of democracy and the guarantor of the separation of powers in Russia, or otherwise everything will rapidly return to the current state of affairs.

Secondly, the restrictions on the creation of regional parties must be removed. Taking into account the dimensions of Russia, it is more logical to prohibit federal parties as such, motivating regional parties to form blocs at the federal level around common program lines and interests. Federal politics must be made in the regions and municipalities and not the opposite.

Third, the incorporation of a parliamentary system of governance at all levels of government – from the federal to the municipal – seems correct, that is, in both the regions and in the major cities, executive power must be in the hands of the head of government elected by the parliament. This will enable the destruction of the prerequisites for a revanche of Putinism several years after the departure of Vladimir Putin from politics, because it will destroy even the theoretical possibility of subordinating one level of government to another through personal agreements or blackmail. On the whole, all of Russia’s history teaches us that any opportunity to concentrate power in the hands of one person rather quickly leads to authoritarianism and a lack of change in government – and not only at the level of the head of state.

Fourth, any attempts to return Russia to the path of democracy and federalism are unthinkable without lustration not only at the federal but also at the regional and even municipal level. The main reason why the democratic endeavors of the 1990s were so easily overthrown was the fact that in the early 1990s, real power in Russia was left in the hands of descendants of the Soviet nomenklatura. Taking into account by whom and how the regional and municipal bodies of governments were formed in recent years, keeping these people in politics will inevitably lead to a revanche in a very short time. There are quite enough new people for politics at all levels in Russia, but for them to get involved and not lose at the very first elections to the re-painted Putin nomenklatura, the latter must be lawfully excluded from the process. Otherwise, everything will come full circle in this new, reimagined future.

Translated by Catherine A. Fitzpatrick

American Private Sector Rallies to Fight COVID-19

As the number of cases of COVID-19, also known informally as coronavirus, grows in the United States, local, state and federal government officials are scrambling to contain the spread of the disease and “flatten the curve,” an expression that roughly means to reduce the outbreak of COVID-19 cases to a more manageable rate.

While millions of Americans have been ordered to stay home, employees deemed “essential” such as grocery store clerks plow on; tired but perseverant. Unemployment claims have skyrocketed in the last few weeks, shattering records from previous economic downturns, and many industries have been shuttered due to the need for social distancing.

With all the dispiriting news, an underreported story has been how private industry has geared up to manufacture and distribute essential products to fight the spread of the virus. Working often in cooperation with federal and state agencies, many companies have put the American people ahead of their own profit margin and pitched in as they had during other times of national emergency.

According to Fox News, tech giant Apple is donating 10 million masks to American health care workers. The Dallas Morning News reports that Neiman Marcus, a department store chain, and Joann, the craft store chain, is also diverting resources to sew health care workers’ gowns, masks, and scrubs. Forbes reports Major League Baseball has partnered with Fanatics, the company that makes the jerseys the players wear, to do the same with the baseball season currently on hold. According to the Wall Street Journal, Governor Charlie Baker of Massachusetts managed to enlist the help of the New England Patriots’ team plane in securing millions of masks to be shipped from China. Brooks Brothers is also producing masks and gowns in their factories, and Crocs is donating shoes to healthcare workers.

Private sector firms are contributing more than just supplies and raw materials, though. According to Forbes, a biotech firm based out of Massachusetts called Moderna has managed to launch clinical trials for a possible COVID-19 vaccine. Forbes goes on to report that antiviral treatments are being tested by Gilead Sciences while the Food and Drug Administration has approved recently developed testing methods. American automobile companies are also manufacturing ventilators to assist COVID-19 treatment. While the work of health care professionals is far from done, steps are being made to contain the disease.

President Trump openly speculated about a possible reopening of businesses on Easter Sunday (April 12th), but with cases of COVID-19 continuing to spread at an alarming rate, the president has since backtracked and called for social distancing protocols to extend at least until April 30, with the Surgeon General speculating that those guidelines could be extended further. Many states have ordered residents to stay at home, with the only exceptions being to buy essential items and to exercise.

While the fight to contain COVID-19 is far from over in the United States, Europe, and Asia, it is heartening to know that significant resources in both the public and private sector are being mobilized to provide reinforcements to the exhausted medical professionals on the front lines of this pandemic. There will be lessons to learn after COVID-19 is contained and eventually cured, and it will be prudent for both public and private sectors to proactively prepare for the possibility of another disease with similar effects. There’s even the possibility of COVID-19 returning as the weather cools down in autumn and winter, a threat that must be taken seriously. Today, both private and public sectors are making significant sacrifices, and that should be a sign that people can use this shared experience toward greater unity and cooperation.

does the drop in oil prices threaten Putin’s regime?

The ongoing decline in global oil prices is very bad news for Putin’s regime which depends on oil and gas revenues for about 40% of its federal budget.

This “black swan” comes in a flock— it coincides with the global coronavirus pandemic, the introduction of new US sanctions targeting the Russian energy sector; and on the domestic front, exacerbated by an extremely unpopular move by Putin to rewrite the Constitution with the sole goal of remaining in power for life.

We put together a matrix with scenarios for Russia under various energy market assumptions. Below, we have put together a matrix with scenarios for Russia and various energy market assumptions.

This is an excerpt from a Free Russia Foundation study Russian Scenarios 2030, that also includes chapters on:

· Elites’ Cohesion and Coup D’état
· Military Confrontation
· Russia as a Proxy Superpower of China
· Decentralization
· Local Military Conflicts
· Two Positive Scenarios
· The Sanctions Scenario
· State Crony Capitalism
· Russia and China in 2030
· De-escalation
· Succession after Putin’s Unexpected Death

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Russia vs Oil

In early March 2020, OPEC has failed to reach a deal with Russia who refused to reduce its oil production in response to the plummeting demand due to the global coronavirus epidemic. “We are confident that Russia will resume its cooperation,” said OPEC’s Secretary General Mohammed Barkindo to a Russian news agency Interfax. According to the latest forecast by the International Energy Agency, 2020 will see a significant drop in global demand for oil, for the first time since 2009.

During the March 6, 2020 negotiations, OPEC members proposed to not only extend the current quota on oil productions through the end of the year, but also suggested to further reduce daily outputs by 1.5 mln barrels. Russia, however, was willing to extend the current quotes only through the end of the second quarter of 2020, and refused to further reduce production (a measure that is seen by OPEC as necessary for sustaining the current level of global oil process).

OPEC+ has sought to stabilize global oil prices since 2017. The OPEC failure to reach a deal means that, starting with April 1, 2020, there will be no limitations on oil production. Following Russia’s rejection of a new deal limiting oil production, Saudi Arabia announced its intention to increase output in April. The reaction of global markets to the prospect of a new energy price war was instantaneous: within a few seconds from the morning opening on March 9, 2020, Brent oil prices fell 30%, its biggest drop since 1991. Russian national currency – ruble – was immediately affected – its exchange with euro exceeded the 86 to 1, and with the US dollar – 75 to 1 rate.

“At this point there are no factors that would limit the drop in oil prices. Under an optimistic scenario, they may stabilize at $30 per barrel, after which the markets may start recovery,” believes Nikolai Ivanov from the Energy and Finance Institute (Moscow, Russia). However, according to a recent Goldman Sachs projection cited by the CNN, due to perturbations on the global oil market the price can go down as low as $20 per barrel.

The deficit in the Russian federal budget that would result from the drop in oil prices can be compensated by the National Wealth Fund, announced the Russian Ministry of Finance statement on its website (as quoted by a Russian news agency RIA News). The Ministry projects that even under a pessimistic scenario with prices at $25 per barrel, the Fund will last for six years.

In his statement to a Russian news agency TASS, Energy Minister Aleksandr Novak said that the prospect of oil production increase in April will be determined by ROSNEFT’s plans. Following the failure to reach a deal with OPEC, Russian State Corporation ROSNEFT (currently under sanctions by the US and EU) began planning to increase its oil output, according to Bloomberg reports citing insider sources.

“I doubt that Russian officials, who are now in the midst of a constitutional reform and government restructuring, meant to intentionally harm the Russian economy and weaken the national currency,” says Nikolai Ivanov. Ivanov believes that Russia was forced to break off its negotiations with OPEC. “On the one hand what happened was a manifestation of domestic political intrigues in Saudi Arabia; on the other hand, one can detect the U.S. influence,” said the expert. “The US Secretary of Energy Mike Pompeo flew to Riyadh, Saudi Arabia right before the OPEC break down. The young and very capable Crown Prince bin Salman had just averted a coup in his country and arrested several key government figures. He had conducted an IPO round for Saudi Aramco and no longer had any motivation to sustain oil prices.” For Russia, on the other hand, new production quotas would mean a reduction of half a million of barrels per day. “Unlike Saudi Arabia, Russia, due to its geological characteristics cannot quickly reduce the production of oil and then ramp back up,” believes Nikolai Ivanov. “For Russia, with its high share of “old” oil deposits, which actually already require intensification of extraction rates, it is impossible to increase production after a forced decrease.”

“This decision could have only been made by Vladimir Putin personally,” asserts Mikhail Korchemkin, Director of the East European Gas Analysis consultancy. He recalls Gazprom’s unfortunate experience from the 2009 crisis. As gas prices in Europe plummeted, the Russian President decided to keep the contract prices high despite a shrinking market share. “I would imagine, today, Putin is applying this past experience to the oil market. In 2009, he learned that a reduction in exports leads to a loss,” suggests Korchemkin. “However, shortly thereafter Gazprom came to its senses, lowered prices, increased its market share,” recalls Korchemkin. Aleksandr Baunov from the Moscow Carnegie Center agrees with this assessment. Baunov believes that a shrinking market and its restructuring are the two major factors. “The rest is just an afterthought: the prices first started dropping, and then the government recalled that it was bad for the shale industry,” he suggested. Korchemkin also notes that the US shale oil production has lived through two major price shocks of 2009 and 2015, each deeper than the current one so far.

“Russian leadership still does not understand the US shale mining industry,” – says Ivanov. The expert is confident that this sector cannot be shut down by external shakeups. “Production volume can be varied. Profits are realized even under modest volumes of extraction,” he explains. According to Ivanov, the US may even decide to increase output despite lower global prices as certain costs can go down through such periods. “The United States has such a diversity of producers – at the major, medium and smaller size levels. They can diversify their investments. The advantage of shale production is that it’s very dynamic, and one can adjust approach to oil extraction based on demands of the market,” concludes the expert.

According to Robert Tummel, a portfolio manager at Tortoise Capital Advisors, currently the impact of coronavirus on global oil demand is uncertain. Estimates for 2020 for global oil demand reduction range from 600,000 to 1.3 mln barrels per a day. “Global oil supply could increase by 500,000 to 1 mln barrels per a day, based on how much Saudi Arabia increases production. And that will result in an oversupply on global oil market between 1.1 and 2.3 mln barrels per a day,” predicts Tummel. According to his estimates, the market is going to oversupplied by 1% to 2%. “We think that the US oil producers are most likely to accelerate the capital discipline, and they’d already began doing one to two years ago. The US production is likely decline if low oil prices persist,” says Robert Tummel.

Examining Russia’s constitutional reforms: An interview with Prof. Ben Noble

On January 15, Vladimir Putin surprised domestic and international audiences by announcing plans for significant reforms to the Russian constitution. Rather than settling the debate over Russia’s political development after 2024, the proposed reforms fueled widespread speculation.We asked Dr. Ben Noble, lecturer in Russian Politics at University College London’s School of Slavonic and East European Studies, about what the reforms might mean for Russia’s future.

You and Samuel Greene have suggested that the lack of a clear road map for succession provided by the proposed constitutional reforms is part of Putin’s plan to keep himself from becoming a lame duck. Is uncertainty a byproduct of the Kremlin’s strategy or is it, in fact, a crucial part of the Kremlin’s strategy?

Sowing confusion and uncertainty is definitely not the singular strategy. Putin is creating options for what he might do in 2024, while not explicitly stating that these are the possible pathways going forward. He is also trying to stay uncommitted to any one pathway. Uncertainty remains while options are kept open.

Is this a strategy that the Kremlin has chosen willingly or has it adopted this strategy out of necessity? A new Carnegie Moscow/Levada report shows that while 59% of Russian surveyed want “decisive comprehensive change”, 39% cannot name a single politician with a road map for change. It seems as though while public approval of the government and Putin is falling, the political system has prevented the emergence of credible alternatives to Putin. What consequences does this dynamic have for Russia’s political future? 

Has the Kremlin adopted this strategy out of necessity? Yes. It can’t do otherwise. If Putin were to say that he was going to step down from the presidency in 2024, he would become a lame duck. In that case, we would have a really unstable and possibly uncontrollable situation with strategic uncertainty among elites becoming an existential problem for Putin. There could be a scramble to find a successor and to take over the offices of government in a way that does not fit Putin’s particular managerial style – and could put his own security at risk. In that sense, the Kremlin does not have complete control of the situation and has been backed into the place it now finds itself.

Doesn’t the current absence of a clear successor mean that Putin is in a weak position? Isn’t he risking sparking elite infighting that might fracture the system?

There has always been intra-elite conflict. It is almost the modus operandi of Putin’s system, which allows for rudimentary checks and balances to work while Putin remains on top. And I’m not saying that Putin is never going to make clear what will happen next. If, for argument’s sake, he decided to remain president after 2024, the election would have to be called and there would be lead-in time for everyone to prepare. A more likely scenario is that Putin heads up a beefed-up State Council. Elites will gain more certainty when the federal constitutional law specifying the form and function of the State Council is created. At that point, elites might begin to maneuver in a way that is more disciplined. But the Kremlin will make sure to release information about the transition on its terms, which means that it will continue to control the level of uncertainty.

So, you’re not buying into the rumors that they will bring up the timing of the Duma and presidential elections within the next year and a half to establish a successor?

It’s always possible, but it would be incredibly difficult. Let’s take the State Duma elections. The date of the 2016 elections was moved up from December to September. What’s forgotten is that, when these changes were made, Federation Council senators raised this as an issue in the Constitutional Court. And the Court said that moving the date of the elections is not unconstitutional as long as it’s moved by a small amount of time and that these types of changes are not going to happen all the time. In other words, it’s an exceptional situation. If the Kremlin wanted to move the Duma election up to September 2020, that would be deeply problematic in so far as it goes against what the Constitutional Court has already said. Of course, the Kremlin could come up with a way to make sure that the Constitutional Court didn’t get in the way. And that could be one of the reasons for the inclusion of the increased powers of the President for getting rid of Constitutional Court judges included in Putin’s constitutional reform bill. In other words, this might be one way to put pressure on the judiciary, possibly with a view to a situation where the Kremlin would like to move the timing of the parliamentary elections. That’s a point that Nikolai Petrov has made a couple of times: he thinks that the references to the president being able to get rid of Constitutional Court judges might not remain in the bill in its second reading because it’s just being used as a way to exert pressure on the judicial branch while the constitutional reforms are being considered.

Debates raged just a few months ago about whether the Kremlin would get rid of party list proportional representation (PR) in favor of single-member districts (SMD) for elections to the State Duma in order to help United Russia secure a majority. But that doesn’t seem like a compatible strategy with any plan to move up the elections because it would mean those changes need to be made even faster.

In classic Kremlin style, they are thinking of multiple options simultaneously. So it’s perfectly normal for us to hear rumors about elections moving up at the same time as news about United Russia using regional and city dumas as test cases to see what would happen if they got rid of the party list entirely or altered the split in the number of seats filled through party list PR and SMD races. This has been discussed recently regarding the Novosibirsk and Lipetsk city dumas, where United Russia is trying to convince systemic opposition deputies to vote for these changes. Understandably, systemic opposition deputies are hesitant to adopt a system that would give United Russia even more seats. At the moment, the Kremlin is stepping back and thinking of multiple options. They are waiting to see how United Russia does on the 13th of September in regional elections in order to help prepare for federal-level elections.

Is there an outside chance that these constitutional reforms will be treated as a term limit reset and Putin will stay on as president by arguing that the old term limits no longer apply to him?

I’m going to be quite bullish in saying that that’s not going to happen. Pavel Krasheninnikov, in his capacity as the co-chair of the constitutional working group and chairman of the lead committee dealing with Putin’s bill in the State Duma, was asked if a reset was possible and he said that this was not being considered. In so far as Yaroslav Nilov, an LDPR deputy and protégé of Vladimir Zhirinovsky, was allowed to ask this question publicly of Krasheninnikov during the reform bill’s first reading on the State Duma floor, and Krasheninnikov was able to provide a firm answer, I think we can be confident that the message has gone out from the Kremlin that a constitutional term limit reset for the presidency will not happen.

It seemed, when they were first announced by Putin, that the reforms could reshape the political system by significantly weakening the office of the president, which was taken as a positive sign for Russia’s political future. But when the written draft came out, it became clear that the reforms would have much less impact on the existing balance of power. What do the reforms really mean for Russia’s super-presidential system?

On balance, the reforms create a stronger presidency. Granted, the presidency will be limited to two terms. But these are six-year terms, so the next president could be in power for twelve years. By focusing on eliminating a possible third or fourth term for the president, we can lose perspective about how long twelve years is, especially given the potential new powers granted to the president with regard to judges. This is not something that is being commented on much because the conventional wisdom is that all judges in Russia are coopted anyway. Telephone justice means that the Kremlin can make its preferences known whenever it wants in key cases. But these new changes would have a chilling effect on the behavior of Constitutional Court judges as well as judges on the Supreme Court, appellate courts, and cassation courts. The fact that we haven’t seen a huge outcry from the judicial community about this makes me think that these changes simply formalize the existing state of affairs.

But I also think that we shouldn’t be too hard on ourselves for our initial optimism following Putin’s speech. Putin said that these would be “drastic changes” that would empower a responsible State Duma and prime minister. We were right to read significance into those words because they are words that Putin doesn’t usually say.

Vladimir Putin in Moscow, 01.18.2014 г. Photo: Pavlo Bednyakov/UNIAN

Putin even had an off-the-cuff moment with the audience where he said that they needed to prepare for all the new responsibility that they would get along with their new powers.

Exactly. Part of it could have been strategic to make sure that the announcement made a big splash. He talked about drastic changes that will deliver a real transfer of power across the branches of government. But then the bill is far less drastic. We are right to feel like hopes were dashed.

It’s also important to note that many of the changes that have been proposed seem to be created for a possible future where we don’t see unity of purpose across the executive and the legislature – that is, when the ‘party of power’ does not have a majority in the State Duma. Take, for example, the proposed “super veto”, where the president will be able to send bills to the Constitutional Court to assess their constitutionality after the president’s initial veto on a bill has been overridden by the State Duma and the Federation Council. This seems to be a mechanism designed to future-proof the constitution to the benefit of the presidency in a situation where the legislature is not controlled by the executive. It’s difficult for us to picture the world that the drafter or drafters of the reforms might be imagining. But this goes back to my previous point that the Kremlin is creating multiple pathways allowing for executive maneuverability in different scenarios.

In a similar vein, Tatiana Stanovaya made a convincing argument that the proposed changes build dispute-resolution mechanisms into the system in order to deal with a possible scenario where the president and legislature or prime minister disagree.

Her broader point about Putin already knowing his successor is a refreshingly clear answer to the question everyone is interested in, but I think no one is really in a position to make that claim with confidence right now. With regard to dispute-resolution mechanisms, lots of disputes are resolved now in the absence of an institutional framework. But I do agree that these reforms are a way of giving the system flexibility in the future in case there is a disagreement across branches of government.

The proposed constitutional changes have so far failed to spark meaningful opposition. Navalny has come out against efforts to defend the constitution and other oppositionists have also largely demurred from staging protests against the reforms. Why is this?

The clearest answer is that Putin promised lots of things that the opposition cannot come out against, like indexing pensions, ensuring the minimum wage remains above subsistence level, increased maternity capital funding, and free hot meals for primary school children. The proposals in the bulk of the speech are things that the majority of Russians would like. That means it’s difficult for the opposition to come out and focus on technical details related to changes to the constitution. The Kremlin played it well to combine all of this together and rely on the knowledge that political reforms are of secondary importance to most people who are primarily interested in their living standards.

So, it seems as though there’s not a natural base of support for protest against the reforms among the public. But it is striking that the opposition is not even trying to organize something. Navalny wasn’t passive on the issue, he came out strongly against any initiative to organize protest. Does he see protests against the constitutional reforms as a losing bet?

I think so. It could also be that they are keeping their powder dry and waiting for a moment when Putin does have to make clear what he will do next. And at that stage, the opposition might use as a framing device something that has been successful in the past: the idea that Putin remaining at the head of the country will prevent much-needed change in Russia. At the moment, that is a difficult message to sell with all the other positive changes announced and without a crystal-clear answer from Putin about what he will do in 2024.

Police at banned massive anti-corruption rally in Moscow. 03.16.2017. Photo: UNIAN

When he was appointed, Mikhail Mishustin was described as a capable technocrat based on his almost ten years of service as the head of the Federal Tax Service. But this week, we’ve gotten a better picture of Mishustin’s background, including his long-established connections to many regime insiders and his savvy ability to navigate political networks. Is he a placeholder PM or could he be a potential successor?

We could debate until the cows come home whether he is a possible successor. He certainly is one of a group of people who could be a successor but this line of thought leads to a guessing game. And that’s not very helpful at the moment.

What is going to be interesting is to see how Mishustin’s cabinet operates in practice. One of the first messages out was that Mishustin is the first prime minister to put his own team together: a younger team forming a homogenous cabinet that has relatively similar policy preferences. But now it seems like something more subtle is going on. There is a system developing with checks and balances that suggests how conflicts might be resolved when they arise. And this is in line with what we learned from the Moscow Times article about Mishustin: he sets up systems and ensures that they run smoothly. For me, it’s going to be interesting to see how policy debates play out with this new team. Under Medvedev, we saw a number of policy conflicts rage for years. Under Mishustin, there may be less policy conflict. I should be able to analyze this possibility with my research on the Duma. If government legislation is passed quicker and with fewer amendments, that would suggest that Mishustin’s cabinet is more harmonious, given my broader argument that lots of what happens in the Duma is driven by intra-executive dynamics.

But there is also a huge question mark about how the relationship between Mishustin and Vyacheslav Volodin will develop. Volodin might not take kindly to Mishustin’s political star rising. I’m going to be looking at policy conflicts between ministries and how the government tries to manage its relationship with Volodin. Under Medvedev, Volodin got really close to openly attacking the prime minister. Volodin is a very ambitious person and criticizing the government allowed him to firm up his base of power and increase his reputation as an important political player. It will be interesting to see what Volodin’s language is like regarding Mishustin and government ministers.

Does this also depend on what role Mishustin decides to play? Medvedev was willing to take a lot of the blame for government inefficiencies and problems with United Russia. I think we don’t know yet if Mishustin is willing to play that kind of role.

I agree. We need to wait. We don’t yet know how Mishustin will handle relationships or how he will act now that he has to operate in the open. He now has new responsibilities in a new environment. At the Federal Tax Service, he could be the technocrat’s technocrat and be positively covered by the Financial Times. Now that he is in a much more public position that has traditionally been used as a whipping boy by the Kremlin and other political actors, it will be fascinating to see how he will react.

In your research on nondemocratic legislatures, you’ve argued against the theory that authoritarian parliaments exist to simply to formalize executive decisions, suggesting instead that nondemocratic legislatures can and do alter legislation. We’re seeing now that the list of constitutional reforms has ballooned to over 100 items and the length of the bill may increase by 50%. Are these additions the result of attempts at policy-making by legislators?  

The most important point to make here is that the Kremlin is not going to lose control of this bill. With other executive bills, there is sometimes a loss of control because the government is a collective actor. So loss of control just means, in practice, a new compromise – some people may be pissed off but some people might have gained something. Putin’s constitutional reform bill is not typical legislation. The Kremlin will maintain control of the working group and agenda setting.

Despite predictions that the text of the bill will increase by 50%, I don’t think we will see a huge conceptual shift from what was included in the bill submitted by Putin. Part of that is technical in that bills aren’t allowed to change conceptually between first and second reading. A more important reason is that if the bill changed radically, Putin would appear weak because his initial suggestions were not authoritative.

I suspect that a lot of these new proposals are being made to score political points. Just Russia is proposing to enshrine the pre-reform pension ages of 55 and 60 for women and men in the constitution. That’s not going to be included. Orthodoxy as a state religion – that’s going nowhere. But we will get much clearer language about the role of the State Duma and how it is involved in appointing and dismissing members of the executive. It makes sense to spell this out more clearly because it was unclear in the original reform bill.

There are additions to Putin’s original reforms that have gained consensus in the working group in the form of changes to the constitution’s preamble. They relate to Russia’s unique cultural heritage, support for fighting efforts to falsify history about Russia’s victor status in the Great Patriotic War, and a reference to Russia’s mature civil society. Andrey Klishas, a co-chair of the constitutional working group, also wanted to add something recognizing family values and saying that a family is formed by a man and a woman. But this seems not to have gained traction.

I also think that the avalanche of amendments will be cited as the reason for delaying the second reading of the bill in the State Duma to late February or early March. However, I think that the actual reason for the delay is the logistical problems that have emerged from trying to include a nation-wide vote in the process. Vague answers by Volodin and Putin to media inquiries about how the vote will happen suggest that there’s not a strategy yet for this.

What is the problem with holding a nation-wide vote? We know from the Crimea example, that the Kremlin can stage a referendum pretty quickly.

The reality of organizing a nation-wide vote and fitting it into the existing timetable and legal process is a headache. There’s a big timing issue for one. In the procedure outlined for passing a law introducing amendments to the constitution, there is no mention of a nation-wide vote. Instead, there is a requirement that at least two thirds of regional assemblies need to approve the initiative before it comes into force, in addition to other requirements. So, Putin can sign the bill and then wait for the assemblies to approve but how do you integrate a nation-wide vote into that procedure?

To be clear: there is no technical need for a nation-wide referendum or vote? The Kremlin has committed itself to a vote as a way to gain legitimacy for the constitutional reforms?

Insofar as the proposed reforms do not relate to chapters 1, 2, and 9 of the constitution, a referendum is not required. A nation-wide vote was proposed, I suspect, for the veneer of legitimacy that the Kremlin thought it would provide. Of course, the Kremlin could engineer a vote result by using administrative resources. But right now, the Kremlin is doing its best to try and make this whole process seem legitimate and democratic.

“Recruitment or Elimination: The Kremlin’s Dark History of Dealing with Ethnic Russians Beyond Russia’s Borders”

On May 5, 2018, New York became a parade ground for two diasporas commemorating a distinct source of ethnic pride. Cinco de Mayo commanded the larger following that day, if only because of the kitsch bacchanalia every bar and restaurant in the five boroughs makes of a holiday meant to mark the Mexican army’s defeat of French empire. But the smaller gathering was distinguished by an unusual spectacle: an aircraft emblazoned with an enormous orange-and-black ribbon overflying the Statue of Liberty. Down below, some two thousand Russian-Americans, some in World War II-era uniforms, solemnly marched downtown along the Hudson, many of them carrying photos of relatives who’d fought Nazism decades earlier. It was four days before Victory Day, the official Russian state holiday celebrating the Soviet Union’s triumph over Hitler.

The marchers in Manhattan were doing their part early to honor the Immortal Regiment, the name bestowed by Vladimir Putin’s Presidential Administration in 2012 on deceased Russian veterans who are said to live forever so long as their heirs remember them. Yet this mass act of necromantic remembrance had an unmistakable political overtone.

The Immortal Regiment parade was organized by a pro-Kremlin youth group ensconced in St. Nicholas Church, the headquarters of Russian Orthodoxy in New York. Ever since Putin’s annexation of Crimea in 2014, the orange-and-black Ribbon of St. George that buzzed Lady Liberty has become an omnipresent symbol of revanchist and nationalist Russian sentiment.

For the Kremlin, this civic gathering, similar versions of which were held across the United States, from Philadelphia to San Francisco, “represented a significant projection of power to America,” according to Andrei Soldatov and Irina Borogan, authors of The Compatriots: The Brutal and Chaotic History of Russia’s Exiles, Émigrés, and Agents Abroad.  It also represented a little-noticed high point for one of  Putin’s long-held foreign policies, one that is really an extension of domestic policy: the de facto enlistment of all ethnic Russians, wherever they are born or reside, as citizens of the Russian Federation, whether they like it or not. “Russia’s ‘compatriots’ policy reflects Putin’s past as a KGB intelligence officer,”  Soldatov, a Moscow-based expert on the Russian security services, explained to me, citing a KGB manual on this very subject published by The Daily Beast in 2018. “He was trained to see every ethnic Russian living either inside or outside the Soviet Union as one of two things: an asset to be recruited or a threat to be eliminated.”

There are plenty of tales of eliminations — or attempted eliminations — in Soldatov’s book. The Compatriots opens with a reconstruction of the poisoning of my colleague Vladimir Kara-Murza, a Washington Post columnist and outspoken critic of Putin. Kara-Murza nearly died by poisoning not once, but twice, while traveling through Russia. The substance that nearly killed him has never been publicly identified. I say “publicly” because the U.S. government apparently has reached a conclusion as to the toxin used.  Soldatov and Borogan quote an unnamed FBI agent who, in December 2017, informed Kara-Murza that the Bureau was preparing to hand the chiefs of the three main Russian intelligence services a report suggesting “that there was an attempted murder of a Russian citizen on Russian territory for political reasons.”

The chiefs arrived in Washington, D.C. a month later, a year into Donald Trump’s presidency, to meet with their American counterparts. Soldatov and Borogan are skeptical the report was ever even brought up, much less passed along. The timing might not have been judged to be quite right, what with a new U.S. administration headed by a president whose avowed wish was to “get along” with Russia. But the timing could hardly have been better, either.

In February 2018, Sergei Skripal, a defector from the GRU, Russia’s military intelligence service, would be found unconscious, along with his daughter, on a park bench in Salisbury, England, both victims of a near-lethal poisoning by the Russian-made nerve agent Novichok. Two operatives from the GRU, the apparatus Skripal once served, would later be identified as the culprits and sanctioned by the European Union, as a host of Western democracies responded to this act of state terrorism by expelling more spies stationed in Russian embassies than at any point since the end of the Cold War.

So much for the eliminations. As to the “recruitments,” Soldatov and Borogan wisely follow the money, the messaging, and the ties to the Russian security services.

In July 2018, Soldatov drove up the driveway to a sprawling mansion in the Rublyovka suburb of Moscow. He was there to interview Alexander Lebedev, the former KGB officer turned oligarch and media magnate who had just returned from celebrating his wedding anniversary — in occupied Crimea.

Lebedev is a colorful figure, even by Russian oligarch standards. He was arrested, interrogated, and ultimately convicted by Russian authorities in 2011 after knocking out a fellow guest on a live television broadcast. Sentenced to 130 hours of community service, the billionaire ex-KGB man and bon vivant was exhibited on Russian state media sweeping the Moscow streets. It was a housebreaking, write Soldatov and Borogan; a signal from the top that ”you might be a former high-ranking KGB officer and an oligarch with newspapers from Moscow to London, but don’t forget you are totally at the mercy of the Kremlin.”

Yet for all this official turbulence, Lebedev hasn’t exactly gone rogue. He has routinely chastised Western governments for instituting sanctions on Russia for its invasion and destabilization of Ukraine. In conversation with Soldatov, he also dismissed the idea of a viable Russian opposition to Putin, of which Lebedev nonetheless considers himself a part, and derided Kara-Murza’s poisonings as an unproven conspiracy theory. Then he allowed this remark about how his various news holdings navigate an overweening Russian state: “Where it’s needed they criticize Russia, and where it’s needed, say, on Syria, we support the Russian position.”

Two of these holdings are in fact prominent British newspapers, The Evening Standard, a free daily now edited by the former Chancellor of the Exchequer George Osborne; and The Independent, a left-of-center tabloid with a notoriously eccentric comment section, particularly when it comes to the Middle East.

Lebedev and his socialite son and business partner, Evgeny, have lately come under scrutiny in the UK for two reasons. The first is their well-photographed coziness to British Prime Minister Boris Johnson, who attends parties hosted by the Lebedevs at home and abroad, including one lavish affair in London the day after his blow-out election victory last month. The second is the existence of a 50-page British intelligence dossier on Russian interference in the British political system, a report Downing Street has refused to de-classify, as Johnson waves off allegations that oligarchs such as Alexander Lebedev might be wielding undue influence over his government.

Closer to these shores, Soldatov and Borogan train their investigative attention on the American-born billionaire Boris Jordan, the scion of an exiled aristocratic dynasty responsible for financing and supporting the pro-czarist White Army during the Russian Civil War. Today, Jordan is gemutlich with the powers that be in Moscow and has done very well for himself in New York. He is currently the chairman of Curaleaf, the world’s largest legal marijuana seller, as well as the patron of the eponymous Jordan Center for the Advanced Study of Russia at New York University. In recent public appearances, he, too, has railed against sanctions on Russian officials and institutions over Ukraine.

Like a number of ethnic Russians born and raised in the West, Jordan moved to his ancestral home after the collapse of the Soviet Union to reap the benefits of a fledging democracy and market economy. He amassed a fortune through savvy investments and excellent contacts. Renaissance Capital, the investment bank Jordan cofounded, enlisted two Russian foreign intelligence officers for executive positions. One of them, Yuri Sagaidak, had been expelled from London in the late 1980s for attempting to recruit a member of the British parliament.

Jordan was later tapped by Putin as CEO of the popular NTV television channel upon its hostile takeover by the state. NTV’s crime was reporting honestly and critically on the Kremlin, and Jordan dutifully oversaw its transformation into a pro-government mouthpiece. One of the casualties of that transformation was Kara-Murza’s father, a veteran reporter who died earlier this year.

Although Jordan at one point fell out of favor with the Kremlin, he is back in its good graces now owing to his successful stateside facilitation of the reconciliation of the two churches of Russian Orthodoxy. The “White Church” was established by émigrés, such as Jordan’s father, who fled Lenin’s regime after the Bolshevik seizure of power in 1917. It came to represent more than a mere spiritual alternative to the grim totalitarianism constructed by the new rulers of the metropole, but also a way-station for the preservation of Russian culture, literature, and art.

The “Red Church,” meanwhile, emerged under communist rule in Moscow and gained in significance after Josef Stalin, himself a drop-out from the priesthood, realized how an ancient faith could be instrumentalized to advance a secular nationalism. The White Church had always been hostile to whoever was in charge back home, whereas the Red Church had consistently been little more than the black cowl of the Russian government. Indeed, after the collapse of the Soviet Union, the Church even counted more than a few former KGB officers in its ranks, including its current head, Patriarch Kirill.

“Jordan helped Putin achieve his most ambitious goal in dealing with the Russians abroad,” Soldatov told me. “He brought under Moscow’s control the Russian Orthodox Church in exile, the one seen by many as a symbol of the spiritual Russia uncorrupted by KGB control. He secured it by investing his money and his personal prestige as a Russian aristocrat.”

That investment, too, has paid off for Jordan, as those Immortal Regiment marches across America in 2018 demonstrated. As for the corruption of KGB control, that the wealthy American heir of a storied White Russian family would do the bidding of Russia’s first KGB-czar might be counted yet another satisfying realization of Putin’s compatriots policy.

“You don’t drag me into criticizing Putin!” Jordan told the authors of this timely and important new book.

Photo credit: UNIAN.

How the KGB Compensated for Perestroika

By Andrei Soldatov

In the third year of Perestroika, in 1988, the intelligence branch of the KGB was deep in a crisis – the headquarters in Yasenevo woods a few miles southwest of Moscow found the officers at KGB rezidenturas in Western countries increasingly reluctant to approach foreigners. They effectively turned off the aggressive recruiting mode the Soviet intelligence was once so famous.

In the United States, Soviet intelligence scored some spectacular successes in penetration, namely Aldrich Ames at CIA and Robert Hannssen at FBI, but the recruited Americans were the walk-ins – i.e. they themselves initiated the contact with Soviet spies, they were not approached by the Russians.

The Soviet Union was losing the Cold War and that certainly contributed to the confusion in KGB intelligence stations all over the world, but most importantly, the officers themselves didn’t want to risk their postings in the West. Being kicked out of a Western country if caught red-handed was not a particularly attractive idea at time when all kinds of shortages back home were already palpable.

Finally, the big shots at Yasenevo came up with a solution. It was a bold and witty idea, and the translated Analytical overview was part of it. Yasenevo suggested to exploit the natural advantages the KGB still enjoyed back home.

In addition to its espionage abroad, the KGB was always busy collecting “intelligence from the territory,” a euphemism for recruiting foreign nationals in the Soviet Union, with an eye to subsequently running them as agents in their home countries. This system worked because the Soviet Union, as a police state, had an opportunity to watch literally every foreign national in the country. Each regional KGB department had what was called a First Section in charge of recruiting foreigners.

This activity was coordinated by the Directorate RT (Razvedka s Territorii: intelligence from territory) of the First Chief Directorate in Yasenevo.

The problem was that no so many foreigners wanted to come the Soviet Union. Now that was changing, thanks to Gorbachev, who was busy opening up the country.

But the Soviet Union was still a totalitarian state, meaning that there was no media, a trade union, or a nascent private enterprise (not to mention a government agency) in position to say no to the KGB if approached and asked to plant a spy in the organization under disguise.

These spies planted by the KGB were known as DR officers, Destvuyushego Rezerva: of the active reserve. The term had a long history; it was used since the 1920s.

The KGB’s “Tradecraft in Intelligence Work from Cover Organizations on Soviet Territory,” an analytical overview presented here for the first time in both its original Russian and in English translation, suggested boosting the activities of the Directorate RT as a way to compensate the passivity of hibernated intelligence stations abroad.

Tradecraft in Intelligence Work on Soviet Territory from Cover Organizations (ENG)

Конспирация в разведывательной работе (RUS)

The beauty of the report was that it suggested combining two things, already at KGB disposal – the capabilities of planting KGB spies in almost any Soviet organization; and the activities of the Directorate RT in approaching foreigners now coming in big numbers to the Soviet Union.

The Directorate RT was thus encouraged to plant more spies in Soviet organizations with an eye to recruiting foreigners in the Soviet Union.

The report even suggested to send officers of the Directorate RT abroad to run its assets, and not to handle them to the intelligence stations in respective countries, probably acknowledging the reluctance of the intelligence stations to taking risks.

The Soviet regime was facing its collapse, but the KGB intelligence branch once again proved its resourcefulness and ability to adapt to changing circumstances.

Andrei Soldatov, The coathor of “The Compatriots: The Brutal and Chaotic History of Russia’s Exiles, Émigrés, and Agents Abroad”

Putin is Panicking

Vladimir Milov explains why Russian president started constitutional reforms well before 2024 elections.

On Wednesday, Vladimir Putin did a rather unusual thing. Three years before the formal end of his presidential term, without any obvious motivating circumstances (the situation in the country is complicated, but it is no worse and no better than in recent months), he simultaneously announced the unprecedented restructuring of the power mechanism, and the resignation of the Medvedev government, which, it would seem, has already received an informal status of an eternal supplement to Putin’s presidency. It is important to understand what really happened and why.

First, let’s talk about the announced constitutional changes and the reform of the country’s governance system. We have to acknowledge the failure of theories that predicted power transit, the emergence of some influential successor, or exotic options of transferring power through integration with Belarus (which did not imply that Putin’s dominance would be unconditionally preserved, since Alexander Lukashenko is very popular in Russia, maybe even more than Putin himself). Those who were right (including the author of this article) envisaged that Putin wouldn’t leave, as current control over political institutions allows for any type of constitutional redrawing. The latter is the most probable move to preserve Putin’s actual power. This is the easiest and safest way for the Russian leader, compared to options such as appointing a successor or integrating with Lukashenko. As we can see, this scenario was actually applied.

Putin has every reason not to trust any successor candidates. The current situation is different from 2008 when he transferred formal leverage at the peak of economic success and his popularity. First, Putin understands better than others that the Russian establishment is tired of him, do not trust him, is aware of his negative role as the main deterrent to Russia’s advancement and will try to dump this legacy at the earliest opportunity. Our state officials, for all their negative role in Russia’s present situation, however, have not signed to sit forever in a swamp and would appreciate some kind of movement towards progress. Secondly, Russia can’t get out of the crisis paradigm, and the future is threatened with new risks and shocks. No one is waiting for a quiet progressive development – in this situation, letting go of the reins and experimenting with successors is definitely not typical for Putin. He would prefer to implement control personally, as he used to. And, thirdly, there are no signs of Putin’s desire to give up power, no matter what political scientists and commentators say – these are fantasies and groundless speculations.

A mistake made by commentators in the analysis of Putin’s proposed constitutional changes is an attempt to give them a concrete shape through their own interpretations. In fact, there is nothing definite there. The design voiced by Putin simply says: “I want to have room for maneuver, and I will decide everything myself.” The State Council is to be created with no clear power; the State Duma is to be endowed with expanded authority to influence the formation of the government. But Wednesday’s message to the Federal Assembly does not clarify how exactly this system will look.

One thing is clear: Putin wants to create a new system of checks and balances in order to prevent the loss of his own influence. He sends a clear signal: “I will form this system myself, and I will still think how. And this system will be approved by a completely controlled group of film directors and figure skating champions – in the way I say when I decide.”

The key difference between the system proposed by Putin and the current one is that this system eliminates the “president-prime minister” dichotomy. In Russia, many mistakenly look at the Prime Minister as the person responsible for the “national economy.” This is not the case: the head of government is a constitutional post, it is an analogue to the vice president who automatically assumes the presidency if something happens to the first person (for example, he was forgotten at the cottage in Foros without any connection with the outside world). It is not surprising that in such a design the prime minister is a natural reason of nightmares for the power-hungry president: if someone wants to initiate a palace coup, then he will first try to gain over the prime minister, and then the national leader catches a light form of flu – and here he is, the new acting president. That is why Putin has been holding the absolutely unprofessional Medvedev for so many years. He did not care about Medvedev’s professional qualities, the main thing was that in 2008-2012 he passed a loyalty test, unlike anyone else from Putin’s circle.

Constitutional changes, instead of this simple dichotomy, create a more complex system with more players and more opportunities for behind-the-scenes management. You are no longer dependent on the particular candidate for the prime minister. It is worth underlining once again that nothing has been decided yet, the specific configuration will be discussed, but Putin’s statement is obvious: “I am creating a new system of checks and balances in order to stay in power, I will determine this system and control it.” This is what we now know for sure. All the rest is still unknown, and there’s no sense to discuss them. It remains to be seen.

The next question: why now? It is clear that the adoption of amendments to the Constitution takes time. Yet there is another three years until the end of Putin’s term, and he is used to keeping all secrets behind seven seals until the last moment. His secrecy has its own logic: when you designate your decision too early, you expose it for criticism, and people get tired quickly from specific configurations. When you throw out a new construction three months before the election (as with Putin-2000, Medvedev-2008 or Putin’s return-2011), your rivals are taken by surprise, and Putin’s political strategists, on the contrary, have every chance to take temporary advantage and secure the desired result, while voters still believe you and the scheme is not “rotten.”

A certain answer to this question can be detected by the sudden change of prime minister (which, as many sources in the executive branch confirm, even the members of the government themselves did not suspect). Now there is no point in changing Medvedev – the elections to the State Duma are still a long way off. Given the short memory of voters, the effect of this decision will quickly disappear and will not live up to the Duma’s election campaign. There is no disastrous economic situation either. It is bad, but no worse and no better than it was yesterday or will be tomorrow. A change in the cabinet would make sense if Putin had appointed a decisive prime minister for new reforms, who would change the situation, but the new candidate for the post of head of the cabinet, Mikhail Mishustin, is certainly not the one (more on that below).

What is the meaning of such a decisive action on several fronts at once and so early? By way of exclusion, we come to the only possible explanation—Putin panicked when he saw some new “closed” sociological data, which showed how bad his situation was. And then he decided to hastily give out all the preparations he had: to dismiss Medvedev and promise a new package of social measures for 450 billion rubles, and also to announce constitutional amendments in advance so that if people don’t like them, there was time to cancel them under the pretext that unreasonable artists and ice skaters gave the wrong advice. Frankly, I see no other rational explanation for the fountain of radical measures announced three years before the 2024 election. There is not a trace left of the calm, prudent and expectant Putin of past years; He throws all his cards onto the table at once.

The information background of the previous weeks created by the Kremlin political strategists in preparation for the Duma elections also speaks in favor of the theory of panicking authorities. Everything looks frivolous and resembles real panic: from the decision to create a “party of tanks” (non-political parties of let’s say beer lovers in Russia have never worked) to the rumors about the creation of Shnurov’s and Dudy’s parties without the consent of Shnurov and Dudy themselves. We are waiting for the emissaries to Kim Kardashian with a generous multi-million dollar contract for obtaining Russian citizenship, real estate in Saransk, and proposals to lead the party in the State Duma-2021 elections. What else can you expect from panicking Kremlin technologists who feel that the country is slipping away from their hands and they have nothing but stale ideas from the 90s in their heads?

Paradoxically, another indirect piece of evidence of Putin’s panic is the candidacy of the new prime minister, Mikhail Mishustin. What is this man known for? Only one thing: as the head of the tax service, with his iron hand he put the dying economy through the wringer and still constantly boasted of the rapid increase in the tax burden on Russian entrepreneurs and citizens. This looked particularly outrageous in relation to self-employed people. Mishustin just a few weeks ago reported that they had managed to collect taxes of about 3 thousand rubles per person in 2019, presenting it as a huge achievement of the service entrusted to him.

Mikhail Mishustin has been working in the government since the late 90s and is well known in this area. He does not have any skills in terms of growth and development, he is a typical tax controller who really knows how to knock the last out of taxpayers in the form of a levy in favor of the state. This is his only strong professional quality. The fact that Putin nominated such a person for the post of prime minister gives us a clear understanding of the psychological state of the Russian leader. Putin feels insecure, anticipates economic difficulties and possible collapse of his own system. He wants to rely on a person who will provide him with cash in his accounts at any cost – including at the cost of further destruction of the Russian economy. Judging by his message to the Federal Assembly, Putin doesn’t care about the economy, because he still looks at the solution to the problem of low incomes of Russians exclusively through the prism of a fragmented distribution of “gifts” to certain groups of the population. Putin clearly isn’t interested in returning to the topic of full-fledged economic growth and development.

In this regard, Mishustin’s appointment looks like hiding under a fiscal “mommy,” who will protect Putin in difficult times. Сommentators argued over the possible candidates to replace Medvedev as prime minister. It could have been either the decisive statesman like Glazyev or Rogozin, who closes the borders, “invests in industry,” and the statist-chavezist economic model would flourish under him, as it has not blossomed anywhere in the world; or liberal Kudrin who would lure investors with sweet speeches and a reformist appearance without real denationalization of the economy. These were emotionally strong options that gave hope to different groups in society. What hope can be inspired by the appointment of the obedient robotic fiscal inspector, who became famous only for squeezing more from the economy into the treasury than it could give? No, this appointment is not about elections, growth or the future. This appointment is about Putin’s personal confidence that everything will not fail, although it is very likely. Mishustin’s appointment is an event from the field of psychology, but not economics or political technologies.

In any case, everything that happened on Wednesday is rather good news. Putin could come up with something that would really preserve the Russian dictatorship for decades, renew its image, and eliminate at least the most obvious contradictions. Instead, we have 1984, not in the Orwellian sense, but in the sense of the Secretary General of the CPSU Central Committee, Konstantin Ustinovich Chernenko, during whose term the last parliamentary elections in the USSR took place, where the CPSU received uncontested 99% of the vote. The key here is not “99%” and not “uncontested”, but “last”. Putin clearly does not understand this. Well, probably, he doesn’t need it – it’s time already. The historical era is coming to an end. The new prime fiscal inspector will finally finish it off. As Gleb Zheglov put it in the film ‘The meeting place cannot be changed‘ “Then so be it.”

This article was originally published in Russian on The Insider

The New Constitution of the Old President

Translated by Catherine A. Fitzpatrick

In his speech before the elite of the Russian ruling class earlier this week, Vladimir Putin announced a new constitutional reform, which, in essence, amounts to adopting a new fundamental law. The Kremlin is proposing a new “social contract” to the Russian people that will replace the “Crimean consensus” – new and restored social benefits in exchange for cementing within the Constitution the monopoly of the current ruling class over the country’s governance.

A new “social contract” is a necessity for Putin’s regime. When he first came to power, at the time of the second war in Chechnya and fairly regular and massive terrorist acts in Central Russia, including in Moscow, he proposed a similar deal to the Russian people – exchange of some political liberties for security. Having imposed “order”, Vladimir Putin continued to expand his powers at the expense of other governing institutions, destroying the constitutional order of Russia. Then a second contract was put forward – a promise of satiety and stability in exchange for the remnants of political liberties. This contract was a much tougher sell and resulted in mass protests of 2011-2012. And in 2014, the Kremlin came up with yet another offer: forfeit of even more liberties for the restored sense of Russian greatness through the war on Ukraine and forceful annexation of Crimea.

We have now entered the final stage in this process. The population, seriously impoverished as a result of the prolonged economic decline, which began even before Crimea and was aggravated by international sanctions, is offered an ambitious program of support for the poorest of its members in exchange for a new Constitution, which will enable Vladimir Putin to stay in power after 2024, when he can no longer, under current law, be re-elected another time to the post of the president of Russia.

Is This Really a New Constitution?

In his address to the Federal Assembly, Vladimir Putin said that his plan does not envision adoption of a new Constitution. A legal analysis of proposed amendments, however, suggest that it amounts to a fundamental change in Russia’s State system.

His first proposal is self-isolation of Russia from international law — an idea floated by the Russian ruling class for quite a while. This would enable Putin’s regime not to observe international obligations when they contradict Russian legislation. This is a reference to the abolition or amendment of Part 4 of Article 15 of the Constitution, which mentions the primacy of international obligations and agreements assumed by the Russian Federation over its domestic legislation. This change would allow Russia to selectively not comply with decisions of such organizations as the Council of Europe or the European Court of Human Rights and essentially make pointless Russia’s participation in these institutions under the new Constitution.

It should be noted that the article proposed for amendment is part of the so called “protected” part of the fundamental law. In order to rewrite it, it is necessary, under the Constitution, to convene a new Constitutional Assembly. At a minimum, a referendum must be held. Vladimir Putin was clear that he does not intend to do either. Instead, with a Presidential Decree, he has formed a “working group” (not stipulated under any current laws) whose task it is to amend the fundamental law. He has indicated, however, that Russian citizens are to approve his proposals by some kind of universal vote.

It is highly unlikely that proposals will be rejected, since the majority of the Russian population does not understand that it is Russia’s international obligations that most reliably protect many of their rights, including social rights, given the tendencies of the authoritarian regime. In time, most likely such understanding may develop, but it may happen too late —after the amendment of the Constitution. Therefore, the international community must actively seek to explain this now, while such discussions are underway in Russia. Another point to be explained is that such a ballot would have no legal force; and neither would the follow-on amendments introduced through parliament, as they clearly violate the Constitution.

Understandably, the Kremlin is apprehensive about convening a Constitutional assembly, since the laws governing this procedure have not been updated since 1993. There may be an uproar, and most importantly, a delay. On the other hand, a referendum requires a set of rather precise formulations, which would tie Putin’s hands for the real re-writing of the Constitution. Putin is clearly counting on securing a wholesale consent from the people, and not a detailed, article-by-article approval process. Moreover, a national referendum cannot be combined with Federal Parliamentary or Presidential Elections which is exactly what the Kremlin intends to do.

Putin’s decision to disregard overt requirements of the Constitution is nothing new. Since his very first days in power, he has been consistent in eroding Russian Constitutional government institutions and creating parallel institutions and procedures. Some of the early attacks included establishment of federal districts and the institution of presidential representatives, not prescribed in the Constitution. The Russian State today even features law-enforcement bodies that exist outside the Constitutional framework – such as Rosgvardiya (the National Guard). Rosgvariya is controlled by the Presidential Administration, whose powers are described by the fundamental law as “the president forms his administration”.

The Problem of 2024

In addition to rejecting the primacy of International Law, Putin has proposed to strip the remnants of the autonomy of judges at the highest courts. At the president’s demand, the docile executive authority of the upper chamber of parliament, the Federation Council (the president can even appoint some of the senators) will, under the new Constitution, dismiss judges from the Supreme and Constitutional Courts (“in connection with a loss of confidence” by the head of government.

Putin has also proposed to renounce compliance with the European Charter on Local Self-Governance, ratified by Russia; and to make municipalities part of government authority, absorbing them as structural sub-divisions of regional state administrations. One of the possible goals of this initiative is to exclude independent political candidates from running in and winning municipal elections.

Likewise, the proposed amendment of the Article on Presidential Elections (which introduces a 25-year limit on candidates and forbids candidates with residences in foreign countries) politically neutralizes powerful opposition figures currently in exile.

Putin has also proposed to remove from the text of the fundamental law the stipulation that prohibits the president from running for elections to this post more than twice “in a row”. Putin himself has already used this clause, having essentially served five terms (four as president and one as prime minister), but he wants to preclude his potential successors from taking advantage of it.

The plan will certainly result in a major re-distribution of powers. The State Duma, the lower chamber of the Russians parliament is now in the process of approving the candidate for prime minister nominated by the president. The Duma also forms the cabinet of ministers, with the exception for the so-called “presidential quota”: the heads of the law-enforcement agencies and
possibly the head of the Foreign Ministry. The new Constitution requires the Duma to do so in consultation with the Federal Assembly, and not appoint them without any discussions as now.

Finally, Putin’s proposal legitimizes a government agency (that already exists parallel to the Constitutional realm) – the State Council. Russia’s governors serve at the State Council and are appointed on a rotation basis. It is not clear what the new State Council would look like, how would it be staffed and by whom, and most importantly, what would be its powers. We can be certain, however, that Vladimir Putin has already thought through those details.

Judging from the people whom the president of Russia has appointed to the “working group” to amend the Constitution, the group is a mere formality. There are practically no lawyers among the members of the group; these are extras in a political show. The real draft for Constitutional reform, has most likely already been written by the presidential administration.

One can speculate on the various motives behind the constitutional amendments. It appears that Putin intends to leave the post but remain in power in some other role. He may choose to run the country from his position at the Security Council (to which he has transferred as his deputy the ex-prime minister Dmitry Medvedev, who had resigned after the publication of the address). Although it is more likely that he will head a reformed State Council which will likely be assigned some sort of extraordinary powers under the new Constitution. This is an attempt to formulate something like a system of checks and balances which would guarantee Putin, even in the event he leaves the post of the president, the possibility of running the country.

The international community has very few instruments to block this path of Russia’s self-isolation. Bringing the country into international alliances would not have any effect on the internal situation in Russia. Mobilization of the currently apolitical majority of the population dissatisfied over monopolization of power within the country is the biggest hope for stopping these encroachments. It is for this reason that Vladimir Putin, before rolling out his constitutional reform, has offered a long list of new social perks and benefits, including hot meals for school kids subsidized by the federal budget. He is clearly counting that as result, some positive meme like a “Putin breakfast” (or lunch) would be established. But for now, this is a direct trade where the right of the current ruling class to extend its tenture by at least a decade is bought with a hot meal.

Putin drops a bomb. Or does he?

On January 15, 2020, President Vladimir Putin delivered his 16th Address to the Federal Assembly of the Russian Federation.

In his annual address to the lower and upper legislative chamber, Putin announced plans with potentially profound ramifications for the future of Russia’s government. Buried among the usual platitudes of socio-economic situation and calls to accelerate the development of all spheres of public life, was a disclosure of a plan that amounts to a major constitutional reform. The address, for the most part, used a very formal language and was rather stingy on the specifics of that plan. One can only guess how and when these plans divulged by Putin would actually manifest in reality—in the past, his public directives have undergone significant changes during implementation.

One concrete, major and immediate outcome of this plan is the resignation of the long-serving Prime Minister Dmitry Medvedev along with the entire government. Following the announcement, Medvedev put out a statement: “…it’s obvious that we, as the government…should provide the president of our country with the opportunity to make all the decisions necessary for this. And in these conditions, I believe that it would be right…” for the government to resign.

 Will there be a referendum?

Vladimir Putin has proposed to amend the Russian Constitution through a mechanism of “citizens’ vote.” It is noteworthy that he was careful to avoid using the term “referendum.” The last referendum in the Russian Federation was held in 1993 and since then, the legislation governing the plebiscite procedure has changed dramatically but has never been applied. Moreover, presidential initiatives in Russia do not necessarily require confirmation by a popular vote. It cannot be ruled out that presidential lawyers would be able to create a legal implementation roadmap avoiding a referendum altogether.

In her comments to the media following the address, the Chairman of the Russian Central Election Commission Ella Pamfilova said a referendum is unlikely, and hinted that another format would likely be used to approve the proposed amendments.

What this really means: The abolition of the principle of primacy of International Law, the abolition of the independence of local self-government, the abolition of the principle of independence of the judiciary.

The most monumental and unambiguous element of the constitutional reform proposed by Putin is the abolition of the principle of the primacy of International Law (Article 15 of the Constitution). This measure represents the development and final consolidation of the position of the Constitutional Court of the Russian Federation, which was formulated in 2015 and subsequently received its legal confirmation.

The proposed obviating of the principle of independence of judges is the direct subversion of the core tenets of the 1993 Constitution. Until now, there have been no formal legal levers of direct and immediate pressure on judges (although, of course, in no way could the Supreme Court of the Russian Federation be considered independent). With the proposed reforms, the highest judges can be dismissed from their posts on the widest possible grounds.

If implemented, this plan would certainly result in a significant deterioration of the already deplorable situation of human rights in the Russian Federation. Russia would cease to be a legal state even in the most lax definition of the term.

Another proposal sounded by Putin that would also directly affect the everyday life of Russian citizens is to establish the principles of a “unified system of public authority” and effective interaction between state and municipal bodies. Exactly how this system of principles will look in practice is still unclear, but it is strongly hinting at the abolition of the principle of independence of municipal self-government and the violation of the basic provisions of the European Charter of Local Self-Government. Moreover, if the principle of primacy of International Law is abolished, it would not even be necessary to denounce any international legal acts— those would simply become non-applicable or selectively applicable. Putin most likely will create a quasi-legal structure to enable local governments in one form or another to be included in the state power system and incorporated into the power “vertical”.

Considering that the State Council, the body which currently consists largely of governors, will occupy a central place in the newly-declared structure of power, it is not difficult to imagine that at the regional level the power system will also become more centralized, possibly at the expense of municipalities.

The New Vertical

It’s very likely that the power transit scenario announced by Putin today, one way or another, will be fashioned after the transit of power launched in 2019 in Kazakhstan, one of the most successful personality-centered regimes oft the post-Soviet domain.

In his 2019 report “A New Prince: An Undemocratic Transit of Power in the Post-Soviet Space” political analyst Kirill Rogov analyzed the Kazakh transit as follows: “Nazarbayev is ‘splitting’ the presidential power. But unlike other well-known scenarios, he is splitting it not in two (the President and the Prime Minister), but three (the President, the Security Council President, and the Prime Minister) or even four components. The powers of the Senate headed by Nazarbayev’s daughter, for example, include the nomination of the Chairperson of the National Bank, the Prosecutor General, the Chair and Judges of the Supreme Court, and also the Chair of the National Security Committee. Such a design provides him with nearly full control of the state. It looks quite reliable as long as Nazarbayev remains legally capable.”

However, it is important to note that the stated plan regarding the transit of power in Russia will most likely go through the State Council and not the Security Council. Therefore, it is the civilian political elite of the United Russia party and state governors that would constitute its initial supporters base and not security officials (“siloviki”). 

Moreover, the shift of the center of gravity to the new Council, the structure of which has not yet been determined (as opposed to a fully-fledged and staffed Security Council) suggests that a variety of loyal players interested in participating in this transit can make a bid to do so (of course, pending a personal approval by Putin himself).

Finally, Putin’s new plan preserves the United Russia as the key pillar of his power. Since for the past few years it has maintained a relatively low profile and even avoided flashing its brand in regional elections so not to lose votes), we are likely to witness a great mobilization of its Duma delegates and the entire party apparatus.  This, in turn, will reinvigorate the cadres dynamics within the Russian government, offering new and rapid opportunities for career advancement all the way up to the top position unseen in the recent decade.  


The Overview of Relationships of Council of Europe and Russia

In 2019, Russia regained its status in the Parliamentary Assembly of the Council of Europe. This event caused many fears and sowed the seeds of doubt in the minds of observers and analysts. The team of the Free Russia Foundation reviewed the development of this challenging situation.

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The Kremlin’s Hostages: Victories, Difficulties and New Challenges

On December 11, Free Russia House held a discussion, “Kremlin hostages: Victories, difficulties, new challenges” as part of the 4th human rights non-conference organized in Kyiv. The discussion was joined by Ilya Novikov, a lawyer to a number of Ukrainian political prisoners, and Igor Kotelyanets, head of the Association of Relatives of Political Prisoners.

Participants discussed multiple aspects of further tactics for the public campaign dedicated to the release of Ukrainian political prisoners still kept behind bars after the big exchange that happened in September. Special attention was drawn to the Normandy format meeting held in Paris on December 9, attended by Angela Merkel, Emmanuel Macron, Volodymyr Zelensky and Vladimir Putin.

Igor Kotelyanets plays a leading role in the informal association of the relatives of Ukrainian citizens persecuted in Russia and Crimea on political grounds. He is a cousin of one of the political prisoners who was lucky to be released during the autumn big exchange. He also cooperates closely with the Ukrainian government, speaks on international political platforms, and actively lobbies for legal amendments to Ukrainian laws related to the political persecution of Ukrainians in Russia. According to various estimates, there are from 90 to 114 Ukrainian political prisoners on the lists of human rights organizations and the Office of the Ukrainian Ombudsman for Human Rights. As well as many others, Igor was attentively following the news after the Normandy meeting, as he knew that agreements on the new exchange were already in place.

At the Normandy meeting it was announced that an agreement had been reached on the exchange of “all for all.” Even though this wording sounds very promising, in fact it brings a lot of uncertainty as everyone understands it in a different manner. Several hours later, at a briefing by Vladimir Zelensky with the Ukrainian media, it finally became clear that the “all for all” format actually implied war hostages in the Donbass region, leaving political prisoners out of the equation. “I have no doubt that Zelensky passed the complete lists, including both prisoners of war and political prisoners. Therefore, we can probably conclude that it was Russia who did not agree to the exchange of truly ‘all to all.’ The release of political prisoners in the Crimea and the Russian Federation will, apparently, be the subject of discussion at the further Normandy meetings,” Igor Kotelyanets concludes sadly.

Ilya Novikov, the lawyers of Nadia Savchenko, Ukrainian sailors brutally detained in the Azov sea and other Ukrainian prisoners, believe that the situation will not change before the end of the year, even though there were rumors after September that a second wave of prisoners’ release would have been launched before 2020. “Putin,” says Novikov, “understands this ‘exchange fund’ as a tool for strengthening his position in the negotiations. And here arises the following logical question. Notwithstanding the monumental effort Ukraine makes to free its citizens from Russian prisons, is it even possible that the country can achieve results on its own without external help or Western assistance in the person of Angela Merkel, Emmanuel Macron or even Trump is an indispensable prerequisite?”

An illustrative case in this regard happened a couple of years ago and involved Norway. On December 5, 2017, a Norwegian citizen, Frode Berg, was arrested in Moscow on suspicion of espionage and Novikov was hired to represent him before the court. From the very beginning it was clear that Berg would be convicted, as no single case of free pardon happened in Russia under this article since 2000. Thus, from the very first day, the Norwegian government, for which it was the first shocking case of such a nature, took this matter as seriously as possible. The Lithuanian side was involved in the process, as Norway did not have its own “exchange fund”. Lithuania gave Russia two Russian agents, and in return received two Lithuanian citizens and Mr. Berg. In order to make this exchange possible, Lithuania had to amend the legislation on the pardon procedure. Russia attempted to force Americans, through the Norwegians, to organize the release of Viсtor Bout. His return is idée fixe for Russia, but the Americans uncompromisingly responded, “It’s out of option.”

In the end, the trigger for the release of Mr. Berg was an accidental combination of circumstances which was helpful only against the background of long preliminary preparations by Norway and Lithuania. On October 24, 2019, Russian Minister of Foreign Affairs Sergey Lavrov arrived in the hometown of Mr. Berg – Kirkenes – on the occasion of the 75th anniversary from the date of the liberation of northern Norway by Soviet troops from the Nazis. The celebration was attended, among others, by the King of Norway. Appropriate location, together with the presence of high-ranking state officials and public pressure, preceded by long negotiations and legislative changes, lead to the successful release of Frode Berg.

Apart from minor disagreements in the Barents Sea regarding fisheries, Norway does not have any other serious conflicts with Russia. The Berg case was nothing compared to the Ukrainian situation. But even against this background, the release of one person required two years of hard work, involvement of a third party and changes in the legislation, and yet the result was uncertain until the very end. The only dubious advantage for Ukraine in comparison with Norway is that Ukraine has a considerable “exchange fund.” But for Russia, Russian citizens have no value.

There were only two persons important to the Putin administration – Vyshinsky and Tsemakh. Negotiations on the September exchange got off the ground when the question about Vyshinsky was finally raised. Before that moment, the situation dragged on for the previous three years without any progress.

Free Russia Foundation-2019: a Year in Review

2019 has been another incredibly eventful year for all of us at Free Russia Foundation, with more critically important programs and interesting projects, new and invaluable team members, new offices, more in-depth research and vital cutting-edge reports, more partners, supporters and publicity, and more ambitious ideas.

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The Value of the Club of Europe

“… in no circumstances shall a State be entitled to be called a democracy unless it does, in fact as well as in law, guarantee to its citizens liberty of thought, assembly and expression, as well as the right to form a political opposition.”

This is one of the declarations of the Resolution adopted at the end of the Congress of Europe held in The Hague in 1948 that laid the foundations of a unified Europe and the Convention for the Protection of Human Rights and Fundamental Freedoms which is the very core of the Council of Europe’s purpose. Then, as now, it raised expectations.

Expectations

First of all, what do we expect from the Council of Europe, the European Court of Human Rights, and its Conventions? Are they just tools to facilitate “communication and dialogue”? Just another reason to meet and talk?

Or do they provide the framework for human rights principles and guidelines that every signatory state should comply with to adequately serve and protect its citizens?

What do we expect from the signatories when it comes to their level of compliance? We expect them to show tangible effort to fix what is broken when shortcomings or violations have been identified, right?

What do we expect the Council to do when faced with a continued refusal to address such problems? Also, how should the values stipulated in the treaties be upheld and prevented from being hollowed out by the signatories’ turning a blind eye to treaty violations?

We expect each other to respect the existing principles, rules, and guidelines, and hold each other in check by promoting the engagement of governments and civil society in demanding that club members comply with resolutions and court rulings. Does impunity fit in here? Not really.

Club

Russia threatened to leave the club. But let’s face it: It actually wants to stay in. It just tries to intimidate the rest of the club to be let off the hook. Feeling sought-after, it demands immunity by dictating conditions of its membership, and successfully at that.

This brings us to Russia’s contribution to the club as its largest member. Its track record leaves much to be desired, and its lack of commitment calls into question the argument for having Russia in the club.

After all, why would it want to be a member if it intentionally disregards it, and why would the rest of the club want Russia to be part of it?

Many argue that if Russia is in the club, it will be forced to play by the club rules. That is with Russia in, Russian citizens will have the protection of the ECHR, and the channels of dialogue will remain open. If Russia showed true commitment and sincere willingness to change for the better supported by clear signs of improvement, one could accept a slow pace.

The Kremlin’s trick however is to time and again sell the illusion that it will really abide by the rules if the community lets it off the hook just one more time. The reality though is that it never delivers on this promise. It simply uses the same trick over and over again after invading and occupying territories of its close neighbours; interfering in British, American, Georgian or Dutch election campaigns; refusing to be held accountable for the downing of a civilian airliner, targeted assassinations in European states, or human rights abuses at home against opposition or dissidents.

Despite countless resolutions, dialogue efforts, and punitive measures Russia shows no signs of improving its behavior or willing to acknowledge its wrongdoings when it is caught in the act. Despite its club membership, Russia is in reverse gear.

So much for the argument that Russia will play by the rules once it is part of the club.

It just goes to show that an inclusive, cooperative, and civilized approach with Russia does not work.

Deformation of Values

Yes, Russian citizens can go to the ECHR, but if the Russian authorities overturn or simply do not implement its decisions, how are Russian citizens protected by the European Convention on Human Rights? They are still at the mercy of the Kremlin’s whims.

By now, we should have realized that it is an illusion to think that the current Russian political establishment – first and foremost, the Kremlin – will ever play by the rules.

The Kremlin respects neither its club co-members nor the conditions and obligations of its membership. It disrespects its own citizens as well whenever it feels like it. This means that if the Council of Europe refuses to confront Russia’s chronic attitude, it will itself suffer from a deformation of values.

Moreover, the Kremlin has proven that it can simply overturn sanctions by threatening to leave the club, thus rendering this punitive measure useless. After all, if it worked once, why wouldn’t it again?

Unless, of course, the club members agree that it has been enough and begin to truly defend what they value: the clubhouse, and what is being protected by its roof. For that, they need to agree not to allow one bully to bring down the entire club. By submitting to the Kremlin’s blackmail, they set the clubhouse on fire from the inside. Can we prevent it from burning down to the ground? Yes, we can. It’s not too late. But we have to act.

We need to live up to the expectations we have set ourselves. We need to follow the existing criteria, values and norms. We need to hold each member to account by demanding to fix violations and to demonstrate tangible progress. And we certainly must not succumb to blackmail over membership.

We cannot tolerate the bully’s victim-blaming techniques. We cannot let cynicism and moral nihilism win, thus allowing impunity to become the norm.

In conclusion, civil society and European governments should put more pressure on Russia to make it comply with the conventions it voluntarily signed.

If takes punitive measures, such as disciplinary sanctions, then so be it. And they should not be lifted until the perpetrator takes steps to resolve the issue that resulted in these sanctions. Compliance is not negotiable. Otherwise, the value of the rules-based order will erode, undermining its very foundations.

If Russia wishes to remain a member it has to accept the existing club rules and the consequences for violating them. Ultimately, we should not be afraid to let a member go if he basically refuses to cooperate.

The European consensus on an EU Magnitsky law that was reached earlier this week shows that a long term commitment of civil society, politicians, and governments to pushing for measures against human rights violators and impunity ultimately pays off. There is no escape. And this is the message that all involved actors should continue to convey. There is no escape from justice.

Keynote Speech by Richard Hoogland “A Brief History of the Dutch Business in Russia”

Today we will talk about different aspects of Nord Stream-2.

About political aspects of the deal, like bypassing transit countries like Ukraine and Belarus and the fact that despite it being a 100 percent Gazprom venture, Nord Stream-2 is registered in Switzerland, which is not an EU country.

About security aspects of the deal, like the Russian navy patrolling in the Baltic Sea to protect their pipelines – in plural because in fact there will be about four of them when they are completed.

About economic aspects of the deal like the loss of three billion dollars in transit fees per year for Ukraine, but also about the enormous maintenance costs of underwater pipelines.

About environmental aspects of the deal like disturbing the seabed which is full of mines, chemical waste and munitions from WW II but also disturbing nature on the surface like bird and marine life.

About land-based alternatives of the deal which are still very much possible and probably a lot cheaper as well.

Will we talk about ethical aspects of the deal as well? About the people at the helm? The former chancellor of Germany who was still chancellor when the deal was in the making in 2005, about the managing director who worked for the secret services in East Germany and the rumors about his past, about the former Prime Minister from Finland who worked as an advisor for Nord Stream and the rumors about his past.

We should probably begin with the history of the Dutch-Russian business relationship.

I, myself, was born in Zaandam, a town 20 km north of Amsterdam. In the late 17th century, it was situated quite conveniently opposite the Golden Age Amsterdam and was well known for its ship building activities. Tsar Peter the Great happened to be very interested in ship building. In Izmailovo, at the time a nice estate of the Tsar’s family to the east of Moscow, with a wooden palace and a large pond, Peter got to know a Dutchman called Carsten Brandt. Carsten Brandt first came to Russia under Tsar Aleksey to help him build small boats, the so-called botiki. Peter asked him to build a sailing boat, and together they sailed on the Izmailovo pond and later on bigger lakes like the Pleshcheyevo lake near Pereslavl Zalesski to the north of Moscow.

In 1697, Peter came to Zaandam, incognito, to learn the craft of ship building from a Dutch carpenter. People recognized him though, and he had to move to Amsterdam where he worked in a shipyard. Today, the monument to Peter the Great on the main square of Zaandam and the small wooden house, where he apparently lived, are among the most popular tourist attractions in my hometown.

In mid – 17th century, there were Dutchmen living in Moscow, in the quarter that lodged all foreigners, the so-called Nemetskaya Sloboda, and since then the Dutch have not stopped to do business with Russia that was exciting and profitable for both Russian Tsars and small and medium-sized enterprises.

In the 18th century for example, the famous Ruslui (“Russia people”), who were traders and manufacturers from a small town of Vriezenveen in the east of the Netherlands, were successful in business in St Petersburg and owned a shop in the Gostiny Dvor on the Nevski Prospekt. Some of them managed to become official purveyors to the tsar’s court, especially with cigars and table linen. They also sold cocoa, coffee, tea, and flowers of course. The Netherlands Reformed Church on Nevski 20 still reminds us of this Dutch page in the history of St. Petersburg.

In the 19th century, the relationship between the United Kingdom of the Netherlands and the Russian Empire became extremely close. Our Kingdom had a Russian-born queen. The daughter of Tsar Pavel, Anna Pavlovna, granddaughter of Catherine the Great, married our William, the heir to the Dutch throne. She lived in a modest palace, nothing like the huge palaces of St. Petersburg.

We have gotten to the 20th century. The Anglo-Dutch company Shell was one of the first ones to enter the oilfields in Azerbaijan, the world’s largest oilfields in the early 20th century. Together with the Nobel Brothers, they built the oil transport infrastructure that still provides the basis for today’s oil transportation in the Caucasus. They controlled 75 percent of the oil production. Baku was the world’s largest and busiest port with a huge fleet of oil tankers. The Baku-Tbilisi-Batumi railway was built as well as the world’s longest oil pipeline of almost 900 km between Baku and Batumi. The Baku oilfields were of extreme strategic importance during the WWII. Nazi Germany got its oil from Russia, especially during the period from 1939 to 1941 when the Nazi military needed an enormous amount of oil. In 1941, Hitler decided to attack his strategic partner, the Soviet Union, and the Nazi army’s first and foremost goal was to reach Baku to ensure a steady oil supply. We all know how this ended. And we also know how it ended for Shell and the Nobel Brothers. They lost all their assets when the Bolsheviks entered Baku in 1920 and nationalized the oil industry.

Then came 1991 and the fall of the Soviet Union. All big western companies were very eager to enter the Russian market and of course Shell was as well. And Shell liked to do it big so why not take huge shares in new projects? Thus, it became involved in the Sakhalin 2 Oil and Gas Project. Today, it is heavily involved in North Stream 2, a 100 percent offshoot of Gazprom, a Russian company with headquarters in Switzerland, doing business with and in the European Union. Shell is not a shareholder but it provides 10 percent of the financing, just like other major EU players.
Let’s make a trip to Sakhalin. Sakhalin, the largest island of the Russian Federation to the north of Japan, was first put on the map by a Dutchman. Martin de Vries sailed in 1643 from Batavia in the Dutch East Indies to the Kuril Islands and Sakhalin to draw a new map of that exciting part of the world. The first Russians arrived in the 18th century, and the Japanese controlled the southern part of the island. In the late 19th century, Sakhalin became notorious as a “prison island.” The most famous man who visited the island was probably the writer Anton Chekhov, who wrote about the misery of the inmates and their families in 1890.

Apart from the Japanese who refused to sign the takeover by the Soviets, no one seemed interested in the island after the war. On Japanese maps the island is still marked as No Man’s Land. In 1983, Sakhalin appeared on the news again when a South Korean airliner was shot down by mistake by Soviet air defense forces. The Soviets first tried to deny that it had happened, and then claimed that this had been a spy mission. The flight data recordings were finally released ten years after the collapse of the Soviet Union. This tragedy that has almost been forgotten was nevertheless one of the tensest moments of the Cold War. Also, this story reminded me a little of MH17.

The development of the Sakhalin-2 Oil and Gas Project began in the late 80s. In 1991, the Russian state, two Texan oil companies, and Japan’s Mitsui founded a consortium. Shell joined one year later and became the majority shareholder with 55%. The Texan companies sold their shares. Everything went well, and a huge project was launched involving a small town for expat workers, an LNG plant, and a lot of infrastructure.

But then Russia had a new president, and things started to change. Gazprom appeared on the horizon and it advanced quickly. It all happened during the period from 2003 to 2005 when the private oil company Yukos tried to merge with Sibneft, and then suddenly everything changed. Major lawsuit threats were followed by the arrest of Khodorkovski. Yukosneftegas was indirectly taken over by Russia’s largest oil company Rosneft.

Abramovich felt obligated to sell Sibneft to Gazprom for 13 billion dollars. It was then that Gazprom and Rosneft conquered the oil and gas industry in Russia.

However, there was still Sakhalin II owned by the Anglo-Dutch company Shell and two minority Japanese shareholders.

A “useful idiot” was quickly found. The Sakhalin-2 project had a negative impact on the environment. An organization called the Sakhalin Environmental Watch brought up all kind of complaints and claims. The first complaints were about the construction of the LNG plant and the disappearance of pedestrian lanes which made it dangerous for school-age children to use the roads. These were followed by the complaints about the noise produced by heavy vehicles. Moreover, the Dutch who were carrying out the drilling were accused of having caused a decline in freshwater fish populations. Also, it turned out that the population of whales was endangered as well.

Normally, major oil companies or governments of oil-rich counties do not bother with such complaints. Moreover, Shell had had its share of accusations in the past of working with the apartheid regime in South Africa in the 70s and corrupt officials in Nigeria as well as polluting the environment. Consequently, Shell might have seen this as the inevitable side-effect associated with taking risks.

However, having been thrown out of Baku in 1920, they did not quite expect to be thrown out of the new modern post-communist Russia as well. Well they were wrong. In 2006, the Russian Ministry of Natural Resources began showing support for Sakhalin environmentalists. What followed was a threat of a lawsuit by Russia’s government environmental protection agency Rosprirodnadzor. The lawsuit sought 50 billion dollars in damages.
The entire Sakhalin -2 project was worth only about 22 billion dollars.
But of course there was a solution. Shell and its Japanese partners could sell half of their shares to a company called …Gazprom. For how much? For 7.5 billion dollars.

Rosneft has also tried to get some money ($1.5 billion) out of the American companies that were involved in the Sakhalin-1 project. Thus, Rosneft accused Exxon Mobil of extracting some crude oil from the concession area under its control. Eventually, the dispute was settled out of court in 2018.
It is also worth mentioning that Sechin plans to build his own LNG plant on Sakhalin in order to keep up with the Yamal plant of Mikhelson/Novatek and that of Gazprom on Sakhalin.

Meanwhile Shell remains a shareholder in Sakhalin-2, with its stake having been cut by half from 55 to 27.5 percent.

What has become of the “useful idiot,” the Sakhalin Environment Watch?
Well it got a taste of its own medicine when in 2015 Leonardo di Caprio’s Wildlife foundation wanted to give it a grant of 159.000 dollars for its activities in wildlife care on Sakhalin.

The Russian government however made it clear that the Sakhalin Environment Watch had to stop its activities and close down its office in Russia or else be labeled as a “foreign agent.” Having chosen to refuse the grant, the organization keeps fighting for the beautiful wildlife of Sakhalin.

Michael Weiss: Misrule of Law: How the Kremlin Uses Western Institutions to Undermine the West

Watch the full version of the “Misrule of Law: How the Kremlin Uses Western Institutions to Undermine the West” report presentation in Kyiv, Ukraine. Speaker: Michael Weiss, the Director of Special Investigations at Free Russia Foundation and co-author of the report.

The report is available by link: https://bit.ly/34uYJ9W

Michael Weiss: Misrule of Law: How the Kremlin Uses Western Institutions to Undermine the West

Watch the full version of the "Misrule of Law: How the Kremlin Uses Western Institutions to Undermine the West" report presentation in Kyiv, Ukraine. Speaker: Michael Weiss, the Director of Special Investigations at Free Russia Foundation and co-author of the report.The report is available by link: https://bit.ly/34uYJ9WСмотрите полное видео презентации доклада «ВЕРХОВЕНСТВО ПРАВА? Как Кремль использует западные институты для влияния на Запад» – широкомасштабного обзора организованных усилий Кремля и его инсайдеров с целью использования правовых систем и институтов в западных обществах против этих обществ и в своих интересах. Спикер – директор специальных расследований Фонда Свободная Россия, со-автор доклада.Доклад доступен только на английском языке: https://bit.ly/34uYJ9W

Posted by Дом Свободной России on Sunday, November 17, 2019

The Lubyanka Files. Here’s How the KGB Knew You’d Be a Traitor: an Exclusive Look at Its Recruitment Manual

The bottom line for spy recruitment comes down to this: look for the losers, especially the ones who want to think they are winners because they hang on to important positions.

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Russia Is a Country Dangerous for Women

On July 9, the European Court of Human Rights made the decision in the case of Valeriya Volodina from Ulyanovsk, who had spent three years trying to get the police to start a case against her former partner Rasheed Salayev. Salayev followed, kidnapped and beat Volodina multiple times and threatened her underage son. Every time, the police turned her down. Police officers explained their rejection by saying that the threats that she regularly received from Salayev “were a result of their personal hostile relationship as well as jealousy experienced by S.” The chief of the Internal Affairs Department “Mozhayskiy” answered: “What can I tell you? You should hide better.” The details of this story can be found on the website of the organization “Legal Initiative,” which Volodina approached for help and which transferred her complaint to the ECHR.

The ECHR judgment on Volodina’s case is the first one on a domestic violence case in Russia. The court points out that “the continued failure to adopt legislation to combat domestic violence and the absence of any form of restraining or protection orders clearly demonstrate that the authorities’ actions in the present case were not a simple failure or delay in dealing with violence against the applicant, but flowed from their reluctance to acknowledge the seriousness and extent of the problem of domestic violence in Russia and its discriminatory effect on women.” The court has also established that the Russian authorities had breached Articles 3 and 14 of the Convention (concerning torture and degrading treatment and concerning discrimination). As soon as the ECHR judgment comes into effect, the Russian government will have six months to present the Committee of Ministers of the Council of Europe with the Action Plan how to prevent similar violations in the future.

Commentary by Vladimir Zhbankov, legal expert of Free Russia House in Kyiv:

“However, the problem of Russia’s systematic failure to comply with ECHR rulings has a long and rich history. Court judgments, as a rule, consist of three parts: one establishing the fact of breach of this or that Convention provision, recommendations on amending the domestic legislation or procedural practices, and one establishing the amount of financial compensation. For many years, Russia only complied with this last part. At the same time, since the early 2010s, the Constitutional Court of the Russian Federation has been developing quite an original and evidently non-legal doctrine that would enable Russia to ignore the judgments issued by the ECHR. The methods of enforcing compliance with international legal standards in the sphere of human rights by Russia are only in development so far. 

The website Nasiliyu.Net already contains translations of important fragments from the ECHR decisions, where, for instance, items 80-81 say that Russia has not enacted specific legislation to address violence occurring within the family context, and the concept of “domestic violence” or any equivalent thereof is not defined or mentioned in any form in the Russian legislation. The court also “cannot agree with the Government’s claim that the existing criminal-law provisions are capable of adequately capturing the offense of domestic violence.”

The public opinion in the Russian Federation increasingly tends to side with the Court’s opinion in this respect. Why is this decision so important for everyone who fights against domestic violence in Russia and tries to solve this problem? Based on this judgment, as well as on other judgments of the Court, it can be concluded that Russia systematically fails to follow through on its undertaken commitments on the protection of individuals under its jurisdiction from all forms of cruel treatment, including cases when such treatment is perpetrated by private individuals. Another conclusion is that Russia as a country supports gender-based discrimination against women and its gender policy is discriminatory in nature.

The government’s reluctance to treat the problem of domestic violence and violence against women seriously constitutes a part of this policy. What would it mean to treat a problem seriously? To abolish the law decriminalizing beatings in the family and to start legislative prevention of domestic violence (introduce domestic violence orders which would prohibit the aggressor to approach the victim). These are just the first steps that Russia needs to take so that the country would stop posing a threat to women’s life and health.

In addition to that, Russia still hasn’t been able to sign and ratify the Istanbul Convention, which is currently one of the most important documents designed to prevent domestic violence and violence against women at the national level.

Commentary by defense attorney Olga Gnezdilova, a lawyer with “Legal Initiative”

G.R.: Will these specific police officers who refused to start the case be brought to justice somehow following the ECHR judgment? Is there any information available on their personal connections with Salayev?

O.G.: The police officers can effectively be brought to justice on the count of negligent performance since this means punishment for failure to perform one’s duties if it has led to grave damage or violation of citizens’ rights. In this case, of course, Valeriya’s rights were violated — by the government as well, de facto, taking into account that the ECHR has awarded the applicant a compensation from the budget (EUR 20,000 as a compensation for non-pecuniary damage and EUR 6,000 for legal costs and expenses — ed. note), and it was the government whose inaction has led to the damage. We do not have information that the police officers were in any way connected with Salayev. However, I am under the impression that they were exhibiting some sort of “male solidarity.” Like, they would tell him how to avoid responsibility when he took away Valeriya’s cell phones. When he gave them back, theft was off the table. In one of their explanations, they said that Valeriya did not need protection from the government, and they considered the threats not realistic, because of her bad relationship with Salayev and his jealousy. So, because of jealousy, the police decided that the threats were not realistic.

G.R.: Was this the first lawsuit filed with the ECHR concerning domestic violence where the state was the defendant? Does this mean that Volodina’s case should resolve the problem of domestic violence in a comprehensive manner? Does this mean that the case against Salayev should be opened after all and carefully investigated? What agencies and individuals will be tasked with the creation of the Action Plan to prevent such violations in the future, which will be presented in six months to the Committee of Ministers of the Council of Europe?

O.G.: This was not the first case concerning domestic violence vs. Russia, but the first one on which the Court has made a judgment. We hope that the judgment will be fully implemented because the Court has recognized not only the breach of Valeriya’s right to protection from cruel treatment and investigation of her lawsuit but also established the fact of gender-based discrimination against her. The Court has also stated that Russia does not have legislation on domestic violence, that domestic violence orders accepted and proven in most countries on the Council of Europe do not work in Russia. We also hope that reports filed between 2016 and now will be investigated. The Action Plan will be created by the Ministry of Justice of Russia, then it will send the Plan to the Committee of Ministers of the Council of Europe, and then coordinate specific steps and deadlines with the Committee.

G.R.: Can this case somehow affect the adoption of the law on the prevention of domestic violence and accelerate this process?

O.G.: Yes, we also hope that this case will have a direct impact on the adoption of domestic violence legislation. I am saying “legislation,” because apart from the law introducing this notion, amendments should be made to the Criminal Code, to the criminal procedural and civil legislation. That is, a lot of work should be done on legislation. We believe that when the government claims it is too expensive and we do not have budget funds to build shelters for women [safe places, special centers for women who have suffered from domestic or sexual violence or ended up in a difficult position] who are running away from violence is unsubstantiated. Shelters are also necessary (and this practice exists in many countries) if there is a threat of violence. We commend the statement of Human Rights Commissioner Tatyana Moskalkova, who has recently said that Russia should ratify the Istanbul convention in connection with the beating of a girl in Ingushetia. The Istanbul Convention sets forth detailed measures, both legislative and educational, which help to fight against this phenomenon at the earliest stages. That is, it is not only about effective punishment, but also about making this crime commonly viewed as unacceptable. There should be zero tolerance to domestic violence in society, no more victim-blaming, etc. Of course, the only one that can be blamed is the perpetrator. 

Today, we can already say that there is a public campaign around the problem of domestic violence in Russia. This is a grassroots initiative led by human rights defenders, activists, and journalists, which is supported by various media and social movements, which unites feminist movements and organizations, politicians, businesswomen and celebrities, writers and public intellectuals. The fact that we hear more and more about notable domestic violence cases is the result of this public campaign. This doesn’t mean that none of that happened before (even though the situation became somewhat worse after a battery in the family was decriminalized). But increased awareness of the domestic violence problem gradually causes the public to recognize that domestic violence in Russia is a political and governmental problem, and not just a problem of a select few. That is why it is so important that everyone who has access to public resources should speak up and form zero tolerance to domestic violence and violence against women in Russian society.

There is another important story that is probably bringing us closer to a comprehensive solution to the domestic violence problem in Russia. On July 9, the ECHR published a communiqué on four more complaints concerning domestic violence in Russia. This may bring in motion the “pilot judgment” procedure, which will result in the Court suggesting a set of legislative measures and a timeline of their adoption in Russia. In the entire ECHR history, 26 such pilot judgments were made, but none of them was about domestic violence. A “pilot judgment” is a procedure of a comprehensive nature. It was initiated because of the complaint of four Russian women who regularly suffered from domestic violence and faced rejections from the authorities when they asked to protect them from cruel treatment. They are Margarita Gracheva, Irina Petrakova, Natalia Tunikova, and Elena Gershman. Currently, domestic violence in Russia is still decriminalized, the legislation does not provide ways to fight against it, and a woman is killed by her partner or family member every 40 minutes nationwide

This text was translated from Russian by Natalia Slienko. The original text could be found here.

Protecting #FreeSpeech in a post-truth world

“What is the cost of lies?” asks Valery Legasov, the Soviet nuclear physicist at the heart of the hit HBO series ‘Chernobyl’. “It’s not that we will mistake them for the truth. The real danger is that if we hear enough lies, then we no longer recognize the truth at all.” That warning is both remarkably familiar and disturbingly apt in an age dominated by fake news and alternative facts, especially because the famed Soviet obfuscation machine has found new life under Vladimir Putin’s watch in contemporary Russia, write Natalia Arno and Vladimir Kara-Murza.

Dutch prosecutors have announced charges against four pro Kremlin separatist commanders for shooting down Malaysian Airlines flight MH17 over Ukraine in 2014, which resulted in the death of the plane’s 298 passengers. Rather than offer an apology to the families of the 298 people who died in the crash, the Kremlin propaganda machine has opted for obfuscation and disinformation, blaming the Ukrainian government — which didn’t control the territory from where the missile was fired — and the C.I.A., saying Putin’s plane was the intended target of the American intelligence agency. These lies may not have fooled anyone in the Netherlands, but given the near-total state monopoly on the media in Russia, many people there seemed to have taken the Kremlin’s story at face value.

On Friday, June 28th, a group of policymakers, prominent journalists, international legal scholars and free speech advocates will come together in The Hague for a public conference designed to find effective responses to the Putin regime’s unprecedented assault on truth and free public debate. Far from being redundant, the question of whether propaganda is protected speech is central to the policy debate over Kremlin disinformation. The key irony is that illiberal regimes like Putin’s are able to exploit the very freedoms they deny their own citizens to wage information warfare in the West. Free speech is an essential liberty and also a gaping vulnerability. How can we reconcile the two?

Free speech: Essential, yet not absolute

First, it is important to note the divergent approaches Russia and many Western democracies have taken to controlling the flow of information. While Western democracies seem to have only just recently begun to grapple with the policy implications of massive foreign disinformation campaigns and the perceived collapse of truth, reason and facts in public debate, Russians have spent the better part of a century living in a ‘post-truth’ world.

A current example can be found in the Chernobyl series. Rather than tell people living near Chernobyl that the plant was spreading radioactive contaminants into the air, Soviet leaders instead urged children to go outside for May Day festivities and didn’t evacuate the nearest town of Pripyat for 36 hours. Nor did then-leader Mikhail Gorbachev warn neighboring countries that a dangerous cloud of poisonous gas was headed their way, out of fear of looking weak to domestic adversaries. Putin and his coterie of oligarchs fit within this long, insidious tradition of post-truth politics.

As our friend, the late Russian opposition leader Boris Nemtsov, described the regime’s propaganda in one of his final interviews: “[Putin] programmed my countrymen to hate strangers. He persuaded them that we need to rebuild the former Soviet order, and that the position of Russia in the world depends entirely on how much the world is afraid of us… they operate in accordance with the simple principles of Joseph Goebbels. Play on the emotions; the bigger the lie, the better; lies should be repeated many times. This propaganda is directed to the simple men; there is no room for any questions, nuances. Unfortunately, it works.”

In the West, democracies have clung to the capitalist model of a ‘free marketplace of ideas.’ As US Supreme Court Justice Oliver Wendell Holmes famously argued in a 1919 dissent: “The best test of truth is the power of the thought to get itself accepted in the competition of the market.”

Vladimir Putin, however, believes in a healthy dose of state intervention to sway perceptions of reality his way. State-run NTV is dutifully producing its own series on Chernobyl, with CIA agents responsible for the meltdown of the reactor while heroic apparatchiks fight to save lives rather than running to avoid exposure to radiation. The Kremlin’s view of what happened at Chernobyl will be artfully produced and pit “good” Soviets against “evil” Americans.  It will likely be one the most trumpeted TV shows in Russia this year.

Protecting the public pursuit of truth

Faced with the real-world consequences of Putin’s propaganda, Western societies are coming to understand that free speech may be an essential liberty, but it has never been absolute. Words that could create a clear and present danger for societies have routinely been prohibited. Just as falsely crying “fire” in a crowded theatre would seldom be considered protected speech because of the dangers such a lie can provoke, several European countries have already taken action against speech that incites ethnic, racial or religious hatred. Much of the Kremlin’s disinformation fits into those categories. 

So how can we adapt our understanding of protected speech in light of the disinformation threats we currently face? How can an ideological opponent compete with Putin’s army of trolls, none of which are operating in good faith? A marketplace of ideas can only function where competition is protected. The key policy challenge facing today’s political leaders is how to safeguard a free marketplace of ideas against a sort of ‘information dumping’ where foreign disinformation campaigns inhibit a free and fair exchange of ideas in the public sphere. On 28 June, we hope to find ways to meet that challenge.

Natalia Arno is the President of the Free Russia Foundation in Washington, DC. Vladimir Kara-Murza is a prominent Russian democracy activist and author and chair of the Boris Nemtsov Foundation for Freedom.

This article was originally published on EU Reporter

The Kremlin’s games surrounding sea lines of communications have becoming increasingly more dangerous

It’s been seven long months since a group of Ukrainian sailors was illegally captured by the Russian government.  The international campaign demanding their immediate release is growing, spreading to new countries. Even in Moscow, where group protests are prosecuted, series of “one-person picketing” has been taking place in front of the Presidential Administration demanding to release the sailors or exchange “all for all” (i.e. all Ukrainian political prisoners held in Russia for Russian citizens held in Ukraine).

The International Tribunal for the Law of the Sea has ruled that Russia must return to Ukraine the three military vessels and 24 sailors captured in the Kerch Straight. June 25, 2019 was the deadline for complying with this ruling. In accordance with the Law of the Sea Convention, all military vessels and their personnel have immunity, they cannot be brought before court, imprisoned, and are not subject to foreign jurisdictions. However, the Kremlin has demonstratively ignored the U.N. Law of the Sea Convention adopted in 1982, as well as the ruling of the International Tribunal for the Law of the Sea.

Instead of a quick release of the Ukrainian sailors in the immediate aftermath of Kerch Straight incident, having held them in illegal captivity for seven months, now the Kremlin has started bringing criminal charges against them. Nikolay Polozov, one of the lawyers representing the Ukrainian sailors reports that the persecution has communicated an intention to formulate final charges by July 9.

Why is the Kremlin so brazen in escalating the Kerch Straight standoff? The answer is quite clear — with the objective to establish a full unilateral control over the Sea of Azov and the Black Sea.

The Kremlin has blocked the renegotiation of fishing quotas for the Sea of Azov. The Russian FSB and the National Guard have been taking Ukrainian fishermen as prisoners. The Russian government, without any legal merit, pressures other countries for transit permits; demands that Russian maritime pilots are included in international court proceedings.

Russia’s ongoing military operation in Syria provides an additional context for these developments. Sevastopol plays a critical role in military resupply to the Mediterranean. This, in turn, is intensifying the process of militarization of the entire Crimean Peninsula.

At the same time, Russian military aircraft and maritime vessels are engaging in provocative military maneuvers far from the Russian border with an ever-increasing frequency, threatening sea lines of communication.  The two most recent episodes took place in early June 2019: Russian destroyer Admiral Vinogradov conducted a threatening maneuver against a vessel from the U.S. 7th Fleet in the Philippine Sea; and a Russian SU-35 jet conducted an intercept of a U.S. Navy aircraft over the Mediterranean Sea.

In their public statements, the Kremlin officials stress their readiness to cooperate with international institutions; express readiness to comply the legal norms and compel others to do the same. However, the situation with Ukrainian military sailors, ignoring of the laws of the sea and the ruling of the Hamburg court show that Moscow is acting in such as manner as if it were bent on uprooting the entire international order established after the World War II.

This double game is not compatible with the high status accorded to Russia through its permanent membership on the U.N. Security Council.

Against this backdrop, the fight over the release of Ukrainian sailors – are important de-escalation measures, and their outcome have profound ramifications for all of the G20 members states.

Ukraine is pressing not only for the release of its sailors, but also for giving the Kerch Straight the status of international waters. In Kiev’s view, this move will mitigate the risk of further clashes.

It is high time to call a UN Security Council session to adopt a special resolution compelling Russia to comply with the ruling of the International Court. It is also critical to consider introducing limitations against the seabed infrastructure of Russian pipelines, the ports of Azov, as well as against entities who facilitate certification of foreign vessels with their subsequent registration under the Russian Federation flag and offer services to foreign operators to establish lines of communications with the closed ports of Crimea in violation of sanctions.

Article 60 of the Vienna Convention of 1969 as well as Article 51 of the U.N. Charter establish the legal basis for Ukraine to suspend or completely withdraw from the 2003 Russo-Ukrainian Agreement, establish a 24-mile adjacent zone and claim the width of its territorial waters as well as continental shelf territories. If this takes place, the Azov Sea beyond the territorial waters will become international, and the Kerch Straight, in accordance to the Part 3 of the UN Convention on the Law of the Sea will acquire the status of a straight used for international communications.

If Moscow moves ahead with military proceedings against Ukrainian military sailors in direct violation of international norms, all European offices of Russian Maritime Register of Shipping and Russian River Register of Shipping must be shut down; and advisory must be issued to European vessel owners, operators and insurers to avoid cooperation with the Russian Registers for purposes of maritime activities.

We must not forget that Russia has illegally ceased Ukrainian vessels Petro Godovanets, Ukraine, Centaur, Sivash, Fyodor Uryupin and is now exploiting them  The UN International Maritime Organization (IMO)  should not ignore these demonstrative and gross violations of the international law by Russia. These pirate tactics are incompatible with Russia’s high status at the IMO Council. Ukraine, in its turn, should consider demanding stripping Russia of this status.

International organizations in charge of enforcing maritime laws must force Russia to release Ukrainian military sailors, stop its pirating activities vis-à-vis civilian vessels and prevent further Moscow’s advances aiming to close off the Sea of Azov.

This Article first appeared in Russian at the Дом Свободной России

Misrule of Law: How the Kremlin Uses Western Institutions to Undermine the West

The Free Russia Foundation has assembled a team of experienced writers, researchers, and journalists affiliated with different organizations, to document some of the most compelling cases of Russian meddling. However, these events are only a sample; the Putin regime is busy throughout the world, undermining the integrity of Western judicial and policymaking institutions.

This report, a tour d’horizon of Russian active measures and subversion campaigns throughout North America and Europe, demonstrates that Vladimir Putin’s attempts to infiltrate Western institutions are relentless and that there is one constant to his two decade-long engagement: he triumphs where we invite him to, and most of all where we happily act as his complacent enablers.

This is a story of how the West consistently fails to get its own house in order. The very institutions created after World War II to keep transparent markets and liberal democracies from corrosion and collapse are now playgrounds for Kremlin agents seeking to enrich themselves and further that corrosion and collapse along. More than anything, the pathologies of our own societies are on ample display in these pages as the principal reason why so many oligarchs, intelligence operatives and bribe-offering banks and energy companies have been able to thrive outside of Russia.

The Putin regime’s persistence has paid off quite well in its geo-political battle of wills with the West, whereby Russia’s military actions since 2014 have been met with lukewarm international sanctions that have failed to shift their course.

What we hope this report demonstrates is the need for Western governments to take a stronger stand and vigorously defend their values and institutions. While this may not have the same impact as ending a bloody war, refusal to give in to the Kremlin’s advances for new laws to protect its business and financial interests; putting up barriers in response to Russia’s abuse of international law enforcement entities or enforcing existing laws so that oligarchs can’t hide behind newly-created NGOs can begin to push back against Russia’s current lawless actions.

If an individual nation defends its criminal and civil court system or combats corrupt practices within its own government, this will provide much-needed resistance against the Kremlin’s aims and objectives.If, collectively, several nations decide to join forces in this effort, ample pressure will be placed on Russia’s leadership to make it play by the rules more often and respect our institutions rather than try to manipulate them.

In the pages of this report, you’ll read about these, and many more:

– a U.S. federal money-laundering case was sabotaged by a Moscow attorney turned Congressional lobbyist, who obstructed justice, set up a dubious charity in Delaware to dismantle a landmark American human rights act— all before trying to influence a U.S. presidential race;

– Russian mobsters in Spain, despite a mountain of incriminating evidence compiled over the course of a decade, all went free by, among other things, enlisting Spanish jurists to spread a malevolent defamation campaign against one of his country’s most committed counterterrorism and organized crime magistrates;

– the Kremlin directed effort to pass laws in the Belgian and French parliaments that would effectively nullify the Yukos shareholder court decisions and render them unenforceable against the Russian Federation;

– the eccentric president of a NATO and EU member-state sided against his own government in favor of a hostile foreign one, to which he’s been financially and politically connected for years.

 

The chart below visually summarizes some of the cases, countries, branches of power, institutions and entities in the West impacted by Russian interference:

The report’s contributing authors:

Nataliya Arno

Ms. Arno is the founder and president of Free Russia Foundation, a non-partisan non-profit think tank headquartered in Washington, DC with affiliate offices in Kyiv Ukraine and Tbilisi Georgia. Prior to creating Free Russia Foundation, Ms. Arno worked for the Moscow office of the International Republican Institute where she was the Russia country director from 2008 until 2014.

Neil Barnett

Mr. Barnett is founder and CEO of Istok Associates, a London-based intelligence and investigation consultancy focused on Central & Eastern Europe and the Middle East & North Africa. Previously, he was a journalist in the same regions for 13 years and wrote for the Telegraph, the Spectator and Janes publications. He covered the war in Iraq, the Ukrainian Orange Revolution, the eastern expansion of NATO and the EU in the 2000s and Balkan organized crime.

Rumena Filipova

Ms. Filipova’s primary research at the Center for the Study of Democracy is related to Russian domestic and foreign policy as well the Kremlin’s media, political and economic influence in Central and Eastern Europe. She holds an MPhil and DPhil in International Relations from the University of Oxford. She has been a visiting fellow at the Carnegie Moscow Center, the Polish Institute of International Affairs, and Chatham House, among others.

Vasily Gatov

Mr. Gatov is a media researcher, journalist, analyst and media investment expert.He is the former head of RIA Novosti MediaLab (2011 – 2013).

 Jacub Janda

Mr. Janda is the Executive Director and member of the executive board of the European Values Think Tank headquartered in Prague, Czech Republic.

John Lough

Mr. Lough is Managing Director of JBKL Advisory Ltd, a strategy consulting company, and an Associate Fellow with the Russia & Eurasia Programme at Chatham House. In a private capacity, he has been providing pro bono advice to the Bitkov family as part of the campaign for their freedom since 2015. He is the co-author of the Chatham House research paper ‘Are Ukraine’s Anti-Corruption Reforms Working?’ (November 2018) https://www.chathamhouse.org/publication/are-ukraines-anti-corruption-reforms-working

Anton Shekhovtsov 

Mr. Shekhovtsov is an external Lecturer at the University of Vienna, Associate Research Fellow at the Swedish Institute of International Affairs, an expert at the European Platform for Democratic Elections, and General Editor of the “Explorations of the Far Right” book series at ibidem-Verlag. His main area of expertise is the European far right, relations between Russia and radical right-wing parties in the West, and illiberal tendencies in Central and Eastern Europe.

Maria Snegovaya

Ms. Snegovaya is a PhD candidate at Columbia University. Expert on the sources of support for the populist parties in the Eastern Europe. She is a regular contributor to The Washington Post, The Huffington Post, The New Republic, and columnist at Russia’s “Vedomosti” business daily.

Dr. Denis Sokolov

Dr. Sokolov is a research expert on the North Caucasus for Free Russia Foundation focusing on the informal economy of the region, land disputes, and institutional foundations of military conflicts. He is a senior research fellow at the Russian Presidential Academy of National Economy and Public Administration (RANEPA) and research director at the Center for Social and Economic Research of Regions (RAMCOM).

Martin Vladimirov

Mr. Vladimirov is an energy security expert specializing in natural gas and renewables markets at the European policy think tank, Center for the Study of Democracy (CSD). His work at CSD focuses on analysis of the energy security and governance risks in Europe, political risk and international security. Before joining CSD, Mr. Vladimirov worked as an oil and gas consultant at the The Oil and Gas Year, where he worked in Turkey, Kazakhstan and Saudi Arabia. He holds a Master’s degree from the School of Advanced International Studies (SAIS) at Johns Hopkins University. He has written several academic publications, multiple policy reports and is the co-author of four recent books on Russian influence including the Kremlin Playbook: Understanding Russian Influence in Central and Eastern Europe, Kremlin Playbook 2: The Enablers,The Russian Economic Grip on Central and Eastern Europe and A Closer Look at Russia and its Influence on the World. 

Michael Weiss

Mr. Weiss is an American journalist and author of the New York TimesBestseller Isis: Inside the Army of Terror. He is a senior editor for The Daily Beast, a consulting executive editor at Coda Story, a columnist for Foreign Policyand a frequent national security analyst and contributor for CNN.

Ilya Zaslavskiy

Mr. Zaslavskiyis Head of Research for the Free Russia Foundation (FRF) and Head of Underminers.info, a research project exposing kleptocrats from Eurasia in the West. Until December 2018 he was a member of the Advisory Council at the Hudson Institute’s Kleptocracy Initiative for which he wrote a report on “How Non-State Actors Export Kleptocratic Norms to the West”. Prior to joining FRF, he was Senior Visiting Fellow, Legatum Institute, and Bosch Fellow, Chatham House. He has written reports on Eurasian energy and kleptocracy for the Atlantic Council, Council on Foreign Relations, Martens Centre and other think tanks.

 

For Press enquiries, please contact: Natalia.Arno@4freerussia.org

Monaco’s Minister of Justice implicated by Kremlin’s oligarch

The case of Russian billionaire Dmitry Rybolovlev is a story of impunity both in Russia and in the West. This oligarch, who was connected with the Kremlin and Russian security services, got away with inflicting a major environmental catastrophe, and instead of facing any consequences, received billions of dollars from another well-connected oligarch as well as the opportunity to live on a supposedly clean slate in the West. He evidently took his corrosive business practices to his new places of residence, including Monaco, which, according to multiple reports, led to the undermining of local police and the resignation of a justice minister. The oligarch continues to enjoy connections with the Kremlin and, when necessary, safety in Moscow. Through these connections, he has effectively avoided facing any consequences for his actions vis-à-vis local law enforcement. This ongoing case is a testimony to the erosion of legal institutions in a key European location.

Dmitry Rybolovlev, former owner of the Russian potash empire Uralkali, was implicated in a major environmental catastrophe in the Perm region. Author Oliver Bullough visited the site of one of the catastrophes at Rybolovlev’s potash plants in Berezniki and noted in his latest book Money Land that the oligarch’s negligence of proper safety procedures at his salt mines led to large swaths of the city literally falling into huge sinkholes that formed above the mines (Oliver Bullough, Money Land: Why Thieves & Crooks Now Rule the World & How to Take It Back (Profile Books, 2018), pp. 219-220.)  Igor Sechin, then deputy head of presidential administration, reviewed the complicated case and, despite condemning evidence, absolved Rybolovlev of responsibility for any of the damages and allowed him to safely leave the country.

Rybolovlev’s companies did not fully provide even the modest compensation he initially agreed to in 2007-2009, but he did sell his stake in Uralkali to Suleyman Kerimov, another Kremlin-connected oligarch (see a separate case about him below), at a high price and depart safely for full time residence in Switzerland and Monaco (The main source in the West on all this has been this NYT article; key Russia source). With money taken out of Russia, Rybolovlev bought mind-bogglingly high-end properties in New York and around the world, expensive art, and football club in Monaco.

Since then, Rybolovlev has been trying to present himself as an independent businessman who cut his ties with Russia and the Kremlin, however, this effort has been a failure on multiple levels. First, the story of close connections between Rybolovlev and Sechin came up at a Congressional hearing last year. Secondly, Der Spiegel wrote in November 2018 that “rumors still circulate in Western intelligence circles today that Rybolovlev bought his way out from under the multibillion-dollar cloud hanging over him”. Thirdly, while Rybolovlev mostly lived in the West, a quick Google search shows that in 2016 he negotiated with Gennadiy Timchenko’s company Stroytransgaz regarding the lease for his property in central Moscow. This proves that Rybolovlev continues to have business relations with Kremlin insiders despite his claims that he permanently moved to the West for a new life.

For considerable time this claim has been taken at a face value by Rybolovlev’s interlocutors and counterparts in the West (especially those who engaged in various lucrative relations with him). In 2017, however, Prince Albert II of Monaco and a number of other high-ranking officials broke all contact with the billionaire. According to Journal du Dimanche, Rybolovlev, who invested 300 million euros in the development of his Monaco Football club, was declared persona non grata by the authorities. In September 2017, the Monaco Prosecutor’s Office initiated a lawsuit against Rybolovlev regarding the bribery of officials and high-ranking police officers. Rybolovlev and his immediate circle have allegedly put a lot of pressure on the investigative authorities and the police of Monaco. They attempted to send the detectives off course while they were investigating the case against the Swiss art dealer Yves Bouvier, who had sold about 40 paintings by famous artists to the billionaire at unreasonably inflated prices”.

At the heart of the complicated Monaco case lie claims and counterclaims about Rybolovlev’s art collection and whether or not his former art dealer, Yves Bouvier, swindled the Russian oligarch. The focus of the scandal then turned towards Rybolovlev himself, who Bouvier claimed used his political clout to coordinate attacks against the art dealer by law enforcement officials.

Monaco’s Justice Minister, Philippe Narmino, had to step down from his position because of this case, facing questions from prosecutors after it was alleged in the press that he might have received gifts from Rybolovlev while the Russian launched fraud claims against Bouvier. Bouvier and his associates presented evidence that they were illegally recorded as part of Rybolovlev’s campaign to prove that he had been defrauded by Bouvier. The dealer himself was arrested by police officers of the Monegasque security “just as he was setting foot in Monaco … This led to accusations against the Russian billionaire of having taken advantage of his relations with senior Monegasque officials, including the Minister of Justice Philippe Narmino, to arrest and charge Bouvier.”

The art dealer was arrested in February 2015 on his way to Rybolovlev’s villa. His lawyer contended that Rybolovlev and his lawyer took part in arranging the arrest. Media outlets published some of the hundreds of SMS messages leaked from the phone of Rybolovlev’s lawyer, Tetiana Bersheda, which were turned over to the investigative judge in charge of the case”. In these messages, Bersheda warns the Monegasque police of the arrival of Yves Bouvier to the Principality.

The Minister of State, head of Monaco’s government, was very reluctant and evasive with regard to the investigations into this matter and even suggested abridging them.  Nevertheless, the authorities of Monaco and other countries have attempted hold the culprits accountable and some disciplinary measures were taken against the police officers involved in helping Rybolovlev. This help was allegedly provided in exchange for high-end tickets to Monaco FC and other lavish perks emanating from Rybolovlev’s circle.

On January 8th, 2019, the Monaco revision court rejected Rybolovlev’s appeal against the use of his lawyer’s mobile phone by the Monegasque justice, who continues to suspect the oligarch and his lawyer of trading in influence and corruption. Following this decision, Rybolovlev’s lawyers suggested that they might appeal to the European Court of Human Rights, claiming breach of privacy and other misconduct on the part of the the investigators. This investigation is far from over and while it continues, the oligarch and his circle still enjoy a wide sphere of influence in the principality. On January 16th, Rybolovlev returned to Monaco with a plan to invest 55 million euros in sport infrastructure in the country, a feat that the Russian press took as “comeback” for the billionaire.

Whatever the outcome of this complicated investigation is, one thing is already clear. The Kremlin-backed conduct of the oligarch, who brought his business and legal practices from Russia to Monaco, led to the demise of a justice minister, but so far has had no real consequences either for him or his political and business interests in the West.

Photo by Pasquale Iovino

The curious case of Suleyman Kerimov in France

The case of the Kremlin-connected oligarch Suleyman Kerimov is a testimony to the power of the Russian state when it is used to the benefit of its allies in western courts. In 2017-18 Kerimov faced serious allegations of money laundering and other wrongdoing in the French courts. After the introduction of political pressure from Moscow, however, the French legal system started to produce strange results that eventually led to the dismissal of all charges levied against the oligarch. Recently, however, a French judge placed Kerimov back under formal investigation on suspicion of compliance in aggravated tax fraud. The outcome of this new case will indicate the ability of the French legal system to act independently despite pressure from the Russian government.

Suleyman Kerimov, nicknamed the “Russian Gatsby”, is the 21st richest person in Russia with an estimated net worth of 5.4 billion euros, the majority owner in Russia’s biggest gold mining company, Polyus PJSC, and a senator in the Russian Federation Council for the region of Dagestan. Upon landing in Nice for a vacation trip in November 2017, he was arrested by the French police and questioned for two days over alleged tax evasion and money laundering in connection with the purchase of real estate on the French Riviera.

The court in Nice charged him with tax fraud, set bail at 5 million euros, and forced Kerimov to give his passport away and to not leave France. The Ministry of Foreign Affairs of the Russian Federation sent a note to the French authorities, stating that Kerimov should have immunity from prosecution, by virtue of his diplomatic passport (link). According to the French, however, Kerimov did not use it when he flew to Nice. The French Ministry of Foreign Affairs claims that Kerimov’s immunity does not apply to actions not connected to his functions (link).

Two weeks later, prosecutors asked for Kerimov to be placed in custody or for his bail to be increased to 50 million euros. The court in Aix-en-Provence then set the bail to 40 million euros, put restrictions on those, with whom he may communicate, but still allowed him to stay out of custody (link).

In 2018, under provisions of a law passed by congress in 2017, the US treasury department announced sanctions against Russian oligarchs (including Kerimov), companies, and senior government members in retaliation against Moscow’s meddling in 2016 US presidential elections (link). Two months later, Kerimov won in a ruling at a court in the Aix-en-Provence that removed the charges set against him and allowed him the right to leave France. According to Kerimov’s defense team, they persuaded the court that the allegations did not qualify as money laundering, only as tax fraud (link). The prosecutor stated, however, that he is surprised by the ruling and indicated that he will consider an appeal to the highest French court (link).

Due mostly to a lack of understanding about why Kerimov was cleared of charges and based on the statements by the prosecutor’ office, it would appear that the judicial process may have been influenced by diplomatic relations between France and the Russian Federation. About a month before the final ruling, French President Emmanuel Macron visited the Russian President in Moscow (link). There is no substantial evidence for these claims and so far there has been no new information about the potential decision of the prosecutor’s office to appeal. After the acquittal, the Russian Federation Council met Kerimov with an enthusiastic ovation (link).

In March 2019, however, the French judge placed Kerimov back under formal investigation on suspicion of compliance in aggravated tax fraud, evidently after the prosecutor in the southern city of Nice took some additional steps in the court (link). The judge’s move to place Kerimov under formal investigation means that he becomes a formal suspect, but such investigations can be dropped without going to trial (link). Kerimov’s defense team already said that the oligarch considers the new investigation harassment. It can thus be reasonably expected that the story of dropped charges may repeat itself the second time around.

It should also be noted that Kerimov already had had highly controversial involvement in incidences of corruption. In 2012, a report by London’s The Henry Jackson Society, titled “The Shuvalov Affair,” described two major 2004 investments by Russia’s then Deputy Prime Minister Igor Shuvalov that yielded unusually high returns (link). One was a $49.5 million loan made to Alisher Usmanov to help buy a stake in Anglo-Dutch steel company Corus, the other a $17.7 million bet on Gazprom stock via Suleiman Kerimov’s Nafta Moskva.

Many experts continue to see this as a clear-cut form of bribing and money laundering between the oligarch and Putin’s top official. Shuvalov has repeatedly denied that there was anything improper or illegal about his business activities and his relationships with billionaires like Kerimov and Usmanov (link). Despite harsh libel laws, however, neither of the figures involved sued the authors of the report, preferring instead to let the news cycle die and its revelations simply be forgotten.

In April 2016, the Organized Crime and Corruption Reporting Project (OCCRP) wrote about the Panama Papers and how they revealed Sergei Roldugin, the Russian cellist and businessman, as the secret caretaker of Russian President Vladimir Putin’s enormous wealth. OCCRP reported that Roldugin had received large sums of money from Suleiman Kerimov, using opaque financial mechanisms including offshore accounts. In two complex deals with Kerimov companies, Roldugin effectively received the rights to receive 4 billion rubles (US$ 59 million) and US$ 200 million respectively for a payment of just US$ 2 (link).

The Invisible Hand: how and when the Kremlin interferes in elections in Europe

Anton Shekhovtsov on how and when the Kremlin interferes in elections in Europe. (more…)

Russian-connected Advisor Maintains Influence Over Czech President

The stance of the Czech people toward Russia is characterized by ambivalent and complicated attitudes rooted in the history of the 20th century. On the one hand, the invasion of Czechoslovakia carried out by the Soviet Union and its allies to crush the liberalizing trends in the country’s politics remains one of the major national traumas for the Czechs and determines negative views of and distrust toward Russia as an heir to the Soviet Union. On the other hand, many people are still nostalgic about the socialist times (which is manifested, in particular, in the popularity of the largely unreformed Communist Party of Bohemia and Moravia that until very recently was the third largest party in the country) and this nostalgia about socialism is often translated to the legitimacy of pro Russian views. However, the significance of this legitimacy should not be exaggerated: the majority of the Czech people are (still) very skeptical about Russia. 1 (more…)

Victory Day in 2055: Four Scenarios

Victory Day – May 9 – is the most politicized date in the post-Soviet calendar. The most widely observed military commemoration in the world today, it is much more than a military parade on Red Square, featuring an astonishing variety of both official and grassroots events across the former Soviet Union and beyond. It is also an occasion for strident debates about the present-day political implications of World War II memory as well as Russia’s role in neighbouring countries and the world at large. (more…)

A message before Russia erects a digital iron curtain: free the Kremlin’s political prisoners

As protests rage across Russia in response to a Kremlin-backed law to erect a digital Iron Curtain, authorities are preparing a “cyber-defence test” to shut down the Russian Internet – a step that may result in isolating the country from the rest of the online world.

At risk: Russia’s fundamental freedom of speech. As one human rights activist told international journalists, “The [Russian] government is battling freedom…, I can tell you this as somebody who spent a month in jail for a tweet.”

For those of us born in Russia who seek a regime that respects human rights, the Putin regime’s aggression abroad has its parallel in repression at home. Last month, Russian civil society activist Anastasia Shevchenko faced a parent’s worst nightmare: her special-needs teenage daughter had been hospitalized and was near death. But Shevchenko – under house arrest for the absurd charge of collaborating with an “undesirable” foreign organization – was prevented by the local Russian court from visiting her dying daughter until just hours before the girl passed away.

What were the charges against Shevchenko? Organizing debates, coordinating educational lectures for voters, and participating in pro-democracy meetings. Though these activities are internationally guaranteed rights — and protected by the Russian Constitution itself — Shevchenko could face six years in a Russian jail.

This type of senselessly cruel treatment from Russian authorities against human rights defenders and activists in Russia is increasingly common. Just two months ago, 77-year-old Lev Ponomarev, a veteran rights defender, served 16 days in prison for the crime of sharing a Facebook blog. Despite strong international condemnation over his arbitrary detention, the judge who convicted him showed no leniency, refusing to let him attend the funeral of his friend and activist Ludmila Alexeyeva.

In fact, human rights are under assault in Russia in nearly every way, as President Putin and his allies have used their power to pass repressive laws that ensnare citizens of Russia and other areas it occupiesOne of the Kremlin’s preferred methods of repression is to detain political opponents and activists on spurious criminal charges. We are jailed for exercising our fundamental rights, for peaceful protest, for texting our friends, and for holding dissenting political opinions. This is part of a larger campaign by the authorities to crush civil society and stifle dissent in my home country.

Six years ago last December, I fell victim to this brutal campaign. I was given 48 hours to leave Russia, or spend twenty years in jail for state treason for my work for an American democracy-promotion organization. Now my son cannot see his father and friends and I do not know when I will be able to watch the sunset again over Lake Baikal, near my birthplace. But I continue to fight tirelessly for this day to come – and for the day when Russia will no longer have political prisoners.

While my organization, Free Russia Foundation, and other rights groups in Russia and abroad have worked on behalf of these victims to bring rights violations to the public’s attention and help them through legal action, there are limits to what our advocacy can achieve. We ourselves often become targets – imprisoned, exiled, or even murdered.

Discrete actions by the broader international community alone will not be enough to make a fundamental change in Russia. There is a need for a common and coordinated advocacy strategy among civil society organizations around the world in order to make the Kremlin heed our calls to release political prisoners.

A dozen rights groups across Russia, Europe, and North America have now joined together as a Coalition to say “enough.” From Moscow, Kyiv and Tallinn to Berlin, Ottawa, and Washington, D.C., the newly-launched “Coalition to Free the Kremlin’s Political Prisoners” will organize collectively to call out abuses of authority and push for the release of the Kremlin’s political prisoners. At a time in which attacks on civil society are at an all-time high, our goal is to join together across borders to stand up for the future of Russia’s people.

The Coalition is hitting the ground running. According to the Moscow-based Memorial Human Rights Center, Russian authorities currently hold 233 political prisoners, with targeted groups including rights defenders, such as Shevchenko and Oyub Titiev, who headed the Memorial branch in Chechnya when he was arrested last year; Ukrainian hostages held by the Kremlin, including Oleg Sentsov, a Ukrainian film-maker imprisoned because he opposed Russia’s attempted annexation of Crimea; and Alexey Pichugin, who – after being framed for several murders and attempted murders and having served more than 15 years in prison on a life sentence – has become Russia’s longest-serving political prisoner.

As Russia seeks increasingly to cut itself off from the world, one of the Coalition’s primary tasks will be to shed light on the stories of these and other prisoners with targeted media campaigns. For the sake of all political prisoners held by the Kremlin, we will stand as one – and we urge other civil society organizations to join our efforts and governments worldwide to support our cause.

This article was originally published on https://blogactiv.eu/

As Nazarbayev prepares his exit, Putin takes note

On March 26, 2019, the global foreign policy wonk community was abuzz with the news of the resignation of Nursultan Nazarbayev from his long-held post as Kazakhstan’s president. The non-democratic transition of power that this resignation has set in motion in Kazakhstan is an event of enormous political significance for the entire post-Soviet space. This is not only due to Kazakhstan’s growing geopolitical importance in the region, but also because the issue of succession is critical to the “personalist” authoritarian regimes that make up the largest and most influential group among former Soviet states. Transition of power is a fundamental challenge to such regimes and it determines the logic of their subsequent evolution in many ways.

Post-Soviet Cult of Personality Regimes

As far as non-democratic governments are concerned, personalist-type regimes are the most common and most effective among them today. Several regional subtypes of personalist regimes can be distinguished: African, Latin American, Arab (where a systemic crisis occurred in the early 2010s) and the post-Soviet.

Within the post-Soviet space, there are seven countries with full-fledged personalist authoritarian regimes: Turkmenistan, Uzbekistan, Kazakhstan, Tajikistan, Azerbaijan, Belarus and Russia. Kazakhstan stands out as the most successful not only among them, but also among all personalist regimes globally. This is why the succession mechanism currently being instituted by Nursultan Nazarbayev is significant regardless of whether it succeeds or fails.

Of course, it is important to acknowledge that the transition of power in Kazakhstan has not been completed, and as of this moment its mechanisms are unclear.  It is not certain who will inherit the power and in which proportions. It is not clear whether Kazakhstan’s Acting President Tokayev will run in the presidential elections a year from now, or whether it will be Nazarbayev’s daughter Dariga, who has claimed the Senate Chair post previously held by Tokayev. In that sense, what is unfolding in Kazakhstan now is the acme of the Nazarbaev personalism— the only certain thing is that he is the real decision-maker behind the process of transition of power and he alone has the capacity to determine who gets the power and how much.

Henry Hale’s Patronal Politics theory describes post-Soviet personalist regimes as hierarchical pyramids of patronage networks with an authoritarian leader at its helm. Unlike African regimes, post-Soviet personalist regimes are much more institutionalized and much less “voluntary”. They are based on complex systems of formal and informal institutions, agreements and traditions.

A key political mechanism of a post-Soviet personalist regime lies in the fact that, while it features a mature legal system, the norms of that system may or may not be enforced. There are no independent institutions able to enforce these norms. Instead, it is the regime’s leader and his patronage vertical who fulfil the enforcement function.  The leader, who controls the administrative system and the system of application of norms, is the informal de facto guarantor of key transactions and rights which are not guaranteed by formal law.

The Successor Dilemma

In practice, this means that the power of an authoritarian leader is accumulated in the process of the making of deals endowing specific actors or elite groups with rights to administer certain official functions or material resources from which they then collect rent. The continuous functioning of such a process is precisely what constitutes the regime leader’s power. This, in turn, shapes the essence of the succession dilemma of a personalist regime: the power of an incumbent leader is sustained as long as the guarantees that he offers are reliable; at the same time, the power of a new leader is a function of his ability to question previous deals and to renegotiate them.

The transitions of power which have already taken place offer ample material for understanding the issues accompanying transition processes within personalist regimes. The successor model is unable to solve its main dilemma. It is assumed that the successor will accept the responsibility of honoring a certain portion of the preexisting deals. However, as was clearly observed during the transition of power from Boris Yeltsin to Vladimir Putin, it is difficult to draw a clear line between the secured and non-secured deals. The uncertainty as to where that line lies becomes a political problem in itself  and a destabilizing factor. The rise of a new leader is proportionate to the rise of his clientele, which must supersede in their capabilities the clientele of the previous leader.

This was roughly the underlying logic of the Yukos case, whose political outcome was not only the redistribution of Russia’s main oil assets to benefit the new clientele, but an outright departure of Putin from the umbrella of the Yeltsin “family” and a wholesale renegotiation of the system of guarantees and agreements. In the aftermath of the Yukos case, even those elite groups whose rights and positions were much better protected than Khodorkovsky’s (who never belonged to the immediate circle of Yeltsin and “the family”), found themselves in a radically new situation and precipitously lost their prior influence.

Events in Turkmenistan and Uzbekistan developed along the same lines: new leaders who inherited systems of personalist rule enacted decisive changes at critical nodes and reoriented the systems around themselves. For the most part, they renegotiated the preexisting systems of agreements.

In contrast to this scenario, in the “tandem” scheme (the temporary shift of formal power from Putin to Medvedev between 2008-2011) no changes took place because the new leader didn’t have the ability to renegotiate deals guaranteed by the previous ruler. At the same time, the tandem experience demonstrated that a new ruler, however impotent in reality, is assumed to have access to at least some of the arsenal of informal power and as such forms his own clientele, a shadow court of sorts, which begins to accumulate power with the intent of shifting into an offensive. The power of a leader or a contending camp is determined by the proportion of elites that will turn to them with their grievances, to seek guarantees or a defense.

The unique characteristic of the post-Soviet variety of personalist authoritarianism is precisely the combination of formal and informal mechanisms of power. They function as of communicating vessels and thereby shape the internal dynamics of such regimes.

Today, it is clear that at the core of the power transition in Kazakhstan lies the family-constitutional troika consisting of Nursultan Nazarbayev as the national leader (elbasy), Tokayev as a formal, but as of now not-yet-elected president, and Dariga Nazarbayeva as the Speaker of the Senate (i.e., according to the Constitution, second in line to the presidency). However, the future factual division of power within this “orchestra” is unknown. It is possible that even the members of this troika are not certain about it either. Tokayev may turn out to be a cover or façade for a transition of power within the family; or he could be the real deal, balancing and checking the family influence.

Sovereignty and Security: Doctrinal Legitimacy

Formal institutional aspects of the transition, about which so little is known, merit a thorough consideration.  These institutional aspects reflect important trends within the evolution of contemporary authoritarian regimes— first and foremost, their propensity toward ideologization, i.e., the quest to identify specific state/regime values as the foundation for their long-term legitimacy. This aspect of the transition in Kazakhstan has direct implications for Russia.

As has already been announced, Nazarbayev, having left the presidential office, kept his posts as the National Security Council and the Leader of the “Ruling Party”. Let’s examine the first post. The institutional side of the Kazakhstan transition is clarified by two laws: the National Security Law of the Republic of Kazakhstan and the National Security Council Law.

The National Security Council Law endows the founding president of the Republic (elbasy) with the right to head this agency indefinitely and describes the powers of the Chair. These powers are quite broad, though not without limitations.  For example, the members of the Council are picked by the President, but with the approval of the Chair. Therefore, the actual influence of the President and the Chair respectively in this process is determined by the informal weight of each and can change over time.  Among the Council’s functions is consideration of candidates for top positions at national and local executive branch agencies under the direct purview of the President. The rulings of the Council and its Chair on candidates are binding and subject to strict adherence by State agencies, organizations and functionaries (Chapter 2, Article 6, Paragraph 6).

The National Security Law is a true marvel worthy of having been authored by Russian President Vladimir Putin, and not by mere Kazakhstan visionaries. The law postulates a so-called “broad understanding of security” in the interest of defending national sovereignty—a concept that encompasses literally everything. The law in detail enumerates threats to the national security in all spheres and the responsibilities of various agencies in countering them. Just as in the speeches by the Russian President, the notion of national security in the Kazakhstan law balloons into a value universe of sorts, which counterbalances and limits other value systems, specifically, democracy and human rights. National Security is something to be defended, including from the citizens themselves; it is something definitely above the rights of an individual or rights of groups of people. Ideological manipulation of security threats and the concepts of security and protection of sovereignty forms the popular foundation used to circumscribe universal application of values of democracy and human rights.

The two laws offer us an idea on the institutional structure of the transition of power in Kazakhstan and the ideology supporting it. The Security Council and its Chair are akin to the Iranian Revolutionary Guard: something that is above the will of the people and having its own doctrinal legitimacy. Therefore, a president — elected by the people and tasked to fulfill the will of the people who elected him — is at the same time limited by the framework of the security doctrine and sovereignty, and also by the organs ensuring compliance with this doctrinal understanding of security and sovereignty.

Beyond Russia and Kazakhstan, and in fact throughout the majority of countries worldwide, security and sovereignty are increasingly set forth as values offered to citizens in exchange for circumscribing their rights, their freedom, and frequently their prosperity. Such an ideological trend not only changes the balance and hierarchy of universal values within civil societies, or serves as a means of further legitimization of authoritarian regimes in the mass consciousness, but also facilitates the deepening of the existing authoritarian regimes.  And therein lies the global challenge to open society.

The Transition of Power in Kazakhstan and the Constitutional Shift in Russia

For Russia, where according to the Constitution Vladimir Putin is not able to run for another term in 2024, the Kazakhstan experience has a limited implication. The limitations arise from a number of factors. First and foremost is the age difference between the two leaders. Putin is 12 years younger than his colleague, which implies yet another presidential cadence (two 6-year terms). The 79-year-old Nazarbayev is genuinely concerned with preparations of wrapping up his political career. Vladimir Putin, on the other hand, does not intend to end his political career in the next decade. This creates a much wider spectrum of possibilities for Putin.

Another difference is in the positions the two presidents occupy within the political history of their respective countries. Nazarbayev is an authoritarian success story. It is not only due to the fact that Nazarbayev is the actual founder of the Kazakhstan statehood, while Putin is a Russian usurper trying to redefine it. Nazarbayev is a unique example of successful implementation of the Gorbachev Modernization Centrism policy. This is a fascinating story which makes us look at Gorbachev himself in a slightly different light (though this is a separate topic). Putin, however, is an eccentric radical attempting to revise the history of the previous 20 years, the reality that frames his counter-modernization policies.

Putin’s radicalism is tied to two key circumstances. First of all, it is tied to the marginal and borderline nature of “Putin’s group” within the context of the traditional Russian elites. Such tightly-knit marginal elite groups frequently find success in taking over power and sidelining their opponents, but this requires levers (leverages) for ideological and political radicalization. Putin’s self-radicalizing, anti-Western stance of 2010 is precisely that type of such a leverage.

The second radicalization factor is the protracted economic stagnation experienced by Russia during the past 10 years. Average GDP growth rates between 2009-2018 stood at 0.9%. Around 2000, the legitimacy of Putin’s rule in many ways hinged upon the high economic growth tempo and high tempos of income growth. Putin’s popularity translated into a rapid expansion of his personal clientele who claimed resources and revenue sources. As growth weakened around 2010, these conquests faced serious risks. This forced Putin’s coalition to seek new foundations for its legitimacy after Putin’s return to his presidential seat in 2012. However, the economic fundamentals during that period remained quite weak. Average GDP growth was stuck at 1% and the real income levels of citizens shrunk by 1.3% per year.

In Kazakhstan, the economic dynamism of the early 2000s also slowed by the second decade of the century. However, the average growth rates remained at 4% per year, and individual income continued to grow at 2% per year. These indicators, coupled with the much higher level of legitimacy that Nazarbayev enjoyed as the Founding President of the state, have preserved his ability to sustain a careful authoritarian modernization. This contrasts with Putin, who must rely upon much more radical policies in order to overcome the constitutional limitations that he is facing.

How the Kremlin works

Top Russia experts in the U.S. and Europe understand that Putin’s regime has no center of planning. Everything operates on the basis of “personal bids.”

Russian forces deploy to Africa, not because of some strategic need (although there is, just like everywhere else), but because a certain individual has come to Putin, pitched a concrete vision (“project”), and has started the implementation of the project. That person, in turn, possesses the required cadres, he has the impetus and so he states an urgent need for such a project.

This is exactly how it worked out with Alexei Kudrin, current Chairman of the Accounts Chamber and former Minister of Finance. Without question, the lack of transparency of state corporations is a big problem in Russia. And leading up to elections, Kudrin had nagged Putin for a long time about the need to bring the state corporations affairs in order. So, Putin appointed him to the Accounts Chamber. (“Your idea, you execute. You have the resources already.”)

An infinite number of such projects is floated, but they don’t get the green light (by Putin) for a variety of reasons. Glazyev may have his eyes set on a siege of Kiev, for example, but he has already mangled the Novorossiya Project and the perception is that he is not up to the task. So none of the Ukraine-focused pitches get any traction currently.

Let’s take yet another example— development of the Far East. Many concept papers regarding that have been drafted, but Putin simply does not have a heavy-hitter who can be appointed to this task. That’s why the development of the Far East is not taking place.

Those who have been studying Russia for a while understand all of this. But moving to a slightly wider circle of Russia watchers, it becomes a challenge to explain this mode of operations. They are inclined to believe that “in the citadel,” or “in the dark corridors of the Kremlin,” some sort of a center exists that is dedicated to planning and directing all of these activities— elections interference, bullying of neighbors, executing premeditated provocations.

They believe all of these activities are organized according to some sort of a hierarchy, similarly to the way it is done in the West (i.e., until the Bundestag directs the German chief of intelligence to prepare a report, nothing is done). They don’t understand that in the Russian Federation, the process is the reverse— a “chief of intelligence” comes to Putin with a project pitch (for example, extort something, squash some large corporation, or ruin a bank). In 80% of such cases, a bank will be consumed, while in the other 20% it escapes with one leg bitten off, and then is very happy to be hopping around on just three legs. This makes Putin’s Russia not so much a classical top-down hierarchy, but a very pitch-oriented environment.

I get asked a lot why Sergey Kiriyenko, First Deputy Chief of Staff of the Presidential Administration, is not working on this thing or that, following some imaginary logic relating to the presumed operational dynamics of the political system. The answer is— he is working only on those things that he has pitched, namely, “Camp Sirius.” If Kiriyenko does not make any other specific project pitches (for which he and his circles then bear responsibility), then Putin does not give a damn.

Everyone is asking right now: Where are the signs of the Kremlin’s interference in the Ukrainian elections? Again, such a question is based on the faulty assumption that the Kremlin sets objectives, that it employs analysts, and that it oversees a political apparatus that articulates projects. None of those exist in reality. The Kremlin as it exists today is simply a building with gargoyles on its façade that chomp down on whatever they can reach (but of course, with the approval of Putin, that is, after a successful pitch). If none of these gargoyles pitched a project – e.g., “how to take a big meaty bite out of the Ukrainian elections” — then all they do is quietly, or not so quietly, bark at these specific elections.   Yes, such barking resonates in a depressing daily howl on the Russian federal TV channels. But that howl still does amount to “a project” until it has a responsible author. That is how it works in Russia today.

And this reality is just so difficult to explain to people, who think that if the Roskosmos Chief announces that he will fly to the Moon, then the Kremlin must have a “Moon Colonization Project.” No, they don’t. It’s just idle chitchat at this point.

Of course, the Russian media holds speculative discussions on an unlimited array of future contingency issues. Everything that a deranged imagination can envision: the return of the islands, annexation of Belarus, an alliance with China. But in reality, all that Russia has is an alliance with Venezuela. Why? Because it was a project personally pitched by Igor Sechin and he now has skin in this game.

The Case of Baring Vostok: foreign investment is not safe in Putin’s Russia

The February 15, 2019 arrests of Baring Vostok Capital top managers on fraud charges sent shock waves through the ever-shrinking community of those still investing in Russia. The incident, however, is rather illustrative of the so-called “investment climate” of Putin’s Russia, and should not surprise anyone.

With its investment portfolio valued at over $3.7 bln, Baring Vostok is the largest private equity firm investing in Russia and the former Soviet States. It has operated in Russia since 1994, weathering through the rough period of the post-Soviet transition, and managing to stay out of trouble with the Russian government. In fact, a quick look at the Baring’s investment profile makes it apparent that the firm succeeded in what the Russian government had said repeatedly it wanted to do, but failed — namely, diversify the Russian economy and develop technologically advanced industries.

Baring has invested extensively in IT and telecom companies, as well as in the Russian retail sector and financial services. It took the plunge and became one of the first private investors in the leading Russian IT company Yandex. That’s the legacy the firm is obviously proud of, as its official website prominently features a quote from Yandex’s founder and CEO Arkadiy Volozh:

“Baring Vostok Fund and its professionals have become true partners and sound advisors, and we are counting on our relationship to continue for many more years.”

Despite Russia’s worsening economic downturn of recent years, Baring had stayed put as the last active venture investment fund in Russia.

German Gref, the CEO of a Russian state-owned bank Sberbank, when commenting on the arrest of Baring’s founder Michael Calvey, characterized him as “an honest and decent man who has done a lot to bring investments into Russia, to develop a high-tech economy.”

What grave transgression has led Baring to such a fall then? The answer is quite mundane.

Baring is currently in the midst of a corporate conflict over the control of a troubled bank Vostochny (ranked #32 in Russia by assets) with a man named Artyom Avetisyan. In recent years, Avetisyan has become Putin’s darling, and has been appointed as  Director of  the “New Business” initiative at the Agency of Strategic Initiatives, a nonprofit organization established by the Russian government to advance the Russian economy with the  ambitious goal of “taking leading positions in the world.”

Avetisyan seems to move in lofty circles. The Bell reports that he is a longtime friend and partner of Dmitry Patrushev, the Russian Agriculture Minister and the son of a former FSB chief and the current Secretary of the National Security Council Nikolay Patrushev.

Not so long ago, Forbes Russia has published an in-depth profile of Artyom Avetisyan, detailing his business partnerships with sons of former head of the Kremlin Administration Alexandr Voloshin; his dealings with the current deputy head of the Kremlin Administration Vladislav Surkov (who is also in charge of the Russian occupation of Eastern parts of Ukraine, and from 2000-2011 was the domestic policy czar infamous for his brutal crackdowns on the opposition); as well as his relationship with Oleg Gref, the son of a former Minister of Economy and currently the CEO of Sberbank German Gref.

The Baring arrests have been instigated by Avetisyan and his partners who had managed to enlist the support of the FSB, claiming that shares of International Financial Technology Group (IFTG) with which Baring had repaid the debt of one of its subsidiaries to bank Vostochny are “worthless.” Baring values these shares at 2.5 bln rubles (or $37.5 mln.), whereas the FSB has claimed in court that they are worth next to nothing. An independent Russian media outlet the Bell, however, reports that a formal KPMG audit suggests that IFTG’s assets roughly correspond to the value cited by Baring.

Disagreements over value of assets, like the one between the Baring and Avetisyan camps are quite common. They are commercial disputes that should be settled in arbitration courts in accordance with the civil law. However, in today’s Russia, civil law is virtually non-existent. Arbitration attorneys lament difficulties with finding work, as it is cheaper for businesses to bribe the police or the FSB and have them open a criminal case against competitors (the scenario that frequently ends with the victim quickly conceding to minimize the disruption to business operations), than to engage in an unpredictable and protracted due process. The Baring arrests scandal is an example of exactly this type of a scheme.

Avetisyan, instead of resolving a corporate dispute through a civil law process, prompted  the infamous siloviki (strongmen) to interfere and arrest the top management of Baring Vostok. Absurdly, the charges against Baring are not even within the official purview of state prosecutors. What’s even more absurd is the fact that the allegations of fraud are based on valuation — a subjective category established by expert assessments — and not on objective figures of losses, actual write-offs, etc.

Clearly, Avetisyan with his high-level political access and protection feels confident engaging in such games. They are commonplace in today’s Russia, and he is just one of thousands of functionaries of Putin’s regime seeking enrichment at any cost. But can Russia afford to bear their consequences for the investment climate? Forbes calls this development “fatal.”

As a member of Russian political opposition, I have no business defending Baring Vostok. For decades, they had worked well as loyal cogs in Putin’s machine. They  cynically validated with their participation the endless string of sham economic conferences organized by the Russian government. They came as special guests invited by officials, and nodded their heads while listening to hypocritical speeches about Russia’s “business climate.” They had known what was going on in the country, but preferred to stay silent, thinking that they would be the exception, and they would able to profit from investing in Putinomics, with someone else having to pay.

Baring arrests last week made it clear that there is no such thing as “someone else.” The foundation of Putin’s system is the predation of the siloviki and their alliances with thieving “businessmen” who advance their interests by using their affiliations with the FSB or police as “competitive advantage.”

According to Putin’s own business ombudsman, Boris Titov, in 2017 alone, over 268,000 new criminal cases were opened against entrepreneurs in Russia. This is a 20% increase from 2013. Only about 20% of “fraud” cases opened are heard in court, and when they do, most of them are dismissed due to demonstrated intention to extort or the failure to establish the element of criminal act.

The Russian opposition has long argued that economic disputes must be settled in accordance with the civil law, and law enforcement agencies must not be allowed to interfere in cases that can be settled through basic arbitration. Arrests of entrepreneurs on charges that involve commercial disputes are simply unacceptable.

The essence of the Baring Vostok case is not in the specifics of the dispute regarding Bank Vostochny, but in the pervasive abuse of power to advance commercial interests, which has become the hallmark of Putin’s regime, and has spread throughout the entirety of its hierarchy down to the proverbial Avetisyans. It delivers a sobering message to foreign investors who thought that they could remain safe, conduct their business and make their profit as long as they were careful to  stay out of politics and not cross the big guys like Gazprom or Rosneft.

Today, even a small guy like Artyom Avetisyan equipped with proper connections will use them to smoke their competition — and so they go up in flames, with the whiffs of Russia’s “business climate” along with it.

It’s time to face the reality — as long as Putin and his criminal system remain in power, fair and legally protected investment in Russia is simply not possible.

Free Russia Foundation 2018: a year in review

Highlights of the Free Russia Foundation achievements in 2018.
(more…)

At the service of the sovereign

Throughout history, the church in Russia has been subordinated to the state, serving as an effective tool to advance the state’s agenda domestically and globally. This phenomenon held true, and perhaps even reached its apogee, during the Soviet era. 

The church, after a brief post-revolution resistance, had accepted the power of the Bolsheviks, and circa 1943, began to take an active role in promoting the interests of the USSR in foreign policy. The circumstances and the essence of such activities became public with the declassification of the KGB archives in the early 1990s.

In his September 16, 1949 note addressed to Molotov, Karpov, the Chairman of the Council on the Affairs of the Russian Orthodox Church (ROC) at the time, wrote that the government can effectively use the networks and capabilities of the Moscow Patriarchate of the Russian Orthodox Church abroad to solve political problems facing the Soviet leadership. In the same letter, Karpov lamented that due to red tape the Patriarchate frequently couldn’t receive cash in time to implement political campaigns and proposed simplifying the process of disbursement of funds from the Council of Ministers of the USSR to the Church.

Karpov also delineated his official plans to “in the course of 1946 arrange a number of business trips”:

  1. To Istanbul to meet with Patriarch Maxim (he is being “blocked” by the British and the Turks, however, he could be with us).
  2. To the Middle East in order to deliver financial aid—$40,000 for Jerusalem, $50,000 for Constantinople.” (The government would have given this money to the Moscow Patriarchate (MP) which would then hand them out as “fraternal assistance” by the Russian Church.)

Facts of recruitment and cooperation at the highest levels at the ROC MP with the Soviet intelligence agencies such as the Ministry of State Security, NKVD,  KGB have been established by such declassified documents. One of them contains a plan to establish a regional ROC MP Cathedral. This plan, approved by Merkulov, the Head of the Soviet State Security Committee stipulated embedding of Ministry of State Security employees with the governing body of that Cathedral—its Council. The documents detailing the mechanism for implanting agents with the church suggest that all of the top patriarchs of the Russian Church of that time were also active Soviet intelligence officers.

A vast tranche of damning information on collaboration was unearthed by the Commission of the Presidium of the Supreme Council of the Russian Federation set up to investigate causes and circumstances  of the 1991 coup attempt. The Commission published a report containing information from declassified KGB archives, including the infamous 4th Archive of the KGB’s 5th Division. It also released individual profiles of informants and agents employed by the State Security Ministry. Their precise identities, including names and religious titles, were then very easy to establish by cross-referencing church chronicle materials, such as records of foreign travel, meetings, hosting of delegations. The report identified several patriarchs disguised under code names of Drozdov, Svyatoslav, Adamant (Metropolitan Alexey, Metropolitan Nicodemus Rotov, Archbishop of Kaluga Clement respectively):

“The Commission would like to draw the attention of the ROC leadership to the unconstitutional use of church institutions through clergy recruitment and embedding of KGB agents by the Communist Party Central Committee and the KGB.”

It is precisely in this manner, through the Department of External Church Relations, special agents under the nicknames of Svyatoslav, Adamant, Mikhailov, Topaz, Nesterovich, Kuznetsov, Ognev, Yesaulenko traveled internationally and carried out tasks assigned by the KGB. The assignments descriptions underscore that the operations of this division were tightly coordinated by the state, overtime transforming  it into a covert unit of KGB agents in the midst of worshippers.

Agents infiltrated and operated inside international religious organizations where the Russian Orthodox Church held memberships, such as the World Council of Churches, the Christian Peace Conference, the Conference of European Churches, the Politburo of the CPSU Central Committee. KGB Director Yuri Andropov reported to Central Committee of the Communist Party that his agency was keeping the relations of the Russian Orthodox Church with the Vatican under control.

Since the collapse of the USSR, the Russian Church has been playing “ahead of the curve” by not only carrying out the state’s explicit directives, but also by attempting to intuit the intent of the Russian leadership and initiating political projects in line with its direction.

Between 2000-2008, Russia grew fixated on the newly independent former Soviet Republics, first and foremost among them being Ukraine. What has been  offered to Ukraine, in essence, amounts to the restoration of the Soviet Union – political subjugation in exchange for access to cheap energy and other economic benefits and trade preferences. This has become the new concept of statehood for Russia, and along certain directions, it has even demonstrated progress (i.e. the Russo-Belorussian Union). Simultaneously, there was a definite spike in the activity of the church in the arena of international affairs; and starting with 2010, when they came directly under the purview of the new Patriarch, such activities have undergone a significant shift from the course charted earlier. “Patriarch Kirill has been appointed the head of the Ministry for the Reintegration of Ukraine back into Russia” is a popular joke that nevertheless is not far from reality.

Throughout its entire existence, the Moscow Patriarchate  has served as a façade for intelligence operations— providing cover for spies and a platform for information gathering. Without a single exception, all of the employees of the Patriarchate sent to work abroad from the USSR had received special training and were assigned tasks to gather information and conduct covert intelligence work in the West. This work was generously funded by the Soviet State. Sadly, even the last decade of the XX century, the short period that promised Russians democracy and freedom didn’t fundamentally change that reality.  It’s fair to point out that during 1990s universal recruitment of clergy traveling abroad was not strictly enforced. Nonetheless, due to the fact that all of the key church figures were originally cultivated by Soviet special services, such liberalization was of no lasting consequence. All freedoms that sprung up inside the institution of the Russian Orthodox Church in the 90s, were swiftly rolled back in the first decade of XXI century.

The ROC MP recent move toward escalation of conflict with the Ecumenical Patriarchate over Ukraine’s bid for autocephaly establishes continuity in its policy.  By sabotaging Patriarch Bartholomew’s plans, the ROC MP attempted to establish an alternative center of power. Such developments were taking place against the backdrop of deteriorating relationships between Russia and Turkey, and therefore were fully consistent with the official position of the Ministry of Foreign Affairs of Russia. By the time Russia and Turkey resolved to mend their ties, however, the hostile discourse pushed by the church had become a runaway train, heralding a major schism in the interchurch relations whose first public manifestations are becoming apparent today.

Without doubt, the Russian Orthodox Church can change its course and adopt an independent position, pursuing its own interests on the international arena. However, for this scenario to be realized, significant changes must take place throughout the entire structure and functions of the church in contemporary Russia. It would require, for example, a fundamental change of Russian laws. New laws must be adopted on the freedom of consciousness (with detailed clauses governing interactions of the state with religious organizations and explicitly prohibiting government agencies and organizations from using church structures to advance political agendas internationally). Provisions should be introduced setting up firm controls inside the church itself that would preclude church’s involvement in political projects and initiatives. Legislation should curb state financing of the church, and limit federal budget expenditures on religious initiatives, while also making such activities transparent and subject to public oversight and scrutiny.

In other words, change can be realized by establishing effective oversight of budgetary spending on the church and by strict enforcement of compliance with regulations explicitly banning intelligence agencies from using the church clergy in operative, intelligence and agency capacity. Such moves would, first and foremost, benefit the church itself. For example, having the ability to articulate and conduct an independent foreign policy, the Moscow Patriarchate of the Russian Orthodox Church would be able to strike compromises and resolve numerous conflicts that have been plaguing it for decades (similar to that over the autocephaly bid by the Ukrainian Orthodox Church.)

Today, having been forced into a position of a voiceless executor of state policies and decisions, the church does not possess any instruments or leverage for discussions, agreements, negotiations. Most international conflicts, after all, with interchurch relations not being an exception, are resolved through compromises, accords, articulation of acceptable outcomes for all parties involved. Today, the church is unable to make such offers, or use diplomacy. Carrying out the state mandate, the church is forced to reject all possible paths to compromise, affirm its exclusive and absolute righteousness (despite realizing the bankruptcy of such a position), and stall all substantial discussions along such directions. In contrast, during a very brief period when the state control over the church was loosened in Russia in the early 1990s, the Moscow Patriarchate of the Russian Orthodox Church, in just half a year, managed to solve a long-standing crisis in relationship with the Constantinople Patriarchate regarding the status of the Orthodox Church in Estonia.  This illustrates how, under a different set of circumstances, the church can, in mere months, with its “hands free”, solve some of the most challenging and sensitive problems in church relations. This is why such changes are so needed and so critical for the Orthodox Church in Russia.

But even under the best-case scenario with such changes fully implemented, the church would likely become consumed for many years by efforts to sort out its internal political agenda, overcome inconsistencies and solve issued that have accumulated over the years. And only then, in the future far beyond our horizon of analysis, the church can embark on independent foreign policy, which will undoubtedly, benefit all of its members.

Azov Sea Conflict: what happened and how to react

On November 25, the Ukrainian ships “Berdyansk,” “Nikopol” and “Yany Kapu,” en route from Odessa to Mariupol through the Kerch Strait, were detained by officers of the Federal Security Service of the Russian Federation. During the detention, Russian border guards used life-threatening violence. As a result, the coast guard boat of the Russian Federation rammed a Ukrainian tug. According to the Ukrainian Navy, six Ukrainian seamen were wounded, all three Ukrainian vessels were seized together with a crew of 23 people and taken to the port of Kerch, located on the territory of the occupied Crimea on the Crimean Peninsula. Later, a Spokesman for the President of the Russian Federation announced the opening of criminal proceedings against detained sailors on charges of illegally crossing the border.

This incident became a turning point in the Azov conflict, which has been mounting over the past few months between the two countries. After the opening of the Kerch bridge, which established the road transport connection between Russia and the occupied Crimea, the Russian side strengthened its military presence in the waters of the Sea of Azov and complicated the passage of Ukrainian ships, despite the existing international treaties ensuring unhindered access of the two countries to their ports. Arbitrary detentions of Ukrainian ships, as well as the emergence of new military equipment, were regarded by many Ukrainian and international experts as a deliberate escalation of the conflict, culminating in the events of November 25.

It is important to note that the collision in the waters of the Azov Sea was the first case of open aggression of Russia against Ukraine. Despite the fact that the armed conflict between the parties began in 2014 with the illegal annexation of Crimea, and then developed in the form of military actions in the territory of Donbass, earlier Russia did not commit acts of military aggression against Ukraine under its own flag.

Andreas Umland, a German political analyst, an expert of the Euro-Atlantic Cooperation Institute specializing in Russian ultra-nationalism and authoritarianism identifies three possible reasons why such an escalation could occur right now. The first and most common version is a decrease in Putin’s rating and the need to divert attention from socio-economic problems with yet another demonstration of power. The second possible reason is the probability of the existence of the project on turning the Sea of Azov into the inner Russian sea and the desire to negatively affect the Ukrainian economy by the blockade of ports in Berdyansk and Mariupol. And the third possible reason concerns the news that the construction of the brand-new Kerch Bridge is allegedly shifted. Accordingly, a new attack could have been undertaken in order to divert attention from the news damaging the reputation of the Russian authorities.

Mikhail Gonchar, director of the Centre for Global Studies “Strategy XXI”, adds that the situation should be looked at much wider than just the conflict between the two neighboring countries. Russia claims the leading world position and in every way demonstrates to the west its strength, checking the limits of what is permitted. In addition to the Ukraine and Syria cases, as well as the case of Skripals, Mikhail also cites a recent example of failures in the GPS navigation system in Norway and Finland, which resulted in that the Norwegian frigate rammed the Finnish tanker during NATO exercises in Norway. According to the Presidents of both countries, the reason was the deliberate creation of GPS-interference from the Russian side. Mikhail Gonchar claims that Ukraine in this chain of events is just an element of a more global policy of Russia’s aggression against the West.

Further Russia goes, the more cynically and shamelessly it lies. Despite the open attack on the sea vessels of Ukraine, the ram of one of them, the opening of fire against members of the Ukrainian vessels crews, and the detention of these crews, Russia accused Ukraine of provocation and violation of the state borders of the Russian Federation and initiated an emergency session of the UN Security Council, which indeed took place on November 26. However, the members of the UN Security Council rejected the wording proposed by Russia and the session was held in accordance with the agenda proposed by the Ambassador of Ukraine to the UN.

The member states of the UN Security Council expressed their deepest concern about the events and called on Russia to immediately release the detained Ukrainian sailors and return the vessels to Ukraine. The NATO Secretary General, as well as the President of the OSCE Parliamentary Assembly, expressed their full support for the territorial integrity and sovereignty of Ukraine. The International Monetary Fund, in turn, said that it would not stop cooperating with Ukraine even if martial law was introduced.

There is no doubt that the actions of Russia fall under the definition of aggression, stipulated in Art. 3 of United Nations General Assembly Resolution 3314 (XXIX) adopted on December 14, 1974 (paragraphs “a” “c” and “d”).

By its actions, the Russian side violated the basic principles of the United Nations concerning the non-use of force or the threat of force in international relations. The provisions of Section 2 of the UN Convention on the Law of the Sea, as well as Art. 2 of the Treaty between Russia and Ukraine on cooperation in the use of the Sea of Azov and the Kerch Strait in 2003 were also violated.

However, since the Russian Federation is a permanent member of the UN Security Council and has the right to veto its decisions, bringing Russia to justice becomes a rather difficult task. Nonetheless, other UN member states have the legal tools for a peaceful resolution of the current situation in the framework of existing international law. However, this would require extraordinary efforts and the development of new approaches that have not yet been applied in international practice. It is entirely possible, under rule 9, to convene an emergency session of the UN General Assembly. In that case, if the GA recognizes the fact of a material violation of the basic UN principles and the fact that Russia is a party to the conflict, then guided by paragraph 3 of Art. 27 of the UN Charter and the principle “in propria causa nemo judex” the Russian side would be obliged to abstain from voting in the Security Council on the issue of resolving this dispute.

It is worth noting that according to the definition of the Geneva Convention on the Treatment of Prisoners of War, 23 detained Ukrainian sailors fall under the status of prisoners of war and should be subject to the rule that “no physical or moral torture or any other coercive measures” can be applied to them. At the same time, at the moment the detainees are in the status of suspects who have allegedly committed a criminal offense and, most likely, are subjected to cruel, degrading and inhuman treatment.

Even though there are still unused international legal means in the arsenal of Ukraine, many experts question their effectiveness in comparison with economic tools. Mikhail Gonchar believes that the so-called collective West has to take decisive consolidated actions necessary in order to break the chain of illegal actions of Russia both in regard to Ukraine and in relation to the entire Western world. Both Gonchar and Umland see the most realistic response to the current situation in the suspension of the construction of the Nord Stream 2 gas pipeline being built from Russia to Germany, as well as the second thread of the Turkish Stream.

As for the actions of Ukraine itself, in addition to international legal instruments, it has taken unprecedented measures to ensure internal security. On November 25, 2018, the President of Ukraine convened the National Security and Defense Council, which took the initiative of imposing martial law throughout Ukraine. On November 26, a presidential decree on imposing martial law was approved by the Verkhovna Rada of Ukraine.

On November 25, 2018, the President of Ukraine convened the National Security and Defense Council, which took the initiative of imposing martial law throughout Ukraine. For the presidential decree on the introduction of martial law to enter into force, its approval by the Verkhovna Rada of Ukraine is necessary.

The legal framework of the martial law is settled by International Humanitarian Law and the Law of Ukraine On the Legal Regime of Martial Law.

Martial law implies a significant expansion of the powers of state bodies, simultaneously with a significant restriction of civil rights. The restriction of the rights of persons present on the territory of Ukraine may concern almost all spheres of public life (property rights, freedom of movement, political rights, etc.). However, the text of the presidential decree introduces only a small part of the measures on martial law, whether this list will expand we will see in the future. The validity of such emergency measures throughout the territory raises serious doubts.

Special attention should be paid to the clause on a direct prohibition of elections for the period of martial law, which, given the first version of the presidential decree, meant that presidential elections already scheduled for March 31, 2019 could be delayed by at least one month. However, after a decisive protest of the deputies of the Verkhovna Rada, Petro Poroshenko changed his decision and shortened the period of martial law to one month, as well as narrowed the geography of its application to several regions.

Thus, the decree approved by the Verkhovna Rada introduces martial law in 10 regions of Ukraine from 9:00 on November 28, 2018 for 30 days to 9:00 on December 27, 2018 (the final version of the document as of November 27, 2018 has not yet been published). The President also instructed the Administration of the State Border Service of Ukraine to strengthen the protection of the state border with the Russian Federation and the administrative border with the Autonomous Republic of Crimea, and the Security Service of Ukraine to take measures to strengthen the counter-intelligence, counter-terrorism and counter-sabotage regime. The essence and limits of these measures are not yet clear; it is the responsibility of the authorities to determine this. Apart from that, the Decree contains a secret part (paragraph 12) closed for the public.

As of November 27, 2108, there were no additional restrictions imposed on persons present on the territory of Ukraine regarding their movement and stay inside the country, as well as the border crossing regime. The administration of the Boryspil airport has officially stated that the adoption of martial law will not affect the mobility of the population, and the airport will operate in a normal regime.

Soldatov and Borogan: Internet a beacon of hope for Russian civil society

Free Russia Foundation recently hosted Andrei Soldatov and Irina Borogan, two investigative journalists from Russia who specialize in security services and internet surveillance, and sat down to talk about control over the internet in Russia, and whether independent media and civil society can prosper in an environment of growing censorship.


You have written a book about electronic surveillance in Soviet times and in modern Russia, and during the internet era. How widespread is government surveillance of the public today?

Andrei: Surveillance carried out by the Russian security services has not ever been intended for monitoring the entire population. The idea of using surveillance, the very fact of its existence, is to intimidate the public. Surveillance is only employed on people who the Kremlin perceives as dangerous – political activists, journalists, experts, people who express an independent opinion. These people may indeed be under surveillance and materials intercepted by the security services can then be used as kompromat. We’ve seen this in the case of Boris Nemtsov, Alexei Navalny and many others. But the very fact that they are being watched becomes public and later people who have no connection to the opposition or political movements will feel limited in expressing their opinion, including on the internet. As in the old days over the phone, now people are afraid to express their opinions online.

Irina: We can say that, in technical terms, the Russian security services have fallen behind, relatively speaking, compared with their American counterparts, for example. They do not have the technical capability to intercept everyone simultaneously and store this data. But since the Russian security services are not bound by oversight, the possibilities of using intercepted information for their own purposes, including that which is obtained illegally, are unlimited. Therefore, people know that if they are under surveillance – their communications are being intercepted and they are being watched – it means that some kind of repression will follow. It’s not like how the NSA gathers information on you and puts the data on hold until they might need it. In Russia, if you’re in the sights of the security services, it is very bad.

So, the SORM system* is not pervasive?

Andrei: No, we don’t have mass surveillance.

Irina: Although, they would love to have it.

Andrei: They are currently trying to create it, for example by forcing all Internet providers and operators to store data so that security services can have access to it. But there are problems with that since the country is so large that data is not stored in one place, but in different regions. It is not technically possible to analyze the whole country’s data at the same time. Therefore, they rely on targeted surveillance of people identified as potential troublemakers. But it does not work in reverse order, like how American intelligence agencies can analyze data and identify people who speak on a particular topic and then create a circle of suspects.

The Russian authorities have been successful in suppressing independent media, including through online censorship. Strict regulation of bloggers has been introduced, and the regulator Roskomnadzor can close down any online platforms on the basis of extremism and so on. But at the same time there are websites like Meduza, Alexei Navalny’s website, YouTube channel and social media available. The authorities have not been very successfully in blocking the messenger service Telegram. How do you see the Kremlin’s struggle to establish censorship of independent media and the readers’ efforts to bypass it?

Andrei: The Kremlin is bad enough in inventing ways to restrict access to information. But in general it’s very difficult to close access to opposition resources by technical means – readers can use VPN, proxies and still get access to what they want to read or see. The problem lies in the fact that for the majority of people – who do not actively seek out alternative information – the Kremlin creates technical difficulties around accessing that information. A good example of this is what happened to Telegram. People who really want to use Telegram use VPN. But a large number of people who used Telegram, but were not motivated to make a special effort to keep using it, they have left Telegram. According to some findings, up to 70% of the Telegram audience left after the service was officially restricted.

Irina: The internet is too big a challenge for the Kremlin, because it is not traditional media, where you can simply control the media owner or repress the editor in chief. This cannot be done with the internet because it is an environment where information is shared instantly and it is very difficult to control. If something happens, some kind of crisis, and people begin to share information, then it is difficult to control 1,000 users at once; it is almost impossible. The tragic college shooting in Kerch is an example of this. At first, the authorities as always began to promote a narrative that a gas explosion had occurred and that was the cause of the deaths. But the authorities did not even have time to react, as videos from the scene began to appear and it quickly became clear there was no gas explosion. The Kremlin could not stop the flow of information. This gives reason for optimism.

But if we talk about the ability of independent media to operate online, to what extent is it possible? The majority of independent initiatives seem to be based abroad.

Andrei: It’s not just that. The fact is that if you want to establish an independent media platform, you must have independent sources of funding. We now have an increase in investigative journalism. We see a lot of projects, small projects, that do very important work and they really do great investigations on very important topics. But their audiences are very small, or if they are large and considered a threat to the Kremlin, advertisers will not go to them. If you do not receive advertising revenue, what is your alternative? Subscriptions? Subscribing involves identifying users and people fear that they can be identified via the surveillance system and it can be used against them. Therefore, the problem here is not technical; it lies outside the internet. We simply cannot find a business model that would allow us to create truly independent media. So far, we Russian journalists have learned to create media outlets that provide an alternative point of view, but we have not invented models for truly independent media.

What is your prediction about whether civil society will gain strength or somehow change the situation in Russia, particularly in the context of the internet?

Irina: Russian civil society, unlike political parties, is strengthening every day. In addition to the huge number of people participating in the Navalny movement – which is not yet a political party but rather a broad movement of resistance to the Kremlin and the current government – there are a lot of volunteer movements. We have not seen volunteer movements in Russia before; this is new and the movements are coordinated via the internet. There are people helping in many areas, like organizations that help prisoners, women in trouble, disabled people, and so on. All this is civil society activity and if they didn’t have the opportunity to coordinate through the internet, there would be nothing at all. The Kremlin does not like this civic activity, but it cannot do much because it is made up of masses of people. It’s not hundreds or thousands anymore – it’s already in the tens of thousands of people.

Andrei: One of the ways the Kremlin can control the situation is to convince people that they should not engage in political and social activities. The Kremlin has always created the perception that if you have problems with the state, then you will be absolutely alone. There will be a huge Leviathan state that will simply crush you. And that indeed was the case for many years in Russia. If you were an ordinary activist – not a famous journalist or writer – and you had problems with the state, then the state would most likely crush you. What is changing now – and this is thanks to the internet – is that civil society has removed this stigma from so many topics and has created a sense of support. If a person now finds himself or herself in a difficult situation, for example by being detained by the police, there are organizations like OVD-info and dozens of others that will help you. If a person goes to prison – it is no longer as scary as it was 10 years ago because the person will not be left on their own. Even if a person does not have money for a good lawyer, there are already organizations that will find one and help him. And this is something new. It removes the stigma from so many topics, it’s not so scary anymore. It’s still scary, but not so terrible and not so final. And it does not necessarily give confidence in the future, but at least some kind of hope.

Irina: Internet spreads hope.

So despite targeted surveillance as well as self-censorship, the Russian authorities still cannot control the internet as they would like to and that gives hope for some change in terms of strengthening civil society.

Andrei: Yes, the changes are already underway.
Irina: Absolutely.
Andrei: As Irina said, civil society is growing and this cannot be stopped.
Irina: If it were a totalitarian regime, they could stop it. But an authoritarian one cannot. The regime in Russia, thank God, is not totalitarian.

*SORM – Soviet and Russian electronic surveillance system (Sistema Operativno-Rozysknikh Meropriyatiy, or System of Operative Search Measures). Russian legislation requires all of Russia’s internet service and phone providers to install a device in their lines, a black box that connects the lines to the Federal Security Services, the FSB. The FSB is then able to intercept and store communication and data.

 

A piggy bank of $6 trillion for Putin’s cronies to “salt the stash away”

Tomorrow, on October 24th, the State Duma will be considering a proposed draft of the federal budget for the years of 2019-2021 in its first reading. One cannot be calling that document anything else but short of sensational, and Vladimir Milov, a leading Russian political and economic analyst, explains why. We have just recently heard about the “absolute lack of any other alternatives” but raising the taxes and increasing the retirement age. However, now the Putin’s government has found trillions of surplus cash in the excess revenues. And that impressive stash will be given away into a piggy-bank for Putin’s cronies.

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Chirikova: Russian civil society needs support

Valeria Jegisman of Free Russia Foundation recently sat down with Yevgeniya Chirikova, a Russian environmental activist who currently lives in Estonia, to talk about civil society and activism in Russia – whether it can develop in an oppressive environment and its efforts are noticed in the West.

 

When the West looks at Russia, it seems that it often sees Putin and the regime, and fewer people think about civil society and activism in Russia. Does Russian activism exist?

Yes, it does and it has been growing and developing very rapidly for the last 10 years. I understand why there is such an attitude because for a very long time — in Soviet times and for a long time during the Putin regime — there was no activism like there is now. In my opinion, the rapid growth of activism began around 2010. Of course, some manifestations of activism existed before – Russia is a big country – but activism did not have a massive influence and it was not the norm. For a long time, the notion of an activist was generally negative. The perception was that an activist is not someone who is completely mentally normal — that if a person participates in activism without an order from his superiors, then there is clearly something wrong with this person. This is such a heavy legacy of the Soviet regime. So, starting from the forest fires of 2010, when people realized that they were on their own against nature because the authorities were not going to solve their problems, they began to organize themselves and solve problems independently. This gained good public coverage and in terms of timing coincided with our movement in protecting the Khimki forest.  At the time we managed to gather a large rally on Pushkin Square in Moscow – there were 5,000 people protesting. That was a lot; there hadn’t been any rallies like that in over 10 years. Later on, we managed to gather 100,000 people in support of fair elections, but in 2010 that would have been nonsense. We managed to achieve an incredible thing in the history of Russia: then-president Dmitry Medvedev said he would suspend the building of the Moscow-Saint Petersburg highway through the Khimki forest which we opposed.

I believe that activism is very young in Russia. You can see the descriptions of various forms of activism on our website, activatica.org. We created this website to support activists and we also have a database on Russian activism. There is a map there that traces various activist efforts and there are already thousands of points, where each point represents a particular undertaking. So yes, activism exists in Russia.

Why do you think activism persists despite the growing repressions and do you think it will continue to grow or not in the current political environment?

It will definitely keep growing. Putin and his regime will lose money because of the sanctions and the sanctions will continue because Putin will not give up his militarist policy. But Putin is used to living well, to buying off foreign politicians, to spending money on a repressive apparatus, on a propaganda machine and his own luxurious lifestyle. So he will need money and will extract it from people, who are basically the “new oil”. New unjust laws and decisions will be adopted, such as the Platon electronic toll road system — essentially double taxation for trucks — which provoked a powerful movement of truck drivers against the system throughout Russia and even in a region like Dagestan, which has always voted for Putin. The whole of Dagestan took to the streets against this system. Activism seemed to arise where it had not existed at all. Right now Putin’s pension reform has generated strong protests, which have taken place in 70 Russian cities despite the fact that participating can be dangerous.

I think repressions will intensify, but also as the political and economic situation worsens the number of protests will increase and the more severe the repressions are, the more brutal the protests will be.

Do you think people will overcome the fear of taking to the streets?

But they will not have any other options. It is not about overcoming something; people will be put in situations like the aforementioned truckers who just understood that they won’t earn any money and if they don’t come out to the streets, nothing will change. And they were able to achieve some change. So people will come out because of hopelessness. The Russian authorities do not leave any scope for normal, legal, peaceful problem solving – you cannot go to court, you cannot write a letter to anyone, because that will not solve your problem. By getting rid of the ways of peaceful and legal resolution, the Russian authorities end up forcing people to the street. As with the pension reform, for example, the authorities rejected a proposal from the Communist Party to hold a referendum, arguing that people are not educated enough to understand the matter. Essentially, people are capable of working until they’re 65 but they aren’t capable of understanding the question on raising the retirement age.

Do you think the authorities will make any concessions?

Of course they will, but it will depend on the strength of the protests. The more people protest, the fewer opportunities the authorities have for implementing tough measures. The government is in the process of acquiring this horrible new equipment for suppressing popular uprisings called “stena”.  And this is happening in the context of the pension reform protests; at a time when people are demanding political change. But the more people are out there, the less likely it is that the authorities will use severe methods to suppress protests.

The government runs into trouble when it makes decisions that affect a broad group of people – like the pension reform. The protests against raising the retirement age will inevitably lead to concessions. Even now, these relatively small protests have led to Putin already reducing the retirement age for women. The more the protests continue to grow, the more concessions will be made. Our authorities have a very good sixth sense and understand they can be taken out of power at one moment and they are afraid of that. But any concessions will be proportional to the efforts of the civil society.

Is it possible that the pension reforms have had such a negative effect on people that even if concessions are made, a lot of people have got a taste of activism and this could potentially lead to political change in the future?

Of course, because when a person becomes an activist, when they begin to take to the streets, they take on a different view of the state. They will begin to experience police lawlessness and they will begin to really understand what propaganda is. When a person becomes an activist, they watch TV in a different way after that, they begin to see the real picture of the Russian reality, it changes them. This does not mean that everyone will immediately become active oppositionists like Alexei Navalny, but it will definitively change their mind.

How does your website help activists?

First of all, we offer media support, including through social networks. When we first started this activity, there was very little information about activism available. Now, thank God, other projects such as ours are emerging as well and we welcome it. We are happy that this topic has become extremely popular and we feel we can be useful in supporting activists and spreading information about their activities. Sometimes spreading information is a matter of physical survival for an activist — that’s in my own biography. There were several cases when timely journalistic investigation about who has beaten up the activists helped stop the beatings and saved their lives.

The psychotherapeutic factor is important, too. It is very difficult to be an activist in Russia – everyone says at best you are crazy, an outcast and an accomplice of the United States. But when you open our website and see the map that tracks activism, you’ll see that all of Russia is actually engaged in this and you feel different. And of course, the role of our website is to unite activists so they can do joint campaigns and support each other.

Returning to the first question: If the Western world, looking at Russia, mainly sees Putin and the regime, how can it be shown that Russia – it is also an evolving civil society? How could this message be conveyed?

It is a very good question and I don’t have a clear answer. But I try to do just that, speaking at different venues about activism in Russia, and I usually surprise people. I recently spoke at the US Congress – everything I said seemed like news there. I talked about campaigns that are already 2-3 years old and I saw that it was a surprise to hear about that.

But it is actually more difficult with Europe – after the conflict with Ukraine, Europe has become more active in its purchasing of oil and gas from Putin’s regime. Germany is buying twice the amount and Nord Stream 2, led by Putin and former German Chancellor Schröder, is under way. So, the West consists of different people. For the West that makes decisions, at least in Europe, it may not even be very profitable for there to be another Russia – the Russia that exists today is very convenient as you can buy oil and gas for cheap. Of course, if something changes in Russia and another, democratic government comes to power, the first thing they will do is stop the current model for supplying gas. In Russia, 30% of people are without gas, and instead use coal for heating, which leads to catastrophic environmental consequences. Of course, Germany will cease to receive its cheap gas and Holland will not receive its cheap oil, and many will be upset. Whoever launders the money will also be upset. Take the scandal at the Estonian branch of Danske Bank, which has laundered a huge amount of Russian money. Someone gained incredible profits and this someone will be very upset if everything changes in Russia. So the West is not all about being good and it simply may not really want to see civil society flourish in Russia.

There are two trends here – there is this wonderful sale of hydrocarbons, which not only did not stop but actually increased after the annexation of the Crimea and the war against Ukraine. The West has not stopped communicating with Putin and has actually strengthened Putin’s regime with hydrocarbon money. On the other hand, at exactly the same moment as the annexation of the Crimea, when the “law on foreign agents” was adopted in Russia, the West and Western donors stopped helping civil society due to fear of these laws. Thus, the nascent Russian civil society was left without support. And it is a good question: how can we change this situation? We need to combine our efforts somehow and I am very glad that Free Russia Foundation has also become engaged with issues of activism.  It seems to me that it is necessary to organize more conferences and events through joint efforts.

I would also note that I have more events in the States than in Europe, which is very disappointing because Europe is closer to us and it could share experience and knowledge. But even in America it is becoming more difficult, especially after Trump was elected. I sense the donors have problems with helping Russia. It feels like the help they try to provide is being blocked, whereas the interactions with Putin’s regime seem to continue.

The interview took place on 20 September 2018 in Tallinn, Estonia. Photo credit: wtaq.com

The conflict of interests. What autocephaly means for Ukraine and Russia

This text is also available in Russian.

At Free Russia Foundation, we have identified the trend where various religious institutions, and especially the Russian Orthodox Church, have become a more prominent instrument of the Putin Regime domestically and globally. To examine this trend, we have initiated a research series focused on the role of religion in Russian politics. In this piece, you will find a reflection of what the gift of autocephaly to the Ukrainian Orthodox Church means to Russia and Ukraine written by Igor Knyazev, bishop at the Karelskaya Evangelical Lutheran Church.

The passionate turmoil surrounding the gift of Tomos of autocephaly to the Ukrainian Orthodox Church does not subside calmly. Dozens and hundreds of experts discuss the intricacies of the intrigue of the church clerical administrators as well as the casuistry of the canon law. Behind the backdrop of all of this discussion, one cannot see the life and aspirations of the ordinary folks – those believers and parishioners, in whose name, and on whose behalf all of the loud statements are being made, and for whose rights the hierarchs and the politicians are fighting.

However, the most important things in this conflict of interests, after all these are the interests, feelings, situations of these very ordinary folks  – the believers, in this convoluted and intricate process of inter-church clerical struggle. While attempting to sort this situation out, I have discovered a great deal of new things for myself, took a look at it as though it was happening through the eyes of some ordinary believer. Over, and above it all, my personal experience has also played a significant part in my interest in this topic – I have departed from the Orthodox Church, as a result of my personal conflict between the faith and my personal point of view and beliefs. Many years ago, back in 1998, I was making a very difficult decision for myself: to stay within the fold of the church, which was proclaiming the slogans that are harming democracy for the people of Russia, the inadmissibility of a liberal political system, the harmfulness of the human rights and freedoms? Shall I stay and not give a flying fig about my point of view, after I would have decided that the faith is more precious to me? Or shall I depart the fold of the church?

To leave the church, to which I came as a young boy in 1977, the church that at that time was persecuted, trampled by each and every single one, the church nobody cared about, and the church that now has itself became a persecutor, after some twenty plus years. I have opted for the departure. I decided that my convictions and points of view, the values, the ideals are just as important as the faith was. I have become a Lutheran and even rose up to the episcopal rank. Nonetheless, all of what I have lived through then, twenty years ago is just as vividly alive in my soul and in my memories. Everything that I have gone through, every feeling I have experienced, as it seems to me, did help me to understand what the believers of the Ukrainian church are feeling in the present situation, and to mull it over in my mind for a while, reflecting on what it can result in for them.

Competitive environment

Before we transgress, or as it would be more accurate to say descend down to the level of individual understanding and the attitude of a person who is a believer to what is going on, let us briefly denote the state of the religious world in Ukraine with the dotted line, as well as those factors that are affecting the behavior of one of the main participants in the confrontation – the ROC MP.

As of today, the religious space of Ukraine includes five major church institutions: the Ukrainian Orthodox Church of the Moscow Patriarchate, the Ukrainian Orthodox Church of the Kyiv Patriarchate, the Ukrainian Apostolic Orthodox Church, the Ukrainian Greek – Catholic Church, and the structures of the Roman Catholic Church as well. One can hypothetically make another addition, and administer in another subject number six, namely a large Protestant community, which does not have a single unified center, nevertheless, it is visible in the religious domain of Ukraine, and it has some serious influence on what is happening in the country. All of these church clerical institutions have a regional distribution factor, and they are not evenly represented across the whole territory of the country (traditionally, the East of the country has the majority of parishioners of the UOC-MP, in the center of the country there are parishioners of the UOC-MP  located, and the UOC – KP is approximately equally divided, in the West the parishes of the UOC-MP are smaller, moreover the Greek Catholics have a strong influence over there, etc.).

This situation creates quite a market similar to (hypothetically) the competitive environment, where there is not a single one – part present that would have a firm and overwhelming monopoly. No one can dominate solo, without having to unite with the others, no one can suppress his opponents simply on his own. In other words, all of the subjects are forced to take into account the strengths and the influence the other players and have to build their activities while keeping an eye on the potential opposition, represented by their competitors. Of course, this is very good for a religious situation in which the course of real competition for the believers makes the church work as efficiently and as actively as it is only possible in its preaching work, its social projects, and precludes the churches from such phenomena as the presence of the unchallenged power of hierarchs, despotism, and a high volume of church corruption.

It is also necessary to point out the fact that the general religious devoutness of the Ukrainian population runs very high, (it is also much superior to that level of the Russian population) that was present in here even during the Soviet period, and which also has experienced a strong influx of the believers, who are leading a church-going and strictly observant life according to the church portamentos after the collapse of the communist system. The presence of the priests representing all of the faiths and all the jurisdictions at the Ukrainian Maidan serves as an example of this equilibrium and a competitive religious environment.

That is why, for instance, the phenomena of the church clerical life that have no relevance for the believers in Russia, due to the lack of any available leverages of influence on the situation, and since they have always been traditionally perceived by them as “the games played up at the top, where the bosses will sort it out between each other, and so on and so forth,” in Ukraine have fundamental and important meanings for the believers, and they are taking place with their active participation ( because believers can influence the situations, right up to the point where they can “vote with their feet” ). A great deal of influence on the activation of these processes and the attitude of believers to the church was played by the Ukrainian Maidans, as well as by the full-fledged avid political life, where yet again due to the existing political competition in place, the citizens are taking an active part in it. This activation has come into being in the course and during the process of making a choice of the future  pathway for the future national development, the path “towards the West,” or “towards the East,” the passage to Europe into democracy and market economy, or the choice towards the Russian authoritarian model of the state and its state – monopolistic model of economy.

This choice has consisted of both – the choice proper and the orientation of the church clerical models. Therefore, one has to say that the political and religious landscape of Ukraine is a very mobile space environment, where the processes of movement, consolidation, and the confrontation of several large entities at  the same very time sans dead, frozen forms (as it is for example, in Russia) are constantly going on.

It is also important  to note that in Russia if for instance all of the decisions of its political and public administration have been transferred to the federal level (to be more exact, all power is concentrated in the hands of one person – the President), and the decision on the replacement of the light bulbs in the entrance lobby, as well as the declaration of a war are the prerogatives of the federal government, then in Ukraine with its competitive environment a significant part of the public and political decisions is being made within the institutions of either direct, or participatory democracy. This explains the fact that Ukrainians perceive the questions of the church structure as the issues, which have a direct connection to each and every one of them and thus require their personal participation in the quest for the solutions.

The fight surrounding the provision of Tomos has been going on for a long-term, and the fact that the outcome of this confrontation would determine the fate of the ROC MP, in its turn, gives an especially so fierce tone to the Church clerical – administrative confrontation created in Ukraine. The final outcome of this struggle will seriously first and foremost have an effect on the position of the Russian Orthodox Church within Russia proper, its relevance and the need for it among the Russian authorities. After all, if the outcome of this struggle is bad for Russia, then the pass way to the most unpredictable processes in the religious space will be opened within it. And the very fact that there are various scenarios in existence for the potential outcome of this struggle, the variety is undermining its position of a clerical monopoly within Russia, and seriously reduces its authority and influence in the external relations of the church. Since the very foundation, it relies upon as well as the main condition for its present existence in Russia is in its position of a monopoly, which is backed up and provided by the state. Therefore, in this case, the ROC MP is not just fighting not for Ukraine per se, but as a matter of fact, it is fighting for its own future in Russia.

The conflict between the faith and the convictions

Now, switching from the overview of the situation, let us try to comprehend what do the believers, the parishioners, and the church hierarchy representatives are feeling? Let us make an effort to sort out what creates the conflict between the faith and the convictions and what are the consequences for the man?

It is obvious that the result of such a conflict is a serious personal and social subdivision for an individual within himself as well as within the social medium in which he exists.

The first boundary of this subdivision is located inside the person himself, hypothetically, it could be drawn as follows: I believe in God and I love my church, but it stands on the opposite side of the war that came to my country, it blesses those who are fighting against me, it proclaims the slogans of nationalistic and imperial hegemony against the neighboring state. I can make attempts to hide behind words or statements about the fact that: “The Church is above this, that the Lord does not have anything to do with it,” etc., however, I do realize that it will not help me. And as a matter of fact, God does not have anything to do with it, nonetheless, the church is not only a spiritual incremental part, but it is a materialistic terrestrial institution, which is guided in its decisions by both – political and national interests. Thus, I must either agree with the position of my church that my country, the citizen and the patriot of which I am is not  a real wholesome country, but it is rather some sort of political ersatz that has no right to exist, and therefore I either have to leave the fold of the church or to influence it in such a fashion that it would change its position. As a rule, there are a lot of caring people in the church among its regular and active parishioners, to whom all of these questions are not at all just some shallow phrases, these are the people, who are looking for answers, they are emphatic and not indifferent, these are the ones who create the entire atmosphere in the church. And it is because of their involvement in the church life and due to their active position on the issue that it becomes the conflict between the faith and personal convictions, and it is extremely difficult for them.

The second line of separation is happening already in the close inner circle of the believer, namely it is occurring primarily within his family, his relatives, and close friends. In there, the conflict of generations sets in to play its own role (the youth is being more radical and is not inclined to make any compromise, it does not accept the viewpoints of the elders, which consist of the following – “one has to endure sufferings, and perhaps only afterward make some kind of decisions.” Young people cannot withstand waiting, and they are not used to the anticipation, they make their choice today and that is why the conflict between the parents and their children on the issue of “their” and the “occupational” churches becomes a dividing borderline between the different generations of the same family, among the families, who had opted for different political choices (and, in this case, the church choice as well).

The third boundary line is in the subdivision running among the residents of different regions of the country (West vs. East), between various political groups (hypothetically the subdivision between the “pro – Russian,” and the “patriotic” citizens).

All of these three boundaries of subdivisions run within the society, creating multiple points of tension, interfering, and frequently tearing down and blocking the process of a civil formation of a nation.

Will these subdivisions be overcome, and, if so to what extent if any, will the Ambassador of Tomos get the autocephaly? In what way can this confrontation result for an ordinary believer? Let us make an effort to figure this out by examining two completely opposite versions of the development of events, which in my personal viewpoint, contain a significantly different probability.

“The Kremlin’s arguments”

Thus, let us examine the first version, which is being written a great deal about in Russia, or to be more correct, that one written about from the “pro-Kremlin” positions  – namely, the gifting of Tomos leads to a sharp political stimulation of activity among the population, the struggle for the temples commences, clashes and physical confrontation among the parties begin,  and a large-scale civic conflict flares up in the country. How very likely is this scenario to happen? I think that this probability is close to a zero point. There are several reasons for that. The first and the major one is the fact that for more than a quarter of a century Ukraine has existed in the conditions of its independence and sovereignty. This is the time frame sufficient enough for its citizens to have perceived themselves as one nation and to have learned how to resolve the internal contradictions without inflicting harm upon their country. By the way, the fiasco of the ideas of the “Russian world” and the failure of expectations for a mass exodus of the subjects of Ukraine from its federal union in the years of 2014 – 2015 are the most vivid confirmations of this theory. As of today, Ukraine is a nation in which the people who comprise it consider Ukraine to be their own country, treat it with responsibly, and they do not allow internal contradictions to rise up to the level of the national confrontation, and to threaten the sovereignty and the integrity of their country.

That is why there is no “devotion” and “love” to one patriarchy or the other in a place that could cause a deep crisis or a split within the nation. The expectations that in the wake of the euphoria stemming from the victory in getting the gift of Tomos the radical political sentiments will prevail, and that there will be the agenda with the theme of fighting with representatives of the ROC MP thrown in the midst of it. It also lives on only in the Russian – speaking propaganda space proper. No one sees any reason to do this inside Ukraine, and nobody witnesses such threats. In addition, the fact that the unification and the mutual integration of all the churches will continue to go on for a long period of time also serves as an insurance against such a potential development of the events. This a very complicated process and it will take years. All of this time will become the time of looking for compromises on the issues of distribution of administrative posts within the clergy and the distribution of the property. And, competitive political and clerical environment constitutes a sufficient enough insurance against any manifestations of any kind of dictatorial aspirations, or against the absolutization of clerical authority.

Compromise 

Let us take into our consideration the second version, which, in my point of view seems to be the most plausible scenario for the future development of the events: the gift of Tomos would become the initiation of the process of building up a single unified Ukrainian Local Orthodox Church. Throughout the duration of this process, within some 3 – 4 years some mutual integration and unification of the clerical structures will take place, and, a compromise will be reached on the figure of the church’s leader (and possibly, given the chances he has Patriarch Filaret will become the Head of the Local Orthodox Church of Ukraine, so the factual figure of the next key leader will become relevant).

The hierarchs of the UOC – MP in Ukraine do realize that the possibility of their influencing the situation and implementing their goals and interests in real life for them will be opened only through the venue of their participation in the process. In other words, if you wish to have another figure in the place of the Patriarch, then in order for this to be a possibility for you, at the very least you would need to become a part of this church. That is why a significant portion of them will transfer rather quickly and on good terms into the structures of the new Orthodox Church of Ukraine.

At the very same time, most probably some part of the UOC – MP will refuse to become a part of the unified Orthodox Church and will continue to exist in the structural form of the metropolitan area of the Russian Orthodox Church on the territory of Ukraine with its parishes, mainly in the East of the country. It is unlikely that this will become a significant enough factor for the aggravation of the situation and for any civil confrontation. And, on top of it all, having taken into consideration the political choice of Ukraine, as well as its confident way chosen towards the West, this clerical metropolis would not be able to exercise any kind of influence over the Ukrainian processes in the future. One can also make an assumption with a high degree of a certain probability that the changes in the legislation that will follow the acquisition of Tomos might strip the structure of the UOC – MP (ROC MP) in Ukraine of its traditional name. During such periods of transition, as a rule, the legal constructions cancel out the emergencies of two various religious entities with the same shared name, or a duplicated one. That is why, it most likely that the status of the “Ukrainian Orthodox Church” will be assimilated by a new unified Ukrainian church, and the structures of the Moscow Patriarchate, which have retained their presence on the territory of Ukraine, would receive the name of a “Metropolitan Church in Ukraine, etc.”. To a certain degree, the stabilizing factor in these processes would be the substantial presence of the Catholics, the Greek Catholics, as well as a large Protestant community in place.

While making conclusions, we can state that it is most likely that the end of the struggle for autocephaly will become the beginning of a new civil and religious state creation for Ukraine. The integration and unification of  the clerical structures would eliminate the divides among the communities, and, it would also provide an individual with an opportunity of being both: a religious believer, a faithful son of his Church, as well as a patriot, without raising a conflict in his inner self and within his social circle.

This will serve as a factor bringing the society closer together and consolidating it in order to increase the level of matureness of the civic nation. Putting an end to this struggle will affect favorably the content of the work of the clerical institutions, and their agenda as well.

The church would need to create a new content for its work after the victory, and of course during the state of euphoria, that would follow next (in this instance, a very brief one)  by moving from the fight for choosing the pathway to the ordinary church services, which are having to do with the social and soul guardianship care work. In other words, the most important beginnings are yet to come after the victory, and the main thing will commence – the work that the Church is called upon. And, it is this work that opens up a completely new space for the competition over the believers. The joy of victory will subside quickly, and it would be necessary to provide the answers to the society having to do with the issues of bad, or in general, non – existent social guarantees, the fight against corruption and the theft, for the social justice. The dragged – out struggle blocks the factual relevance of all these issues, but after the victory is achieved and after obtaining of Tomos, a short triumph will be invisible against the backdrop of the church’s submerging into the daily agenda of its clerical services in the country, which is pegged by a bunch of economic and social problems. At the end of the day, the completion of this process along with the creation of a single unified Ukrainian Local Orthodox Church would have the most positive and salutiferous effect, first and foremost, upon the lives of the ordinary religious believers, parishioners and the members of the communities, who thus far as of today still do belong to different jurisdictions.

Why We Must Speak Out about Oleg Sentsov Now

Oleg Sentsov, a Ukrainian filmmaker imprisoned by Russian forces in 2014, is on the verge of death. More than one hundred days ago, he began a hunger strike to demand that Russian President Vladimir Putin free sixty-four Ukrainian political prisoners being held in Russia.  Since then, Sentsov has lost almost 70 pounds and suffered cardiac complications. In early August, he confided to his lawyer that “the end was near” and this week he told his cousin that his limbs are going numb. Unless the international community takes urgent action, his uncompromising commitment to freedom will soon kill him.

Policy makers and human rights activists face an all-too-common decision: Do we raise our voices loudly and in unison now, when it can potentially spare one life, or honor yet another opponent of tyranny with a street name following his death? We’ve got enough streets named after dead democrats and courageous freedom fighters. Let’s make an uproar now if only to say we shed a light on those unfairly held in Russia’s modern gulag.

Sentsov’s trouble began soon after Russia illegally annexed Crimea. He was arrested on May 10, 2014, by Russian FSB security forces for peacefully protesting the illegal Russian takeover of Crimea. From his home in the Crimean city of Simferopol, he was jailed and held incommunicado for three weeks. During this time, prison authorities physically abused him, including by suffocation, and threatened him with torture, rape, and murder in an attempt to get him to “confess” to terrorism.  The Russian authorities proceeded to strip him of his Ukrainian citizenship—a blatant violation of international law—and tried him in a military tribunal in Moscow as a Russian citizen. Despite a lack of evidence—including from the main witness against him who retracted his testimony after admitting it had been made under torture—Sentsov was convicted of terrorism and sentenced to twenty years in prison.

​Sentsov’s case is far from unique. Convicting political opponents on manufactured charges and bogus evidence is one of the hallmarks of Putin’s regime, and there are more than 183 political opponents currently imprisoned in Russia. In an attempt to wear them down, they are regularly subjected to torture; inhumane transport, including month-long transits in cramped trains with little access to water and sanitation; and imprisonment in “gulag-like” prison colonies.

​So far, Putin has managed to repress dissent, and Sentsov’s ongoing struggle is an attempt to change this. Sentsov hopes to force Putin to answer for the numerous Ukrainian activists he has imprisoned. Selflessly, Sentsov has not even demanded his own release; rather, he will only end the hunger strike if all other Ukrainian political prisoners are released, and he is willing to obtain his own freedom through death should Putin choose to ignore his demands.

​Unfortunately, Putin appears ready to let Sentsov die. Perhaps Sentsov’s case is a matter of pride. As a Ukrainian prisoner from Crimea, releasing Sentsov to the Ukrainian authorities might undermine Russia’s claim over Crimea. Or perhaps Putin simply wants to show the world that nothing, not even the death of an innocent man, can make him change.

Whatever the case, we must not let Putin have his way. It is time for the international community to stand in solidarity with all of Russia’s political prisoners and take concerted actions to hold Putin accountable. Sentsov’s life depends on it. If we don’t, it’s a defeat for those who believe in human rights and a victory to those who traffic in tyranny.

As an urgent first step, if Sentsov is to be saved, the world must unequivocally call for his immediate release.  As Sentsov’s situation has grown increasingly precarious, a handful of organizations and world leaders, including Amnesty International and French President Emmanuel Macron, have already done so. But to get Putin to listen, we need the United States and other countries and organizations that value democracy and human rights to prioritize Sentsov’s case.

Second, Russia must face serious and tangible consequences. Putin has repeatedly demonstrated that he does not act out of compassion or shame, so we must force him to do what is right. The United States should lead the charge by using all the tools in its arsenal—including significantly expanding sanctions—to force Putin to meet our demands for freedom.

Finally, we must not lose sight of what is at stake. Sentsov may be fighting to free Ukrainian political prisoners specifically, but this fight transcends national boundaries. It is a timeless and universal fight for freedom and justice—the very values that our society is built on. Sentsov has not weeks, but fleeting days left.  And if he dies, so does a part of our humanity.

This article originally appeared on the Atlantic Council’s website

The main photo: Barbed wire and placards with images of Ukrainian film director Oleg Sentsov are seen after a rally demanding the release of Sentsov, who was jailed on terrorism charges and is currently on hunger strike in Russian jail, in front of the Russian embassy in Kyiv, Ukraine August 21, 2018. REUTERS/Valentyn Ogirenko/File Photo

Priority Number One: Save Oleg Sentsov

To governments and legislators of democratic countries, to democracy promotion and human rights organizations, to all democracy-minded people, journalists, and public opinion leaders.

Is the world listening?  Does the name Oleg Sentsov cross the consciousness of global leaders every morning they wake up?  It should. There is a very urgent task for all of us right now – to save Oleg Sentsov from death in a remote Siberian prison.

Oleg Sentsov, who was arrested and jailed for merely opposing Russia’s takeover of Crimea in 2014 while making a documentary, has been on a hunger strike since May 14. Not a hunger strike to compel a brutal regime to free him, but the selfless act of demanding the release of 64 other Ukrainian political prisoners held in Russian jail cells.

Sentsov is a manifestation of our conscience. And Putin’s repressive machine is methodically killing our conscience at the moment. To save Sentsov is to save the others.  Will the world challenge Vladimir Putin, the petty dictator less and less bound by a moral compass, or will Sentsov be another name we celebrate posthumously like a Soviet dissident Anatoly Marchenko?

Since Sentsov began his hunger strike on May 14, many of us have been counting the days of it: Day 1, Day 23, Day 57, Day 107 today… But his health has become so dire that now the countdown goes to minutes, not days.

So, all leaders of the free world, all governments, all legislators, all democracy agencies and human rights organizations, all media outlets, all democracy-minded people worldwide should come together and put Sentsov life as priority Number One, above all other things on their agendas, until he’s released. We will all regret we didn’t do enough to save him if he dies.

It’s Sentsov’s deliberate decision to end his unfreedom with death in order to force the release the other Ukrainian hostages of the Kremlin. It seems like Putin has made his deliberate decision, too — to let Sentsov die as a signal to the world that his regime is unshakable and can care less about a human life.

It appears the Sentsov case is too personal for Putin, some sort of vendetta with those who oppose to him; or perhaps Putin doesn’t have a say here because the Sentsov case was initiated by the FSB and is under its close supervision. Maybe the allegedly all-powerful dictator doesn’t dare to interfere in FSB’s business.

Like Marchenko, Sentsov is determined to give meaning to his own death. Are we ready to lose him though? What else can be more valuable for us, democracy-minded people, than a person’s life?!

So many people in the world have requested, begged, and demanded the Kremlin set Sentsov free. The Kremlin is mercilessly deaf to all statements and pleas to free Sentsov. The international community does a lot in trying to save Sentsov, but it’s still not enough. Are our voices to release Sentsov too scattered and not convincing enough? Are we sending raindrops instead of unifying into the tsunami against the Kremlin?

Last Friday, Vladimir Kara-Murza, twice poisoned in Russia himself, held the second ceremony of opening a new Boris Nemtsov square in memory of his friend, a slain Russian opposition leader. The first unveiling of Nemtsov Plaza took part in Washington, DC and last week it happened in Vilnius. Do we really want to have a reason to push governments of Western countries to start opening Sentsov plazas? Do we want to start advocating for a Sentsov sanction list? Shouldn’t we prefer to have Sentsov alive?!

Let’s all unite our efforts and act right now and act every moment. I urge the U.S and other democracies to try all methods with the Kremlin — both carrots and sticks, but with all means to save Sentsov. Threaten to impose more sanctions, but NOW when Sentsov is still alive. Or promise not to impose some. It can all be re-evaluated later. If Putin wants to exchange him for somebody – start discussing it NOW when Sentsov is still alive. Nothing is more important and urgent right now than Sentsov’s life.  I hope I’ll meet him one day to thank him for his fortitude.

Is Putin’s Kremlin subverting Israeli democracy? A Russia expert thinks so

A devastating, complacency-shattering interview with Ilya Zaslavskiy, one of the world’s leading experts on Moscow’s overt and covert designs on the West.


This article originally appeared in
The Times of Israel

 

WASHINGTON, United States — Despite the global headlines about Russian meddling in foreign elections, Israeli experts have thus far expressed little concern that it could happen here.

At Tel Aviv University’s CyberWeek cybersecurity conference in June, for instance, Israeli officials made light of the impact of fake news and foreign influence campaigns on Israeli society. Fake news is a “nuisance,” Eviatar Matania, head of the National Cyber Bureau in the Prime Minister’s Office, told a panel at the conference, not a major threat. Other speakers said they had seen no signs of Russian influence campaigns targeting Israel.

But the recent release by researchers at Clemenson University of three million Russian troll tweets created by Russia’s Internet Research Agency between 2012 and 2018 paints a different picture.

Reporters from Israel’s Channel 10 News found that tens of thousands of the tweets dealt with Israel and the region and some were written in Hebrew, indicating they were indeed targeting Israelis and people who care about Israel.

Ilya Zaslavskiy, a Washington, DC-based expert on Russia and head of research at the Free Russia Foundation — a nonprofit led by Russians abroad that says it “seeks to be a voice for those who can’t speak under the repression of the current Russian leadership” — told The Times of Israel that he would be extremely surprised if Russia weren’t carrying out covert influence campaigns in Israel.

“We now know for a fact that Russia has been interfering on a massive scale in US, German and UK elections and referendums,” said Zaslavskiy, who is also a member of the advisory board at the Hudson Institute’s Kleptocracy Initiative and an academy associate at Britain’s Royal Institute of International Affairs (Chatham House) think tank.

“We know that they intervened in the Catalonia referendum as well as a referendum on Ukraine in Holland. They continue to interfere in the US midterms and they have been meddling in all sorts of local elections in Eastern Europe. and the post-Soviet space,” he said. “So why wouldn’t they interfere in Israeli elections when Israel is so important to their strategic interests?”

Asked why Israel is of interest to Russia, Zaslavskiy, who is Jewish and immigrated to the United States from Russia as a young adult, said that “Israel is of strategic importance to the Kremlin  — because Israel is actually one of the forces that could contain Russia, could prevent some of the abuses that Russians are carrying out.”

He cited, for instance, developments in Syria. “Israel is not a great friend of Assad, but now the Israeli government has sort of accepted that Russians uphold him and have got a foothold in Syria,” he said. Asked how things could have been different, Zaslavskiy replied “Israel could have been more vocal and critical about Russia’s role in Syria.”

More generally, “you could have expelled some of the Russian oligarchs, you could have prevented some of the money laundering,” he said. “You could actually impose some sanctions on Russia and limit their influence in your country.”

Why hadn’t that happened? During a deeply disconcerting interview in the US capital Zaslavskiy offered some insights. And as the conversation developed, he moved rapidly beyond election meddling to a wider, nightmare vision of an ascendant Russia, with Western democracies weakened and outflanked. Regarding Israel specifically, he described covert, Russian-led processes already unfolding that he believes are undermining the rule of law and democracy itself, and set out specific measures that he believes must urgently be taken if the decline is to be halted and contained.

An existential danger

Zaslavskiy believes that both Israel and the West face an existential danger from Russia unless the problem of covert and overt Russian influence is fully acknowledged and decisive measures are taken to combat it. He says most of the West fails to grasp the gravity of the threat, which includes not just efforts to meddle in elections but the exporting of corruption and criminality from post-Soviet countries to the West, thereby undermining democracy itself.

In a recent report for the Hudson Institute’s Kleptocracy Initiative entitled “How Non-State Actors Export Kleptocratic Norms to the West,” Zaslavskiy argues that the West did not in fact win the Cold War and that its norms and values, like democracy and the rule of law, are very much in peril.

“When the Soviet empire collapsed in 1991, it was widely believed that Western-style democracy and liberal capitalism based on free elections, separation of powers and the rule of law would eventually take root in the Commonwealth of Independent States (CIS) and other regions emerging from the Cold War,” he writes. “Even when ex-Communist Party leaders and representatives of Soviet security services returned to power throughout the former Soviet Union (FSU) in the late 1990s to mid-2000s, mainstream political thought never once doubted the inevitability of democracy’s march across the globe. Experts debated speed and direction, but rarely questioned the ultimate destination.”

In reality, Zaslavskiy goes on, “the West has largely failed to export its democratic norms and is instead witnessing an increasingly coordinated assault on its own value system. This destructive import of corrupt practices and norms comes not only from post-Soviet kleptocratic regimes like Azerbaijan, Kazakhstan, and Russia, but also from China and other countries around the world whose ruling elites now possess far-reaching financial and political interests in the West.”

The new norms being exported to the West, which he dubs neo-Gulag norms, include the idea that those in power are the only real and rightful decision-makers and that the rest are ultimately “prison dust.”

Another such norm, he writes, is that “everything and everyone is for sale, or at least susceptible to manipulation or some form of control.” And finally, the Russian ruling elite believes that “individual human life does not matter anywhere, unless it is someone from their inner circle or equally as powerful as they are.”

The Times of Israel sat down with Zaslavskiy at a cafe in Washington, DC, to discuss the connections between Putin, Israel, organized crime, election meddling and the decline of democracy in the West.

The Times of Israel: There has been a lot of talk about Russian influence campaigns and Russian interference in elections. What aspect of this threat do you think people in the West are failing to grasp?

Ilya Zaslavskiy: They are failing to grasp two main things. First they think that the corruption, criminality and anti-democratic developments that happen in a place like Russia have very little to do with their own life or their own country. That’s the first delusion.

Today, everything is so much more integrated. When criminal groups supported by security services are allowed to do things in their own country, they immediately export their practices and values to the West, to safe havens where they can actually not only keep their money but can continue their activities.

The second thing people fail to realize is that, unlike during the Cold War, there are open channels of business that these kleptocrats can exploit to export their norms and practices legally.

You see a lot of money from kleptocratic countries pouring into the West and paying for lawyers, lobbyists, PR people, even journalists, as well as former security people and security companies. In Soviet times this was not possible. Today, a Russian kleptocrat can continue his criminal activities in the West in broad daylight, without being prosecuted and hardly being covered by the press.

How might this be happening in Israel, and how might Israelis not be aware of it?

There are many oligarchs of Jewish background from the post-Soviet space, from Russia, Kazakhstan and the Caucasus, who earned their money in a very dirty way in the 1990s and 2000s, and now they’ve moved to Israel.

Some have Israeli citizenship and operate abroad and some operate in Israel. It’s not only that they have a luxurious lifestyle, throw fancy parties and buy amazing real estate. That’s another delusion in the West. Many Westerners believe that oligarchs bring their dirty money to their new country but merely as consumers.

In fact, they start to invest in assets — in strategic assets, in politics and in newspapers.

The vast majority of oligarchs can be hired on an ad-hoc basis by the Russian state or Kazakh state, and can be exploited for political purposes by this kleptocratic state.

I recently co-authored a report — “How to Select Russian Oligarchs for New Sanctions?” — that explains why and under what criteria the US government should add oligarchs like the Alfa Group oligarchs to sanctions.

There are very powerful figures with lots of money, lobbyists and PR support in Israel. [Prime Minister Benjamin] Netanyahu shows up at events with some of them.

Let’s say you have an oligarch who is close to Putin. What would they be doing in Israel? Why should Israelis care?

They can do multiple things. First, they can normalize Kremlin narratives about Israeli interests.

For example, the way they present Russia’s place in the Syrian conflict, in relations with enemies of Israel like Iran, or concerning the Soviet diaspora in Israel.

I’m sure they help promote Kremlin propaganda about the Second World War and Russia’s [ostensibly] almost exclusive role defeating the Nazis. And they peddle the Jewish veterans’ theme with the orange and black St. George ribbon. It’s a ribbon that commemorates the Soviet victory over Nazism that has come to be associated with Russian propaganda against Ukraine and against the West — how the West never really stood up to the Nazis, for example. These are not just historical narratives; they are very useful for today’s politics.

But the other thing oligarchs can do in Israel is to co-opt the elite, under the guise of cultural and charity events. They can throw fancy parties with caviar and beautiful women and invite politicians. They have held these receptions around Western capitals. I have followed some of these in London, as well as here in Washington.

Why would a Russian oligarch own a newspaper or TV station?

They may have financial interests and hope to make money but for many of them it is not done for commercial purposes. The reason is to support politicians through the media, and that allows you to get a foothold in the government. You do nice things for the government and then they do nice things for you in return. You establish a relationship and it’s a long-term thing.

It’s all very interconnected. The payback is not immediate but it’s a very solid investment.

Let’s say a Russian oligarch moves to Israel and starts investing in all kinds of businesses and giving money to charity. Why not just assume he’s retired?

No one from that world of state security or organized crime is off the hook because the Russian state has too much compromising material on them, as well as incentives. Also, if you don’t comply you can be eliminated. There is now a book on how Putin most likely ordered killings of dozens of people inside Russia and outside Russia who did not comply with his interests, including from his own security services or organized crime.

For example, he first used polonium not on Alexander Litvinenko but most likely on Roman Tsepov, who was part of the organized crime group in St. Petersburg in the 1990s that allegedly worked closely with Putin during his rise to power. It’s easier for anyone to comply. There are many oligarchs abroad that he uses on an ad-hoc basis. It’s switch on, switch off. It’s not too demanding or too crazy, and it’s actually acceptable to most of these people.

What’s the connection between the Russian state and organized crime?

In Soviet times there were three worlds that were distinct — with separate, even contradictory, goals. There was the Communist Party, the security services and organized crime. Organized crime was more or less antagonistic to the Soviet regime.

Under Putin these three worlds collided and fused and learned from each other. Security services now oversee the businesses of organized criminal groups. Organized criminal groups carry out the political building and conduct operations for the Kremlin. The ideology of the Communist Party was thrown down the drain but the cynical and pragmatic practices, like co-opting the far right, co-opting the far left, co-opting Christianity or Judaism, remained.

You co-opt whoever is important to you in any given country. You can even contradict yourself in different countries but just divide and rule through all these channels — through ideology, through organized criminal groups, through corruption. Organized crime and its networks have become part of the Kremlin’s political instruments abroad, including in Israel.

If there were a Georgian or Russian oligarch who wanted to open hundreds of call centers throughout Israel and scam people abroad out of money, is that something that co-opting the elite would allow them to do?

Yes. But compared to corruption in Russia which involves billions for a single road or pipeline, binary options and forex are a relatively small-scale fraud. Russia as a state is also involved in hacking and dodgy cryptocurrencies; we now know that for a fact from Robert Mueller’s investigation. Russia as a state, especially its security services and associated oligarchs, are involved in all sorts of dodgy things, including in the digital realm.

Someone like Putin would not follow specific criminal activities like binary options, but he sits at the top of a pyramid and there might be levies that make their way from an Israel-based criminal enterprise all the way to the top.

Why would a Georgian or Russian criminal decide to put call centers in Israel of all places?

For a variety of reasons. Corrupt Russian money penetrates any vulnerable spot in the world. The criminality has not just penetrated Israel. It’s in Europe, in Asia, the Middle East and the US.

Why do there seem to be many Jewish oligarchs?

It’s a very useful topic to anti-Semitic circles and it’s not true. Maybe in the late 80s and 90s indeed there were a lot, perhaps too many, visible Jewish oligarchs because of the legacy of the Soviet era and tsarism. Jews had been marginalized and pushed into the black market. They traditionally had math skills, due to the way they were raised, and they helped each other, as does any minority network; ethnic minorities tend to help each other.

Under Putin, I think it’s a specific propaganda tool to expose Jewish oligarchs much more than the rest of the oligarchs. “Oligarch” is actually no longer a useful term in my view, because it suggests that they still have some power. They lost all their power to Putin. Their only currency today is loyalty, it’s not dollars.

Whatever dollars they have in their accounts can be taken away from them at a snap. Yes, they can store their money offshore but they can’t stop working for the Kremlin. Most of them still own too much in Russia and there are too many hooks and levers on them.

There is no distinction between public and private property in Russia. Everything is owned in one way or another by the Kremlin. So the money that they give as donations, very often they are asked to give the donation. And they have no choice but to give it.

Actually, the Russian state tries to present some of these oligarchs as if they are no longer with the regime, as if they are now in the West. It’s all very misleading. I could count actual Russian oligarchs who are completely removed from the Russian state with one hand.

What about Leonid Nevzlin?

Well, Nevzlin is one of the exceptions. He was ousted from Russia. Mikhail Khodorkovsky too.

I don’t like the term oligarch. I prefer the term handlers, operatives, maybe agents, rich agents. Many of them are actually front men for the money that they ostensibly have. It’s not actually considered fully their money. I’m sure they’re representing some of the Kremlin money, just under the guise of it being their money.

Just to return to your question about the Jewish oligarchs. Currently there are many rich and powerful security people around Putin. They are mostly Russian or a variety of nationalities, but they are secretive and very well protected. Some of the federal ministers as well. Most of the Russian Duma and government are millionaires. They’re just officials but they have the lifestyle of a mini-oligarch.

Should we feel sorry for the oligarchs? It sounds like they can’t escape their gilded cages.

Well some of them managed to escape and these are very exceptional, but obviously at a very high cost to themselves.

There are actually many whistleblowers and refugees from the Russian regime, some of them reformed, some of them not. London has a lot of people like that. Some of them managed to take out some money while others didn’t. They lost a lot, some involuntarily because they fell out of the system. Only few deserve any kind of empathy. Otherwise it’s a very complicated and dark world.

Why do oligarchs give so much money to Jewish and Israeli charities, especially religious ones?

It’s co-option and soft power, and they may be even be using these charities to give political donations.

For themselves, it’s reputation-laundering and legitimacy. It also allows them to advance narratives that are useful to the Kremlin — like about World War II.

For instance, this whole debate about Ukraine. Russia tries to say the current government is a Nazi government, and how all of western Ukraine and their parties are anti-Semitic, how the West opened a second front in World War II at too late a stage and did not help Russia. The Kremlin can co-opt Jews to promote these narratives.

And then there are the May 9th celebrations [V-Day, commemorating the surrender of the Nazis in 1945] by Russia around the world, including in Israel on a large scale now.

Funding Jewish charities also gives them access to people. If you have a high-level event at the Metropolitan Museum or the Museum of Jewish History, you get access to politicians so you can co-opt them. If you look at the list of art galleries, museums, and all sorts of Jewish organizations, in New York, Europe and Israel that are associated with Putin’s oligarchs, you will be absolutely amazed and stunned. MOMA, the Metropolitan Museum, operas, Carnegie Hall, the Victoria and Albert Museum, the Tate Gallery. The list is endless.

Half of the major Jewish events that I see here in Washington, the fancy ones where you can co-opt elites, are co-sponsored by Russian oligarchs.

I’m sure that Russian oligarchs have managed to co-opt many politicians in Israel.

Look at [the rise in Russia of] Chabad. People in Chabad say, “We are just promoting the Jewish legacy. At least there is no anti-Semitism under Putin.” They find all sorts of excuses [to be supportive of Putin]. Before Putin, Chabad was a marginal group, at least in the former Soviet Union.

What is the Russian ruling class’s goal in Israel?

To create an environment — a political environment and economic environment — where it’s too difficult for Israel to resist some of the strategic interests of the Kremlin in the region. Not to oppose Russia’s interests.

But they’re also interested in subverting democracy. A strategic goal for the next few years is to subvert democracy in the West. In some ways they have already succeeded, and the appetite comes with food, as they say. So once they subvert democracy, the goal is to advance more corruption, more vested interests and then just turn the whole West into a corrupt world.

Why do they want to turn the West into a corrupt world?

Because then you can engage in what Russians love, which is realpolitik. Whoever is strong gets his own zone of influence and no one else can interfere. Russia would like to divide the world into zones of interest.

Look at what they did with influencing the American elections and possibly Brexit.

By the time of the 2016 elections in the United States, Russians already had all sorts of Putin understanders and supporters in the press, in the lobbying groups, in business circles, in chambers of commerce, among politicians, even in Congress. They have all these people who are associated with Russia through attending events at the Russian Embassy, going to conferences in Russia and Europe, sitting on boards of Russian companies or galleries associated with Russian money. It’s all done through open channels.

They also influence think tanks and their debates and narratives about Russia. There are several think tanks in Washington, for example, which are completely subverted by Russians and that put forward narratives useful to the Kremlin about everything — from Ukraine, to Israel, to corruption — and that acts as a force against an independent press, independent thinking, because you can pollute the whole policymaking and debating environment.

Why does Putin want to destroy democracy? Because it competes with his patronage system?

Yes. If I had to judge, I think it’s just his enormous lust for power and he’s a control freak. He just can’t get enough. But maybe, some people suggest that his circle pressures him. I would imagine they pressure each other and it’s a constant game of power, so he has to stay afloat and show benefits.

You’ve said you think journalists are not writing enough about Putin and his oligarchs?

I see it as a huge problem that the Western press is just incapable of covering many of these topics. The press has been marginalized by the internet, so it’s a global trend. Newspapers have lower budgets, they struggle more for advertising, there is much more private and partisan ownership of media outlets. These are all global trends but they influence coverage on Russia also.

Even high-level, big outlets like The New York Times and Guardian face extremely aggressive, litigious teams of lawyers and lobbyists of these oligarchs who have infinite pockets and can afford long legal fights.

Many newspapers don’t have proper foreign country correspondents. If they do, they have to write quick articles, like one per week without delving into difficult topics. Then there is a vicious cycle where complicated cases about Russia are not covered in the West and so there is no interest about them. And since there is no interest there is no coverage.

Very often I found that I wasn’t able to put important topics out there just because it was too complicated for the journalist to write. Not even because of libel issues or because of time constraints. He or she would say, “My editor will not take it through because it’s too complicated. It delves too much into Russian detail.”

Most amazingly, most major media outlets do not have a full-time Russian translator and researcher who can fully devote his or her time to the most basic background research for the few investigative journalists that these outlets struggle to support.

What will happen to Israel if it does nothing about the corrupt kleptocratic influence you describe?

The first stage is that you lose transparency, democracy and good governance. Israel is already losing that. There is no longer separation of powers. There is prevalence of the executive. There is organized crime and no one takes action against it. The police do nothing. This is the first step.

Israel may give up many of its positions in Syria very soon. I can’t exclude that.

What definitely will happen if we continue on the current trajectory is that the entire West will turn into some kind of Hong Kong. where superficially it is democracy. It has some kind of elections, it looks capitalist and there is modern technology, but in reality a corrupt, non-democratic government actually runs it.

For the average person what does that mean? That you’re either a criminal or you’re poor?

Exactly, if you don’t become part of the corrupt network, you’re much worse off. You’ll be on the sidelines, as happens now in post-Soviet states. There will be growing income inequality, shady deals, no social mobility and all these problems that are associated with semi-corrupt authoritarian states.

There may still be some semblance of democracy. The press will do fewer and fewer investigations and more entertainment and brainwashing. It will be much more partisan — so the only differences of opinion you can get is from vested interests, not from independent and objective civil society.

What can be done?

It’s a very harsh, difficult choice. The first step is acknowledgement of what is going on, followed by investigations and revelations of all these things.

I am not even sure what can trigger such acknowledgement and exposure. Even the meddling in US elections has not triggered the United States enough, although at least something is happening.

After this acknowledgement happens, you need a very robust policy of containment. There is no other choice.

Some money flows have to be stopped; some people have to be kicked out of your country, or even stripped of their Western citizenship. There must be much stricter anti-money laundering and due diligence of companies, and auditors should hire Russian or Georgian or Chinese translators to look into the background of people trying to buy assets in the West.

Security services have to have a major say in any strategic purchase related to security, defense or the national interest.

And then obviously there should be more funds for independent investigative reporters. I am friends with an organization called the Organized Crime and Corruption Reporting Project (OCCRP). They tell me that to train one proper investigative journalist and to keep him safe and to keep him protected from libel suits, you have to have a budget of about $300,000 a year, maybe $400,000.

When societies start investing in investigative journalism like that, that’s when the job will be done. And it can’t be one investigative journalist. You have to have dozens.

If your readers care about Israel, about keeping it democratic, there should definitely be some civil society efforts, some donations, some Kickstarters. Ultimately people should understand that this will hit them back in terms of their own welfare and their access to democratic institutions, but ultimately even economically.

It could happen in very unexpected ways. Your child could end up in a war with Syria, or some conflict instigated by Russia somewhere in the world. In a way this is a repetition of the 1930s. No one thought that events in Nazi Germany would have any repercussions for the United States. But then the country ended up fighting the Germans when it was too late.

Could this covert Russian influence constitute a factor in a future Israeli war?

What people in general in the West should understand is that the West and NATO are now becoming a minority force in the world; the power of the United States is declining. These large authoritarian states are taking over if not the world then at least Eurasia, countries like China and Malaysia that are not going to become democratic any time soon. The richer they get, the more authoritarian and the more aggressive and expansionist they become.

Democratic countries are becoming like an oasis in the desert. A better metaphor is that the West is like a small clean lake, or relatively clean lake, in the middle of a swamp. And the floodgates have been opened. It’s not like the small lake will clean up the swamp. It’s the other way around. So unless you close the doors and put some filters in place, you will be taken over as a swamp as well.

It won’t be easy. Consumption in the West will have to be scaled back from those money flows from Eurasia. Some industries will have to suffer, especially those that benefit from gas and oil contracts, as well as lobbyists, PR people, lawyers, all offshore accountants and real estate people. They will have to suffer; they will not make as much money.

But the society as a whole will benefit and be able to hold on to its values, like due diligence and good governance.

In terms of Israel specifically, if this does not happen, then I think the NATO alliance will be marginalized and might have to be involved in conflicts it doesn’t want. And then Israel will be much more on its own against its foes, and might not receive as much American help as it might hope to in such circumstances.

So all this has direct security implications for Israel as a society, and Israel as a state, unfortunately.

The main photo: Russian President Vladimir Putin (R) with Israeli Prime Minister Benjamin Netanyahu during their meeting in Moscow on September 22, 2015. (Kremlin.ru)

Is Putin’s Kremlin subverting Israeli democracy? A Russia expert thinks so

A devastating, complacency-shattering interview with Ilya Zaslavskiy, one of the world’s leading experts on Moscow’s overt and covert designs on the West.


This article originally appeared in
The Times of Israel

WASHINGTON, United States — Despite the global headlines about Russian meddling in foreign elections, Israeli experts have thus far expressed little concern that it could happen here.

At Tel Aviv University’s CyberWeek cybersecurity conference in June, for instance, Israeli officials made light of the impact of fake news and foreign influence campaigns on Israeli society. Fake news is a “nuisance,” Eviatar Matania, head of the National Cyber Bureau in the Prime Minister’s Office, told a panel at the conference, not a major threat. Other speakers said they had seen no signs of Russian influence campaigns targeting Israel.

But the recent release by researchers at Clemenson University of three million Russian troll tweets created by Russia’s Internet Research Agency between 2012 and 2018 paints a different picture.

Reporters from Israel’s Channel 10 News found that tens of thousands of the tweets dealt with Israel and the region and some were written in Hebrew, indicating they were indeed targeting Israelis and people who care about Israel.

Ilya Zaslavskiy, a Washington, DC-based expert on Russia and head of research at the Free Russia Foundation — a nonprofit led by Russians abroad that says it “seeks to be a voice for those who can’t speak under the repression of the current Russian leadership” — told The Times of Israel that he would be extremely surprised if Russia weren’t carrying out covert influence campaigns in Israel.

“We now know for a fact that Russia has been interfering on a massive scale in US, German and UK elections and referendums,” said Zaslavskiy, who is also a member of the advisory board at the Hudson Institute’s Kleptocracy Initiative and an academy associate at Britain’s Royal Institute of International Affairs (Chatham House) think tank.

“We know that they intervened in the Catalonia referendum as well as a referendum on Ukraine in Holland. They continue to interfere in the US midterms and they have been meddling in all sorts of local elections in Eastern Europe. and the post-Soviet space,” he said. “So why wouldn’t they interfere in Israeli elections when Israel is so important to their strategic interests?”

Asked why Israel is of interest to Russia, Zaslavskiy, who is Jewish and immigrated to the United States from Russia as a young adult, said that “Israel is of strategic importance to the Kremlin  — because Israel is actually one of the forces that could contain Russia, could prevent some of the abuses that Russians are carrying out.”

He cited, for instance, developments in Syria. “Israel is not a great friend of Assad, but now the Israeli government has sort of accepted that Russians uphold him and have got a foothold in Syria,” he said. Asked how things could have been different, Zaslavskiy replied “Israel could have been more vocal and critical about Russia’s role in Syria.”

This December 11, 2017 photo shows Russian President Vladimir Putin, right, and Syrian President Bashar Assad watching troops march at the Hemeimeem air base in Syria. (Mikhail Klimentyev, Sputnik, Kremlin Pool Photo via AP)

More generally, “you could have expelled some of the Russian oligarchs, you could have prevented some of the money laundering,” he said. “You could actually impose some sanctions on Russia and limit their influence in your country.”

Why hadn’t that happened? During a deeply disconcerting interview in the US capital Zaslavskiy offered some insights. And as the conversation developed, he moved rapidly beyond election meddling to a wider, nightmare vision of an ascendant Russia, with Western democracies weakened and outflanked. Regarding Israel specifically, he described covert, Russian-led processes already unfolding that he believes are undermining the rule of law and democracy itself, and set out specific measures that he believes must urgently be taken if the decline is to be halted and contained.

An existential danger

Zaslavskiy believes that both Israel and the West face an existential danger from Russia unless the problem of covert and overt Russian influence is fully acknowledged and decisive measures are taken to combat it. He says most of the West fails to grasp the gravity of the threat, which includes not just efforts to meddle in elections but the exporting of corruption and criminality from post-Soviet countries to the West, thereby undermining democracy itself.

In a recent report for the Hudson Institute’s Kleptocracy Initiative entitled “How Non-State Actors Export Kleptocratic Norms to the West,” Zaslavskiy argues that the West did not in fact win the Cold War and that its norms and values, like democracy and the rule of law, are very much in peril.

“When the Soviet empire collapsed in 1991, it was widely believed that Western-style democracy and liberal capitalism based on free elections, separation of powers and the rule of law would eventually take root in the Commonwealth of Independent States (CIS) and other regions emerging from the Cold War,” he writes. “Even when ex-Communist Party leaders and representatives of Soviet security services returned to power throughout the former Soviet Union (FSU) in the late 1990s to mid-2000s, mainstream political thought never once doubted the inevitability of democracy’s march across the globe. Experts debated speed and direction, but rarely questioned the ultimate destination.”

The West has largely failed to export its democratic norms and is instead witnessing an increasingly coordinated assault on its own value system

In reality, Zaslavskiy goes on, “the West has largely failed to export its democratic norms and is instead witnessing an increasingly coordinated assault on its own value system. This destructive import of corrupt practices and norms comes not only from post-Soviet kleptocratic regimes like Azerbaijan, Kazakhstan, and Russia, but also from China and other countries around the world whose ruling elites now possess far-reaching financial and political interests in the West.”

The new norms being exported to the West, which he dubs neo-Gulag norms, include the idea that those in power are the only real and rightful decision-makers and that the rest are ultimately “prison dust.”

Another such norm, he writes, is that “everything and everyone is for sale, or at least susceptible to manipulation or some form of control.” And finally, the Russian ruling elite believes that “individual human life does not matter anywhere, unless it is someone from their inner circle or equally as powerful as they are.”

The Times of Israel sat down with Zaslavskiy at a cafe in Washington, DC, to discuss the connections between Putin, Israel, organized crime, election meddling and the decline of democracy in the West.

The Times of Israel: There has been a lot of talk about Russian influence campaigns and Russian interference in elections. What aspect of this threat do you think people in the West are failing to grasp?

Ilya Zaslavskiy: They are failing to grasp two main things. First they think that the corruption, criminality and anti-democratic developments that happen in a place like Russia have very little to do with their own life or their own country. That’s the first delusion.

Today, everything is so much more integrated. When criminal groups supported by security services are allowed to do things in their own country, they immediately export their practices and values to the West, to safe havens where they can actually not only keep their money but can continue their activities.

There are many oligarchs of Jewish background from the post-Soviet space, from Russia, Kazakhstan and the Caucasus, who earned their money in a very dirty way in the 1990s and 2000s, and now they’ve moved to Israel

The second thing people fail to realize is that, unlike during the Cold War, there are open channels of business that these kleptocrats can exploit to export their norms and practices legally.

You see a lot of money from kleptocratic countries pouring into the West and paying for lawyers, lobbyists, PR people, even journalists, as well as former security people and security companies. In Soviet times this was not possible. Today, a Russian kleptocrat can continue his criminal activities in the West in broad daylight, without being prosecuted and hardly being covered by the press.

How might this be happening in Israel, and how might Israelis not be aware of it?

There are many oligarchs of Jewish background from the post-Soviet space, from Russia, Kazakhstan and the Caucasus, who earned their money in a very dirty way in the 1990s and 2000s, and now they’ve moved to Israel.

Some have Israeli citizenship and operate abroad and some operate in Israel. It’s not only that they have a luxurious lifestyle, throw fancy parties and buy amazing real estate. That’s another delusion in the West. Many Westerners believe that oligarchs bring their dirty money to their new country but merely as consumers.

In fact, they start to invest in assets — in strategic assets, in politics and in newspapers.

The vast majority of oligarchs can be hired on an ad-hoc basis by the Russian state or Kazakh state, and can be exploited for political purposes by this kleptocratic state.

I recently co-authored a report — “How to Select Russian Oligarchs for New Sanctions?” — that explains why and under what criteria the US government should add oligarchs like the Alfa Group oligarchs to sanctions.

There are very powerful figures with lots of money, lobbyists and PR support in Israel. [Prime Minister Benjamin] Netanyahu shows up at events with some of them.

Let’s say you have an oligarch who is close to Putin. What would they be doing in Israel? Why should Israelis care?

They can do multiple things. First, they can normalize Kremlin narratives about Israeli interests.

For example, the way they present Russia’s place in the Syrian conflict, in relations with enemies of Israel like Iran, or concerning the Soviet diaspora in Israel.

I’m sure they help promote Kremlin propaganda about the Second World War and Russia’s [ostensibly] almost exclusive role defeating the Nazis. And they peddle the Jewish veterans’ theme with the orange and black St. George ribbon. It’s a ribbon that commemorates the Soviet victory over Nazism that has come to be associated with Russian propaganda against Ukraine and against the West — how the West never really stood up to the Nazis, for example. These are not just historical narratives; they are very useful for today’s politics.

But the other thing oligarchs can do in Israel is to co-opt the elite, under the guise of cultural and charity events. They can throw fancy parties with caviar and beautiful women and invite politicians. They have held these receptions around Western capitals. I have followed some of these in London, as well as here in Washington.

Above and photo at top: Prime Minister Benjamin Netanyahu (right) and Russian President Vladimir Putin (left) attend a wreath-laying ceremony at the Tomb of the Unknown Soldier in Moscow, on May 9, 2018. Both men are wearing the orange and black St. George ribbon (Amos Ben Gershom/GPO)
Why would a Russian oligarch own a newspaper or TV station?

They may have financial interests and hope to make money but for many of them it is not done for commercial purposes. The reason is to support politicians through the media, and that allows you to get a foothold in the government. You do nice things for the government and then they do nice things for you in return. You establish a relationship and it’s a long-term thing.

It’s all very interconnected. The payback is not immediate but it’s a very solid investment.

Let’s say a Russian oligarch moves to Israel and starts investing in all kinds of businesses and giving money to charity. Why not just assume he’s retired?

No one from that world of state security or organized crime is off the hook because the Russian state has too much compromising material on them, as well as incentives. Also, if you don’t comply you can be eliminated. There is now a book on how Putin most likely ordered killings of dozens of people inside Russia and outside Russia who did not comply with his interests, including from his own security services or organized crime.

A file photo taken on September 14, 2004, shows Alexander Litvinenko (L), a former Russian intelligence agent, speaking at a press conference in London. (AFP PHOTO / MARTIN HAYHOW)

For example, he first used polonium not on Alexander Litvinenko but most likely on Roman Tsepov, who was part of the organized crime group in St. Petersburg in the 1990s that allegedly worked closely with Putin during his rise to power. It’s easier for anyone to comply. There are many oligarchs abroad that he uses on an ad-hoc basis. It’s switch on, switch off. It’s not too demanding or too crazy, and it’s actually acceptable to most of these people.

What’s the connection between the Russian state and organized crime?

In Soviet times there were three worlds that were distinct — with separate, even contradictory, goals. There was the Communist Party, the security services and organized crime. Organized crime was more or less antagonistic to the Soviet regime.

Organized crime and its networks have become part of the Kremlin’s political instruments abroad, including in Israel

Under Putin these three worlds collided and fused and learned from each other. Security services now oversee the businesses of organized criminal groups. Organized criminal groups carry out the political building and conduct operations for the Kremlin. The ideology of the Communist Party was thrown down the drain but the cynical and pragmatic practices, like co-opting the far right, co-opting the far left, co-opting Christianity or Judaism, remained.

You co-opt whoever is important to you in any given country. You can even contradict yourself in different countries but just divide and rule through all these channels — through ideology, through organized criminal groups, through corruption. Organized crime and its networks have become part of the Kremlin’s political instruments abroad, including in Israel.

If there were a Georgian or Russian oligarch who wanted to open hundreds of call centers throughout Israel and scam people abroad out of money, is that something that co-opting the elite would allow them to do?

Yes. But compared to corruption in Russia which involves billions for a single road or pipeline, binary options and forex are a relatively small-scale fraud. Russia as a state is also involved in hacking and dodgy cryptocurrencies; we now know that for a fact from Robert Mueller’s investigation. Russia as a state, especially its security services and associated oligarchs, are involved in all sorts of dodgy things, including in the digital realm.

Someone like Putin would not follow specific criminal activities like binary options, but he sits at the top of a pyramid and there might be levies that make their way from an Israel-based criminal enterprise all the way to the top.

Why would a Georgian or Russian criminal decide to put call centers in Israel of all places?

For a variety of reasons. Corrupt Russian money penetrates any vulnerable spot in the world. The criminality has not just penetrated Israel. It’s in Europe, in Asia, the Middle East and the US.

Why do there seem to be many Jewish oligarchs?

It’s a very useful topic to anti-Semitic circles and it’s not true. Maybe in the late 80s and 90s indeed there were a lot, perhaps too many, visible Jewish oligarchs because of the legacy of the Soviet era and tsarism. Jews had been marginalized and pushed into the black market. They traditionally had math skills, due to the way they were raised, and they helped each other, as does any minority network; ethnic minorities tend to help each other.

Under Putin, I think it’s a specific propaganda tool to expose Jewish oligarchs much more than the rest of the oligarchs. “Oligarch” is actually no longer a useful term in my view, because it suggests that they still have some power. They lost all their power to Putin. Their only currency today is loyalty, it’s not dollars.

Half of the major Jewish events that I see here in Washington, the fancy ones where you can co-opt elites, are co-sponsored by Russian oligarchs

Whatever dollars they have in their accounts can be taken away from them at a snap. Yes, they can store their money offshore but they can’t stop working for the Kremlin. Most of them still own too much in Russia and there are too many hooks and levers on them.

There is no distinction between public and private property in Russia. Everything is owned in one way or another by the Kremlin. So the money that they give as donations, very often they are asked to give the donation. And they have no choice but to give it.

Actually, the Russian state tries to present some of these oligarchs as if they are no longer with the regime, as if they are now in the West. It’s all very misleading. I could count actual Russian oligarchs who are completely removed from the Russian state with one hand.

What about Leonid Nevzlin?

Well, Nevzlin is one of the exceptions. He was ousted from Russia. Mikhail Khodorkovsky too.

I don’t like the term oligarch. I prefer the term handlers, operatives, maybe agents, rich agents. Many of them are actually front men for the money that they ostensibly have. It’s not actually considered fully their money. I’m sure they’re representing some of the Kremlin money, just under the guise of it being their money.

Just to return to your question about the Jewish oligarchs. Currently there are many rich and powerful security people around Putin. They are mostly Russian or a variety of nationalities, but they are secretive and very well protected. Some of the federal ministers as well. Most of the Russian Duma and government are millionaires. They’re just officials but they have the lifestyle of a mini-oligarch.

Should we feel sorry for the oligarchs? It sounds like they can’t escape their gilded cages.

Well some of them managed to escape and these are very exceptional, but obviously at a very high cost to themselves.

There are actually many whistleblowers and refugees from the Russian regime, some of them reformed, some of them not. London has a lot of people like that. Some of them managed to take out some money while others didn’t. They lost a lot, some involuntarily because they fell out of the system. Only few deserve any kind of empathy. Otherwise it’s a very complicated and dark world.

Why do oligarchs give so much money to Jewish and Israeli charities, especially religious ones?

It’s co-option and soft power, and they may be even be using these charities to give political donations.

For themselves, it’s reputation-laundering and legitimacy. It also allows them to advance narratives that are useful to the Kremlin — like about World War II.

If you look at the list of art galleries, museums, and all sorts of Jewish organizations, in New York, Europe and Israel that are associated with Putin’s oligarchs, you will be absolutely amazed

For instance, this whole debate about Ukraine. Russia tries to say the current government is a Nazi government, and how all of western Ukraine and their parties are anti-Semitic, how the West opened a second front in World War II at too late a stage and did not help Russia. The Kremlin can co-opt Jews to promote these narratives.

And then there are the May 9th celebrations [V-Day, commemorating the surrender of the Nazis in 1945] by Russia around the world, including in Israel on a large scale now.

Victory in Europe Parade – Haifa -2018

Funding Jewish charities also gives them access to people. If you have a high-level event at the Metropolitan Museum or the Museum of Jewish History, you get access to politicians so you can co-opt them. If you look at the list of art galleries, museums, and all sorts of Jewish organizations, in New York, Europe and Israel that are associated with Putin’s oligarchs, you will be absolutely amazed and stunned. MOMA, the Metropolitan Museum, operas, Carnegie Hall, the Victoria and Albert Museum, the Tate Gallery. The list is endless.

Half of the major Jewish events that I see here in Washington, the fancy ones where you can co-opt elites, are co-sponsored by Russian oligarchs.

I’m sure that Russian oligarchs have managed to co-opt many politicians in Israel.

Look at [the rise in Russia of] Chabad. People in Chabad say, “We are just promoting the Jewish legacy. At least there is no anti-Semitism under Putin.” They find all sorts of excuses [to be supportive of Putin]. Before Putin, Chabad was a marginal group, at least in the former Soviet Union.

Minister of Defense Avigdor Liberman seen with Russian-Israeli World War II veterans, as they take part in the Veterans Day parade in honor of the Allies’ victory over Nazi Germany, at the Knesset. May 8, 2018. (Miriam Alster/Flash 90)

What is the Russian ruling class’s goal in Israel?

To create an environment — a political environment and economic environment — where it’s too difficult for Israel to resist some of the strategic interests of the Kremlin in the region. Not to oppose Russia’s interests.

But they’re also interested in subverting democracy. A strategic goal for the next few years is to subvert democracy in the West. In some ways they have already succeeded, and the appetite comes with food, as they say. So once they subvert democracy, the goal is to advance more corruption, more vested interests and then just turn the whole West into a corrupt world.

Why do they want to turn the West into a corrupt world?

Because then you can engage in what Russians love, which is realpolitik. Whoever is strong gets his own zone of influence and no one else can interfere. Russia would like to divide the world into zones of interest.

Look at what they did with influencing the American elections and possibly Brexit.

Russia’s President Vladimir Putin (L) and US President Donald Trump talk as they attend the Asia-Pacific Economic Cooperation (APEC) leaders’ summit in the central Vietnamese city of Danang on November 11, 2017. (AFP/Sputnik/Mikhail Klimentyev)

By the time of the 2016 elections in the United States, Russians already had all sorts of Putin understanders and supporters in the press, in the lobbying groups, in business circles, in chambers of commerce, among politicians, even in Congress. They have all these people who are associated with Russia through attending events at the Russian Embassy, going to conferences in Russia and Europe, sitting on boards of Russian companies or galleries associated with Russian money. It’s all done through open channels.

There are several think tanks in Washington which are completely subverted by Russians and that put forward narratives useful to the Kremlin about everything — from Ukraine, to Israel, to corruption. That acts as a force against an independent press, independent thinking, because you can pollute the whole policymaking and debating environment

They also influence think tanks and their debates and narratives about Russia. There are several think tanks in Washington, for example, which are completely subverted by Russians and that put forward narratives useful to the Kremlin about everything — from Ukraine, to Israel, to corruption — and that acts as a force against an independent press, independent thinking, because you can pollute the whole policymaking and debating environment.

Why does Putin want to destroy democracy? Because it competes with his patronage system?

Yes. If I had to judge, I think it’s just his enormous lust for power and he’s a control freak. He just can’t get enough. But maybe, some people suggest that his circle pressures him. I would imagine they pressure each other and it’s a constant game of power, so he has to stay afloat and show benefits.

You’ve said you think journalists are not writing enough about Putin and his oligarchs?

I see it as a huge problem that the Western press is just incapable of covering many of these topics. The press has been marginalized by the internet, so it’s a global trend. Newspapers have lower budgets, they struggle more for advertising, there is much more private and partisan ownership of media outlets. These are all global trends but they influence coverage on Russia also.

Even high-level, big outlets like The New York Times and Guardian face extremely aggressive, litigious teams of lawyers and lobbyists of these oligarchs who have infinite pockets and can afford long legal fights.

Many newspapers don’t have proper foreign country correspondents. If they do, they have to write quick articles, like one per week without delving into difficult topics. Then there is a vicious cycle where complicated cases about Russia are not covered in the West and so there is no interest about them. And since there is no interest there is no coverage.

The first stage is that you lose transparency, democracy and good governance. Israel is already losing that

Very often I found that I wasn’t able to put important topics out there just because it was too complicated for the journalist to write. Not even because of libel issues or because of time constraints. He or she would say, “My editor will not take it through because it’s too complicated. It delves too much into Russian detail.”

Most amazingly, most major media outlets do not have a full-time Russian translator and researcher who can fully devote his or her time to the most basic background research for the few investigative journalists that these outlets struggle to support.

What will happen to Israel if it does nothing about the corrupt kleptocratic influence you describe?

The first stage is that you lose transparency, democracy and good governance. Israel is already losing that. There is no longer separation of powers. There is prevalence of the executive. There is organized crime and no one takes action against it. The police do nothing. This is the first step.

Israel may give up many of its positions in Syria very soon. I can’t exclude that.

What definitely will happen if we continue on the current trajectory is that the entire West will turn into some kind of Hong Kong. where superficially it is democracy. It has some kind of elections, it looks capitalist and there is modern technology, but in reality a corrupt, non-democratic government actually runs it.

For the average person what does that mean? That you’re either a criminal or you’re poor?

Exactly, if you don’t become part of the corrupt network, you’re much worse off. You’ll be on the sidelines, as happens now in post-Soviet states. There will be growing income inequality, shady deals, no social mobility and all these problems that are associated with semi-corrupt authoritarian states.

There may still be some semblance of democracy. The press will do fewer and fewer investigations and more entertainment and brainwashing. It will be much more partisan — so the only differences of opinion you can get is from vested interests, not from independent and objective civil society.

What can be done?

It’s a very harsh, difficult choice. The first step is acknowledgement of what is going on, followed by investigations and revelations of all these things.

I am not even sure what can trigger such acknowledgement and exposure. Even the meddling in US elections has not triggered the United States enough, although at least something is happening.

After this acknowledgement happens, you need a very robust policy of containment. There is no other choice.

People walking near Red Square in Moscow, Russia. (Hadas Parush/Flash90)

Some money flows have to be stopped; some people have to be kicked out of your country, or even stripped of their Western citizenship. There must be much stricter anti-money laundering and due diligence of companies, and auditors should hire Russian or Georgian or Chinese translators to look into the background of people trying to buy assets in the West.

Security services have to have a major say in any strategic purchase related to security, defense or the national interest.

And then obviously there should be more funds for independent investigative reporters. I am friends with an organization called the Organized Crime and Corruption Reporting Project (OCCRP). They tell me that to train one proper investigative journalist and to keep him safe and to keep him protected from libel suits, you have to have a budget of about $300,000 a year, maybe $400,000.

If your readers care about Israel, about keeping it democratic, there should definitely be some civil society efforts

When societies start investing in investigative journalism like that, that’s when the job will be done. And it can’t be one investigative journalist. You have to have dozens.

If your readers care about Israel, about keeping it democratic, there should definitely be some civil society efforts, some donations, some Kickstarters. Ultimately people should understand that this will hit them back in terms of their own welfare and their access to democratic institutions, but ultimately even economically.

It could happen in very unexpected ways. Your child could end up in a war with Syria, or some conflict instigated by Russia somewhere in the world. In a way this is a repetition of the 1930s. No one thought that events in Nazi Germany would have any repercussions for the United States. But then the country ended up fighting the Germans when it was too late.

Could this covert Russian influence constitute a factor in a future Israeli war?

The West is like a small clean lake, or relatively clean lake, in the middle of a swamp. And the floodgates have been opened

What people in general in the West should understand is that the West and NATO are now becoming a minority force in the world; the power of the United States is declining. These large authoritarian states are taking over if not the world then at least Eurasia, countries like China and Malaysia that are not going to become democratic any time soon. The richer they get, the more authoritarian and the more aggressive and expansionist they become.

Democratic countries are becoming like an oasis in the desert. A better metaphor is that the West is like a small clean lake, or relatively clean lake, in the middle of a swamp. And the floodgates have been opened. It’s not like the small lake will clean up the swamp. It’s the other way around. So unless you close the doors and put some filters in place, you will be taken over as a swamp as well.

It won’t be easy. Consumption in the West will have to be scaled back from those money flows from Eurasia. Some industries will have to suffer, especially those that benefit from gas and oil contracts, as well as lobbyists, PR people, lawyers, all offshore accountants and real estate people. They will have to suffer; they will not make as much money.

But the society as a whole will benefit and be able to hold on to its values, like due diligence and good governance.

In terms of Israel specifically, if this does not happen, then I think the NATO alliance will be marginalized and might have to be involved in conflicts it doesn’t want. And then Israel will be much more on its own against its foes, and might not receive as much American help as it might hope to in such circumstances.

So all this has direct security implications for Israel as a society, and Israel as a state, unfortunately.

The main photo: Russian President Vladimir Putin (R) with Israeli Prime Minister Benjamin Netanyahu during their meeting in Moscow on September 22, 2015. (Kremlin.ru)

Russian pension reform: a “black swan” for Vladimir Putin?

Russian pension reform aimed at sharply raising the retirement age has all the chances to become a long-anticipated political “black swan” for Vladimir Putin’s government – a mistake that may not necessarily lead to immediate political problems for Putin, but would definitely deliver one of the strongest blows to his grip on power in years. The media has already picked up the decline in Putin’s approval ratings to pre-Crimea annexation levels, and there’s a good reason for it. There was hardly any major element of governmental policy in the past couple of decades that was met with such overwhelming rejection (and “approval” nearing the statistical margin of error, if any) by the society as the proposed “pension reform.”

A recent opinion pollby the Levada Center (dated July 5th, 2018) illustrates explicit rejection of Government-suggested pension reform by Russians—only 7-8% view raising retirement age totally positively or somewhat positively, whereas 89-90% view it somewhat negatively or strongly negatively, with “strongly” negative responses clearly prevailing (70-73%). (The fluctuation in percentage points is explained by the fact that two different questions were asked: one about raising retirement age for men from 60 to 65 and one about raising it for women from 55 to 63. Similar figures are shown by another pollster, FOM (dated June 29th): 80% of the respondents reject raising retirement age, whereas only 6% approve.

Russian opposition is currently actively working the political grassroots in the Russian region, and was behind recent sizable protests in provincial Russian cities. Our interaction with ordinary Russians in Moscow and in the region, suggests that people view the proposed retirement age raise not simply as just another economic reform, but instead as a breach of one of the few available major social guarantees. This guarantee remained untouched for decades, from Stalin’s era through very difficult reforms of 1980s and 1990s. Frankly speaking, there are very few solid social guarantees available to ordinary Russians from the government, and pension is arguably the most fundamental one. Many people build their living strategies after 40 on “holding out until retirement age,” as demand for elderly workers in Russia is quite limited. Vedomosti cites a recent study by the Higher School of Economics which shows that the salaries of Russians peak, on average, at age 45, after which begin to severely decline (by 15-20% compared to peak). This is a stark contrast to developed Western countries with higher retirement ages, where peak salaries are observedbeyond 45 and 59 years. Russian hiring ads traditionally include provisions like “inquiries from candidates aged above 40/45 are not considered.”

The age group which falls under the provisions of current “pension reform” – for whom retirement will be delayed beyond 60 years for men and 55 for women – fall under very high risk of ending up unemployed or forced to take extremely low-wage jobs. Analysts at Raiffeisenbank have calculated that about 660,000 Russians per year will be affected by a raised retirement age, of whom 200,000 risk ending up unemployed – that’s 5% of the total current numberof unemployed Russians.

Yet another problem is poor health of Russians: according to already cited a Levada poll on July 5th—58% of Russians stop working after reaching retirement age due to poor health. According to many independent experts, the majority of Russians around pension age have chronic diseases which complicate their competitiveness in the labor market and their ability to continue to work. See, for instance, Tatiana Maleva and Oksana Sinyavskaya: “Raising retirement age: pro et contra”. The poor health of elderly Russians also devalues the government’s promises of “higher pensions after 65”. Since many peoples’ health sharply deteriorates after 65, they basically have no time to enjoy their retirement and instead begin to fight for physical survival. The Russian government is aiming to take away these relatively smooth first five years of pension

In this regard, raising retirement age as proposed by the Russian Government puts tens of millions of Russians in the risk zone for the upcoming decade, potentially driving unemployment higher and creating millions of “new poor” people who will not be in demand by the labor market and will have a very difficult time living through to reach the new, raised retirement age.

This perspective is completely understood by the Russians in the risk zone. According to our surveys, about one fifth of the attendees of protest gatherings against raising the retirement age in provincial Russian cities in the past weeks were completely new people who have never attended opposition rallies before. These people have very strong feelings about what they believe to be dishonesty and betrayal by the authorities:

  1. There was not a word about such swift raising of retirement age during the “presidential elections” campaign. In fact, Putin and many top ruling party officials have categorically rejected such a perspective many times on record in the previous years;
  2. As said above, the current retirement age was one of the very few solid social guarantees by the government surviving decades of changing policies, and people truly believed in it and built their basic living strategies upon it;
  3. Unlike other countries where retirement age has been raised before, there was never an open debate in society about it—instead, the government recently switched on its full-throttle propaganda machine spreading ridiculous and poorly crafted messages that “working longer is great and everyone will just be happier.” This clearly heightens the negative reception of the reform. Instead, critical voices are suppressed. This atmosphere does not help build trust to suggested measures, to say the least;
  4. Aggressive governmental propaganda is so out of touch with reality: nice looking TV hosts in designer clothes discussing how nice it is to work after 60, whereas the bitter reality for many Russians at that age is poor health, enormous medical costs, and the total inability to find a job.

Also, it’s worth noting that the pro-reform message is extremely weak in terms of its argument. The comparison with other countries simply doesn’t work due to poorer health and quality of life in Russia. Talk about the “inevitability” of raising the retirement age due to pension fund deficits hardly sells itself on the background of fresh news about record surplus of the federal budget, which is expected to hit over 1 trillion rubles this year due to rising oil prices.  According to Minfin, the government’s National Wealth Fund reached $77.1 billion on July 1st. That amount alone is sufficient to close down the debate on raising retirement age for at least a decade.

So, our feedback from the Russian region tells us that this time it’s serious. Relations between the public and Vladimir Putin’s government are broken. Yes, Putin always has the option of interfering and softening the proposed scale of raising retirement age, but it seems unlikely that he will completely cancel the reform after decades of discussion. Key political decisions to proceed with the raise have already been taken, and any such softening gestures will not be able to restore the trust of those people who lost it after the pension reform was announced in June.

Of course, the retirement age factor alone can’t radically transform the Russian political landscape. Russian society in many ways is traditionally driven by inertia and adaptation rather than revolt, as people have very limited historic experience of democratic governance. Many Russians believe that their lone voice can’t make a difference, but postponing the retirement age – a blatant breach of an important provision of informal social contract – will definitely be one of the game changers that will ultimately contribute to ruining trust in Vladimir Putin and his system. It is already becoming one.

Tuula: I hope Oleg will win

Valeria Jegisman of Free Russia Foundation caught up with Maxim Tuula, producer of “The Trial: The State of Russia vs Oleg Sentsov,” during his recent visit to Washington, to talk about the film, the international campaign to support the political prisoner, attitudes towards his case in Russia, and the current state of Sentsov’s health.


The film was released about 1.5 years ago. While you were working on it, you probably had your goals and expectations. Do you feel you have achieved them? Apart from Oleg still being in jail.

When we were making this film we wanted to bring the message about Oleg Sentsov’s case to the widest international audience possible. After a premiere in Berlin, some Russian film critics – friends of ours – told us they didn’t really like the film because they expected more. Since most of them support Oleg Sentsov and know a lot about his case, they expected some kind of revelations. But we didn’t make the film for them. We made it for people who don’t know about Oleg’s case. We wanted to make an internationally relatable film to explain everything and I think it works.

In terms of creativity, I don’t know – for the sophisticated taste it’s not an intricate arthouse film. It’s too simple for that, but we had to choose one way or another. I asked Natalia, Oleg Sentsov’s cousin, whether she liked the film or not, and she said she didn’t think about it in artistic terms, but that it is an important tool to help Oleg’s cause.

However, after our premiere in Berlin, Netflix was looking at the film and whether to take it and they decided not to. And a lot of European channels didn’t take it. They said the film is not relevant to their audiences because it’s Ukraine, and no one knows who Oleg Sentsov is. That is unfortunate.

So it must have come as a disappointment?

Of course we were disappointed because we wanted to make it as big as possible. But we are trying, maybe things will change. When we were making the film, we started a publicity campaign where we recorded messages from European, Russian, and Ukrainian filmmakers to support Oleg’s release. But it was really hard to get feedback from their American counterparts.

Many of them said that they had never heard anything about it and asked why they should care about a Ukrainian filmmaker? Something changed when Johnny Depp joined another global campaign, Imprisoned for Art, and supported Oleg Sentsov. And thanks to Pen America awareness of Oleg’s case has risen in the States.

After the hunger strike began, the American media started writing more about Sentsov, especially after Masha Gessen, the Russian-American journalist, wrote about him in the New Yorker. Her participation in our film screening in New York a few weeks ago attracted a lot of interest and it helped raise awareness.

It seems to me that the international campaign has been quite prominent and far-reaching. A lot of people, including from film industry and international organizations, support Oleg Sentsov’s case. But what is less prominent is political support. What do you think about this and what else can civil society do to put more pressure on politicians?

The Institute of Documentary Film in Prague asked me what they could do to help – should they write an open letter to the Russian Minister of Culture, or to President Putin? But I told them they [Russian authorities] don’t care about you. The only thing you can do is try to make an impact by talking to your politicians, who in turn may try to influence Putin.

French President Emmanuel Macron raised the issue of Oleg’s case during his recent visit to Russia, probably because the French intelligentsia exerted pressure by signing a letter in support of Oleg. Yet it did not lead to any results because Putin was not interested. The president of European Council, Donald Tusk, issued a statement calling for the release of Oleg because our Polish co-producer Dariusz Jablonski and director Agnieszka Holland wrote a letter to Tusk. But again, it didn’t have any effect.

The Czech Institute of Documentary Film asked me what they could do to help and I said the same thing: you need to write the politicians. They showed Oleg’s own film, Gamer, and our film about Oleg at a festival in Karlovy Vary and then wrote an open letter on behalf of all the Czech filmmaking associations to the Czech Parliament, which eventually took up the matter. But again these were cultural figures raising the issue, not the parliament itself.

Of course, there are politicians who are very active in supporting Oleg – for example, the former Bundestag member Marieluise Beck, who even came to our Berlin premiere and was an active participant of our other German screenings. Estonian President Kersti Kaljulaid also took part in the interantional campaign and she held a #FreeSenstov sign in her hands – but I wish there were more of them.

Putin will not listen to the Institute of Documentary Film, but he might listen to someone who has an impact on Russian or international politics. So, high-level politicians could probably influence Putin, but he would want to get something in return.

Did you expect that the World Cup would bring more attention to Oleg Sentsov’s case?

This is what Sentsov was hoping for when he started the hunger strike. He started his hunger strike just few weeks before the World Cup to attract attention to the Ukrainian political prisoners in Russia. Unfortunately, it didn’t work. Our friends in Moscow were handing out leaflets to the soccer fans who came to Russia. We thought that if even five out of a hundred fans took the leaflets, and started to think about it, then that’s something. Unfortunately, nothing happened. The World Cup and the case of Oleg Sentsov turned out to be two different universes, not really connected to each other. But let’s see what happens after the end of the World Cup, there is still hope that Putin will do something.

In the film, Oleg Sentsov says that the majority of the population in Russia believes the state propaganda, but one-third understands what is really going on. So the majority of people believe that Oleg is guilty, but there are those who try to stand up for him in Russia. It must take courage to do that in Russia. How do you assess the support for Oleg in Russia?

Well, I think one-third is an exaggeration and that it’s much fewer people, but still this is the thinking part of the Russian population, people who really question the order of things. The Russian filmmakers, they continue to support Sentsov because they feel the blame is partly on them since this is their government who is doing this, yet they can’t do anything about it.

There is a documentary made by Radio Liberty that shows activists handing out leaflets about Oleg to people on the streets of Moscow. Many people don’t take the leaflets, those who do don’t really want to know anything about it. They also say they won’t take one because he is Ukrainian. When they see the word Ukraine, they don’t even read it because it is the enemy – they are so brainwashed.

But the worst part is when people clearly understand what is going on, but close their eyes to this injustice.

Do you think they are just afraid to stand up, or that they just don’t care?

They are not afraid, they work for the regime. They support Putin, if it works for Putin, injustice is not a problem to them. Maybe some people are afraid, but I don’t think fear is the main factor here.

Once I happened to have a conversation with a former FSB officer who said it’s Sentsov’s own fault because he didn’t have to stick out. He clearly realizes Oleg is not a terrorist and that it’s a show trial. But it’s normal to him, it is normal to many people. It’s all right to have this kind of injustice if it has a purpose. And for me that is the worst part.

How is Oleg Sentsov’s health at the moment, do you keep in touch with him?

It is deteriorating, of course, because it’s been 61 days. At this point, the changes in your body become irreversible. Even if he stops the hunger strike, he may not fully recover. He has lost about 20 kilograms and his health is clearly deteriorating.

I’m going to ask a difficult question and you don’t have to answer it. Do you think Oleg did the right thing to go on a hunger strike?

It is his choice and I respect it. There is a discussion among Russian filmmakers about whether we should ask for a pardon from Putin or should not because we have to respect his decision. I respect his choice, and I wouldn’t convince him to stop. I wouldn’t do it myself because my family just wouldn’t let me, because it is a serious risk I would be taking. But he is absolutely convinced he is going to win and I hope Oleg will win. In any case, he has achieved what he was trying to do. He has brought attention to the issue of Ukrainian political prisoners, but if he has to pay with his life – it is a very high price.

Maxim Tuula is an Estonian film producer whose work also includes “My Friend Boris Nemtsov.” The interview with Tuula took place on 13 July 2018. Photo credits: snapshot from “The Trial: The State of Russia vs Oleg Sentsov,” and Alexei Salomatov

All power to the bears!

Does Siberian separatism exist?

There is no Siberian separatism yet. And this is the main problem of Siberia. While speaking of Siberian separatism, people mostly mean the “special rights” of Siberia, unfortunately. There is no ethnic community, horizontal links between regions are weak, there’s lack of civil society institutions – all this could not make a good ground for regional separatism. The idea that Moscow is draining all the Siberian resources, leaving little of them locally is probably the only one point that unites the Siberians. After a brief upswing of regional activity in the 1990s, while the “Siberian Agreement” Association and the Ural Republic of Eduard Rossel were created, today’s regional elites are focused on the President’s administration, rather than on the interests of Siberians.

(more…)

Sokolov: engage Russia’s regional elites

Valeria Jegisman of Free Russia Foundation recently sat down with Denis Sokolov, an expert on security and the North Caucasus, to talk about Russia’s current power structure, its link to criminal networks, the danger it poses, and the need for the West to work with Russia’s regional leaders in order to tackle these challenges.


The “market of violence” is spreading internationally

“In principle, we can say that the Russian government today is a political elite consisting of the post-Soviet bureaucracy, intelligence officers and criminals. Together they form a political class that governs the Russian state, in which criminal networks are built in, and their activities go far beyond Russia,” says Sokolov.

Over the years, the security services, which have risen to a position of power, have incorporated these criminal actors into the system. This differs from pure organized crime in that, in addition to direct violence, there is also the violence that is facilitated by authorities – the judicial system, law enforcement agencies, intelligence agencies and administrative bodies.

In the 2000s, adding to income generated from illicit activities, the ruling powers introduced economic institutions into the system, providing revenues from energy sources, natural resources and infrastructure enterprises. “They receive most of it legally, through dividends from public companies such as Rusal, Rosneft, Gazprom,” says Sokolov.

As the system has become entrenched, its threat to the international community has grown due to the emergence of political interests within this mafia. There may be economic motivations, but when it comes to control in the Middle East or Ukraine, political interests clearly prevail, says Sokolov. And the “mixed ontology” of the system – fragments of the state, organized crime and the security services – have manifested in the hybrid tools used by the Russian political elite: unleashing wars in local conflicts, informal armed groups, outright bandits, agents networks, criminal money, co-opting Western politicians, propaganda and disinformation.

The North Caucasus plays a significant role in the spreading of this “market of violence,” says Sokolov, having significant influence within Russia and spreading beyond borders as well. One of the most powerful criminal groups is that led by Ramzan Kadyrov, head of the Chechen Republic, with its private army and FSB backing. It represents an inseparable mix of criminals, intelligence officers and jihadists, with a network operating in Georgia, Ukraine, Turkey, Syria and Europe. According to various sources, up to 7,000 combatants who took part in the war in Syria came from Russia, primarily from the North Caucasus. Of these, according to various studies, about 2,500 primarily came from the North Caucasus, 500 people have gone to war from Chechnya, and 2,000 second-generation of emigrants after the Chechen wars have traveled through Istanbul from Europe. Those who survived have later gone to Turkey and Ukraine, says Sokolov.


Losing control

The question that arises is whether Putin maintains control over this spreading network. “I think that his control is constantly diminishing,” says Sokolov.

Over the last five years, Russia’s involvement in various conflicts and the use of hybrid tactics has led to a transfer of decision-making from the top to the bottom, says Sokolov. The situation is complicated by the various competing interests, which range from entrepreneurial activity to economic and political motives.

“This is a mosaic, which has not been described in detail – I have not seen publications describe this mosaic in detail, but it would be useful to understand how it is organized,” says Sokolov, adding that if Putin himself is no longer in control, it would be useful to know who is. “It’s a matter of security,” says Sokolov.

And in the case of Kadyrov, with his private army and transnational networks of gangsters and agents, the Chechen strongman sometimes acts on direct orders from Moscow, but other times makes decisions independently, at his own risk.

In a way, the North Caucasus represents Moscow’s declining influence, says Sokolov. There are fewer people who represent Moscow, and generally speaking fewer Russians as well. In the eastern and western Caucasus, Islam and alternative ideologies of independent statehood are developing. In some regions, conflicts in the criminal world are no longer resolved through gangster methods, but through sharia. For now, it is more convenient for Kadyrov to maintain the status quo, rather than to embrace separatism, but when Moscow runs out of money, Sokolov asks, how will it remain in control?

The network as a whole is fueled by and kept together by revenues from natural resources, and Moscow can more or less hold on to its authority as long as there is enough money, says Sokolov.


Growing risk of conflict and violence

There is a growing danger of conflict and violence within and outside of Russia, due to rising tensions between Moscow and Russia’s regional powers, says Sokolov.

The parallel process of a generational shift is underway among the ruling elite, says Sokolov, and to maintain control Moscow has appointed bureaucrats and siloviki to replace regional heavyweights. However, the new appointees are not integrated into the regional powers, says Sokolov, forcing them to rely on the FSB to assert their power.

“Thus, the chief of the regional FSB becomes a ‘warlord’ of a vast territory,” says Sokolov, “and I think that regional politics will see the development of competition with these warlords. They will try to strengthen their positions and deprive the centralized powers of the opportunity to change the composition at the regional level of the FSB.”

On the other hand, these FSB officers are driven mainly by economic interests while the regional elites – local politicians, regional business owners and criminal actors – will try to protect their own economic interests. Yet in order to protect these interests, Sokolov says, they must rely on ethnic, religious or regional groups. This is the case in the North Caucasus, he says, where there are many such groups, which can easily be mobilized. Raising the role of these regional identities may lead to the emergence of a process of de-colonization.

Moreover, in the absence of fair political processes, the only option for regional elites in this conflict is to resort to violence – all types of violence, says Sokolov.

“There is a risk that the whole network will fight among themselves and compete for favoritism with the centralized powers, as we saw in the Caucasus,” says Sokolov, adding that such conflicts could take place in many other regions, including outside of Russia.

If at some point, the situation gets out of control to the extent that the global community imposes tougher sanctions against the major companies that generate financing for the network, it can be a double-edged sword. On the one hand, this would help decrease violence outside of Russia, since there will be less money to finance external military initiatives, says Sokolov. But on the other hand, cutting off funding could increase criminalization within Russia even more. Revenues from natural resources would still find their way into the system – in ever more disintegrated and illicit ways – creating more players and making this “market of violence” more competitive. “We need to be prepared that it doesn’t all turn into Iraq,” says Sokolov.


The role of the West

To avoid the worst, the West should build closer ties with Russia’s regional elites, says Sokolov. To some extent, this work is already underway, mainly between business communities, yet more should be done.

“It is clear that at the political level, there is no such work going on today. There are no legislative or administrative mechanisms for this, and there is no motivation to develop these mechanisms due to the risks involved,” says Sokolov.

“It is, of course, a challenge,” says Sokolov, “yet there is a need to at least develop policies toward working with the regional and industry elites in Russia, and to at least understand who these people are.” In addition to the business communities, this cooperation could also include regional political, community, ethnic and religious leaders, says Sokolov.

But is it possible to have such cooperation within Russia? “There is a clear need for discussions in the regions today about how to organize life inside the regions, how to arrange the rules of the game within the regions. Because everyone understands that the system in its current state does not have a future. It will not be able to exist for long and it is impossible to develop in this system. There is a definitely a demand for change,” says Sokolov.

Former Bolotnaya Prisoner: Free Sentsov and other political prisoners NOW!

In the spring of 2014 in Crimea, Russian federal security service arrested Ukrainian citizen Oleg Sentsov due to suspicion of terrorism.

Oleg is a film director. During the period of the Russian annexation of the Crimean Peninsula, he was an auto Maidan activist, carrying food and supplies to the Crimean military units blocked by Russian troops.

In August of 2015, he was sentenced for 20 years in prison. Oleg did not admit to his guilt; he stated that he was tortured to make him plead guilty. Court sessions had a lot of legislation infringements. Materials within the criminal case contain signs of falsification.

Oleg is recognized as a political prisoner by Memorial (the most respectful Human Rights NGO in Russia). Apart from him, there are 71 more Ukrainian citizens in Russian prisons arrested on political motives. Oleg says there are about 64 Ukrainians; data may vary, and one of the lists of Ukrainian citizens held in Russia as political prisoners is presented by OVDinfo – a Russian human rights organization.

On the 14th of May 2018, Oleg went on hunger strike with the demand for the release of all Russian political prisoners of which are Ukrainian citizens.

Stanislav Zimovets (a Russian citizen and Russian political prisoner, arrested during the anti-Putin demonstration on the 26th of March 2017), Alexander Shumakov (a Ukrainian citizen and Russian political prisoner), Alexander Kolchenko (a Ukrainian citizen and Russian political prisoner, treated by the Russian court as an accomplice of Oleg Sentsov), Stanislav Klih (a Ukrainian citizen and Russian political prisoner) also went on a hunger strike in support of Oleg’s demand. Moreover, a Ukrainian citizen and Russian political prisoner in Crimea Vladimir Baluh has been on a hunger strike for 2.5 months, against the illegal verdict.

The only person in Russia who is capable of meeting Oleg’s demand is Putin.  Until the demand is met, those gone on hunger strike will continue and will die eventually.

Full list of Members of the European Parliament who voted against the resolution on political prisoners in Russia

On 14 June this year, the European Parliament adopted a resolution that, in particular, demanded: “that the Russian authorities immediately and unconditionally release Oleg Sentsov and all other illegally detained Ukrainian citizens in Russia and on the Crimean Peninsula”.

Oleg Sentsov is a Ukrainian filmmaker who lived in Crimea. He stayed there after Russia had annexed the Crimean Peninsula; shortly after the annexation, Sentsov was arrested, forcibly “granted” a Russian citizenship, falsely charged with terrorist activities and sentenced to 20 years.

On 14 May 2018, Sentsov went on an indefinite hunger strike demanding to release all Ukrainian political prisoners held in Russia and Crimea – there are more than 70 of them. Sentsov is dying right now.

Out of 627 Members of the European Parliament (MEPs), 485 voted for the resolution, 76 voted against, and 66 abstained. Here is a full list of MEPs voted against the resolution on political prisoners in Russia and Crimea. It is hardly a coincidence that almost all the MEPs listed here represent the pro-Putin “red-brown alliance”.

 

NAME PARTY IDEOLOGY GROUP
 

Bulgaria

Georgi PIRINSKI Bulgarian Socialist Party Centre-left S&D
 

Czech Republic

Kateřina KONEČNÁ Komunistická strana Čech a Moravy Far-left GUE-NGL
 

Cyprus

Neoklis SYLIKIOTIS Progressive Party of Working People Far-left GUE-NGL
 

France

Marie-Christine ARNAUTU Front national Far-right ENF
Nicolas BAY Front national Far-right ENF
Joëlle BERGERON Independent [Front national] Far-right EFDD
Dominique BILDE Front national Far-right ENF
Marie-Christine BOUTONNET Front national Far-right ENF
Steeve BRIOIS Front national Far-right ENF
Aymeric CHAUPRADE Les Français Libres [Front national] Far-right EFDD
Jacques COLOMBIER Front national Far-right ENF
Mireille D’ORNANO Les Patriotes [Front national] Far-right EFDD
Sylvie GODDYN Front national Far-right ENF
Bruno GOLLNISCH Front national Far-right NI
Jean-François JALKH Front national Far-right ENF
France JAMET Front national Far-right ENF
Patrick LE HYARIC Front de Gauche Far-left GUE-NGL
Gilles LEBRETON Front national Far-right ENF
Dominique MARTIN Front national Far-right ENF
Bernard MONOT Front national Far-right ENF
Sophie MONTEL Les Patriotes [Front national] Far-right EFDD
Joëlle MÉLIN Front national Far-right ENF
Younous OMARJEE L’union pour les Outremer Far-left GUE-NGL
Jean-Luc SCHAFFHAUSER Rassemblement bleu Marine Far-right ENF
Mylène TROSZCZYNSKI Front national Far-right ENF
Marie-Christine VERGIAT Front de Gauche Far-left GUE-NGL
Marie-Pierre VIEU Front de Gauche Far-left GUE-NGL
 

Germany

Stefan ECK Independent [Partei Mensch Umwelt Tierschutz] Far-left GUE-NGL
Cornelia ERNST Die Linke Far-left GUE-NGL
Sabine LÖSING Die Linke Far-left GUE-NGL
Jörg MEUTHEN Alternative für Deutschland Far-right EFDD
Martina MICHELS Die Linke Far-left GUE-NGL
Martin SCHIRDEWAN Die Linke Far-left GUE-NGL
Helmut SCHOLZ Die Linke Far-left GUE-NGL
Gabriele ZIMMER Die Linke Far-left GUE-NGL
 

Greece

Nikolaos CHOUNTIS Popular Unity [Syriza] Far-left GUE-NGL
Georgios EPITIDEIOS Golden Dawn Far-right NI
Lampros FOUNTOULIS Golden Dawn Far-right NI
Stelios KOULOGLOU Syriza (Coalition of the Radical Left) Far-left GUE-NGL
Kostadinka KUNEVA Syriza (Coalition of the Radical Left) Far-left GUE-NGL
Konstantinos PAPADAKIS Communist Party of Greece Far-left NI
Dimitrios PAPADIMOULIS Syriza (Coalition of the Radical Left) Far-left GUE-NGL
Sofia SAKORAFA Independent [Syriza] Far-left GUE-NGL
Eleftherios SYNADINOS Independent [Golden Dawn] Far-right NI
Sotirios ZARIANOPOULOS Communist Party of Greece Far-left NI
 

Ireland

Luke Ming FLANAGAN Independent Far-left GUE-NGL
 

Italy

Mara BIZZOTTO Lega Nord Far-right ENF
Mario BORGHEZIO Lega Nord Far-right ENF
Angelo CIOCCA Lega Nord Far-right ENF
Eleonora FORENZA Lista Tsipras-L’Altra Europa Far-left GUE-NGL
Danilo Oscar LANCINI Lega Nord Far-right ENF
Curzio MALTESE Lista Tsipras-L’Altra Europa Far-left GUE-NGL
Giancarlo SCOTTA’ Lega Nord Far-right ENF
Barbara SPINELLI Independent [Lista Tsipras-L’Altra Europa] Far-left GUE-NGL
Marco ZANNI Independent [Movimento 5 Stelle] Far-right ENF
 

Latvia

Andrejs MAMIKINS “Saskaņa” sociāldemokrātiskā partija Centre-left S&D
 

Netherlands

Marcel de GRAAFF Partij voor de Vrijheid Far-right ENF
André ELISSEN Partij voor de Vrijheid Far-right ENF
Olaf STUGER Partij voor de Vrijheid Far-right ENF
Auke ZIJLSTRA Partij voor de Vrijheid Far-right ENF
 

Portugal

João FERREIRA Partido Comunista Português Far-left GUE-NGL
António MARINHO E PINTO Partido Democrático Republicano Centre-right ALDE/ADLE
Marisa MATIAS Bloco de Esquerda Far-left GUE-NGL
João PIMENTA LOPES Partido Comunista Português Far-left GUE-NGL
Miguel VIEGAS Partido Comunista Português Far-left GUE-NGL
 

Spain

Xabier BENITO ZILUAGA PODEMOS Far-left GUE-NGL
Javier COUSO PERMUY Izquierda Unida Far-left GUE-NGL
Tania GONZÁLEZ PEÑAS PODEMOS Far-left GUE-NGL
Paloma LÓPEZ BERMEJO Izquierda Unida Far-left GUE-NGL
Maria Lidia SENRA RODRÍGUEZ Alternativa galega de esquerda en Europa Far-left GUE-NGL
Lola SÁNCHEZ CALDENTEY PODEMOS Far-left GUE-NGL
Estefanía TORRES MARTÍNEZ PODEMOS Far-left GUE-NGL
Miguel URBÁN CRESPO PODEMOS Far-left GUE-NGL
 

United Kingdom

Janice ATKINSON Independent [UKIP] Far-right ENF
James CARVER UKIP Far-right EFDD
Steven WOOLFE Independent [UKIP] Far-right NI

This post first appeared at Tango Noir site.

Badanin: to combat disinformation, we must support high-quality journalism

Valeria Jegisman of Free Russia Foundation sat down with Roman Badanin, editor in chief of Dozhd (TV Rain), one of the few independent news outlets in Russia to talk about the media situation in the country and the role of Western support.

How do you assess the media situation in Russia today, and what are your predictions for the future?

The situation is both deplorable and promising. There is no need to explain why it is deplorable – many good media outlets have been ruined, a lot of journalists have lost the opportunity for professional fulfillment, the vast majority of existing media is under state control to one degree or another, and so on. What is much more important is why I, nevertheless, see the situation as being promising. The thing is that while the Russian authorities were preoccupied with their attack on the media, the world did not stand still but moved forward both with new technologies and new approaches to media. And this gives us a lot of opportunities. Here is what I mean: there was something called Samizdat in the USSR where many thousands of people across the country reproduced censored materials at their own peril. Today, there is again something like Samizdat and no one, except the Russian state itself, is to blame for this. About 10 years ago, there were a lot of large media players in Russia – oligarch media, large state media, and subsidiaries of large foreign media. Today, some of these large media have disappeared, some of them have been banned, some have been kicked out of the country. But they have one thing in common: they have lost a monopoly on the Russian audience, especially the young.

Instead, a considerable number continue to appear as a whole cohort of young media and quasi-media that resembles Samizdat. Many of these media are not registered or are registered abroad. Moreover, many of them are generally anonymous, such as Telegram channels, which have taken on the role of media. Or bloggers – they are not registered either, yet they are also engaged in media delivery, sometimes delivering news or even more complex content. One can make a million criticisms about them, yes, but this is the reality of today. And all these projects are small, so they do not need a large management.

Another distinguishing feature of these media, in addition to being small and not following all the previous conventions, is that they are often specialized in the subject matter. They are also experimenting with new business models, such as using native advertising, crowdfunding or non-profits. That’s why I am very hopeful about all of this. Instead of the big unwieldy giants with whom the Russian authorities have been waging war in recent years, suddenly and unnoticeably, perhaps for the authorities themselves, a great number of new promising teams have appeared. Of course, for such a large country as Russia, this is not enough and there should be more of these media. And there is a need to spread regionally, which is the most difficult part, yet all of these developments make me look to the future with hope.

The audience to which independent media reaches out to is quite small in Russia. Is it possible that independent media could play a role in changing the status quo, or will it remain a niche for a certain group of people?

I do not like to ask myself such big global questions. Let’s look at the facts and I will give the following example. Last September, there was a story that at the Mayak plant in Chelyabinsk Oblast, allegedly, there was a leak of radioactive ruthenium and the radioactive cloud traveled over the whole of Russia, and no one knew about this. You ask me, as a journalist, if writing about this cloud could become a driver for some sort of changes? I just write about it because it’s important. If it provokes some public response, some mass movement, then it is good – this is one measure of the success of journalistic work. But I’m not a politician or an activist, I am a journalist and the main thing for me is simply to tell people that this is happening.

What are your thoughts on the new generation of journalists and journalism education in Russia? There are new journalists who want to work for Rain TV and others who want to work for national channels.

It’s hard for me to speak about the quality of education since I myself did not study with a faculty of journalists. But then again, there are mixed feelings of pessimism and optimism. Regarding the pessimistic views, there are more than 1,000 new journalists graduating each year in Russia – more precise numbers can be found in my column on this topic in Republic – and they all must go somewhere to work. The majority, of course, go to VGTRK [the National State Television and Radio Company] – the largest employer in the media market in the country.  They are hardly guilty because of this and are going there just with the thought of earning money and knowing that they will not be fired.

The other thing is that the Russian media market didn’t develop during those ten years in the 1990s before the crackdown happened. People just do not really understand what journalism or a journalist’s ethical code is. Many of them just land on this conveyor belt and do not have time to think about what they are really doing. This is a big problem because many of these people think that they do real journalism. Even worse – their friends, counterparts, PR professionals and the audience start thinking in a similar manner. I am more pessimistic here, but the optimistic side is that there are still a lot of people, especially young ones, who are eager to do something real, especially in the big cities. They have the enthusiasm and the courage, to be honest journalists – it is a brave thing to be an honest journalist in Russia today – but since the media market hasn’t properly developed, they have no experience, no basic skills, and no ethical journalistic standards.

What do you think the West, in the context of the current relations between the West and Russia, could do to help independent media in Russia?

There is a growing trend all over the world to support independent media projects with non-profit funding. These media projects specialize in socially important topics; however, they can’t get by just on readership traffic – it is another type of journalism. Every society needs an independent and investigative media. America came to fully understand this after Donald Trump became president. For example, three years ago there were fewer than 100 of these types of media outlets in America, and now there are around 300. I wrote about this in more detail on Medium [an online publishing platform] at Stanford University. And where is the Russian reality in all of this?  In Russia, the trend is quite the opposite.

I understand that with Putin in Russia and the legislation not allowing certain things, that everyone is afraid to invest money in Russian media. This is understandable, but here is what is not acceptable:  Russia is the world’s largest country with a nuclear bomb, a population of 140 million, a bunch of tanks, two open conflicts, and a million unresolved internal problems that, if they play out, could fundamentally affect stability in the world. Despite all this, I see a declining trend towards Russia, as supporting freedom of speech here in the US has become more important. Yet I think that what the West can do is to continue to support independent media in the most transparent and clear way, and to stop being afraid of the million tricks that the Russian authorities come up with to force the West to abandon these investments.

But can this Western support be detrimental to the people and organizations in the current situation?

Yes, it can, but it’s a matter of choice. There is always a choice – either you do it, or you do not. Therefore, this support should be as transparent as possible. Supporting these 300 successfully working media organizations is based on transparent and clear mechanisms. Every reasonable person understands that these media projects receive donor support due to the importance of their work and no one complains about this. If everything is done in a transparent way, reasonable people will not question Russian journalists who could receive donor funding in the same way. The Russian authorities, if they want to do something with them, well, they can do it anyway.

Do you expect that Russia will continue to spread disinformation?  How is it possible to fight disinformation both in the West and within Russia? Do you think the Western approach to countering disinformation is the right one?

I won’t go into the political aspect of this. But yes, I expect that Russia will continue its disinformation tactics. If a manager tries some method which seems to work well and doesn’t cost much, then you, like a smart manager, should probably continue with this technique and develop it further.  In order to combat disinformation, we must, first of all, invest in and support independent, high-quality journalism and related projects.

Roman Badanin, editor in chief of Dozhd (TV Rain). He is currently a John S. Knight Journalism Fellow at Stanford University, focusing on the development of independent media in Russia.

Oleg Sentsov and other political prisoners we must fight for

On May 4th, Oleg Sentsov, the film director, announced a limitless hunger strike with the demand to release all Ukrainian political prisoners from Russian prisons (64 people total). On May 31st, Ukrainian activist OlexanderKolchenko announced the hunger strike with a demand to release film director Oleg Sentsov. VolodymyrBalukh, OlexanderShumkov, Stanislav Zimovets also went on hunger strike.

On June 2nd, acts of solidarity both with Sentsov and the political prisoners in Russia with the demands to release them took place in more than 70 cities in Europe, Asia, America and Australia. Updated information on these acts of solidarity can be found  here.

All these events have made the issue of political prisoners in modern Russia relevant again.

Who are political prisoners? The definition by the “Memorial” Human Rights Center, which is deeply involved with this issue, is: “Political prisoners are the two categories of people who are subject to criminal prosecution (on a politically motivated basis).

The first group is those oppressed solely for the practice of their civil rights, and for being of a particular nationality, religion or another group, for their beliefs and views (also known as prisoners of conscience, according to Amnesty International).

The second group is those persecuted due to significant violations of the law, selectively, or according to the political motivation of the authorities.

An extensive definition can be found in the Guide to the Definition of a Political Prisoner issue  (In Russan).

According to “Memorial”, there are more than 50 political prisoners in Russian prisons today, more than 100 people persecuted for their religious convictions and more than 70 people with clear signs of politically motivated cases. Here you can find the  Sentsov’s case analysis on the “Memorial” website  (In Russian).

The “Bolotnaya Square case” became the first large politically motivated case in modern Russia. The “political prisoners” term returned in current journalistic and activist vocabulary due to this case. The absolute evidence of falsification of the case, inhumane treatment conditions, and the feeling of belonging in every sense of the word (a lot of people participated in the “white-striped protests” and many of them were on Bolotnaya Square on May 12, 2012) provoked a lot of outrage. This led to a protest and a solidarity campaign, both quite effective and noticeable, being brought to life. It is important to note that many of those affected by the “Bolotnaya Square case” are former political prisoners now engaged in human rights activities and provide assistance to political prisoners and those persecuted for political reasons.

Ivan Nepomnyashiy, ex-political prisoner:

“It was very important for us to know, – during the trial and after the verdict – that there are many people who consider the case and the sentence to be absurd and fabricated, and that they appealed to the authorities to recognize this and to make us free. And this is the minimum we can do now for Oleg Sentsov, OlexanderKolchenko and many others who are unfairly detained in Russian prisons.”

The ongoing issue has another important aspect: five people went on a hunger strike. The management of Sentsov’s penal colony has already declared that they are ready to use forced feeding and infusions. The hunger strike is one of the extreme measures available for those in prison. It is easy to remember the hunger strike of Anatoly Marchenko, the Soviet dissident, and the tragedy at the end of it. The hunger strike of Vasily Aleksanyan, one of the “Yukos’ case” political prisoners was not successful either. It is still unclear whether the Russian government is ready to react to such actions. But one point is obvious – this situation is very dangerous for the life of political prisoners.

Sergey Sharov-Delaunay, human rights defender:

“The authorities are not going to drop back, for sure. The only way to force it is to make the intense pressure on this power rise from the inside, and from the outside, all over the world. For the outside pressure, which is really important for Ukrainian authorities, as well, it is necessary for us to support the demands of Oleg Sentsov. This is the starting point for everything. Without it, this demand will never become actual or satisfied.“

That is the reason that urgent and regular acts of solidarity are becoming more important than ever. Join the  #SaveSentsov campaign!

Bandits vs. Chekists. Do Regional Elites Support Modernization?

On May 19, 2018, in Moscow, supporters of Alexei Navalny founded a new party “Russia of the Future” (Россия будущего). Navalny himself is under an administrative arrest for a “repeat violation of the law pertaining to the organizing of a public event” which refers to his May 5, 2018, countrywide demonstration under the slogan “He is Not Our Czar”. Around 1500 demonstration participants have been arrested throughout Russia.

Around the same time, on May 21, 2018, about 15,000 Circassians joined a memorial march dedicated to those who lost their lives fighting for the independence of Circassia. This is the largest turnout since the march originated in the early 90’s. Circassians clearly are harboring historic and contemporary grievances against the Russian government.

From the video coverage of the two events, it is evident that the majority of participants of both, the Navalny demonstration, as well as those in Nalchik, have been born after the mid-80’s and grew up using social media and smartphones. Today they constitute about 30% of Russia’s working age population, and by the end of Putin’s current term will amount to about 60%. This population wants to live in a different Russia.

If they are to realize their vision of living in a different country, those fighting for democracy, those fighting for a free Circassia, and many other groups, must make deals with each other. This has to be done directly, without Kremlin intermediaries. Moreover, in order for this to happen, the new social contract must involve regional elites, — those who control the financial flows, assets, and violence within the various regions of the Russian Federation.

Regional business owners, criminal bosses and law enforcement officials— in essence, all former or still active bandits—can gain political and economic sovereignty only with the support of the population at large.  This piece is an attempt to explain three points: 1. Why the entrepreneur strongmen must be involved in modernization efforts; 2. Why they should be interested in getting involved; and 3. How this process would look in practice.

 

Well-Armed Gentlemen

Simply passing good laws is not enough for political modernization to take place. Armed elites must be compelled to observe these new laws. And up to now, this has only happened, crudely speaking, in two ways:

  1. As described by the American sociologist Charles Tilly, the modern state is created by organized crime as a way to settle military and political competition among more or less equal opponents. This has been the case in Western Europe and North America. Mature democracy, therefore, is a product of competition between stationary bandits and institutionalized organized crime through political mechanisms, including labor unions. This is a long and expensive process; the pioneers that took this approach did so due to the lack of alternatives, and, thereby, willingly or unwillingly, created a contemporary open society.
  2. As a result of the absorption of one entity by another already mature jurisdiction (including ones created by means described above), with simultaneous acceptance of rules by all social groups (including strongmen) integrating them into the democratic society. This can happen as the result of an occupation and removal of military aristocracy from power (the way it happened in Japan when it was occupied by the U.S.) or voluntarily, for example, the way it happened during the secession of the three Baltic States from the U.S.S.R. The Norms and institutions in the newly independent Baltic States were, for the most part, borrowed from the E.U. National elites; and almost all of the social groups perceivedsaid transition to denote the country’s return to its original historically ordained path. By the early 2000’s, former criminals and strongmen of the Russian-speaking Narva in Estonia had cleaned up their act and turned into law-abiding entrepreneurs and politicians. Some have even agreed to serve prison terms in order to remain within European jurisdiction.

Georgia is a telling example of a policy reversal, after the political defeat of Mikheil Saakashvili, exposing the social mechanics of such a transition. During his time in power, Saakashvili succeeded in consolidating parts of the Georgian elite around the idea of importing good institutions and integrating into the European Union. He even managed to temporarily usurp the monopoly on violence, sidelining organized criminal networks. However, to Moscow’s satisfaction, his successor Bidzina Ivanishvili managed — with the help of the revanchist old political and criminal elites with ties to Russian organized criminal networks, the Georgian clergy; and by using the institution of elections, capitalizing on his opponents’ crude mistakes as well as on the post-Soviet infantilism of certain civil activists — to freeze Georgian reforms and push the Saakashvili team out of Georgian politics.

At this point, Ukrainian reforms also look like forced concessions by the Petro Poroshenko Administration to civil activists and business associations in wartime and under pressure from Europe and the U.S. Criminals networked with Russian organized crime as well as law enforcement officials remained in the camp of the corrupt bureaucracy.

In Russia, the rut is even deeper, yet there are practically no real forces outside of the ruling class similar.For example; to the networks of entrepreneurs in Ukraine, the only functioning political mechanism in Russia is the FSB, whose regional directorates control investigations, law enforcement agencies, courts, criminals, bureaucrats (including governors sitting atop financial flows), and large business enterprises. Its structure and culture is similar to organized crime which has taken control of the state, society, and even international businesses.

Therefore, paraphrasing Benjamin Franklin, conditions of political modernization are equal to the conditions of change in rules of behavior of well-armed gentlemen in this society.

A question follows: why would the armed gentlemen accept such a change?

 

Why Bandits Need Democracy

This “Chekist Order” that has subjugated courts, the police and organized crime in Russia is a completely new state, no longer the U.S.S.R, nor a criminal post-Soviet Russia.  It’s a police state in which the monopoly on violence, in fact, is delegated by the FSB regional directorate heads. With the threat of criminal investigations, they keep a firm grip on everyone, from governors to owners of gas stations. When direct physical violence is required to deal with activists, they turn to the Department of Countering Extremism and when violence is needed to deal with public figures, even with representatives of the law enforcement bureaucracy, they turn to private paramilitary forces.

Neither business owners nor criminals like this arrangement. As an entrepreneur from Dagestan put it, “when in Moscow even the smallest commercial entities started increasingly to employ people who introduced themselves as former officers of the KGB, FSK, FSB, GRU, and others, or who were even on active duty, it has become clear that capitalism would not be taking hold. Instead, there would be banditry served under different sources (in law, outside of the law), but not capitalism. There is no point in trying to think in economic terms.”

Russia’s regional business is hemorrhaging. In the early 2000s, carbons, ferrous and non-ferrous metals, lumber and fertilizers were taken away from the regions. In the decade after that, the manufacturing of vodka, local electric power networks, and gas pipes were taken. As we speak, the regions are losing control over chain retail, agricultural production.  New tariffs are being levied on long-haul truck drivers, and ideas are floated on taxing the self-employed.  My friend who owns a small chain of stores used a metaphor to describe the situation: “it is as if your bloodstream was open with a small cut. The blood flows, and you are slowly growing weaker and weaker. There are fewer resources and no means to fight back.”

As small and medium-size business is degraded, the income of the corrupt system itself at regional levels is dropping as well. The only remaining source of profit is government contracts. But Moscow meddles with a heavy hand even there. More or less powerful governors and mayors that cannot be controlled from Moscow are imprisoned and their replacements are sent from the capital — young bureaucrats trained by the Kremlin’s Personnel Reserve Program or former law enforcement agents. This is a result of a generational change within Putin’s circles, which has entered the indefinite stage of the political golden years.

All of this is part of Putin’s attempt to raise the stakes by taking the Russian world hostage and securing his rule indefinitely.  He is walking on thin ice, however, and the current regional policy is more dangerous for the regime than even a moderate drop in oil prices or protests against toxic landfills.

Owners and beneficiaries of liquid assets in Russia’s regions— electrical power companies, retail, natural resources and agricultural complexes— are losing assets as well as the ability to pass property on to their heirs. They either run, like Akhmed Bilalov and Yevgeny Chichvarkin; or sell their assets, like Sergey Galitsky, vodka manufacturers and intensive garden owners from Kabardino-Balkaria, and owners of private oil service companies from Khanty-Mansi Autonomous Region; or they are already in detention or prison, like Vyacheslav Derev and the Magomedov brothers; or they have just been released from prison like Magomed Kaitov.

Whether they understand it or not, the only way for regional elites and large businesses not only to preserve their assets but to survive and keep something to pass down to their children is by taking down the political system. This process can notionally be divided into two phases.

The first phase— decentralization. Large land-owners in Southern Russia could easily strike a deal with rural communities; organized crime can do the same with mayors, governors and labor unions. They need each other’s support. Regional politicians and civil activists would not survive without the protection of the well-armed gentlemen. This was a lesson learned long ago in the North Caucasus due to the traditional importance of familial and communal ties. But other regions, little by little, will come to the same realization.

The Second Phase entails the transfer of functions of safeguarding persons, private property, contract, civil liberties and transparent elections to independent judiciary and law enforcement institutions. Today, due to advances in communications technology, a wholesale direct import of institutions is possible. The only political issue to resolve is what choices to make from an array of good institutions. Open and just courts, the protection of property and civil liberties, are not policy issues but prominent features of contemporary society, akin to a smartphone connected to the internet.

Russian Guard soldiers in riot gear or Cossacks with whips may personify state authority only for the older generations, but Young Russians see them as a zoo with extinct specimens, and demonstrations as a dangerous safari. Modernization of the Russian mind has already taken place. What is needed to be available on the market, are institutions such as property registries, contract enforcement systems, good educational and health care systems, and financial services. It is not necessary for each village to invent its own iPhone.

If this does not happen, regional elites and corporations will be forced to flee, the way the Baltic Republics once fled from Russia’s atavistic tentacles and to a modern jurisdiction. They, along with the FSB generals keeping tabs on them, will either run or vanish into obscurity.

 

Contract to Occupy

Putin’s Administration has been forced to replace seasoned regional politicians with the boy scouts from the Personnel Reserve Program and former bodyguards in order to create a safe environment for their own heirs. However, these local powerhouses are supported by desperate people with nothing to lose, or with youth with their own political aspirations. They are also supported by local mafia bosses whose assets are being expropriated; by former mayors and municipal heads kicked out from their posts and unable to find a spot in Putin’s United Russia party; and by bankrupt entrepreneurs. In fact, there is a handful of other protest movements that could be mobilized with ease.

The well-armed gentlemen, business owners, and opposition movement leaders already possess a full spectrum competence in order to take over control of any regional assets and entities— from municipalities and agricultural production facilities to aluminum plants and oil processing companies. De Soto’s contract for the takeover of political, industrial assets and infrastructure would work well as the action plan for economic decentralization and secure the monopoly on violence.

In the Kabardino-Balkar Republic, for example, it can happen in the following manner.  Let’s suppose there are several million acres of land formerly a part of a collective state farm and now leased for 49 years to an entrepreneur with connections within the local government. With government funds, this entrepreneur has built intensive gardens on this land and leased those too poor local farmers to operate. The local community is unhappy they have lost the collective land. The landowning entrepreneur faces a real threat of a raid takeover by federal law enforcement agents— they initiate criminal investigations against him, attempt to impound his property, and their ransoms demands keep growing.

One way for this entrepreneur to liberate himself from the direct pressure of the strongmen would be, together with civil activists, to organize mass demonstrations, and with the pressure from the local population to take the land out of the jurisdiction of the Republic. For example, the land can be turned into a shared ownership property and a collective venture could be created. In such a scenario, of course, the large landowner would have to make deals with the local community. But there he is likely to have relatives, he would have enough money for such negotiations, he is known by local farmers, and his small security detail would turn into the core of a national movement.

There are real-life examples of municipalities in Dagestan receiving compensation for land flooded for hydroelectric power station reservoirs as the result of the municipal leader airing the issue with the local community. In this case, neither strongmen nor the mafia dons were willing to go against several thousand angry men and women.

In theory, RUSAL’s aluminum plants and northern oil companies from Western Siberia are not that different from collective farms. The young bureaucrats from the Personnel Reserve Program would have a hard time dealing with the armed men if they all of a sudden side with labor unions or with those protesting new landfills. Several such scenarios playing out throughout Russia would amount to a de-facto decentralization.

It is, therefore, precisely regional criminal networks and associated entrepreneurs and protest movement leaders that hold the potential to launch a decentralization process. The paradox here is that the only measure available to Moscow in such a scenario would serve to facilitate the takedown of the police state.

Trillions of rubles that Putin has promised to support infrastructure and social services, such as healthcare, education, and construction, will, no doubt, be expropriated (i.e. stolen). Regional actors would either transfer these funds offshore or use them for re-privatization of assets into their own private property. The balance of forces will inevitably shift.

Sanctions against Russian companies brought about by the foreign policy adventurism of Putin’s government, as well as the Russian counter-sanctions, are destroying corporate control over finance, decreasing the value of assets, facilitating the takeover of regulatory control as offshore funds return to Russia, and making devalued assets more attractive to investors. For example, the much cheaper shares of RUSAL (РУСАЛ) and Rosneft (Роснефть) now can be bought by regional players along with the global businesses and thereby protected by both, the international law and the “bayonets” on location.

Technological progress with its global education, market, Internet and the invincible Telegram erase borders and devalue local political sovereignty. Contemporary financial and legal instruments allow almost anybody to go to the global market and a more transparent jurisdiction. Insurance companies, retirement funds, property ownership registries, educational programs and even healthcare companies now can be headquartered in any spot on the globe. The less a government meddles in redistribution of collective resources, the less cost is imposed on its population. Regions and networked communities that join the global market and global jurisdiction would lower the cost of political institutions, compared to old democracies. Old democracies, in turn, would successfully sell their jurisdiction globally.

To end on a positive note, profit can be made from the modernization of the post-Soviet space. This motivation, in practice, is much stronger than any higher humanitarian goals. The moment this huge (and still with a future potential to expand a hundredfold and by hundreds of billions of dollars) market of the gentrification of institutes and infrastructure opens up, it will be impossible for any archaic criminal regime to counter free capital.

This article first appeared in Russian at the Republic site

Canadian Business in Crimea: Turning a Blind Eye to Sanctions and Human Rights

On May 14, 2018, Oleg Sentsov went on an indefinite hunger strike, demanding the release of 64 Ukrainian political prisoners held by Russia in pre-trial detention centers and penal colonies. Today marks the 16th day of his hunger strike.

Four years earlier, in May 2014, the Russian Federal Security Service arrested the Ukrainian film director Sentsov along with dozens of others. Russian officials claimed that all of the detained activists, including Oleg Sentsov, were Russian citizens.

Sentsov was accused of setting the United Russia party office on fire as well as of participating in the activities of a Ukrainian nationalist organization the Right Sector banned in Russia for extremism. In 2015, Sentsov, who is a resident of Crimea, was sentenced to 20 years in prison.  In 2016, he was sent to the Russian Arctic region of Yakutia, and in October of 2017 transferred to a maximum security penal colony in the city of Labytnangi in the Yamal-Nenets Autonomous District. This “Polar Bear” colony was established to hold especially violent and dangerous criminals.  Its prisoners are forced to work in 12-hour shifts, in violation of the Russian labor law. The hard labor manual projects usually include making chicken-wire, cinder blocks, barb wire and other construction materials. At least two of the colony’s executives have been under criminal investigation for corruption and abuse of authority. Among violations continuously reported by prisoners is physical abuse and torture.

Sentsov’s story is just one of the many reported and documented instances of horrific violations of human rights unleashed on the inhabitants of the Crimean Peninsula in the aftermath of its invasion and annexation by Russia. Since 2014, the Office of the United Nations High Commissioner for Human Rights (OHCHR), has received hundreds of such complaints, and while their biggest spike was in 2014, the number is growing again.

In 2014, 21 people were abducted in Crimea by the Russian proxies. More than 10 persons abducted between 2014-2016 are still missing. Other crimes reported in Crimea are arbitrary arrests and detention, most for political purposes of neutralizing and intimidating opposition and dissent.  Russia has labeled extremist and abolished the regional ethnic legislative body of the indigenous Crimean Tatars, the Mejlis.

The Russian annexation of 2014 has plunged the entire peninsula into a new reality of totalitarian repression.  With the Russian military, however, came Russian business. The position of the E.U., U.S., and Canada toward such ventures has been clear from the start. Sanctions have been introduced against a number of Russian individuals and companies operating in Crimea. Western businesses are explicitly banned from association with those on the sanctions list. They are also banned from investing in Crimea, or any of the related energy, transport, tourism projects.

On November 18, 2015, Colliers International signed a Federal contract with Russia’s Vnesheconombank worth 2.3 million rubles ($36,800) to provide marketing research services for the repurposing of historic buildings in St. Petersburg for a hotel complex developed by the Mandarin Oriental Hotel Group. This deal was signed against the backdrop of two students detained by the FSB in Crimea on November 19, 2015, for reportedly vandalizing billboards with portraits of Putin. Around the same time, on November 24, 2015, the Military Collegium of the Supreme Court has sent two other Crimean residents, Oleg Sentsov and Olexander Kolchenko, to prison for 20 and 10 years respectively.

On November 11, 2016, Colliers International signed another state contract worth 1,18 million rubles ($18,430), this time with the Simferopol International Airport of Crimea. The contract was to perform analysis of the economic feasibility of establishing an office center in the new terminal of the airport. The new terminal opened in April 2018.

Colliers International performed this contract as Russian forces conducted mass raids and unwarranted searches of the homes of Crimean Tatars (on November 17, 2016) and detained their community leaders.  These searches have been documented and publicized by IlmiUmerov, Deputy Chair of the Tatar Mejlis. On November 14, 2016, persons who presented themselves as agents of the Russian FSB and officials from the Crimean Prosecutor Office, yet failed to produce a legal warrant, cut off electrical power, and raided and searched the Khan Dzhami mosque in Evpatoria. The imam of that mosque was accused of storing and distributing literature banned in Russia. Subsequently, he became the target of a smear campaign carried out in the local press.

On August 15, 2017, Colliers International, signed yet another state contract with Vnesheconombank, this time to provide business management consulting services. The contract was worth 2.95 million rubles ($ 50.000). This happened a day after several Crimean residents, including Lilya Gemeji, had been arrested in Simferopol for solitary pickets in support of the arrested Server Karametov. A week later, on August 24, 2017, two Ukrainian Cultural Center associates Halyna Baloban and Olena Popova were detained and searched by police at the Simferopol train station. The two were suspected of engaging in the illegal activity of celebrating the independence of Ukraine.

Now, just what type of companies are the Collier International, LLC, and its partners? Two companies are registered in Russia under the name of Colliers International LLC, — one in Moscow with registration number INN 7728150075, and another in St. Petersburg, registered under INN 7825453815. Both are owned by Cyprus Checot Holdings Ltd and are part of the Canadian Colliers International, which operates over 500 offices worldwide and specializes in commercial real estate services.

The Rossiya Bank which operates the airport in Simferopol has been on the list of entities sanctioned by Canada and the E.U. since March 2014. The Russian state-owned Vnesheconombank has been on the sanctions list since July 2014.

An attempt by the Municipal Scanner to contact a Colliers International office in Moscow and clarify its corporate position on violation of the E.U. and Canadian sanctions law has yielded no response.

The Current Russian Government Will Become a Textbook Example of Administrative Stagnation

Dmitry Medvedev’s new Administration has already been dubbed “the stagnation cabinet” and for a good reason. Despite some rotations, the new government is dominated by well-known bureaucrats who have hopped between various positions within the Putin system for years but have never established themselves as agents of change. There simply are no reformers or rabble-rousers in this cabinet, and consequently, no reasons to expect substantial changes in economic policy. The overwhelming majority of officials from the previous administration have kept their posts, just like Medvedev himself, who has long become the national symbol of stagnation and imitation of competent economic management.

At the same time, certain shifts within the government do offer clues on exactly what kind of adjustments of the economic management style we should expect in the coming years. Let’s discuss this in detail.

The most glaring change is the dramatic beefing-up of the fiscal component of the cabinet. The opposition of the fiscal hawks to all development proposals had figured prominently in all of the previous administrations. As a rule, all breakthrough proposals require either lower taxes or increased spending for purposes of development. The fiscal hawks are categorically against such proposals, as a balanced budget is their foremost priority. This is exactly what type of standoff shook the Kasyanov government in early 2000, when Kasyanov and Gref sought to lower the taxation burden, but Finance Minister Kudrin was opposed.

The most striking feature of Medvedev’s “old new” cabinet is the unprecedented power of the fiscal hawks; they are probably the most powerful they have been in the past twenty-five years. First of all, the government now has a de facto shadow Prime Minister — Anton Siluanov — who has not only been given the powers of a First Vice Minister and now is in the supervisory position over everyone else in the government but has also kept his full control over the powerful Ministry of Finance, the very agency that regulates the state financial flows.

Siluanov will inevitably grow stronger due to the weakness of Medvedev himself, who is by far less proficient financially, and to the new arrangement where Siluanov will oversee the political process of budget negotiations with the Duma lobbyists — he would always have the pretext of telling other agencies: “apologies, you will have to take a hit on this issue due to the current political situation.” A balanced budget and growing reserves to fight off inevitable future crises are the traditional priorities of Siluanov. That means we should anticipate an increasingly restrained discussion of spending increases and, conversely, very lively discussions of tax hikes.  Such fixation on balanced budgets and reserve growth is not great news for Russia’s weak economy.

Siluanov is not the only bad news. Tatyana Golikova, the new public-sector czarina, in fact, is yet another fiscally rigid official who has spent years overseeing the budget process at the Ministry of Finance. That fact is even more important than the widely-publicized business interests of the Khristenko-Golikov family in the pharmaceutical industry, — it’s hard to imagine Golikova aggressively demanding dramatic increases in spending for health and education.  The opposite is more likely.  Against the backdrop of the bureaucratically weak Ministers Skvortsova and Vasilyeva, who were retained in their posts, we anticipate new waves of public sector “optimization”.

In that regard, a telling appointment is that of the new Minister of Science and Higher Education Mikhail Kotyukov. The appointment came a few days after the announcement of the abolition of the Federal Agency of Scientific Organizations (FANO- ФАНО) and the creation of the new Ministry. The scientific community was jubilant— finally, the benevolent President had responded to the pleas of the learned men and fired from the FANO the squad of heartless boys with no real science background who were intent on consolidating their control of the budgets and properties of the scientific sector.  But their glee was short-lived, for appointed to the post of the new ministry was precisely the head of the much-hated FANO Mikhail Kotyukov, barely over 40 years of age, who has spent most of his career in finance and has no background in science. This was a sophisticated way for Putin and Medvedev to spit into the face of a scientific community. To put it bluntly, the “old new” Medvedev Administration will basically finalize the process of cashing out Russia’s social services and science — and that explains the current appointments very well.

One should not expect a comprehensive policy of human capital development when everything is administered exclusively by finance cadres with a very different way of looking at things. Veronika Skvortsova can be an award-winning doctor three times over, but we have already seen her real position within the decision-making process. In that regard, the situation has gotten even worse.

Consistent with this overall picture is the reappointments into the “old new” financial block of two ministers — Siluanov and Oreshkin.   Before the new cabinet was announced, a broad range of forecasts was floated that Putin may surprise everyone with appointing into the government new strong cadres with a mandate to resuscitate economic policy.

Dirigistes had hoped for the appointment of their own gurus; traditional in-system liberals for Kudrin’s appointment. But it is clear now that Putin is quite content with the people who keep the government piggy-bank under control and keep feeding us fairy tales about the growth which is not even on the horizon.

Of course, there are a number of other odious appointments offensive to those who understand our country’s problems even a little. For example, Mr. Kobylkin, under whose governorship the Yamalo-Nenents Autonomous Okrug witnessed the first epidemic outbreak of anthrax in 75 years, has been appointed the Minister of Environment and Natural Resources. Medinsky, with his plagiarized dissertation, has kept his Minister of Culture position. Everyone has heard about Mutko and the Ministry of Construction.

However, the most scandalous appointment, of course, is that of Dmitry Patrushev, the son of former FSB Director and closest friend of Putin Nikolai Patrushev, to the post of Minister of Agriculture. Must we highlight the fact that Patrushev Jr. has only worked in agriculture for…. never! He has never worked in agriculture, not a single day. He has worked in banking, and not very successfully: the Rosselkhozbank (the Russian Agrarian Bank — Россельхозбанк) which he headed since 2010, has not managed to get out of the red, despite numerous promises of the management, and is now one of the largest recipients of government subsidies. The reason — reserves backed by bad debt which consume all of the bank’s interest profits. To put it bluntly, loans were generously issued for random projects and now the taxpayers (that is you and me) are bailing them out.  By the way, my personal theory on Patrushev’s appointment to the Ministry of Agriculture is that he was removed from the Bank because he simply was not up to the job, and the Ministry of Finance got fed up with constantly having to bail him out. So, it was an honorary discharge, of sorts. However, considering the high-powered daddy Dmitry Patrushev, this is definitely not the end of his career.

Therefore, the new edition of Dmitry Medvedev’s Administration — is not just a stagnation cabinet, but also a parade of egregious incompetence as well as the first in history barefaced attempt to introduce the corrupt practice of appointing the sons of the new high nobility to ministerial posts (I am struggling to recall such an impudence, frankly).

At the same time, we should note that the numerous forecasts of anonymous Telegram channels foretelling the strengthening of Igor Sechin’s position in the new Administration have not come true. Not only has Sechin not realized any gains, he has lost ground. For example, even the new head of the Ministry of Environment Kobylkin is much closer to Novatek (Новатэк) and Gazprom, but definitely not to Sechin himself, in contrast to the previous head of that agency Sergey Donskoy. It is hard to say whether Donskoy was a “Sechin man” in the full sense of that term, but the obvious trend is definitely not to the advantage of the head of Rosneft.

Sechin’s frenemy ArkadiyDvorkovich has left the government. However, Dmitry Kozak who replaced him as the Energy Czar is not any closer to Sechin. Another obvious opponent of Sechin, Prime Minister Dmitry Medvedev, has managed to wrangle an important position of the Chief of Staff for his college classmate Konstantin Chuychenko, despite Medvedev’s conspicuous lack of competence.

However, overall, it would be fair to say that Medvedev’s Cabinet is consistent with Vladimir Putin’s view of the situation. He is content with everything, he does not want any radical changes, he does not want any reforms. All that he is after is further fiscal consolidation. Putin is satisfied with fairy tales about economic growth told him by the Ministry of Finance and Ministry of Economic Development. An old joke comes to mind: “Experts say people’s incomes are growing. — But our income has not grown! — Clearly, you are not the experts!”

He is unwilling to undertake any serious attempts to change the situation, just as he is unwilling to alter fundamentally the existing balance between the power clans.

It’s difficult to come up with a better illustration of the term “stagnation” (or in common parlance, zastoy) than the composition of the new Medvedev Cabinet. In some distant future, this Administration will become the textbook example of regulatory stagnation

This Article first appeared in Russian at the Insider’s site

Justice Ginsburg, don’t accept a prize backed by Putin’s oligarchs

Whatever Natalie Portman’s own reasons were for turning down the so-called “Jewish Nobel” awarded by the Genesis Prize Foundation, she did the right thing. The Genesis Foundation now wants to give a second award, this one for lifetime achievement, to US Supreme Court Justice Ruth Ginsburg. Justice Ginsburg should also decline the honor. The prize is sponsored by Mikhail Fridman, Petr Aven, and German Khan, partners in the powerful Russian Alfa Group consortium. Alfa-Bank, a company in the consortium’s portfolio and Russia’s largest private bank, is under FBI investigation for what is widely presumed to be interference in the US presidential elections due to an unusual volume of communication between Alfa’s internet servers and those of the Trump campaign.

Accepting the Genesis Prize could place Justice Ginsburg in a direct conflict of interest in the event that the US Supreme Court considers Russia’s meddling in US elections. According to Western media reports, Blavatnik and Vekselberg, two oligarchs closely interlinked with Alfa, are likely under investigation by special counsel Robert Mueller. Recently their company Rusal, and Vekselberg personally, were sanctioned. Alfa figures heavily in the dossier of the British intelligence officer Chris Steel and Khan’s son-in-law, a Dutch lawyer, was the first man convicted under Mueller’s investigation for lying to the FBI.

As an activist fighting the influence of Kremlin-controlled oligarchs in Western countries together with many other anti-Putin activists, this is not the first time I have urged leading western institutions to wake up to Alfa-Bank’s undermining of democratic values. For example, many people signed our public letter to Oxford University, where, in a truly Kafkaesque joke, Alfa sponsored a joint business award with Oxford’s Said Business School and Blavatnik opened a School of Government in his name at Oxford. I care deeply about democracy in the West and in Israel in particular. Benjamin Netanyahu and some members of his government are dangerously neutral on the global mischief wrought by Russian oligarchs. In fact, Israel’s prime minister is currently the subject of corruption investigations involving Len Blavatnik (for now as a witness), who has close business links to the Kremlin and Alfa Bank.

My family is Jewish and we don’t see much difference between the Gestapo and the various secret police agencies like the KGB and its current-day successor FSB that have propped up the Soviet regime and now Russia. Shortly after the Nazis entered the city of Dnepropetrovsk, they murdered tens of thousands of Jews, including my great grandmother Dora. She was married to a non-Jewish Russian who was subsequently employed by the Nazis in their passport bureau. After the Red Army came in, he then continued in the same job, a fact that illustrates how the NKVD, precursor to the KGB, often used the same cadre as Germans.

Dora’s brother Khanya was a Zionist who was kicked out of Ukraine in the 1920s and who took part in Israel’s War of Independence in 1948. My grandmother Inna lost touch with him as Stalin’s anti-Semitic campaigns made contact dangerous. Her tutor in medical sciences was one of the professors tortured under the so-called Doctors’ Plot in 1952-3.

On the other side of the family, my grandfather Alexander, an employee in the Soviet ministry of economy, was framed by NKVD as an Italian spy in 1939. My parents suffered anti-Semitism in the USSR and had many friends whom the KGB refused exit from the country. We finally left Russia for the US through a family reunification program. However, in the mid-2000s I went back in the naive hope of creating positive change in Moscow, where I ended up working at TNK-BP, an oil company co-owned by the Alfa investment group.

In 2008-9, the FSB, with active help from the private security services of TNK, directly controlled by German Khan and Mikhail Fridman, falsely accused my brother and me of being spies. The Kremlin and its oligarchs used us as one of the pretexts to oust 150 Western managers of the company and seize full control of the company, which they successfully did. TNK-BP’s tenacious CEO, Robert Dudley, refused to leave the country and was poisoned in the TNK offices by unknown assailants, and other westerners were harassed in various ways.

It was never proven that the oligarchs were behind the poisoning, but they certainly benefited from BP’s demise. They took control and sold the company in a shady, overpriced offshore deal – the biggest in Russian corporate history – personally micro-managed by Putin. These very oligarchs now award “Jewish Nobel” prizes and teach corporate governance in the West while advocating on behalf of Putin’s regime.

Justice Ginsburg and other US Jewish celebrities lured by Alfa’s prizes should examine the myriad ways these oligarchs are connected to the Kremlin and its FSB apparatus, and how severely they undermine the interests of the West and Israel. Alfa entities illegally traded oil with Saddam Hussein through an abused UN program and gave loans to Russia’s Atomstroyexport nuclear power exporter to build a nuclear plant in Iran. Until recently, they also gave loans to Russian military plant Uralvagonzavod, whose arms were used against Ukraine. Just two years ago Alfa-controlled Vimpelcom was caught giving bribes to Gulnara Karimova in an $800 million case prosecuted by US and Dutch authorities. Then Fridman’s lawyer was arrested in Spain on suspicion of further telecom fraud. German Khan has been cited by a UK judge as having used intimidation tactics against a TNK employee, while the US embassy and a former insider have alleged that oligarchs sent oil via Gunvor, a company of Putin’s crony, the billionaire Gennady Timchenko, who is now under Western sanctions.

In 1992, as Trade Minister, Petr Aven personally shielded Putin from a criminal investigation when he was caught with illegal trade involving the St. Petersburg mayor’s office. In 1993, as relayed by the esteemed, late social scientist, Karen Dawisha, in her book “Putin’s Kleptocracy,” Kroll Associates’ report to Boris Yeltsin “recounted widespread instances of ‘bribery of officials, blackmail, and the illegal transfer of currency resources to foreign banks.’” The Kroll report identified Minister Petr Aven as one of the officials.

Oligarchs have been employing lobbyists in the West and sponsoring many academic and cultural institutions, like Oxford University or the Genesis Foundation, to present themselves as “private” businessmen “independent” of Kremlin. But until recently, Alfa’s key entity employed the son-in-law of Russia’s foreign affairs minister Sergey Lavrov and Putin’s elder daughter, while in Europe they employ the son of the ex-director of the notorious GDR’s Stasi secret service.

Alfa’s lobbyist Richard Burt, who is also a lobbyist for Russia’s state-controlled Gazprom, was most likely involved in making the connection between oligarchs and Natan Sharansky, who chairs the Genesis prize selection committee. Aven continues to sit on the board of the Kremlin’s thinktank, RIAC, together with key Putin’s men.

Investigations into Alfa’s role in Russia’s meddling in US elections may prove that they are innocent on that account but there is already no doubt that these oligarchs are closely linked with Putin and FSB. This is why my family is against their participation in the Babi Yar Holocaust Memorial. I urge US celebrities to do their due diligence before dealing with Alfa oligarchs and call upon them to make the ethical choice.

Karen Dawisha and the truth she spoke loudly

Many people and under various circumstances have developed serious hunches about Vladimir Putin’s shady financial ties to the St. Petersburg mafia and the symbiotic relationship with law enforcement agencies. This information was first publicized in 2005 by an American journalist Robert Eringer, whose investigation of a Monaco-based mafia network led him to a princely palace rumored to belong to a powerful Russian. In response, a massive smear campaign was unraveled against Eringer, painting him an alcoholic and a madman gathering rumors.

Then, in 2000, there was Jürgen Roth, a journalist from Germany, who obtained documents from the German BND – Federal Intelligence Service establishing Putin’s involvement in money laundering, even featuring Putin’s personal signature. Unbeknownst to the public, Kurt Spitzer, an Austrian special prosecutor who investigated the resulting criminal case became the target of numerous hate websites. When Jürgen Roth died last year, obituaries dubbed his work “controversial”, not only displaying an outrageous lack of sensitivity for his family’s grief but clearly pushing a specific political agenda.

A Spanish prosecutor José Grinda, who collected testimonies on ways St. Petersburg gangsters laundered not only money but also their image in Europe with the support of Russia’s top leadership, was declared a pedophile by the media and social networks. According to the ongoing investigation, this defamation attack was funded by Putin’s friend in St. Petersburg’s mayor’s office.

Though from different countries, professions, and walks of life, these people are alike in their commitment to integrity and justice even when it is their safety and life are at stake. A towering presence among them was Karen Dawisha.

Karen’s research became the decisive contribution to our understanding of Putin’s crimes and the nature of his regime. It irreversibly took the discussion outside the realm of hunches and insinuations and into the worlds of widely acknowledged facts. Getting this done was a herculean task not only intellectually and through investigative means, but politically. English publishers had refused to print her submissions, despite the book’s meticulously referencing previously available publications in the Russian press and documents.

Karen’s book “Putin’s Kleptocracy” was finally printed in the United States, just in time for the new “unexpected” aggression that Putin unraveled against Ukraine. In a documentary based on this book, Karen explained that initially, she had no prejudice against Putin. Like many scholars of Russia, she had believed that the country was steadily moving toward democracy, even if with some hiccups. At one point, she even posed for a photo together with Putin. However, a scrupulous examination of evidence allowed her to conclude that Putin and his friends had been stealing from the very beginning.

Studying the Russian kleptocracy requires an uncommon amount of courage, clarity and moral fortitude. An excuse we often hear from those who shy away or even condone Putin is that Russia is dealing with many challenges, and the corruption is the only one point on the list. The point they are missing is that most of Russia’s worst problems are the consequences of kleptocracy.  Another popular theme is that Putin doing the best he can controlling the Russian gangsters while not himself being the mastermind of corruption. Karen Dawisha’s book refutes these platitudes once and for all. It takes the drama and glamour out of the story and presents it in their plain vulgarity: the bribes, corporation raids and seizures, trusts tucked away in Lichtenstein, intimidation of Western law enforcement. All of that began in 1990 and all this continues to this day.

The book by Karen Dawisha sent shockwaves through Washington. The information blockade had been finally breached. And yet, the truth has still not triumphed. To most of my journalist friends the proposition of the kleptocracy of Putin and his friends, as well as their connection with the mafia, seem so monstrous and improbable, that they do not even try to check it.

Indeed, Putin’s real biography and his professional CV, as discerned bit by bit from documents, his statements and eyewitness accounts, read like scripts of a gangster comedy. Just consider his decree to create a municipal casino, purportedly to benefit low-income citizens, but in reality, to be run by the St. Petersburg and Japanese mafias.

Investigating Putin kills

“Criminal groups and KGB were concerned about gaining control over the money of the CPSU. Those who tried to prevent it, like Galina Starovoitova, were killed”, – says Spanish the prosecutor Jose Grinda. Part of the money of the CPSU – and this is only officially – ended up at the private bank “Rossiya” – the bank of Putin’s friends, which two reputed mafia boss as shareholders.

Alexander Litvinenko, whose case became famous when he was poisoned by Russian intelligence services, claimed that Putin was involved in drug trafficking and that he had reliable documents on this matter. Much less attention was paid to a Russian parliamentarian Yuri Shutov, who suddenly died in a Russian prison, compiled file on Putin and his “board” of St. Petersburg security officers, documenting schemes such as illegal privatization of hotels. In her book, Karen Dawisha revisited the forgotten case of Shutov. For this, his family and friends would be forever grateful, as they hope that the full dossier will be published one day.

Karen Dawisha was a pioneer. She was an objective researcher whose findings and narratives were not motivated by political agenda or political struggle, — an argument that the Kremlin frequently uses to discredit similar efforts by democracy activists and human rights defenders.

Some Russians believe that the West has many powerful tools to deal with Putin, for instance, arresting his bank accounts the moment it finds doing so expedient. Those familiar with the Rule of Law based societies understand that it is not the case. A state governed by law, in the short term, seems at a disadvantage when dealing with a rogue regime. Just consider the legal nuances involved in closing bank accounts in Monaco and Liechtenstein, as compared to a business registered in Delaware. Or, for a more complicated case, take a Delaware company who owns a firm in Panama with an account in Switzerland and buys land in Mallorca for a friend of Putin. How can the Washington Obcom shut it down?

Of course, the role of the Western governments and its commitment to freedom is very important. Taking a jab at inconsistencies, Russian TV channel announces that Angela Merkel expels Russian diplomats in response to Skripal’s poisoning with one hand while approving the construction of the “Nord Stream 2” with another hand. That is a very salient point.

The President of France has been recently the target of hacking attacks by a GRU contractor. A capo controls everything— as it typical for the mafia, so the owner of the company turns out to be a neighbor of Putin’s summerhouse friends, and he bought his apartment from the Tambov mafia boss (a criminal process of which was held in Madrid). And despite it all, the “hacked” Emmanuel Macron is now heading to the St. Petersburg Economic Forum to improve relations with Putin.

Still, we do have many reasons to remain optimistic. A couple of days ago, Margarita Simonyan, the editor-in-chief of the Russia Today propaganda channel called an ambulance for her sick child and was surprised that medics that arrived looked impoverished. In a rare gleam of humanity, she suddenly felt ashamed of her own wealth.

I do not know when the patience of all Russians will end. But I do believe that people like Karen Dawisha could get through to even the Simonyans of the Putin’s regime. Not all of Putin’s “Joe Blows” understand for whom they work. Let them scold the independent journalists and writers and read furtively— what else they wrote about our mafia government? “The truth does not need to be told loudly,” said Robert Eringer explaining to me why his blog created such an uproar. And Karen was able to do the impossible: tell the truth loudly, and for that, I will be forever grateful to her. We will remember.

Russia has fundamentally changed after 2014

Valeria Jegisman of Free Russia Foundation, sat down with Alexandr Morozov during his recent visit to Washington, D.C., to talk about Russia’s political system and future, the impact of sanctions against its elite, and the changes taking place in Russian society.

 

Beyond 2024

“Putin is not going to change the constitution [to get rid of term limits],” says Morozov, while also ruling out the creation of a Chinese-style state council that would allow Vladimir Putin to rule for life as its head. It is more likely that Putin will find a successor, he says, a young and loyal bureaucrat – not someone from the old guard. “Whatever position Putin is in, he will remain the real shareholder of this political system,” says Morozov, adding that whoever becomes Putin’s successor will lack any political independence.

During the intermediate period of 2008-2012, when power was temporarily handed over to Dmitry Medvedev, there were hopes he would offer an independent alternative. But post-2014 Russia is very different, says Morozov. The annexation of Crimea and growing tension with the West has led to a strong mobilization of the Russian society, and Putin’s successor will face resistance to any kind of change from the entire establishment. “Therefore, Putin has a simple scheme ahead of him – in 2024 he can transfer power to someone else, and then later return,” Morozov says.

Yet Russia is no longer dependent on a particular leader such as Putin, says Morozov, as society has fully accepted the underlying system of governance. Russia’s political system has deteriorated into a form of Eurasian autocracy, says Morozov, something is seen in Central Asia and Azerbaijan. This system can go on in perpetuity since any change in the system would require completely remaking many fundamental issues.

Any attempt to reform the system from within is perceived as subversive by society itself, which has come to terms with various constraints, says Morozov. “This is not the Kremlin pressuring society, as it was before 2014 when the Kremlin was manipulating various social groups to hold them in subjection. This is no longer a problem for the Kremlin – the submission of society is completely voluntarily.”


The West is no longer a model

Russian society no longer sees the West as its political, social or cultural model, as it did 20 years ago. “It has not become an enemy of the Russian people in the full sense of the word,” says Morozov, “but it has crumbled in their minds.” Many ordinary Russians have been to Western countries and they have come to believe that the Western way of life is just one model – not a superior one – while Russia and other non-Western countries have their own models. And similar to Erdogan’s Turkey, those who disagree can leave, and the rest of society will carry on.

The new system is not simply the result of a post-Crimean mobilization. Putin has been successful during his previous terms and during the recent election in providing a comfortable social contract to the main societal groups. For example, in Putin’s annual state-of-the-nation address on March 1, it was clear to millions of people employed in the infrastructure and construction industries that a vote for Putin would bring good employment opportunities and incomes for them and their families in the coming years. The same goes for the military and defense industry, where millions of people work, and the agricultural sector, which expects growth as a result of sanctions and import substitutes. Meanwhile, the elderly are given pension increases, the younger generation is given the opportunity to get involved in urban development, and young bureaucrats are given career prospects in public service. The dissatisfactions and tensions among different societal groups – inherent to any society – have therefore been successfully managed by the Kremlin through these various promises.

Whether there are enough resources to fulfill the election promises is another question, but society has taken the offer.


The younger generation and the Russian opposition – any hope for change?

The younger generations, who grew up not knowing any other leader than Putin (and nominally Dmitry Medvedev), are very patriotic and it appears they would rather have a “young Putin” than a new political system. There is no evidence or data from social research that shows that the new generation wants to radically reform the political and social system, says Morozov. By voting for Ksenia Sobchak, they are just voting for someone younger, yet essentially still a representative of the same system. And many probably see a “younger Putin” in Alexei Navalny, too.

“Young people expect that they will be co-opted, that the politics will be inclusive of them, and that Putin’s establishment will give them a chance in life,” says Morozov. He notes that many people in their thirties and forties hold key positions in government, and those in their twenties expect to have career opportunities. Putin’s bureaucrats are undergoing a rapid rejuvenation, says Morozov, and this is very different from Brezhnev’s era when regional and federal officials were all in their sixties and seventies.

Meanwhile, the Russian opposition is often accused of not being able to reach an agreement among themselves, says Morozov. He finds that the main problem is that the ideas of liberal values that originated in the 1990s have exhausted themselves, and not only in Russia. Across Europe, for example, the leaders of Velvet Revolutions are in the minority, says Morozov.

An additional challenge for the Russian opposition is competing with the promises Putin makes to society and coming up with an alternative to Putinism. This is something Alexei Kudrin and his Center for Strategic Research have been working on: trying to convince some of Putin’s bureaucrats that even minor changes could achieve some kind of development towards democracy and freedom. Yet the anti-Putin movement in Russia is very small and “can only fight for self-preservation,” says Morozov. The Putin opposition in Russia and abroad must come up with new ideas for a transition – it is no longer enough to say we propose a European model of development, says Morozov. “For example, there has to be changed in the military, which employs 4 million people. If they say they want to change, then something can significant happen.”


Sanctions on the mafia state

Morozov says sanctions are important, as they have a clear goal: the West wants Putin to end his interventionism abroad and his propaganda. However, sanctions have little impact on internal politics. They do not seem to have worked on ordinary people, who are convinced that Russia is on the defensive against the West. The Kremlin’s propaganda has worked well; it has persuaded all levels of Russian society, including the well-educated, that if the West imposes sanctions, it is an act of economic war against Russia and Russian companies.

There is no reason to expect that this will split the elites, says Morozov. In the last ten years, there has been a transformation within the so-called “oligarchat”. Those who oppose Putin have left Russia, and those who have stayed are deeply co-opted in the system. “They have made their choice,” says Morozov, “they must carry their fate to the end with Putin.”

Putin’s Russia is essentially a mafia state, says Morozov. It is organized in a similar way, with Putin’s underlings enjoying relative freedom, so long as they don’t challenge the leader. This does not necessarily mean that Putin is always aware of or agrees with all the activities of the various factions, but he is their guardian. If Putin had clearly stated that he would investigate one incident or another and that the perpetrators would be punished, there might not be such a big problem, says Morozov. But Putin defends everyone connected to Putinism.

This became especially clear after the shooting down of the Malaysian Boeing in 2014, and since Crimea, there seems to have been other groups that have carried out “uncoordinated” actions. Morozov says, “Putin believes that the West is waging a war against him, and Russia is certainly in a weaker position militarily and economically.” This is the basis, in Putin’s mind, for legitimizing the activities of those who are part of his system, even when he does not approve of their actions. According to Morozov, Putin and the Security Council of Russia frankly believe the Boeing was shot down accidentally, that Skripal’s poisoning is a provocation against the Kremlin, and that the recent chemical attack in Syria did not happen and is being used as a pretext by the West to intervene in Syria.


What else could the West do?

Firstly, says Morozov, the West could ramp up sanctions, so Russia would focus on its internal affairs and development instead of malign activities abroad. Sanctions should also be imposed on companies – and there are around 20 of them – that are involved in recruiting mercenaries in Russia for activities in Ukraine and Syria. Furthermore, sanctions should be brought against journalists who actively generate Kremlin propaganda on Russian state TV and against organizations which co-opt Western politicians to advocate the Kremlin’s views. The latter leaves the impression in Russia that the West shares the Kremlin’s views, thus strengthening propagandistic messages.

It is also important to support groups of Russian intellectuals who might provide the answer to Russia’s future. There is also a need for closer monitoring of human rights abuses in Russia, perhaps through the creation of new institution, since Russia’s nuclear capability and UN membership means it should be under greater scrutiny and pressure.

Putin and the European Far-Right: Partners in Crime

On Saturday, March 10th, at Kiev’s Free Russia House, Anton Shekhovtsov presented his book “Russia and the Western Far Right: Tango Noir.” The book is the first to study the critical trend of the growing connection between the Kremlin and Western far-right activists, publicists, ideologists and politicians in considerable detail. An in-depth discussion with Mr. Shekhovtsov was held after his presentation.

 


About the book

It is impossible to analyze the Kremlin’s relations with nationalist and far-right European activists and political parties today if we do not first examine the roots of this partnership, which started to form in the 1990s. In turn, that cannot fully be understood without returning to the Cold War and events that preceded it in the 1920s and 1930s.

Just after World War I, National Bolshevism, a movement of far-left nationalists who rejected the Treaty of Versailles, appeared on the scene in Weimar Germany. This movement was greeted with some flirtatious interest by the Soviet Comintern, still in its infancy.  German National Bolshevism defined the western powers of France, Britain, and Belgium as enemies. German National Bolsheviks, with their young proletarian movement, became associated with the USSR to a certain extent. However, after the consolidation of Nazi Germany in 1933, this movement lost its momentum. National Bolsheviks and the left-wing faction of the Nazi Party were destroyed by Hitler’s SA during the Night of the Long Knives.

A few years after the Second World War, neutralist far-right milieu (former representatives of the Nazi SS and Hitlerjugend) existed in West Germany, hoping to keep West Germany neutral and non-aligned. These policies, once again, lined up with the interests of the Soviet Union. According to some reports, until 1955, when West Germany became a member of NATO, the Soviet Union financed far-right groups in the West with more money than their socialist counterparts in East. During the Cold War, that money quickly dried up as agency activity became more expedient.

Shekhovtsov’s book goes on to examine the connections in the1990’s between Vladimir Zhirinovsky, Aleksandr Dugin, Sergei Baburin and Sergei Glazyev. In the chaos of the 1990s, Vladimir Zhirinovsky, leader of Russia’s far-right nationalist LDPR first attempted to create an international far-right force. Between 2000 and 2004, Putin’s first term, a number of conferences related to Zhirinovsky’s ambitions were held, but the Kremlin was largely uninterested. That period could be described as a honeymoon between Putin and the West. Everyone praised Russia, ignored human rights, and believed that perhaps giving Putin a little more time would lead to democratization.

In 2003, while getting ready for the “First People’s Patriotic Congress”, where Zhirinovsky’s far-right allies in France and Belgium were guests, Vladimir Volfovich wrote that the Liberal Democratic Party of Russia holds “patriotic views”, and the European “patriotic forces” are increasingly close to power. Their rise to power would turn out to be politically expedient for the Kremlin.

The next attempt to consolidate power was a more institutionalized form of cooperation between allies of the Kremlin and the far-right during controversial election monitoring in 2005. Then the media cooperated in 2008-2009, after the war with Georgia. A third wave, since 2011, has been crashing ever since as direct representatives of the Putin regime began to cooperate openly with such political forces as “National Front” (“Front National”) in France, the “Freedom Party” of Austria (“FreiheitlicheParteiÖsterreichs”), the Italian “Northern League” (“Lega Nord”), the Bulgarian “Attack” (“Атака”), among others. Today, agreements between “United Russia” (“ЕдинаяРоссия”, hereinafter “UR”) and Austria’s “Freedom Party” in 2016 and Italy’s “Northern League” in 2017 represent direct cooperation at high levels within both countries’ governments.

Today, the Austrian “Freedom Party” is the junior partner in the Austrian government coalition, and the “North League” recently stormed to its best performance in Italy’s recent election. People who maintain clearly pro-Kremlin stances are moving closer to power in Europe.

 

Does the Kremlin place the stake only on potential winners and why the far right needs Russia?

The Kremlin’s desire to cooperate with the Austrian “Freedom Party” was formally signed in 2016, as Austria went to the polls to elect a new president. For the first time since the Second World War, no representative of the main conservative (Austrian People’s Party) and socialist (Socialist Party of Austria) parties made it to the runoff round of Austria’s presidential election. A couple of weeks before the second round, far-right candidate Norbert Hofer was invited to Moscow to sign agreements with United Russia. United Russia seemed to get the ball rolling only when the far right looked within reach of victory…but then they narrowly lost the presidential election. By contrast, the agreement with the “Northern League” which sought to institutionalize cooperation since 2014, did not get signed until 2017. Ironically, the original agreement sought to create an agreement at a time when polls showed no significant support for the nationalist Lega Nord party.

Support for the Kremlin is not universal among European far-right parties, but for some of them, cooperation with the Kremlin legitimizes their cause. Extreme right-wing ideologies were marginalized after the Second World War, and while many realize they cannot fully break the liberal-democratic consensus in the West, they still preach a release from the endless marginal circle. Therefore, they claim: “We are in favor of Putin’s Russia, which has the same ideology as us, and at the same time, is a global actor”. They surreptitiously promote the rhetorical narrative to legitimize themselves through an indirect reference to the Kremlin.

 

Does the far right continue to strengthen its position in Europe now?

The growth of support can be traced throughout Europe, with the exception of Portugal and Spain. But it is important to understand that many far-right groups have become more moderate since the 2000s. Many have moved closer to the center-right because they understand they will not come to power with fringe ideals. In political science, there is a classic case when the fascist party became conservative in Italy when the “Italian social movement” (“MovimentoSocialeItaliano”), a party with roots in Mussolini’s fascist Italy, managed to rebrand in the 1990s and join forces with Berlusconi’s center-right Forza Italia party.

In Norway, the “Progress Party” (“Fremskrittspartiet”), considered far-right in the early 2000s, has moved to the center and now it’s a national-liberal party. In Hungary, there was a unique situation when the parties reversed roles. Since 2015, “Jobbik” (“JobbikMagyarországértMozgalom”) deliberately decided to move closer to the center and effectively switched spots with “Fidesz” (“Fidesz – Magyar PolgáriSzövetség”). Fidesz later began to borrow slogans from “Jobbik.” According to the “Political Capital” think tank’s analysis, 10 different proposals from “Jobbik” were realized by “Fidesz”. ”Jobbik” couldn’t implement these proposals while in opposition. Now “Jobbik” has moved towards the center-right insofar as it supports the Central European University and defends George Soros, while “Fidesz”, being the far right party now, wants to close the university and demonizes Soros completely.

In other words, the support of the far right in Europe is growing not only due to the refugee crisis since 2015 and the weakening of mainstream forces but also due to the face that the far-right is becoming more moderate, so they can be acknowledged as legitimate participants of the political process by many people.

 

Legitimation of Putin’s regime via the far-right Europeans

The Putin regime has a constant legitimization problem. According to the UN’s voting results regarding the occupation of Crimea in 2014, no Asian, African and South American countries voted against. For Russia, it is important to show not only that Asians and Africans support it, but the “real Europeans” as well. They need to bring these Europeans to Crimea to let them wax poetic on TV about how wonderful life is on the peninsula.

In addition, this resource can be used to legitimize elections.

When it comes to Russia’s population, political elites and a vast majority of the television media are anti-Western and anti-American, but the ordinary people don’t always subscribe to this mentality. Russian society considers itself a part of European civilization, so they subconsciously want to be accepted by “white Europeans.”

Even though Putin’s Russia has totally anti-fascist rhetoric, it sometimes ties itself in knots trying to legitimize itself with European approval. When Luc Michel, an old-school Belgian marginal skinhead from the 1980s was brought to Crimea’s referendum in March 2014, he was introduced to the media as “head of the OSCE observation mission”, a complete fabrication. In fact, the OSCE refused to send a mission to the illegitimate referendum.

You can see the full version (in Russian) of the discussion in video.

Putin’s Wunderwaffe

The times are changing and so is Russian President Vladimir Putin.  Back in 2014, when Russia invaded Ukraine, Putin was inebriated with the unexpected astounding success of his Crimean operation and gutless response of the West. He had never expected that his action in Ukraine, which was intended to keep this country in the Moscow’s orbit of corrupt regimes, would trigger such a great wave of nationalistic exaltation in Russia which would turn him into a semi-mythical figure, a hero who came to restore Russian national might and glory.  Even the liberal opposition and imprisoned leftist leaders unanimously joined the ecstatic crowd praising the Putin’s action.  Never in the long history of his reign, Putin could feel so close to claiming the title of Russian Messiah.

However, with the Ukrainian gamble, the Russian President has opened a can of worms.  The nationalistic paranoia lifted the lid and any hint of stepping back in front of a foreign enemy would provoke a charge of high treason and accusations of being a fake Messiah.

Meanwhile, after such a promising beginning dubbed the “Russian Spring,” a chain of misfortunes and failures followed.  The majority of ethnic Russian and Russian-speaking citizens of Ukraine remained loyal to their country and rejected Putin’s siren songs of the “Russian World.”  As a result, the ambitious project of “Novorossiya,” which implied the territorial grab of a half of Ukraine all the way from Kharkiv to Odessa, shrunk to a puny sliver of land in the east of Ukraine controlled by pro-Russian separatists. No less misfortunate was Putin’s venture in Syria, which was supposed to distract national attention from the failure in Ukraine.  After declaring three times victory and withdrawal of Russian troops from Syria, Mr. Putin had to face the music of the Deir ez-Zor debacle, were more than three hundred of Russian fighters were killed in February by the U.S. artillery and aircraft (by the way, if confirmed this number exceeds all the Soviet losses in clashes with Americans during the entire Cold war.)  Finally, the hated Anglo-Saxons began to threaten Kremlin with a seizure of multiple assets in the West, which belong to Putin’s close friends and relatives:  only in the U.S., these assets’ combined value exceeds $1 trillion. Closeness to Putin becomes toxic for Russian elites.  Their bitter disappointment with Putin echoes with the deep discontent of Russian nationalists, who volunteered in great numbers to fight in Ukraine and now feel betrayed.  Their spokesman, Russian fascist philosopher Alexander Dugin ceased praising Putin and reversed his position on the President.

Russia-watchers have noticed, that whenever Putin feels he is in trouble, he tends to disappear for a long time.  This happened when Russian opposition leader Boris Nemtsov was killed, and the pattern was repeated after the Deir ez-Zor disaster when Putin “got cold” and was absent for two weeks (officially, he got sick for the first time in 18 years of his presidency.)

He came back with a new agenda for the rest of his presidency for life.  Until recently, the Putin we knew was trying hard to reach a deal with the West, a sort of a new version of Yalta.  After being kicked out from G-8, Putin’s active meddling in Syria, North Korea and elsewhere had only one message to the Western leaders: you need Russia (and me personally) to tackle  these problems, bring me back to the club of world leaders as an equal partner and recognize my absolute dominance over the zone of my exclusive interests ( at least in Ukraine and the rest of the post-Soviet space)  It seems that now he has abandoned this futile hope and moved to the “Russia as a sieged fortress” scenario.

Now he wants a confrontation with the West, from this day on he is willing to crank up the level of risk and is much more dangerous than he used to be.  This agenda will help him to unite the «elites» around himself and keep the power for life.

But what resources besides unique Russian spirituality can he use to confront the NATO alliance, which is many times stronger than Russia economically, militarily, and technologically?

Actually, Putin has a Wunderwaffe, and he has displayed it in a number of interviews earlier this month.  Of course, we are not talking about ridiculous videos he showed in his address to the Federal Assembly.  Putin’s wonder weapon is his nuclear blackmail, his willingness and readiness to strike first, his complete disregard of the value of human lives, both Western and Russian ones, which he has repeatedly shown before.

Lately, he has incessantly and with gusto repeated with graphic detail depiction of him personally launching a nuclear attack against the West.

His blatantly defiant poisoning of a fugitive Russian spy with a chemical weapon was the first step in his special operation to prolong his presidential term through the rest of his life.  He has deliberately left plenty of evidence to state urbi et orbi: I, Vladimir the Terrible, did it!

By doing this Putin killed two birds with one stone: the level of confrontation with the West went sky-high, while the world starts to believe that he really is a monster ready to use the weapons of mass destruction.

What is behind the visit of the “Alternative for Germany” to Crimea?

“No human rights violations have been observed in Crimea”, — announced the group Alternative for Germany (Alternative für Deutschland, AfD) political party members who visited Crimea in early February, 2018.

The nine-person delegation was composed of State Diet (Landtag) representatives and city council members, such as Evgeny Schmidt from the “Russian Germans for AfD” fraction; as well as Christian Blex, Nick Vogel, and Helmut Seifen, — all three from the North Rhine-Westphalia parliament.

The German parliamentarians had been invited to Crimea by the obscure organization called the Regional German Ethnic and Cultural Autonomy of the Republic of Crimea. Its Chair Yuri Gempe confirmed that the Autonomy covered part of the expenses associated with the trip. Incidentally, Mr. Gempe happens to serve on the Crimean State Council as representative of the Putin’s United Russia party.

This trip has set off an outpour of indignation from various German federal government officials, outraged the leadership of the AfD party itself and drove a wedge among its various chapters. While the Baden-Württemberg and North Rhine-Westphalia AfD factions have supported the visit, several local AfD chapters refused to endorse it. The Berlin AfD attempted to publicly distance itself from the controversial visit by stressing via its social media accounts that the trip was private in nature and the delegation members hadn’t received the mandate “from neither the faction nor from the party”.

“I am critical of this visit” – stated George Pazderski, the head of the Berlin AfD in his interview to the Frankfurter Allgemeine Zeitung. He felt that this initiative by his colleagues was dangerous in that it could “shut the doors to other east European countries”. He also speculated that the parliamentarians who visited Crimea may have been simply “used” by someone.

Notably, the visit has been covered extensively in the Russian media. Russian newspapers and TV channels have described in rich detail the astonishment of German guests who, contrary to their pre-trip expectations, observed modern well-designed highways instead of beat-down roads.

In their coverage, Russian outlets conveniently leave out certain details. For example, “not every segment clarifies that these were local officials representing State Diets (Landtag)”, —notes a reporter from Deutschlandfunk. “Instead, they are introduced simply as “German parliamentarians”. Such nuance is critical. The politicians who spent a week in Crimea and returned to Germany on February 9, are members of local parliaments from three states: North Rhine-Westphalia, Baden-Württemberg, and Berlin. They are not part of the AfD’s leadership and do not play a significant role in decision-making at the federal level. For example, one of them, Roger Beckamp, merely chairs an AfD chapter at the City Council of Cologne.

This was not the first trip by AfD representatives to Crimea. The April 2016 visit by an EU Parliamentarian and AfD member Marcus Pretzell to the Ukrainian peninsula annexed by the Russian Federation turned out just as scandalous when it was uncovered that it was sponsored by a Russian foundation. This became evident from the disclosure documents filed by the German politician at the insistence of the Ethics Commission of the European Parliament.

The Prosecutor’s Office of the Autonomous Republic of Crimea (which is a part of Prosecutor General’s Office of Ukraine) has opened a criminal investigation against the German citizens who visited the peninsula. The announcement has been published on the website of Prosecutor’s Office.

The case was initiated under Article 332-1 Part 1 of the Criminal Code of Ukraine (“Violation of the entry regulations to the temporarily occupied territory of Ukraine”). The Prosecutor’s Office stated, that “on February 3, 2018, a group of citizens of the Federal Republic of Germany arrived in the Autonomous Republic of Crimea in disregard of the order of entry to the temporarily occupied territory of Ukraine. The above-mentioned citizens planned to use this visit to meet with representatives of the Russian occupation authorities to discuss cooperation with the German side”.

This, however, is not the end of the story of the odious adventures of AfD reps. Some of them (Christian Blex, for example) followed up with a trip to Syria, which also triggered a negative reaction, including from the ruling party of Christian Democrats (CDU).

On Tuesday, March 6, 2018, Michael Brand who represents the CDU/CSU parliamentary faction issued a statement denouncing the trip to Syria by a number of MPs from the AfD party. He declared that “meeting with criminal cliques” while “dictator al-Assad uses bombs and chemical weapons” is “just awful.” AfD members of parliament “did not shy away even from meeting the ruthless mufti” who, according to Brand, “called for suicide attacks in Europe and personally signed thousands of death warrants”.

Why would members of German local parliaments so actively pursue foreign affairs activities while conducting them “privately”? The AfD delegates insist that the latter trip was self-paid, which contradicts the Russian official story. Such activity is outside of their jurisdiction level and is not sanctioned by their party or even local chapters.  Clearly, courting scandal and the attention of the media is one of the key political tactics of the AfD. The Russian media omits from its coverage the AfD’s far-right populism, asks no inconvenient questions and portraits it as a viable political force in Germany.

We should, therefore, not be surprised to discover AfD representatives serving as so-called “independent” observers during the Russian presidential elections. Exactly what they will “observe” is hardly a mystery either.

The Russian government is planning a large “international” conference in Crimea this April.  The invitations have been already issued to the left-wingers as well as to AfD members. We will just have to wait and see whether the AfD participation will once again take the form of “personal visits”, or the party leadership would finally stop this homegrown diplomacy.

The view from Moscow: Sound and Fury

To whom and why did Russian President Vladimir Putin address in his impressively aggressive Federal Assembly speech delivered on March 1st? As usual, the pundits disagree. Domestic policy experts say it was clearly a pre-electoral address, designed to communicate to voters the image of Russia as a strong superpower ahead of the March 18th presidential election. Foreign policy experts argue that Putin’s address was to get the attention of the United States and, more broadly, the West, as relations between Moscow and Washington deteriorate.

It is possible, however, that Putin had both in mind. First, his message clearly targets a domestic audience. Putin built his entire presidential campaign in this electoral round — if one can speak of it at all — around the slogan “Strong president, strong Russia.” Moreover, Putin’s emphasis on defense and a military buildup as evident from his pre-electoral trips, such as his visit to the Ufa Engine Industrial Association, which assembles long-range bombers as well as motors for military helicopters. These appearances underscore Putin’s effort to restore Russia’s superpower status and shape foreign policy during his upcoming fourth term as president. So, it only makes sense that the Federal Address — intentionally postponed from December to March, closer to the election itself — contained elements of aggressive anti-Western rhetoric and muscle-flexing. The election’s symbolic meaning is further driven home by holding it on March 18th, the fourth anniversary of Russia’s annexation of Crimea, rather than on March 11th, as required by law.

It is not surprising that Putin’s domestic agenda fuels his aggressive foreign policy. Political analysts have long stated that in 2014, the Kremlin had to mobilize unprecedented resources to generate public support for the Ukraine conflict to levels seen during the 2008 Georgia war. In 2014, most state TV channels switched to almost nonstop 24-hour coverage designed to make Russians believe they were under siege.  Having to resort to extreme propaganda to get Russians to rally around their flag suggests that support for the regime’s policies is running out. That means the Kremlin will have to spend more and more resources to maintain the same levels of approval — and Putin’s Federal Assembly address is proof of that.

Second, constant references to Western betrayal and video footage of Russia’s updated weaponry is a response to Russia’s recent foreign policy failures and scandals. These include the U.S. attack on Russian mercenaries in Syria, the embarrassing doping scandal that nullified Russia’s achievements in 2014 Sochi Winter Olympics and continued throughout this year’s winter games in PyeongChang. Moreover, Moscow has failed to stop the West from renewing existing anti-Kremlin sanctions or passing new ones, further driving the discontent of Russian elites. The Kremlin sees all this as a demonstration of anti-Russia plots by the West. Note that some pro-Kremlin commentators have even tried to portray the recent Argentine cocaine scandal as a U.S. conspiracy against Russia. In many ways, Putin’s aggressive anti-Western rhetoric looked like a delayed response to those foreign policy failures, rather like fist-waving after losing a fight. This is not the first time the Kremlin resorts to aggressive, threatening rhetoric in retaliation for what it sees as a Western plot against Russia; in 2014, Moscow portrayed its war with Ukraine as revenge for the U.S. attempts to implement a color revolution in that country. Similarly, the recent Gazprom decision to terminate gas contracts with Ukraine also came as retaliation to its loss of an arbitrage dispute to Naftogaz.

An important but often forgotten foreign constituency of interest to the Kremlin is a set of nations — including China, Iran, India, and Vietnam — that Russia sees as allies in building up a coalition to challenge “U.S. global hegemony.” Those countries also typically buy Russian arms — and could have been potential targets of the weapons Putin advertised in his speech.

Lastly, by portraying Russia as a rogue state the Kremlin aims to split the international system into two camps of soft- and hardliners, by fostering a divide in Western unity. The idea is that the soft-liners, scared by the threats and the aggressive rhetoric, are more likely to negotiate with Russia and lift the sanctions.

In short, Putin’s address appears to have targeted several groups, yet the Kremlin’s overall goal remains the same: to retain power for as long as possible and, apparently, at almost any price.

This article first appeared at the CEPA site.

Bortnikov – the Bostonian in DC

In my article published the day before New Year’s Eve I posited that Russian diplomacy would devote all its efforts to convince their “US partners” to keep Putin and his personal financial guard out of the “Kremlin Report.” As the fateful January 29th deadline kept drawing mercilessly closer, the Kremlinites desperately had to find some kind of dramatic blackmail. And at the eleventh hour, a troika of Russia’s top security officials arrived in DC.

By then, the “Kremlin Report” had already been finalized by the agencies that drafted it and was ready to go to the Congress. As prescribed by August 2nd, 2017, Act, the Report included a list of individuals closest to Putin who were most intimately involved in his military and financial crimes.

On January 29th (when the Act-prescribed 180 days to draft the “Kremlin Report” expired), DC spent the day in anticipation. However, it was only learned the next morning that the report had in fact been presented at the stroke of midnight. The delay was apparently due to significant last-minute changes introduced at a very high government level. You will recall that the  Section 241 of the Act (concerning individual sanctions) required that the executive branch list the individuals close to Putin and involved in his crimes, as well as detail each such individual’s financial information, including net worth, sources of income, corruption schemes, property held by their family members, and include a comprehensive list of all such assets held in the US jurisdiction. The crucial last-minute change was the following: this detailed financial information was classified, hidden from the public eye in a special secret section of the Report.

While the “Kremlin Report” was being drafted, the very credible US institution, the National Bureau of Economic Research, estimated that private Russian assets in the US total around 1 Trillion Dollars (more precisely, between 0.8 and 1.3 Trillion). This number is mind-boggling. Even the most merciless critics of Putin’s regime had no idea the robbery was so large-scale. The Act required that this Russian Trillion is broken down in detail: How much belongs to Abramovich, how much to, say, Mordashov and to the various frontmen who hold Putin’s personal assets.

This now classified document numbers hundreds of pages and is potentially devastating to the Russian Kleptocracy for two reasons. First: Yes, it’s no secret in Russia that its rulers steal but that’s just general knowledge whereas detailed information about the hundreds of billions of dollars stolen from Russia by its rulers will have a great political impact, with consequences that are hard to predict. This is not even the robbery of the century – it’s the robbery of the millennium, unprecedented in world history. Never in the history of human conflict have so many been robbed of so much by so few.

The second reason the Report is devastating to the Russian Kleptocracy concerns the consequences of the Report for the Russian Trillion’s beneficiaries. When the classified portion of the Report is disclosed, its contents will easily enable the judicial authorities (with no new sanctions or other political decisions) to charge those named in the Report with money laundering, freeze their assets, confiscate these assets, and ultimately return the stolen goods to the victims of these crimes, the Russian people. In fact, the British government is already doing this, requiring Russian mega‑conmen (starting with RF First Deputy Prime Minister Shuvalov) to explain the source of their wealth. There is no way Russian leaders could have made this type of money legally during non-work hours.

And that’s exactly what the Russian elite has been fearing, which is why panic, and hysteria reigned on all Russian political TV shows on January 29th. During one broadcast, for example, a prominent public servant exclaimed: “Trump betrayed us! Now we have to reveal all the dirty laundry we have on him.” Intrigued, the host  asked: “Oh, we got dirty laundry on him?”- to which the politician exclaimed: “Sure we do!”

Compared to the day prior, the atmosphere on the same TV screens on January 30th was night and day, and we heard joyful exclamations “Trumpie is ours again!”, while Putin spent the day sounding off on how Russia must keep constructively working with the US (first and foremost, naturally, in the joint fight against Islamic terrorism).

For the umpteenth time, Putin passionately recited the story with the Tsarnayevs brothers, saying Moscow warned the US about the Tsarnayevs in 2011 but was ignored, and in 2013 the Boston Marathon bombing took place. Why does Putin permanently bring up the Tsarnaev story? The answer is simple: this is a criminal returning to the scene of the crime. In retelling the story over and over, Putin deliberately leaves out a key linking element.

Yes, it’s true that Moscow warned the US – twice – that the Tsarnayevs were dangerous Islamic extremists and potential terrorists. However, Moscow furnished no evidence that would enable the US authorities to prosecute the Tsarnayevs.

Still, after being alerted by Moscow, the FBI questioned Tsarnaev the elder – twice. Nevertheless, in 2012, Tsarnaev (now fully aware that the Russian authorities have declared him a dangerous Islamist extremist) traveled to Moscow. No, he didn’t find some secret trail to smuggle himself into Russia: He traveled quite openly, using his own passport, boarding a Delta flight to Moscow’s Sheremetyevo airport. He could only go to Russia if he had no doubt he’d be totally safe there (and why wouldn’t he be – after all, he was going to see his friends and mentors). Naturally, upon arrival, he was met by competent Russian authorities, under whose watchful eye he remained over the next six months or so while traveling in the Caucasus region and meeting with Islamist underground activists. Those activists were done away with, yet Tsarnayev remained safe and unharmed, returning to Moscow and, with his mentors’ blessing, boarding another Delta flight to the US, to meet his fate. The Boston bomber was loaded.

The story continues. In 2013 a group of US senators came to Moscow to investigate Tsarnaev’s Russian ties. After initially being given the run-around and told that Tsarnaev had never been to Russia, the senators then fell for a hoax when the Russians used a stool pigeon who promised to provide intel on Tsarnayev. What followed was an on-camera arrest of a US diplomat, quite theatrically orchestrated by the Russians. Thereafter Ambassador McFaul came to rescue the diplomat from the FSB, whereupon the Americans asked no more questions about Tsarnaev.

There is a great deal of direct, indirect and psychological evidence that, in 2012, Tsarnayev the elder spent six months in Russia getting ready for his 2013 mission in the US. Until and unless the Americans find the courage to face the truth about their Russian “partners,” those “partners” will keep on pulling the wool over the Americans’ eyes under the guise “fighting Islam terrorists together” – just like they did at a very high level on the eve of the “Kremlin Report” deadline.

Three war criminals (I call them that based on the aftermath of their ongoing actions in Ukraine and Syria) – Naryshkin, Bortnikov, and Korobov – unexpectedly arrived in the US, unhindered by the fact that two of them are named on the sanctions lists. While in the US, these three men met with their US colleagues, including CIA Director Pompeo. As seen from an interview with Director Pompeo and a handful of Russian and US publications, this trio used the same old tried-and-true blackmail methods Russia has been using throughout the five years following the Boston marathon bombing.

These three “nice guys” came to warn the American people of grave danger: After wrapping up the military campaigns in Iraq and Syria, hundreds, or even thousands, of Islamic terrorists of Russian and post-Soviet origin will be traveling to other countries and might end up in the US. Now wait a minute: the Kremlinites sent hundreds of terrorists to the Middle East from Russia, then proudly reported that all these terrorists have been wiped out ten times over by their glorious aerospace forces.  But now it turns out that apparently thousands of these terrorists are still out there, and if not for the resplendent Naryshkin, Bortnikov, and Korobov warning the US about this and taking themselves the necessary measures, these terrorists would be flooding the US, blowing up American cities. So, of course, you have to work with these great guys who have taken the time to warn their partners of a looming threat.

Putin’s entire crew of agents of influence in DC – the various simes, rojanskys, kissingers and grahams – are once again belting out in unison the mantra they have learned by heart: “We need the Russians, we need the Russians! We have to work with the Russians or we’ll get blown up in our own cities. And in order to make sure the Russians cooperate with us, we must forget about petty little disagreements on Ukraine and other issues. And we should forever abandon the idea of sanctions against Russia’s political leadership.”

The Kremlin has already used this cheap con dozens of times worldwide, and now the Americans fell for it once again. This time, one of the Boston Marathon bombing masterminds took part in the con in an especially callous way. It’s no accident that, whenever he brings up the Tsarnayevs, Putin says: “Bortnikov and I,” “I assigned this task to Bortnikov…” And now this Bortnikov-the Bostonian has come to the US to teach the Americans, and Bortnikov’s class is not on how to make cabbage soup, but on how to make American cities safe. For a true chekist (and Comrade Bortnikov recently told us he’s proud of each of the hundred years of this criminal organization’s (the KGB/FSB)) history, it’s just as much fun to pull the wool over the CIA head’s eyes as it is to shoot enemies of the people using Felix Edmundovich [Dzerzhinsky’s] Mauser. The degree of the Americans’ failure to understand who Mr. Putin and who Mr. Bortnikov are baffles the mind.

On January 31, I took part, I took part in the Atlantic Council seminar where the late-night metamorphosis of the “Kremlin Report” was discussed. At the seminar, I, like other speakers, ascribed the “Kremlin Report’s” overnight transformation to the Russian Troika’s DC visit. While discussing the January 30th reaction by Moscow, (which included yet another one of Putin’s diatribes on the Tsarnayevs), I did a little experiment: I asked members of the audience to raise their hands if they knew that Putin’s canonical account (of Russia warning the US about the Tsarnaevs) is incomplete because it leaves out the fact that Tsarnaev the elder spent six months in Russia in 2012 under total control of the FSB, and returned to the US unscathed and free from the FSB’s grasp. Not a single hand went up in the audience. Seminar participants honestly knew nothing about this and asked me lots of questions after the seminar. It’s worth mentioning that these weren’t just random people off the street – these 100 or so attendees were longtime experts in the security field or US-Russian relations. I was dumbfounded by how deep and pervasive the conspiracy of silence regarding the circumstances of the Boston marathon bombing run.

This silence on the subject is due to reasons of US domestic policy. The predominantly liberal US media vehemently flail Trump on a daily basis for displaying even a hint of flavor to the Putin regime. Yet the unspoken rule of political sparring doesn’t allow the media to bring up the Boston Marathon bombing’s Putinesque roots, because if the media were to do so, these fiery Democrats would have to admit that it was the Obama administration that deliberately hushed up the truth behind the Boston Marathon Bombing, the most devastating terrorist attack on US soil since 9/11.

One would think that by raising the Boston Marathon bombing issue, Trump could easily call the Democrats hypocrites and once and for all smite their accusations against him concerning his mysterious Putinophilia. However, this brutal alpha male’s puzzling timidity toward his Russian counterpart is not fake, it’s real.

And so, the American political class finds itself in a two-party trap of its own making and is forced to tamely chew the cud force-fed to it by the Kremlin called “our common interests in fighting Islam terror.”  On the night of January 29th, the Kremlin Special Troika and President Trump jointly halted (albeit hopefully not for long) the “Kremlin Report’s” devastating informational and financial blow. It’s worth noting that this blow would not be aimed at Russia, its target would be the criminal Russian Kleptocracy that’s been robbing and destroying Russia for a quarter century.

The stakes couldn’t be any higher right now: either the hundreds of classified pages of the Report are disclosed in the paramount interests of the Russian and American people, or else the US voluntarily becomes a long-term hostage of the Kremlin Kleptocracy.

In order to break free from the trap of “cooperating with Russia in the fight against Islamist terrorism,” the US Congress should undertake a real investigation into all the circumstances of the Boston Marathon Bombing and into the Kremlin’s ongoing efforts of supplying ISIS with militants from Russia and other former Soviet countries.

I would strongly recommend the Congressmen start by reading СNN National Security Analyst Michael Weiss’s brilliant article Russia’s Double Game with Islamic Terror. Published back in October 2013, the article was not heeded by the Obama administration and is yet to be read and heeded by the Trump administration. This is so perhaps due to the fact that, as far as I know, Michael Weiss is the only American asking very obvious questions, hard as they may be for those defending “cooperating with Russia.” Weiss asks:

But how did Tamerlan manage to arrive at Moscow’s Sheremetyevo Airport in January 2012, then proceed to Dagestan, after the FSB was obviously aware of his purported plans to join “bandit underground groups?”

How did Tamerlan get from Makhachkala to Moscow, then board a plane back to New York, if he was wanted for questioning by the Russian security services?

For any observer in Russia irrespective of his political sympathies, these questions are rhetorical, and the answer to both is the same.

To help the Congressmen with their investigation at least four people can shed valuable light on the subject. One is former Secretary of State John Kerry (who in 2013 accompanied a delegation of congressmen to Russia); another is former US Ambassador to Russia Michael McFaul; the third one is the US diplomat and intelligence officer Ryan Fogle, who was arrested while trying to get information on Tamerlan  Tsarnaev’s sojourn in Russia, and, finally, there’s the younger Tsarnaev brother, who may well talk as the prospects of the electric chair are looming.

Putin’s 4 percent: How criminal kingpins with Kremlin connections launder oil money in Monaco

As The Insider found out, money made by Russian businessmen with gang affiliations and Kremlin connections in Russian ports are still being laundered in Monaco and Liechtenstein – after being exposed in corruption scandals, the old “laundries” simply changed their company names and management. The money in question belongs to the Tambovskaya gang and criminal bosses Ilya Traber and Sergei Vasilyev – those in control of Petersburg Oil Terminal, which transships oil products of Kirishi Oil Refinery overseas. Our sources claim that both have the president’s special trust and have been welcome guests at his birthday parties. Meanwhile, straw men in Monaco and Liechtenstein keep up fruitful cooperation with companies owned by Putin’s friends, including Gennady Timchenko and Vladimir Yakunin. Even such influential organizations as the Bank of New York are known to have been part of the money laundering schemes. Loud corruption scandals were just a minor nuisance for those in the spotlight: Traber was put on the Interpol’s wanted list after Spain accused him of participation in an organized crime group (in spite of multiple protests lodged to the Spanish authorities by the Russian Prosecutor General), while Sergei Vasilyev keeps visiting European states with an Italian visa, according to our source.


The search for Putin’s money in Monaco

On February 12, 1999, the Monegasque police received a radiogram from the National Central Bureau of Interpol, Russia. The Russians requested assistance in regards to a criminal case of money laundering, asking to identify two Monaco-based telephone numbers. As it turned out, the numbers belonged to a company called Sotrama, and the police decided to take a closer look into the company’s de-facto owners.

On May 19, 2000, the government of Monaco passed Resolution 00-62, barring entry into the principality to Dmitry Skigin, de-facto managing director of Sotrama. According to the Monegasque police, Dmitry Skigin, co-owner of Petersburg Oil Terminal and OBIP, retained close contact with Ilya Traber, who is known for his affiliation with the Tambovskaya gang.

Traber and Skigin have indeed worked in close cooperation: Skigin used to control Petersburg Oil Terminal (PNT), while Ilya Traber headed it in 1996 (the current head of PNT is Dmitry Skigin’s son, Mikhail Skigin, whereas its formal ownership is distributed among several Cypriot offshore companies). Moreover, Ilya Traber sometimes paid Dmitry Skigin personal visits at his place of residence at the French Riviera, which was documented by the Monegasque police on February 4, 2000 (the police reports on the inspection of Sotrama are at our disposal). The police drew up a number of reports on the alleged affiliation of Sotrama with “organized crime groups from the CIS countries.” In the meantime, French media shed light on Ilya Traber’s luxurious villa at the French Riviera.

Ilya Traber

In 2002, Crown Prince Albert (the current Prince of Monaco) hired Robert Eringer, an American journalist, who undertook to investigate the activities of foreign organized crime groups in the country. His official capacity remains unclear; according to Eringer’s own words, he was head of the  Monegasque intelligence, whereas Prince Albert denied the very existence of such a service in the principality and claimed that Eringer had been looking into the “rumors” he caught wind of “at his own discretion.” Either way, there are documents confirming that Eringer received regular wages from the Prince’s palace, while the documents and evidence he released are noteworthy, with the information being backed by a number of other sources.

Eringer stated that he had been studying the Sotrama oil-trading company since 2005, driven by his suspicion that the company acted in the interests of both the organized crime groups and Vladimir Putin personally.

Generally, money laundering through export of natural resources is not unheard of: time and again, Russian gangs try to get hold of legitimate European enterprises to play on the difference between domestic and export prices or launder money through actual or fake shipments during multiple resale transactions. For instance, such was the case of the Izmailovskaya organized crime group (with Oleg Deripaska and Iskander Makhmudov as suspects, the case was transferred to Russia for investigation in 2011 and eventually closed in Spain in 2016). A Swiss intelligence report mentions that crime boss Semion Mogilevich was involved in the Russian natural gas export, while gangster Zakhariy Kalashov (also known as Shakro Molodoy – “Young Shakro”) acted on behalf of Lukoil in Spain, to be subsequently convicted both in Spain and in Russia.

In the course of the investigation, a source (whose real name Eringer does not reveal) contacted the journalist:

“MARTHA informed me that Sotrama had declared a monthly income of 100,000 euros to the Monegasque tax authorities, which barely covers its salary fund and operational expenses, yielding a small profit. Meanwhile, the oil-trading company actually laundered „millions upon millions“ euros a month for its controlling company, Horizon. MARTHA attended a party in Saint-Jean-Cap-Ferrat [The Insider’s note: Skigin’s place of residence on the French Riviera], where Sotrama’s CEO proposed a toast to the Russian president, saying: ‘None of this would be possible if it hadn’t been for Putin.'”

The search of information on Sotrama became easier after Dmitry Skigin’s death in Nice in 2003, when his widow hired Spanish lawyer Pablo Sebastian to prove her entitlement to the property her deceased husband had left behind in a number of countries.

In an interview to Novaya Gazeta in 2011, the lawyer described the situation as follows: “Sotrama, Horizon International Trading, and a wide range of other companies are nominally managed by two attorneys, Graham Smith and Markus Hasler. They operate out of Ruggell, Liechtenstein, acting on behalf of very influential individuals. As to their identities, your guess is as good as mine.”

In the Monegasque police reports Eringer refers to, Sotrama is just a link in the chain of legal entities suspected of money laundering for the Tambovskaya gang under the cover of oil trading. The company was registered in 1972 under the name of Aermar and was re-registered in December 1990, according to the Trade and Industry Register of Monaco. Apparently, St. Petersburg mob acquired other previously existing companies around the same time as well.

Offshore companies of Petersburg Oil Terminal

The company’s de-facto financial activities took place in Liechtenstein. Sotrama’s managing company, Caravel Establishment, represented by Italian national Michele Tecchia (up to 2016), was registered at 105A Industriestrasse, Ruggell, Lichtenstein, and did not cease to operate until July 12, 2017. The same address (except for the “building A” part) is the location of its subsidiary, Horizon International Trading, which was founded in Liechtenstein in 1992 and is still operating. What is more, the company is listed among the current partners of Petersburg Oil Terminal. The official head of the company is none other than Markus Hasler (more on Hasler’s connection with Vladimir Yakunin and Gennady Timchenko below).

“The actual control over Horizon International Trading and Caravel Establishment belongs to father and son, Eduard and Dmitry Skigin,” says the Monegasque police report. “These individuals, in their turn, act on behalf of Ilya Traber.” The geography of this group’s activities included Italy and Nice. Thus, according to Nice policemen, Ilya Traber ran a company named SARL Horizon [The Insider’s note: the entity was listed in the trade register of Nice from 1994 to 2009]. Moreover, the Monegasque police have discovered that Skigin managed Petersburg Oil Terminal and OBIP (Association of Banks Investing in the Port, CJSC) on behalf of Traber.

The Monegasque police report states that «Sotrama manages Petroruss, Petrovision, and United Jet Service Company Establishment from Liechtenstein.» The first two of these companies are registered at the same address in Liechtenstein, while the latter is registered at a different location in the same country: 52 Аuring, 9490 Vaduz, which coincides with that of the Nasdor company (Liechtenstein), an entity that used to hold 50 percent of OBIP shares. Apart from that, Nasdor was the primary shareholder at the Sea Port of St. Petersburg, along with the Mayor’s Office, prior to the sale of the port to Vladimir Lisin in 2004.

In other words, all these Liechtenstein-based companies connected to Sotrama and registered at the same couple of addresses – “mailbox” companies, as they are dubbed in Europe – indeed formed a network (see the scheme below) and were managed by the same group of individuals, including Dmitry Skigin’s heir, Mikhail, with one of the companies currently listed as an official partner of Petersburg Oil Terminal, which still trades in oil products manufactured at the Kirishi Oil Refinery.

Tambovskaya gang’s money

Dmitry Skigin’s surviving divorced spouse was not the only contender for his inheritance. In 2014, Maxim Freidzon, Skigin’s former business associate, filed a lawsuit to the American court against such companies as Gazprom, Lukoil, Gazprom Neft, and Gazprom-Aero under the U. S. Racketeer Influenced and Corrupt Organizations Act (RICO). Freidzon claimed that he and Skigin had co-founded a company named Sovex, which engaged in jet fuel deliveries; 34 percent of its shares belonged to Horizon International Trading, represented by Graham Smith. Horizon International Trading, in its turn, was acquired by the aforementioned Sotrama. In 1997, crime boss Sergei Vasilyev, who answered to Vladimir Kumarin (head of the Tambovskaya gang), “ordered Traber to withdraw Sovex’ incorporation documents and corporate stamps” and to alter the list of founders. According to Freidzon, the incorporation documents were falsified, and the Tambovskaya crime group gained control over the company. Today, equal parts of its shares belong to Lukoil and Gazprom – two of the companies sued by Freidzon in the USA.

“Vasilyev and Kumarin used Sovex not only for tax evasion purposes but also for the laundering of their ‘dirty’ money through Horizon International in Liechtenstein and the Bank of New York. The scheme was realized by Graham Smith and Dmitry Skigin,” says Freidzon in his claim.

Alexei Miller, a former official of Vladimir Putin’s Committee for External Relations, was in charge of direct “investments in the port” through Liechtenstein. In 1998–1999, he occupied the position of director for development and investment in the Sea Port of St. Petersburg at OBIP CJSC.

“Alexei Miller, director for development at OBIP, worked in close contact with Graham Smith. After the main adversary of OBIP was assassinated [The Insider’s note: Mikhail Manevich], the company secured a contract with the city administration for the control over the Sea Port of St. Petersburg (Traber and Skigin’s enterprise),” according to Maxim Frteidzon’s claim in the American court.

In 2015, the U. S. District Court for the Southern District of New York rejected the lawsuit because neither the plaintiff nor the defendant were U. S. citizens (Graham Smith is a citizen of Liechtenstein, while Freidzon holds citizenship in Israel and Russia); the plaintiff also failed to prove any other connection of his claim to the USA. In particular, according to the ruling of the Southern District Court, the claim that the money was laundered through the Bank of New York was not sufficient grounds for a RICO indictment because it was a consequence of alleged corruption and racketeering in Russia. However, as Fabio Leonardi, an American lawyer with an expert knowledge of the RICO Act, pointed out to The Insider, RICO lawsuits are often filed without the purpose of winning, simply to “leave a record” in the U. S. judicial system and attract the attention of the media.

Ilya Traber’s organized crime connections

The credibility of Freidzon’s claim is confirmed by a number of other records. The Sovex company mentioned in a Spanish criminal case #321/2006 against Gennady Petrov’s gang (covered in detail by The Insider). Thus, according to the case materials, on June 22, 2004, QUICK AIR JET CHARTER GMBH invoiced Sovex for a charter flight from St. Petersburg to Palma de Mallorca for 22,500 euros. At the time, the company was co-owned by Lukoil and Gazprom in equal shares. However, the invoice was settled by a different company, Vesper Finance Corporation. The corporation wired 5 million euros to yet another defendant of the criminal case, lawyer Juan Untoria Agustín, who invested the amount in Spain on behalf of Gennady Petrov. In addition, Vesper Finance Corporation served as an intermediary for the transfer of 600,000 euros, wired from Switzerland by Pavel Kudryashov of the Tambovsko-Malyshevskaya gang. In other words, for some reason, a charter flight invoice to Sovex was settled by a different company with connections to the Tambovsko-Malyshevskaya gang, which was reflected in the criminal case.

Ilya Traber, who was mentioned in the Monegasque police files and Freidzon’s claim, resided in Switzerland for a long time, litigating against the Bilan magazine, which had tried to include him in the list of the wealthiest local residents of Russian origin. In Russia, Traber owns an entire business empire, which has been covered in detail in a recent documentary by the Dozhd independent channel. He co-owns some of the assets with Putin’s friends. It seems unlikely that such an influential businessman should have any criminal connections, all the more so because he consistently sues any media that make insinuations to that effect.

However, Ilya Traber is also a defendant in Spanish case #321/2006, which landed his name on an international wanted list. The recordings of Petrov’s phone calls obtained by The Insider have been divided into several categories, and conversations with Traber are classified as “related to illegal activities.” On September 21, 2007, Petrov called his Greek lawyer (he had obtained a Greek passport, like Traber) to discuss the necessity of erasing certain data from the country’s digital database because the individual he had commissioned for the task had cheated on both Petrov and Traber. At 10:57 a.m. on September 23, 2007, Petrov makes a personal call to Traber and informs him of “the lawyers and the consul’s” visit scheduled for September 25. Petrov refers to a certain Aguis who needs to be punished through his “system,” and then, if the problem is not resolved, so much the worse for him. Ilya undertakes to go to Greece and speak to this man to get him to meet Petrov, asking whether he should “take a hard line” in his persuasion.

There are some other notable calls too. In July 2007, Traber mentioned to Petrov that he wanted to get in touch with Vladislav Reznik (State Duma Deputy Vladislav Reznik is also a defendant in the Spanish case against Petrov’s gang, as we have previously revealed)On October 1, 2007, Petrov called his accomplice Leonid Khristoforov and said he was going to meet Traber that day. In the same conversation, he mentioned “the evidence they have against Vasilyev.” On April 18, 2008, Petrov complained to Traber that he had not been able to get through to Ilya for as long as two days, to which Traber replied that he had been in Paris, and the French “wiretap everyone,” looking for enemies.

 

Petrov explains that “the Vasilyev brothers are very powerful and have a lot of connections; we have to be careful around them because, as soon as they take interest in a certain business, there is no getting away from them”

 

The recording made on August 16, 2007, is a conversation with a certain Eduard Averbakh, who calls to complain about “the problems Igor has at his shop because of the Vasilyev brothers,” to which Petrov explains that “the Vasiliyev brothers [The Insider’s note: Sergei, Boris, and Alexander] are very powerful and have a lot of connections; we have to be careful around them because, as soon as they take interest in a certain business, there is no getting away from them.” Petrov offers to speak to them, also revealing that the eldest (Sergei) is a crime boss who even participated in a shoot-out with “a neighbor.” Apparently, the neighbor in question is Petrov’s former neighbor in the apartment block at 35 Tavricheskaya Street (St. Petersburg), who was accused of Sergei Vasilyev’s attempted murder in the fall of 2005. The crime boss survived but was badly wounded.

At 3:25 p.m. on August 26, 2007, Petrov notifies Leonid Khristoforov, referring to an Igor [The Insider’s note: most likely, Igor Sobolevsky, future deputy of Alexander Bastrykin, head of the Investigative Committee, and part of Petrov’s contact network, according to the investigation], that Kumarin has been apprehended “at the czar’s order.” The investigation believes that “the czar” in these conversations is a codified reference to Vladimir Putin. What is more, in an exchange from December 11, 2007, Petrov and an Andrei “Behemoth” Nikonov refer to Vladimir Putin as “our guy.”

The international order for Traber’s arrest signed by Spanish judge Jose de la Mata states that Traber “is integrated in an organized crime group which has been actively operating in Spain since 1996.” Furthermore, as The Insider learned, a pre-investigation check was carried out a few years ago in Switzerland, at Traber’s place of permanent residence (the man had already acquired Greek citizenship by then). However, the case was not initiated. As the Swiss prosecutor general stated to The Insider, Ilya Traber is not currently being prosecuted in the country.

Whitewashing: Sotrama changes its name, address, and CEO

While Traber was dealing with his predicaments in Greece, Spain, and Switzerland, an Italian-language Internet blog was launched in 2015 with a seeming purpose of filling the Web with positive references to managers of Sotrama and Horizon – Michele Tecchia, Graham Alan Smith, and Mikhail Skigin (who do not have any formal connection, by the way). This method is called SERM – short for “search engine reputation management.” The blog was continuously updated from May to September 2015. A new post was added every other day, with topics varying from Russian ballet and Alfred Hitchcock’s works to biological diversity and the economy of Monaco. According to these inane publications, “one of Monaco’s residents is Italian national Michele Tecchia, who has chosen the Principality as his operational base – a confident professional who takes a particularly strict approach to situations that arise suspicions of Russian mafia’s involvement,” and “the Principality is home to such celebrities as Michele Tecchia.” Another post says the following: “The Principality of Monaco and dance have an ancient history of reciprocated love. The most accomplished art has always been the ‘queen’ of the city state, which has been chosen as a place of residence or a tourist destination by such experts in arts and business as Michele Tecchia and Graham Alan Smith.” Mikhail Skigin is also mentioned, for instance: “The city-state, appreciated by affluent people and international entrepreneurs, such as Michele Tecchia and Mikhail Skigin, ranks high on the list of perfect holiday destinations.”

However, in September 2015, the updates of the weird blog on “celebrities” from Sotrama stopped for no apparent reason.

The current location of “celebrity” Michele Tecchia is unknown: according to The Insider‘s correspondent, his former Monegasque residence has been torn down and construction is underway; apart from that, Tecchia has a New York address, and in January 2017, he made an appearance at a horserace in Madrid.

Michele Tecchia at a horserace, 2017 (second on the right) 

The outcome of the SERM campaign aimed at the whitewashing of Michele Tecchia, Mikhail Skigin, and Graham Smith remains unclear, but in 2016, Sotrama decided to change its name and CEO.

In November 2016, it was renamed to CINPIT (pronounced as “senpit” in French, which is similar to “St. Pete’s,” short for St. Petersburg). According to the abstract from the register obtained by The Insider at the Chamber of Economic Development of Monaco, the new administration of the company consisted of Russian national Vladimir Belkovsky (a native of St. Petersburg) and Swiss citizen Ueli Ambauen. Both indicated their Swiss addresses, with Belkovsky permanently residing in Abtwil.

It looks like Sotrama has been doing some reputation cleansing in Russian as well. The search for publications mentioning its exact address in Monaco leads to a 2015 “political detective novel” titled “The Chase for Putin’s Gold.” Its author, former Pravda correspondent Vladimir Bolshakov, published books like “Zionism at the Service of Anticommunism” in Soviet times and has now switched to mass-production of trashy pro-Putin fiction that aims to undermine the Russian fifth column. In “The Chase for Putin’s Gold,” a certain American intelligence agent is looking for “Putin’s fortune” to dismantle the Russian statehood, but fails to find Sotrama’s office in Monaco because the indicated address is a large business center with thousands of companies, and the phone does not answer.

How Skype prevented them from covering their tracks

In June 2017, The Insider‘s correspondent rendered a personal visit to the office of CINPIT (former Sotrama) in Monaco (at 7 rue du Gabian, bloc C). The company occupies offices 20 and 21 on the fifth floor; one of the offices did not answer the door, and in the other one, there were only two female Russian employees. The employees corrected the correspondent’s pronunciation (“Not Michel, Michele Tecchia!”) but refused to offer any assistance, saying they could not provide Tecchia’s email or fax even for an official media inquiry. The only thing they gave away is that one of them had been Michele Tecchia’s personal assistant.

Incidentally, we also found out that the current managing director, Vladimir Belkovsky, is an acquaintance of Mikhail Skigin’s. On August 26, 2017, Mikhail Skigin’s Skype account was hit by a virus that created a group conversation with all of his contacts. The Insider‘s correspondent received a link to this conversation. The group featured Mikhail Skigin’s family members, business partners (including names of Russian business lobbyists in Switzerland), German pro-Kremlin political scientist Alexander Rahr, who had become the senior advisor to the president of Wintershall A (Gazprom’s Nord Stream partner), Roman Belousov (more about him below), and Vladimir Belkovsky. In Russia, Skigin’s acquaintance Vladimir Belkovsky founded a company called Nefteorgsintez, which is now in the process of dissolution. The company’s statutory activities are “Rendering of oil and gas extraction services.”

 

Skigin: “I did nothing but optimize taxes”

Previously, Mikhail Skigin denied any connection to his father’s business or the Sotrama company, and neither was he listed among the shareholders. However, in his interview to The Insider, he unexpectedly admitted that he had owned the company but had sold it by then. He explained cooperation with Hasler and Graham Smith by his intention to “optimize taxes.” At the same time, he denied his involvement in any money laundering schemes: “I make movies and run a few projects for children, but no one is interested in those, because they have nothing to do with corruption.” In reply to the question about the connection between Traber and Vasilyev, Skigin countered: “The authenticity of the Monegasque reports on the Internet is yet to be verified; I have only gotten down to it recently and I have outlined my course of action, but it is too early to talk specifics. Money laundering allegations are nonsense. There is a different person there now – a number of other people. Essentially, it is not so easy to start a new company in Monaco; my father bought a company that had already existed, and it was later sold to Vladimir (Belkovsky). Had the company been involved in any illicit activities, it would have been shut down long ago. I met Vladimir Belkovsky in St. Gallen, where I resumed the university course I had abandoned in 2003 because of my father’s death. A few years ago, I had enough time to go back and complete my studies. St. Gallen is a small town with few Russian residents, so I got to know Vladimir Belkovsky, who lived and worked there, and he expressed his interest in the Monegasque business. It appeared that he would spare me the trouble by moving to Monaco and taking charge of the company, but your call shows that I was wrong.”

Mikhail Skigin

Speaking to The Insider, Belkovsky offered a similar interpretation: “Naturally, I’m aware of the fact that the company was mentioned in Monegasque police reports as a money laundering enterprise. Having decided to acquire it, I discussed it with Mikhail; I found a number of references on the Internet. It goes without saying that I did my best to verify all the facts, but I didn’t find any evidence to back the allegations, which was enough to alleviate my concerns at the time. Frankly speaking, I brought up the rumors at the moment of the purchase and got a much better price because of them. This could have been the key factor for me. But now that you’re asking, I wonder if I dismissed my concerns too early.”

Belkovsky specified that he had owned the company since last year. “Former Sotrama and current CINPIT, the company seemed to be a valuable asset because starting a new business in Monaco is a very complex procedure, even though Monaco is not a business jurisdiction. The company offers a range of services in supply chain management: selects suppliers and logistic services, monitors the suppliers’ performance, and manages shipments that involve multiple transport modes. Its monthly turnover fluctuates around a couple hundred thousand euros. I have a fairly good knowledge of multimodal petrochemical logistics. This field encompasses everything related to commodities that have to cover long distances between their production site and the end consumer, with shipping that includes several transport modes and rigid requirements to every stage, be it a railway tank, a truck, or a tank vessel – full compliance must be ensured.”

It is amazing how a company with a turnover of several hundred thousand euros and such large-scale projects seems to survive with a headcount of just two full-time employees. All the more baffling is the fact that at least one of the “logistics enterprise” employees has retained her position since the times of Sotrama (which had nothing to do with logistics).  Belkovsky clarified that he was “in the process of hiring around a dozen of new employees,” but “it’s tremendously hard to find professionals in Monaco,” and “he’s interviewed yet another applicant today.”

Notably, there are hardly any traces of the CINPIT global logistics enterprise. There is no corporate website or logistic services advertisement. It also remains unclear what kind of cargo the company ships.

More importantly still, CINPIT – not Sotrama – is currently specified as the headquarters of Horizon International Trading AG, a company that was registered by Markus Hasler and Graham Smith in Panama in 2002. It would appear that CINPIT is not a new company, after all; it is a renamed company that has retained its connections to Skigin and the rest of the network.

“New people, old operations” – this is how Robert Eringer interpreted the emergence of CINPIT in place of Sotrama to The Insider.

“Celebrities from Monaco” share business with Yakunin and Timchenko

We can judge the level of connections enjoyed by the management of CINPIT (Sotrama) and Horizon International Trading by the fact that the managing directors ended up beneficiaries of three high-profile and notorious Russian projects – two ports and a toll road.

Markus Hasler’s name is also listed among the affiliates of the Ust-Luga Port on the Baltic Sea, where the Liechtensteinian attorney had been a member of the board of directors up to 2015. The authorities started mentioning the construction of a port in Ust-Luga as early as in the 1990s. At different times, the port and its oil loading terminal were overseen by Vladimir Yakunin’s people through Investport Holding Establishment (Liechtenstein) and by Gennady Timchenko. The construction of terminals was met by letters of protests by EU officials to Angela Merkel and Vladimir Putin and a deputy inquiry in Bundestag in 2012. The lawmakers were concerned by low environmental standards of the construction site and the collapse of facilities which resulted in the damage to the protected area of the Baltic Sea. Valery Izraylit, head of the Ust-Luga port, was arrested in 2016 and placed into custody till December 27, 2017. He is charged with embezzlement of 1.5 billion rubles.

Vladimir Yakunin and Gennady Timchenko

In the meantime, Markus Hasler and Graham Smith suddenly took an active interest in road construction in St. Petersburg. St. Petersburg administration intends to spend 8 billion rubles on the construction of toll roads, to which end they concluded a contract in 2017 with a company unknown in Russia, in spite of its self-explanatory name – Sankt-Peterburgskaya Platnaya Doroga OJSC (“St. Petersburg Toll Road”). The Platnaya Doroga enterprise was founded by a Cypriot company, Tollway Limited, co-owned in equal shares by Russian national Roman Belousov (who is also the CEO of Platnaya Doroga) and Magalo Investments (Panama), headed by the Liechtensteinian attorneys Markus Hasler and Graham Smith.

In June 2009, Markus Hasler signed an agreement on the lease of his Italian villa in the Monte Argentario peninsula, indicating his address in Liechtenstein as Raben Anstalt, 26 Industriestrasse, Ruggell. The Insider has obtained a copy of the agreement. According to the document, the tenant is Czech lobbyist Marek Dalík, who was sentenced to five years in prison by the Prague Municipal Court in 2016 for receiving a payoff while overseeing armored personnel vehicle shipments for the Czech Army.

St. Petersburg gangsters take over Sakhalin: Allegations of illegal port takeover

Not long ago, a group of investors from St. Petersburg, headed by Skigin Jr., made their way to Sakhalin to take over the Poronaysk Port – which did not go smoothly.

In June 2015, Alexei Fert, who introduced himself as the new director, was denied access to his office by the port security guards. Presenting himself to the media as the chairman of the board of directors of the port, Roman Belousov declared that the former top management had to be replaced with Alexei Fert due to their “low efficiency, a lack of financial results, permanent losses, ongoing conflicts with all contractors, and a lack of development prospects for the port.”

Effectively, a network of companies based in Cyprus and the British Isles gained control over the port because of an outstanding debt, which had been “in fact created by these companies,” according to  its former owners. The person behind the scheme is none other than Mikhail Skigin. This information was disclosed to RBC by Mikhail Belov, head of the legal team of Petersburg Oil Terminal and one of the new Poronaysk Port investors. “Mikhail Skigin makes a lot of investments in Russia, and the port is one of his projects. I wouldn’t call it the most successful one,” Mikhail Belov said to RBC. Alexander Radomsky, the Mayor of Poronaysk, was happy that the takeover of the port by the new investors in 2015 “did not involve any shooting.”

Sergei Vasilyev, head of Tambovskaya gang: How to manage a port with a primary school education

As Maxim Freidzon revealed in his interview to The Insider, in March 2015, “Mikhail Skigin acted as a legal representative of his ‘big brothers’ – Ilya Traber and Sergei Vasilyev.” Here is what another acquaintance of Vasilyev’s mentioned to The Insider in confidence:

“Vasilyev would sometimes say in a very heartfelt manner: ‘The head of the department in the port (The Sea Port of St. Petersburg) has a doctor’s degree in Economics. He comes up to me with a paper, saying, ‘Sergei Vasilievich, this subparagraph needs amendment.’ I look at this paper with my three classes of primary school – and I can’t understand s***. So I look at him, knit my brow, make a clever face and say, ‘You know, this matter requires careful consideration.’ I met Freidzon with Skigin because they spent all their time with Vasilyev. Whenever Skigin came to St. Petersburg from Monaco, he did not leave Sergei’s side (at a luxury suite in Belmond Grand Hotel Europe), and Freidzon sometimes trailed along. When Vasilyev was shot [The Insider’s note: former leader of the Tambovskaya gang, Vladimir Kumarin, was later convicted for his assassination attempt], Traber and I visited him at the hospital.

Besides, according to Vasilyev’s acquaintance, the crime boss has lately called Freidzon “a fool who would not last long.” Maxim Freidzon has reported being threatened on Facebook; his claim in the American court also contains information about anonymous calls with threats.

During his work in Monaco, Robert Eringer learned that Sergei Vasilyev, co-owner of Petersburg Oil Terminal, traveled to Monaco with Michele Tecchia from Italy by helicopter to avoid French immigration officers:

“MARTHA contacted me with urgent news: Sergei Vasilyev, a Russian national who, as we suspected, was connected to the Horizon company, Petersburg Oil Terminal, and Sotrama, had arrived in Monaco to meet Sotrama’s COO, Michele Tecchia. Vasilyev had opted for an intriguing mode of transport: he was brought from Italy to Monaco by a private helicopter. It was a trick to avoid the French immigration control posts. Vasilyev is affiliated with the Tambovskaya organized crime group in St. Petersburg. Apparently, he had a Bentley waiting for him in a garage in Monaco; they say he was also looking for an opening in the port to moor a yacht he had intended to buy here.”

Gennady Timchenko and the Bank of New York

Ilya Traber and Sergei Vasilyev are not Skigin’s only high-profile criminal connections. Thus, the Sovex company (and by proxy its co-owner, Horizon International Trading) acquired jet fuel from the Kirishi Oil Refinery, where Gennady Timchenko, Putin’s long-time personal acquaintance, supervised export matters since 1987 and throughout the 1990s. Petersburg Oil Terminal was connected to the refinery by a pipeline, which transported oil for export.

As a reminder, while investigating Sotrama’s activities, the Monegasque police obtained certain information on Gennady Timchenko from the French intelligence on July 4, 2005. However, the police report at our disposal does not make the nature of this information clear.

Yet another company name that can clarify the situation is Petrotrade, where Timchenko’s associate was involved. Robert Eringer mentioned this company in his blog as yet another Monegasque firm engaged in the embezzlement of oil export revenue “in Putin’s interests.”

According to Eringer, in 1999, the Polish law enforcement sent an inquiry to Monaco about Petrotrade in the course of their investigation of a money laundering case involving its subsidiary, BMG Petrotrade-Poland. The parent company, Petrotrade, was controlled by a former co-owner of the Bank of New York, Bruce Rappaport, an Israeli of Russian descent, who was accused of money laundering for Russian organized crime groups in 1999 in a claim lodged with the District Court for the Southern District of New York by other shareholders (the result of the trial was that the BoNY paid a 38-million-dollar fine in 2005). Rappaport was barred from entering Monaco for six months in 2001. In the 2000s, Petrotrade’s Swiss subsidiary was managed by Rappaport’s children, Irit and Noga, according to the publicly accessible Commercial Register of Switzerland.

Petrotrade SAM (Monaco) used to run a subsidiary in Geneva. In the period from 1994 to 1996, one of its managers was Swedish national Torbjörn Törnqvist, co-owner and subsequently sole proprietor of Gunvor (after Gennady Timchenko lost his share because of the sanctions).

According to Maxim Freidzon, Dmitry Skigin met Russian emigrant Natasha Gurfinkel Kagalovsky, vice president of the Bank of New York who was responsible for its operations in Eastern Europe, in 1992 in New York. Freidzon claims he saw them together with his own eyes. In Soviet times, Gurfinkel was in charge of cooperation with Vnesheconombank (“Bank of Foreign Economic Activity”) of the USSR. Freidzon says Dmitry Skigin assisted Gurfinkel in the registration of new companies in Liechtenstein through Graham Smith with the purpose of using them as recipients for money previously laundered through the BoNY. Three individuals, Russian emigrants Lucy Edwards, Peter Berlin, and Alexei Volkov, were charged with crimes related to an illicit transfer of 7 billion dollars through the BoNY, while Gurfinkel resigned in the heat of the scandal. According to a Swiss counterintelligence report of 2007, the money was laundered through the BoNY at the behest of Grigory Luchansky’s structures and Russian intelligence agencies; at the same time, neither the report nor the corresponding criminal case mentions Skigin or Horizon International Trading.

The abstract from the register obtained by The Insider states that the current managers of Petrotrade are Englishman John Randall and Swiss national Yarom Ophir. In the 1990s, John Randall co-managed the Geneva subsidiary of Petrotrade with Torbjörn Törnqvist. 

Putin’s 4 percent

According to Freidzon’s claim in the American court, Sovex, with Horizon International Trading acting as an intermediary, participated in the laundering of the Tambovskaya gang’s money through the Bank of New York. The laundered funds were partly reinvested in OBIP and Petersburg Oil Terminal. Over the period from 2007 to 2011, the turnover of Sovex reached 1.26 billion dollars, with the income of 131 mln dollars. Maxim Freidzon accused Putin of holding 4 percent of Sovex shares, which was the condition of the company’s registration and operation in St. Petersburg. In 2012, the exact same share of the company belonged to Traber’s people – Alexander Ulanov and Viktor Korytov, Putin’s ex-colleague from the KGB. Freidzon pointed this out in an interview to Radio Svoboda, whereupon a Democratic Party YABLOKO deputy directed an inquiry to the Prosecutor General of Russia. However, the publication was taken down after a while. Prior to the release of their interview with Freidzon in the Panorama series under the title Putin’s Secret Riches (2016), BBC made a similar inquiry to Vladimir Putin, asking whether the president was willing to comment on his participation in Sovex, a company involved in money laundering, but no reply followed.

In a 2011 interview to Novaya Gazeta, Dmitry Peskov stated that “Putin has never had anything to do either with the Sotrama company or with the establishment of oil trading companies elsewhere.” At the same time, when asked whether Putin knew Dmitry Skigin and Ilya Traber, Peskov said that “they once worked on an oil terminal construction project in St. Petersburg in close contact with St. Petersburg Mayor’s Office.”

Putin may have contacted Ilya Traber outside the Mayor’s Office as well: Traber’s former bodyguard, Sergei Kosyrev, said in a YouTube video that he saw Putin in 1991 in Traber’s office at an antiquity shop in Lavrova Street (currently, Furshtatskaya Street) – and the office had a number of unofficial uses as well.

Notably, such companies as Sovex and its co-owner, Horizon International Trading, would not be able to operate without the contracts signed by Vladimir Putin himself. On May 17, 1996, Vladimir Putin signed Directive 488-R on the lease of the Pulkovo Bulk Fuel Installations to Sovex CJSC. Sovex enjoyed a monopoly on aircraft fueling in the Pulkovo Airport up to 2013.

 

De-facto co-owners of Petersburg Oil Terminal, Ilya Traber, and Sergei Vasilyev, have attended Putin’s birthday parties and received a warm welcome there. No other crime bosses have been honored this way

 

According to two of our sources, de-facto co-owners of Petersburg Oil Terminal, Ilya Traber, and Sergei Vasilyev, have attended Putin’s birthday parties. They visited at least two such parties, in 2004 and 2016, and received a warm welcome there. No other crime bosses have been honored this way: thus, Petrov was not even there, according to a source who witnessed the entire celebration.

Today, Ilya Traber is on an international wanted list, where Spain put him in 2016, states investigative prosecutor José Grinda of the Special Public Prosecutor’s Office against Corruption and Organized Crime. In the meantime, Russian prosecutors have tried making direct reports about “the violation of Traber’s rights,” taking on the role of Traber’s defense attorneys, whereupon the Spanish side lodged a formal protest.

Speaking of Sergei Vasilyev, his acquaintance disclosed to The Insider that the crime boss continues visiting Europe with an Italian visa.

As for Prince Albert II of Monaco, he failed to see “any hint of a lead” in Eringer’s report on the network of companies in Monaco and Liechtenstein connected to the Tambovskaya gang and Putin at the same time. However, His Highness joined Vladimir Putin on a trip to Tuva in 2007, participated in the Olympic Torch Relay in Sochi in 2014, and finally honored Vladimir Putin with the highest Monegasque award – the Order of Saint-Charles.

This article has first appeared in Russian at The Insider’s site.

Putin’s Russia 4.0: What can we expect from it?

On the 7th of December, Vladimir Putin announced that he would run for a new presidential term in March 2018. So far, he has not presented a programme or agenda for his fourth presidential term, which is expected to last from 2018 until 2024, and it is very unlikely that he will do it in the nearest future. However, particular developments in Russia in December can give us a glimpse into what we can expect from Putin’s Russia 4.0.

When Putin announced his decision to run for the presidency again, Russian elite groups probably sighed with relief. Some Russia experts use the expression “The Kremlin has many towers” to refer to the fact that Putin’s regime is not a coherent whole, but a conglomerate of different elite groups – each with their own interests and agendas – that compete for resources and often seek to undermine their opponents from other elite groups. Putin, in this system, plays the role of a moderator of the competition and an ultimate arbiter of the conflicts between the elite groups.

This role makes Putin unique: he has built this system himself and for himself, which means that his potential departure from the referee’s tower, i.e. not running for, and winning, the presidency in March 2018, would dramatically destabilize the system and bring about its collapse. One may say that the elite groups need Putin’s presidency more than he does, but Putin needs it too, because he has not yet found a person who would succeed him and give him a security guarantee – similar to the guarantees that Putin granted to President Boris Yeltsin when he handed the reins of power over to Putin in 2000. Moreover, if Putin found such a person, no-one would be sure that he (or, very unlikely, she) could be accepted by the different elite groups as a moderator of their conflicts. Indeed, a person who can potentially succeed Putin can only come from one of the elite groups, but this would elevate that one group, afflict the others and, again, upset the balance of the entire system.

Yet even now one can observe that Putin’s system is already being destabilized. The troublemaker is Igor Sechin, the US-sanctioned CEO of the Russian state-owned oil company Rosneft, the leader of one of the most conservative elite groups and perhaps the closest associate of Putin – Sechin has also served under Putin in his various positions since 1994. In 2016, Sechin initiated – with the help from the Federal Security Service – an allegedly anti-corruption case against now former Minister for Economic Development of Russia Alexei Ulyukaev who, as Sechin stated, tried to extort a bribe from him. In December, Ulyukaev was sentenced to eight years in a prison colony. Having initiated the case against Ulyukaev, Sechin broke the unspoken rule of the competition between the Russian elite groups: to keep conflicts between them out of the public eye. Ulyukaev’s widely publicised case is, in fact, not about him: compared to Sechin, he is a minor figure. Rather, the case demonstrates that Sechin has made a very bold and insolent move to humiliate and damage the antagonistic elite group to which Ulyukaev belonged, namely the pragmatist and economically liberal circle around Prime Minister Dmitri Medvedev. And this means that Sechin’s ultraconservative elite group has gained the upper hand in Putin’s system and, thus, disrupted the balance within it.

There are other several indications that Putin’s system during his fourth term will become even more conservative and reactionary, but also even more anti-Western than it was before. Putin has been officially nominated a presidential candidate on the 26th of December at an exhibition titled “Russia – my history” organized by Russian Orthodox Bishop Tikhon. The latter is considered to be a spiritual advisor to Putin and is an unofficial leader of the monarchist and extreme conservative circle within the Russian Orthodox Church. The choice of place for the official nomination has a symbolic meaning too: many Russian historians argue that Tikhon’s exhibition, while full of factual mistakes, praises conservatism and authoritarianism, as well as showing that all attempts to democratize Russia are Western plots and naturally alien to the Russian people.

The Kremlin’s misuse and revision of history, the legitimization of openly authoritarian practices and increasing obsession with “Western conspiracy” has also manifested in a recent interview of Alexander Bortnikov, the head of the Federal Security Service – another powerful elite group within Putin’s system. In this interview, Bortnikov justified Stalin’s political mass repressions by the need to fight against “foreign agents”, and in Bortnikov’s opinion, the fight against the “fifth column” in Russia needs to continue, because “the destruction of Russia is still idée fixe for some” in the West.

The rise of the extreme conservative elite groups destabilizes Putin’s system, and this destabilization limits the flexibility of the regime – a flexibility that has so far been the main advantage of the system both domestically and internationally. Now, it seems, that Russia 4.0 will mobilize the society for the support of the regime around three ideas only: the country’s historical grandeur, its non-compatibility with democracy and Western conspiracy. Against the background of Russia’s continuous economic and social decline, this means that Putin’s regime will become even more oppressive at home and more aggressive in foreign relations.

This article first first appeared in German in Wiener Zeitung.

Summarizing 2017 North Korean “nuclear-missile achievements”

General consideration

The entire North Korean “rocket-nuclear scientific &production system” consists of the following elements (according to the data which I managed to assemble from many sources):

– Several thousand units of modern Chinese metal-processing equipment (machine tools etc., are mostly obtained through “underground channels”, generally, without Beijing’s knowledge).

– Serving these machines are the mechanics that have basic qualification (very poorly paid, half-starved) as well as several hundred researchers, engineers, and technologists, also of average quality and poorly paid.

– Some amount of gas-diffusion centrifuges for the production of enriched uranium (but, evidently, not weapons-grade plutonium, which is necessary to manufacture a compact “light” warhead).

This “scientific-production system” appeared to be PHYSICALLY INCAPABLE of creating independently even a “perfect” Musudan (Hwasong-10) ballistic missile with a combat range of 4000 kilometers (2500 miles). Seven Musudan launches failed out of eight total, according to the information available. Let’s take a look – North Korea has been engaged in Musudan development (reverse engineering of the Soviet R-27 missile) for 27 years, starting in 1989. And all it has to show for it is such a bleak outcome, which by itself provides a perfect estimation of North Korean “rocket-nuclear scientific & production system” with real (very low) capabilities!

In 2017, North Korea successfully tested Hwasong-12, Hwasong-14, and Hwasong-15 ballistic missiles with higher capabilities than Hwasong-10. And I have no doubts that these three missiles are built from spare parts and even blocks received from “outer space.” Specifically, where did they come from?

Definitely, they did not come from China. The “divorce process” between China and North Korea continued for many more years and was over by the end of 2016. China is very tired of North Korea’s tricks and, for sure, has nothing in common with Pyongyang adventurism.

Could the source be Ukraine? August 15 -17, 2017, directly after publishing the “notorious article” in New York Times on August 14, Ukrainian leaders and space-missile expert proposed to the West to inspect the Ukrainian plants and design bureaus in any possible way, so no suspicion would remain regarding the alleged “ties” between Kiev and Pyongyang.

Could the technology have come from Iran? Iran would have given these technologies to North Korea, however, Iran itself has nothing beyond ballistic missiles with a combat range between 2500 km to 3000 km. By the way, they have been developed with the use of North Korean and Russian technology.

Maybe, North Korea merely stole the key technologies for the new ballistic missiles? Indeed, during the last 20 years, North Korea managed to steal a lot for the purpose of Musudan missile development. Still, in practical terms, these thefts did not advance this project. And it would be silly to consider these thefts a serious factor in the framework of new missiles development projects.

The unavoidable conclusion is as follows: Russia, the only major ally of Pyongyang in “outer world”, providing systematic, persistent and comprehensive assistance to North Korea in the framework of the development of Hwasong-12, Hwasong-14, and Hwasong-15 missiles. And this became the decisive factor.

Let’s consider the entire situation in “digital way”. Let’s take “technological difficulty” related to the development of a “perfect Musudan” missile as 100. Then it appears that North Korea’s “missile scientific and production system” completed somewhat 90% of required work and, consequently, was capable, by 2017, of accomplishing projects with “technological difficulty (later TD) of ~90.

Hwasong-12 has a combat range of 5000 km, 25% greater than Hwasong-10 (Musudan), so its TD can be estimated as ~125.

Hwasong-14 has a more sophisticated engine in its first stage (instead of one-stage Hwasong-10 and Hwasong-12) and a second stage, namely, Hwasong-13 missile. Above all, Hwasong-12 has a combat range of 10,000 km. And it is possible to estimate Hwasong-14 TD as at least 300.

Finally, Hwasong-15 is more sophisticated than the Hwasong-14 missile, has two engines inside its first stage and its combat range is as great as 15,000 km. So, it is possible to estimate Hwasong-14 TD as at least 500.

Eventually, it is necessary to recognize that “foreign side” (namely, Russian side) accomplished at least 80% of necessary work in Hwasong-15 R&D and production. That’s it.

 

Estimations of three renowned experts on August 11-14

Let’s start with a quote from a statement by a top-rank German missile scientist Dr. Robert Scmucker on August 9, for Deutsche Welle (German Wave) channel. (www.dw.com/de/robert-schmucker-nordkorea-baut-allein-keine-raketen/a-40027158, 08.09.17) (“Who provided Hwasong-14 technology for North Korea?”  Interview with Mikhail Bushuyev; translation from German, abbreviated):

“The vast majority (of North Korean missiles) are old Russian rockets that have a specific (Russian/Soviet) technology. The new rockets (North Korean) that have been launched in the past twelve to 14 months have completely new technology. But we see engines that are clearly Russian engines. The connection to Russia is not only about the early Russian missiles, but also about the current ones, at least for the engines. North Korea has presented seven different rockets in the past 14 months. How is that possible? The effort for seven different rockets requires seven different project teams, manufacturing equipment for the different caliber rockets, different materials, fuels, materials, and sizes. There is an infinite number of tools, machines, and regulations needed. It’s a huge hassle to do it all in parallel and then succeed at the first shot. Nobody has done that yet unless the rocket came from somewhere else…”

In short, all the technologies for Hwasong-12, Hwasong-15 and several more new “North Korean” missiles are from Russia, and the necessary funding for their R&D and production is from Russia as well. I and Dr.Schnucker came to the same conclusion.

Then came the article in “Bulletin of atomic scientists” published by Dr.Schnucker, his colleague and employee of “Schmucker Technologie Co.” Marcus Shiller and MIT (Massachusetts Institute of Technology) Professor Emeritus Theodore Postol. All three (and probably Dr.Shiller also) are ‘superstars’ in both missile and nuclear technologies.

“The newest Russian rocket motor we have identified in North Korean arsenal, derived from the RD-250/251 and used in (Hwasong-12 and Hwasong-14 missiles, is not from Russian) Makeyev Design Bureau, but from an entirely different major rocket motor manufacturer, NPO Energomash, which supported the OKB-456 Design Bureau in the Soviet Union. This rocket motor was associated with rocket and space launch vehicles produced in Ukraine. The presence of RD-250/251 rocket components in a new North Korean rocket raises new and potentially ominous questions…”

Finally, on August 14, Dr.Michael Elleman published his report on new North Korean ballistic missiles for London based IISS (International Institute for Strategic Studies). The report claimed that for sure Hwasong-12 and Hwasong-14 used engines RD-250/251 or their close modifications, which North Korea obtained from Russia or Ukraine.

So, based only on these three very important publications, it was possible to conclude that Pyongyang got missile engines and other key technologies (blocks) for Hwasong-12 and Hwasong-14 from Russia (with 90% probability) or from Ukraine (with 10% probability) and from nowhere else. So, let’s forget about the “independent development” of these missiles.

However, after energetic rebuke by Ukraine leaders and experts after the publication of the notorious article in New York Times on August 14, the probability of “Ukraine source” fell to somewhat 1%, while the probability of “Russian source” increased to ~99%. Simultaneously it became understandable that the publishing of a New York Times article was…sophisticated Moscow provocation (its authors should answer several unpleasant questions).  And expert Elleman himself had to give up his claim regarding “Ukrainian track in recent North Korean missile achievements”.

The nature and, partly, mechanism of this provocation is revealed in the article “ Ukraine Provide Rocket Engines to North Korea For Its Nuclear Missile Program?”  By Nolan Peterson.

 

Latest developments

On November 29 North Korea successfully launched its newest missile Hwasong-15. Almost instantly, Michael Elleman published his new comment. The essence of this comment is as follows: “No doubts, major technologies and blocks of Hwasong-15 came from abroad. And this missile is extremely dangerous for USA.”

A little bit later, in December 2017, the New York Times published a new big article on North Korean missiles: “North Korean Leader’s Heroes: His Rocket Scientists”. The authors of this article had nothing to do with two authors of notorious publication on August 14, 2017. The most remarkable here was the quote of Professor Postol statement:

“North Korea had this fantastic record (in 2017) for flying rockets the first time and having them succeed. We think it’s because they had rocket motors and their designs that were basically Russian designs, and they had the expertise of Russian engineers who knew how to solve the problems.”

That’s enough, I think. If one was to use these two last publications as a basis, only one possible conclusion is left: Moscow provided everything, including money, for the success of Hwasong-12, Hwassong-14, and Hwasong-15 missiles.

But maybe even these statements and facts are not entirely convincing? Then look at all these North Korea supporting statements and actions of Vladimir Putin and his close retinue (for example, speaker of “Russian Senate” Valentina Matvienko) during the second half of 2017.

 

Recommendations  

On October 25, 2017, a commission of Josh Gottheimer and Francis Rooney started working in U.S. House of Representatives. The goal of this Commission is to find “the foreign sources” of North Korean “missile-nuclear achievements”.

According to the author’s humble opinion, the Commission should ASAP get an inquiry from three experts mentioned above: Robert Schmucker, Michael Elleman, and Theodore Postol. The author himself is eager to make a statement before the Commission.

And it is necessary to do it swiftly, before February 2, 2018, when Congress intends to initiate the package of new, very strict financial sanctions against Putin and his oligarchs. It is probable that Moscow and Pyongyang are preparing a new very dangerous provocation.

Nuclear Coercion to “Yalta”

The deeper Russia plunges into its current morass of economic, social, and political problems, the more sophisticated is its art of manipulating Western minds with esoteric ploys. It conveys the message that “without us, you cannot address the challenges you face” while at the same time creating or enhancing these very same challenges itself for its own corrupt interests.

It was back in 2013 that the Kremlin’s propaganda and its agents of influence first used the mantra “you’d better be good and cooperate with us, or else terrorists will continue to attack you” when the Tsarnaev brothers fashioned crude explosive devices out of pressure cookers to bomb the Boston marathon.  American prosecutors, journalists, and politicians haven’t bothered to probe for the truth about the Tsarnaevs.  In fact, “The Boston bomber was armed a long time ago.” Before he committed his act of terrorism, the elder Tsarnaev in 2012 spent eight months in Russia, all the while closely monitored by the FSB.  Although the Russian security agency in its correspondence with their U.S. counterparts assessed this young Chechen as an Islamist, Tsarnaev traveled to Russia via Moscow’s main airport, Sheremetyevo, without being held up.  He would never have done so without being sure he could travel there safely. Most likely he was visiting his friends and handlers, who would eventually send him back to the U.S. for his meeting with destiny.

The Boston tragedy has opened a new chapter in the history of the Kremlin’s psychophysical impact on the Western establishment and society. Instead of sporadic ad hoc active measures, Kremlin operators have developed and activated an emotionally loaded concept of systemic zombification of the West.

Post-Boston, and following every major terrorist attack in the U.S., France, Germany, and Great Britain, Moscow has sent the message “You either cooperate with us, or terrorist bombings will continue on the streets of your cities.”

The notorious Russian propagandist Sergei Markov spelled out just what Moscow means by  “cooperation”: “The conflict between Russia and the West over Ukraine should be immediately halted. The gang that came to power in Kiev should be replaced with a technocratic government, the Ukrainian Constitution should be amended, and the neo-Nazis should be removed.  The dictatorship in Kiev is one of the main obstacles for the joint U.S.-EU-Russia’s fight against terrorism.”

After the terrorist massacre in Paris, Russian Ambassador to the E.U. Vladimir Chizhov complained that “unfortunately, one terrorist attack in Paris might not suffice to give European leaders the correct consciousness and strategic vision”, and even Russian Prime-Minister Medvedev clearly stated that the terrorist attacks in the EU and the rest of the world are occurring because the West is trying to isolate Russia.

What the Kremlin is offering the West is protection against future terrorist attacks – but with a caveat.  It is an open secret that Moscow has a network of agents among jihadis and has a certain influence on their leadership.  This network is made up by people recruited by the KGB back when the Soviet Union supported “national liberation movements,” as well as by former Iraqi military officers trained in the USSR (who became the backbone of ISIS), and by a new generation of warriors from the Northern Caucasus and other regions of Russia willing to die for Allah.  The FSB provided the latter group Russian passports and helped them reach the Middle East.

This caveated “cooperation” touted by the Kremlin, in essence, amounts to a new “Yalta” agreement:  recognition of delineated spheres of influence and of Moscow’s exclusive rights over former Soviet republics. The West is to be intimidated, cajoled, and corrupted to the point that it ceases support for breakaway republics (such as Georgia and Ukraine) and escorts them back into the zone of the Russian kleptocracy’s privileged interests.

These are the goals of the hybrid World War Four declared by President Putin against the West and his stated terms of surrender.  To come to power, Putin went to the extent of blowing up apartment buildings in Moscow and other Russian cities in 1999.  To convey to Americans the urgency of this “cooperation” with the Kremlin, Putin and his FSB Director Alexander Bortnikov dispatched the elder Tsarnaev brother back to the U.S.

The Obama’s administration was aware of the Boston terrorist attack’s circumstances but refused to face the truth since it was too frightening and implied very serious consequences.

The next Kremlin’s operation pursued the goal of bringing to the White House the candidate willing to repeat incessantly: “We need Russians to fight Islamic terrorism together.” The resounding success of this operation turned into a disastrous failure for the Kremlin. Its masterminds failed to understand the U.S. political system and its multilayered system of checks and balances.  It was a Pyrrhic victory: any hint of pandering to Russia by the new administration met a fierce resistance of the American establishment.

Congress almost unanimously endorsed “An Act to Counter Aggression by the Governments of Iran, the Russian Federation, and North Korea,” and on August 2, President Trump reluctantly signed it.  Essentially, this legislation outlawed the entire Russian leadership as a criminal group and froze all its loot pillaged in Russia that had been stashed in the U.S.  FinCEN was tasked with identifying all assets of the Russian ruling elite in the U.S., starting with Putin. Once these results are presented to the public, the Anti-Money Laundering and Proceeds of Crimes Acts will be applied to these assets and their owners. If and when this occurs, it will radically transform U.S. relations with the Putin kleptocracy.

It seemed like a breakthrough in the World Hybrid War: no new “Yalta” is looming on the horizon, while the noose of sanctions, which implies among other things the forfeiture of “Putin’s Trillion,” is tightening on the neck of the Kremlin kleptocracy.  To change the dynamics of the game Putin, played his newest card: his Excellency, Extraordinary and Plenipotentiary Ambassador of the Russian Federation to the United States of America, Four Star General Anatoly IvanovichAntonov (who was included on the sanction lists of EU, Ukraine, and Canada for Russia’s military intervention in Ukraine.)

Ambassador Antonov was sent to crank up the level of political blackmail.  His task is to coerce his new country of residence to “Yalta” and to dissuade it from touching Kremlin slush funds. Apparently, he will not fall back on the old tsarnaevesque boogeymen of terrorists with IEDs. His argument will be the threat of nuclear apocalypse in the U.S.

In his remarks to the World Affairs Council in San-Francisco on November 29, and at Stanford University December 1, the Russian Ambassador touted Moscow’s influence on the North Korean leadership, asserting repeatedly that without Russia’s assistance, the U.S. won’t be able to protect itself against the North Korean nuclear threat.

“Russia is a permanent member of the U.N. Security Council and the world’s second-largest nuclear power. We are ready to offer our assistance in negotiations with the DPRK, as we too are concerned about the growing nuclear potential of North Korea. Likewise, we can help the United States in its fight against ISIS, and in regulating Iran’s nuclear program.”

There is no question, but that Moscow has a great deal of influence on Pyongyang. President Putin tirelessly lobbied for the North Korean nuclear missile program on the world stage: “they would rather eat grass then give up their program.” With each new leap of the North Korean missile/nuclear progress, experts have ever diminishing doubts about Russia’s crucial role in this Pyongyang’s astonishing progress.

The new Kremlin operation is an improved rerun of the Cuban Missile Crisis scenario. Unlike 55 years ago, Russia is today in a much better situation, since it bears no responsibility for its latest ‘nuclear offshore,’ but it is offering the U.S. its magnanimous assistance – for a price, of course.  Back in 1962, JFK declared any nuclear missile launched from Cuba against… the United States [will require] a full retaliatory response upon the Soviet Union.”

At that time, Soviet leader Nikita Khrushchev did not have the chutzpah to respond in the manner of, “We are ready to offer you our assistance in negotiations with Cuba, as we too are concerned about the growing Cuban nuclear potential.”

Last week Putin lavishly praised President Trump’s achievements in his first year in office. Trump immediately called him back to express his gratitude.  Putin aptly used the opportunity to repeat the offer of Russia’s potential contribution to solving the North Korean nuclear crisis, which his ambassador had already delivered in California.  As a former Director of National Intelligence James Clapper succinctly stated: “Putin is a great case officer, and he knows how to handle an asset and that’s what he’s doing with the President.”

A different kind of strategy

By giving your vote to Sobchak, you are voting for Putin, by casting your vote for Grudinin, you are voting for Putin, by giving your vote to Yavlinsky, you are voting for Putin, even when you are destroying the voting ballot itself you are still voting for Putin, and by not voting at all – you still are voting for Putin as well. This is the current tone of discussions about the upcoming elections that are taking place at this moment in various social networks. It is apparent to all folks that even getting through to the second round is not possible, as well as the fact that the forthcoming elections themselves are not proper elections, but rather a night hockey league game, access to participate in which is only granted to either the players of the sitting President’s team, or to those ones who are overtly powerless.

In other words, let us speak honestly: there are no elections going on, however, even those people who do realize that there are none are continuing to design their political strategy around these nonexistent elections. Even AlekseiNavalny by his declaration of an “electoral strike,” is still operating within by the rules of the game that have been imposed on him – by placing the focus of his attention on the presidential elections exclusively, although with perhaps some negativity.

It is quite apparent that the framework of the boycott of governing group that was suggested by Navalny is not facing any legal consequences whatsoever since God only knows for how many years on end now there has not even been a threshold of attendance established. Thus, the produced effect of this campaign even if it would have happened to unravel vividly (and that possibility in itself is causing quite a few doubts, but we shall dwell on that later), it still would only occur so in the Public Relations realm. Navalny will be able to re-assign each and every lazy cookie pusher, who prefers to sip beer on his couch to going to the voting stations to cast his vote as his own follower. And, one would think in principle that comrade Kirienko (First Deputy Chief of Staff of the Presidential Executive Office – edit., Free Russia) would have found himself in some sort of a predicament, and, perhaps, would not be able to hold on to his position since he would have failed to secure the guaranteed sacred formula ratio of 70-70.

As far as Putin’s presidential term is concerned it has nothing that presents any threat to it whatsoever in this scenario: he has not been kept in his position due to the fact that he was not perceived as an Akela of his kind because he has not missed his target prey thus far, but rather because he is convenient for everyone with the said formula ratio of 70-70, or with the formula ratio of 60-60. The PR effect at its best would have lasted for a couple of weeks if even that long, and as a result once again the most advanced forces in the country would have gotten a feeling of being stuck somewhere in the blind alley. That is due to the fact that Navalny’s team does not have any contingency plan on what to do next after the strike.

One can ram his head against the locked gates, so craftily built by Putin, repeatedly and to no avail, one can feed the bees in the bonnet of his administration (in here I am referring to the wishful thinking of having a high rate attendance turnout), but instead of storming a wall that could not be taken down one can try to shake down the very foundation that it is standing upon. And there are three keystones that are at the base of the foundation of this authoritarian regime fortress:

1) The passive behavior of the citizens and their reluctance to assume the responsibility for the governance of their own lives and their own country;

2) The lack of a substantial number of political leaders available, the independent political actors in the multi-million country that is spreading throughout thousands of kilometers of land;

3) The lack of fundamental trust in politicians.

That is exactly where that rooted point is located, the one from which the very vertical power system of governance stems from, the one that Vladimir Putin sits on like a throne as if it were the tree of the world, and where nobody else is allowed to approach anywhere nearby, not even the charismatic Aleksei Navalny.

The idea of not taking part in elections not only does not resolve the fundamental problems of our society, but it even aggravates them in some parts. Everyone who canvassed door to door during the election campaign knows that the major foes of the opposition candidates are not supporters of United Russia party, but those very citizens who do not have any faith in the elections. A long time ago we came up with the answer for them. In certain instances, we even manage to sway their position. However, yet one more call for declaring a boycott will only re-assure them in the rightfulness of their original point of view that was held by them all along: nothing depends on us.

Well, it is not quite possible to create a truly captivating and persuasive campaign that would be based on a negative agenda: people have grown weary of fighting ghosts on a non-stop basis. Those people who are active all around are feeling terribly antsy to start creating. I witness that in every conversation when I communicate with both public officials and common activists.

In the meantime, there are approximately 30 elections that are being held every month across the country in Russia. In other words, (if we do not take into consideration the fact that they only happen on Sundays) there is one election per every day happening at the average rate. There are deputies of local councils, heads of village councils, and heads of municipal districts, and so on and so forth, that are being voted for in elections. Tens of thousands of people run for these positions every year. Who are these people? Are there any opposition representatives in their midst?

Regrettably so, in most instances, this is not the case. Lev Shlosberg was the only one who succeeded in organizing the work of his team in the Pskov region in such a fashion that hundreds of the members of the opposition are taking part in it there, and dozens of them win in the local elections. As far as the other localities go, well, in there the corrupt “United Russia” corrupt red tape officials come to power. Those are even duller and bleaker in their character than Vladimir Vladimirovich.

And it is exactly these people who are weaving the fundamental fabric of every single day injustice and the lack of freedom that everyone is confronted with. It is exactly these people who are performing those most governmental functions that are vitally close to every single person. And, therefore they are the most important governing power functions. It is exactly them whose governance is based not on the rule of law, or common sense, and the needs of the citizens, but it is rather based on the point of view and the needs of that very vertical power of authoritarianism, which they carry on their well-nurtured shoulders. It is exactly them, who build the atmosphere of hopelessness and instigate a passive mode that is so advantageous to those who sit at the very top of this vertical power system of governance.

What kind of actions could have Navalny undertaken? (Forgive me to give him any piece of advice, I am just pointing at some different kinds of options to him in here). To speak: friends, let us stop worrying about this Mr. Putin as if he were some kind of a unique piece of rare beautiful artistry. Let us take a look around, let us transform ourselves from the volunteers into politicians, and let us go and cease power where ever we can do so, go there where they would not be able to block us with their heavy artillery, simply because there is not going to be nearly enough of said heavy artillery in their procession to stop us all. Let us stop glaring up at the palaces and turn our eyes to the shacks.

That is because only through some personal communications, through everyday assistance, through common actions the trust is being built. It is only by coming out victorious that one can gain the experience of winning. It is only by gaining governing practical experience (and Ilya Yashin is a bright testament to it) that one can learn how to govern. And it is not just one single leader but rather tens of thousands of them, who would be able to drag passive millions out of their swamp. And it is through this way only that one can shake the foundations of the vertical power system of governance in such a fashion that it would simply tumble down. And it is exactly then when the time will come when you will not have to take it down either by a storm or to boycott it. All you would have to do is simply to ignore it.

There is such a parable: a seller of the fighting cocks is singing high praises to his commodities at the market, claiming that his cocks are fighting to their deaths.

“I would rather that you sold me some better cocks than these ones,” – the buyer says to the seller – “You know, sell me the kind of cocks that would fight until they win.”

And what shall one do during these presidential elections? – Well, everything and anything, really. That is all because there are no decisions that are being made during them.

The review of 2017: the third year for the Free Russia Foundation

The year of 2017, the third year of operation for the Free Russia Foundation, proved to be a very eventful year. Over the course of this year,  we worked hard and achieved quite a lot.  We continued to assist pro-democracy forces in Russia and to inform Western audiences on Russia-related matters.

We continued our think tank activities and published three more reports on Russia-related subjects, conducted a series of presentations of our papers in Europe and the U.S, Ukraine, and Russia and organized dozens of briefings for Western decision and policy makers.

In January, we translated the report by Ilya Yashin “Kremlin’s Hybrid Aggression” about the entire arsenal of military, disinformation and other methods Putin’s Russia uses in Ukraine. To attract more attention to the problem and convince the West to continue its assistance to Ukraine, FRF’s President Natalia Arno wrote an op-ed for the Hill saying that “If the world blinks Putin will seize the rest of Ukraine”. The report was presented by FRF at the U.S. Congress, European Parliament, British and German parliaments.

In May, together with the Atlantic Council, we published the report “Kremlin’s Gas Games in Europe” by our research expert Ilya Zaslavsky. We jointly launched this report at the U.S. Senate with Senator Jeanne Shaheen as a keynote speaker. Then we had a European tour with the report presenting at the European Parliament, Verkhovna Rada of Ukraine and leading European think tanks including London’s Chatham House and Berlin’s Council on Foreign Relations, DGAP. More on that could be found here.

After that European trip, it became clear to us that we need to follow up with a new report exposing Gazprom’s corruption and political implications of its Nord Stream 2 project to EU security and democracy. Our report “Corruption Pipeline” was published in and FRF made new European tours to Visegrad and Scandinavian countries. More on that could be found here.

Throughout the year we continued to serve as an informal “Embassy” for Russian pro-democracy activists, journalists, representatives of civil society organizations and expert community in the U.S., for whom we arranged meetings with various American or international organizations, think tanks, media outlets or put together panels on urgent topics.

Thus, in March we hosted a prominent environmentalist Evgenia Chirikova. Together with the Atlantic Council, we conducted a panel on recent emigration from Russia “Putin’s Exodus: the new Russian brain drain”. Other panelists included Sergey Erofeev, a sociologist, and Mikhail Kokorich, an entrepreneur. With Evgenia Chirikova we had many briefings on the rise of grassroots activity in Russia at the U.S. Congress, Department of State and other DC organizations.

In May we assisted Meduza, a leading Russian-speaking independent media outlet and Memorial Human Rights Center with panels, briefings, and meetings. Together with Meduza and Foreign Policy Initiative, we held the panel at the U.S. Congress “The Struggle for Free Speech in Russia” moderated by Jamie Kirchik, Brookings.

In July, we arranged a speech of Vladimir Ashurkov from Alexey Navalny’s team at the World Affairs Council in San Francisco.  In August, we hosted Konstantin Rubakhin, an anti-corruption activist and Maria Epifanova, a journalist for Novaya Gazeta-Baltics.

In September, we hosted Vadim Prokhorov, a lawyer for Boris Nemtsov Family.  In partnership with Institute of Modern Russia and National Endowment for Democracy, we held the panel at the U.S. Senate discussing prospects for Russian pro-democracy movement And with the Atlantic Council and IMR we conducted the panel on Boris Nemtsov’s case and its political and legal implications.  During a three-day visit of Vadim Prokhorov to DC, Vladimir Kara-Murza, Vice Chairman of Open Russia and Natalia Arno, FRF’s President, briefed a number of U.S. Senators and Congressmen on the situation in Russia, Nemtsov’s case and discussed the perspectives of Nemtsov Plaza in Washington, DC. The hearings on Nemtsov Plaza were held in December at DC city council and attended by Zhanna Nemtsova, President of the Boris Nemtsov Foundation for Freedom among others. FRF submitted its written testimony in support of Nemtsov Plaza to DC Council as well.

This year we held a very big event – in April, we opened our Free Russia House in Kiev.  Since that time, our Kyiv office was busy with regular panels, conferences, trainings and screenings of documentaries with over 1,000 people attending our events. Throughout the year our Kyiv stage featured such speakers as the former Prime Minister of Lithuania, Andrius Kubilius, Ambassador John Herbst, prominent journalists David Satter, Matvey Ganapolsky, Evgeny Kiselev, an exiled Russian MP Ilya Ponomarev, political analysts Alexander Morozov, Taras Berezovets, the Director of the Kennan Institute Kyiv Office Ekaterina Smagliy, Ondřej Kundra, a leading Czech investigative journalist, Tamila Tasheva, the Chair of the Board of the Crimea SOS and many many others.

We continued our humanitarian and legal aid to Russian refugees and emigrants assisting more than 300 people only in Ukraine, where at the Free Russia House we have opened public legal and psychological assistance consulting offices.

We started another big program this year – assistance to human rights defenders who had to flee from Russia in recent years. Through long-term fellowships and internships, we keep them engaged into Russia-related issues and help them continue their investigations or research. It’s a new initiative and we will keep our partners and supporters informed of it.

We keep fighting for the release of Ukrainian hostages still kept in Russian prisons. We are proud to contribute to the release of two leaders of Crimean Tatars – Ilmi Umerov and Akhtem Chiigoz. We are concerned Roman Sushchenko, a Ukrainian journalist, and many other Ukrainians are still imprisoned and we will keep fighting for their freedom. In March and October, we hosted Mark Feygin and assisted with his advocacy efforts at the U.S. Congress and among human rights organizations. Their cases were discussed at the UN sessions, U.S. Helsinki Commission, Lantos Commission and other structures. We provided all the necessary information to the Ukraine Caucus of the U.S. Congress to issue its statement on Roman Sushchenko.

Together with Open Russia, we kept organizing Campaign Schools for activists from various Russian regions. In April, we studied French political and election system and observed the first round of the French presidential elections. In May-June, we analyzed the EU institutions in Brussels. And in September, we studied the German election system and observed its parliamentary elections.

There is much more we’ve done this year, but we realize there is even much more to do in the upcoming 2018 and years ahead until we have a truly free and democratic Russia. Russia we are proud of.  Russia for its people. Russia, a reliable partner on the international arena.

Let us thank all our partners, colleagues, and supporters for working together this year. Let us wish you success and happiness in 2018. We are looking forward to the new year – the year we will be a step closer to a free Russia!

Real foundation of the “North Korean miracle”

General picture of the “North Korean crisis

In 2016 and, especially since the beginning of 2017, our world has become much more unstable. One of the most destabilizing factors has been a sharp increase in the nuclear-missile potential of North Korea (DPRK). More precisely, the following has happened:

  • The number of nuclear devices (warheads) at the disposal of the “Juche regime” increased from 6-8 units in January 2015 to 8-10 units in January 2016, and to 10-20 units in January 2017 (according to the very authoritative SIPRI – Stockholm International Peace Research Institute). Still, by August 2017, this estimate has grown “by a single leap forward” to 40-60 units (according to the Defense Intelligence Agency and other structures in the U.S. intelligence community). This fact was first reported on August 8 by The Washington Post, known by its reliable sources. In general, the power of these devices does not exceed 10-15 kilotons of TNT (roughly the size of the bomb that destroyed Hiroshima).
  • At least one nuclear weapon at the disposal of North Korean leaders reached a power of about 150 kilotons and its parameters corresponds to that of a hydrogen bomb. The test of this bomb on September 3, 2017 had very broad resonance in the world and especially in the USA. It is highly possible that by the end of September 2017 the “Juche” regime had several more nuclear weapons of the similar power.
  • For several decades (at least since 1989), the DPRK has been developing an intermediate-range ballistic missile (IRBM) called Hwasong-10 with a radius of approximately 4,000 km, based largely on technology obtained from the USSR. A number of Hwasong-10 tests in April 2016 – February 2017 were mostly unsuccessful and demonstrated very limited technological capabilities of the DPRK in this area.
  • All of a sudden, the situation changed dramatically. In May 2017, DPRK successfully tested an IRBM Hwasong-12 with a radius of approximately 5,000 km, capable of reaching the island of Guam and Alaska. Two more successful tests of Hwasong-12 – namely unprecedented brazen “flights over Japan” – took place on August 29 and September 15, 2017. Moreover, quite tellingly, until April 2017 no one in the world, outside of the DPRK, had a slightest idea of Hwasong-12 existence.
  • Furthermore, in July of 2017 the DPRK successfully tested the intercontinental ballistic missile (ICBM) Hwasong-14 with a radius of at least 10,000 km twice. This missile can cover almost the entire continental part of the United States. Again, until July 2017 no one outside the DPRK knew anything about the missile.

Using mathematical terminology,  the North Korean nuclear-missile sector experienced  an exponential growth in 2017. Using biblical terms, one can recall Beast-of-the-Sea from Apocalypse. This Beast-of-the-Sea would suddenly appear at the time of the universal catastrophe and take control over the dying world.

We can see four such Beasts-of-the-Sea almost instantly emerging out of nowhere: the triple increase in the number of nuclear devices in the DPRK’s storage facilities during eight months of this year; the arrival and successful testing of North Korean “hydrogen” bomb; three successful Hwasong-12 IRBM tests, and twice successfully tested Hwasong-14 ICBM. That’s some black magic!

I became seriously engaged in the study of this “magic” in mid-August 2017 – after reading an interview of a prominent German missile designer Robert Schmucker with online “Deutsche Welle” newspaper on August 9 2017 about the “fat Russian trail” in the North Korean nuclear-missile program. In particular, Professor Schmuker noted, that Pyongyang has used a fundamentally new technology in recent missile tests. He indicated that the DPRK would have to utilize giant resources for new missiles development from scratch.

As an engineer creating missiles through his entire career, Dr. Robert Schmucker noted that the designer needs a certain number of missile prototypes to be launched and their trajectories to be measured; conclusions to be made based on these launches, errors corrected, ballistic tables compiled, etc. Without numerous unsuccessful tests, a successful launch of a missile is impossible.   We have not seen anything of this, the prominent missile expert stressed. And he believes that it is impossible to conceal such works, since “North Korea is under constant surveillance”.

“The costs for these projects would have to be enormous, you would need seven project teams, several factories to produce the missiles of different diameters, they’d need various materials, fuel, etc. Developing these projects concurrently and, at the same time, making sure practically all the launches, including the first ones, are successful? This is impossible for anybody; the only plausible explanation: these missiles came from outside,” – the expert concluded.

Where did the engines come from? 

Since August 2017, Russian state media has been “helpfully” offering various versions that would explain “clear and simple” the North Korean nuclear-missile “miracles”:

  • DPRK received the production technologies for RD-250 missile engines and similar engines from Ukraine, from the Yuzhmash plant and Yuzhnoye design bureau, where the RD-250 engines have been produced for several decades, until 2001. “Just the modifications of the RD-250 have been used in the North Korean Hwasong-12 and Hwasong-14 missiles!”
  • The DPRK received a significant part of the new nuclear-missile technologies from China.
  • North Korea has independently mastered new nuclear missile technology. “They’ve tried for so many years, and finally they succeeded!”
  • Iran has rendered very substantial assistance to the DPRK in the development of nuclear- missile technology.

Elleman, the author of the IISS report cited in The New York Times story, later took to Twitter to walk back the quote attributed to him in The New York Times in which he said the engines more likely came from Ukraine than Russia. “Let me be clear about DPRK’s source of ICBM engine: Yuzhnoye is one of several possible sources, there are other potentials in Russia,” Elleman wrote on Twitter. “I don’t believe Ukr gov’t condoned or knew, if the engines were sourced in Ukr. To the contrary, Ukr arrested North Koreans in 2012!” Elleman wrote on Twitter.

Of course, all this does withstand any criticism, especially the fabrications about the possible complicity of Ukraine.  However, on August 14, 2017 The New York Times published an article by Michael Elman, an expert at the London-based International Institute of Strategic Studies (IISS). The article claimed that most likely North Korean agents purchased several RD-250 missile engines, as well as technologies for manufacturing these and similar engines” on the black market” during the “troubled times” of 2014-2015 in Ukraine.  At the same time, Elman did not rule out that North Korea could buy RD-250 engines and corresponding technologies in Russia in Ukraine, also on the black market. Elman ruled out any direct participation of the government of Ukraine as well as the government of Russia.

The Russian media eagerly picked up the “Ukrainian component” of the article in The New York Times, while the “Russian component” has been completely ignored.

And in Ukraine? Representatives of the Yuzhmash plant stated: “Missiles and military-use missile systems have not been produced and are not being produced at Yuzhmash since Ukrainian independence”.  Top leaders of Ukraine and its military experts categorically rejected Michael Elman’s conclusions. Through Yelchenko, Ukrainian envoy to the UN, they suggested that United Nations and US top leadership should conduct a thorough investigation of the problem, namely, whether Ukraine has anything to do with the new North Korean missile technologies and whether there has been any missile technology leakage from Ukraine.

FOR THE REFERENCE: engines RD-250, the modifications of which are used in Hwasong-10, Hwasong-12, Hwasong-14 missiles, have been developed by Energomash Group in Khimki, near Moscow, but their manufacturing had been transferred to Yuzhmash plant in Dnepropetrovsk, Ukraine back during Soviet times. There they have been used for installation in Satan R-36 ICBMs until 1991. After that, until 2001, these engines have been manufactured in Ukraine for usage in Russian Cyclone space missile carriers.  At this time in Ukraine, all RD-250 engines have been accounted for.  And in Russia, according to Ukrainian experts, there are up to 20 Cyclone missile carriers and up to 80 RD-250 engines, as well as proper documentation and expertise. Obviously, in the case of an international investigation experts will have to investigate just these engines.

Already by the end of August, the United States representative in the UN Nikki Haley and senior US State Department officials stated firmly: “Ukraine has a very good track record in the prevention of leakage of missile technologies and other dangerous technologies”. They also said that NY Times article and similar allegations against Ukraine are baseless and will not affect the US decision to provide Ukraine with lethal weapons in any way. This was brief and clear.

So, perhaps, was it China helping the DPRK?  It is ridiculous. China is absolutely not interested in strengthening of its eastern neighbor and, at least since 1992, has not supplied the DPRK with any weapons.  By the way, as of September 2017, relations between the DPRK and China have fallen very low, while relations between the DPRK and Russia were growing rapidly.

What about independent research &development of DPRK itself? Or perhaps Iranian help? North Korea is too weak, economically and technologically, for the “Great Leap Forward” in several directions at once in the nuclear missile sphere described above. And even Iran could help the DPRK in a very insignificant way.

So, who is to blame? Here is a statement by Siemon Wezeman, an expert of authoritative Stockholm International Peace Research Institute (SIPRI), on August 18, 2017 at the UN, which can become the key: “In the supply of missile technology to the DPRK, are involved either Ukraine or Russia.” The former is unlikely, primarily, because Ukraine has no common border with North Korea. A rocket engine is not a needle in a haystack; even disassembled, it is difficult to move across a border unnoticed. With modern monitoring systems, it is hard to believe such transit could occur quietly. Even if it happened, Ukrainian leaders would not demand a public investigation of the case.

Based on the above, Ukraine, which is watched closely, should be taken off the “radar screen”. Then only Russia remains? We have to admit that this is the case.

The Soviet Union had always actively assisted North Korea in the upgrading of its military machine.  Russia “inherited” this support.  In 2014 (according to other sources, in 2012), Putin wrote off 90% of the North Korean debt to Russia, which was about $11 billion. Moreover, when in 2017 China stopped its energy exports – oil and petroleum products – to North Korea, Russia immediately replaced China.

Russia supported North Korea’s nuclear program technologically: since 2015, North Korean specialists have been working at Russian nuclear research facilities. Now in 2017, Russia is providing significantly more serious support to the missile program of North Korea.

In May of 2017, at the very moment when Pyongyang initiated series of successful missile tests (Hwasong-12, Hwasong-14) and was going to test its “hydrogen bomb”, and while the whole world was cutting off their last ties with DPRK, Russia opened a new sea lane between Russian port of Vladivostok and Korean port of Najin (Rajin).  Najin is located about 50 km (appr. 30 miles) southwest of Russian-North Korean border and 120 km (about 75 miles) southwest of Vladivostok. And Najin is quite close to Kusong, the main North Korean missile range. Mon Gyong Bong ship, owned by Russian company registered in North Korea, continuously makes voyages between Vladivostok and Kusun port and, apparently, services Pyongyang missile launches.

Why would Putin involve himself in this new gamble? This is a subject for a separate article.

Who is the right-wing populist in Russia: Putin vs. Navalny

When one examines the rise of right-wing populism in Russia and Europe, it is curious that Russia reproduces the rhetoric seen elsewhere in Europe in a somewhat distorted manner. When one venture outside of Russia this becomes evident. No matter where you live, your country will likely consider itself completely unique. In Hungary, you will be told that there is hardly any other country similar to Hungary in the whole world. In the US the theme of “American exceptionalism” in both good ways and bad, is very evident in politics. All countries, despite their own peculiarities, react in one way or another to the same processes of economic, political and cultural globalization currently taking place in our world.

In Russia, it could be argued that Putin, not Navalny, is the main right-wing populist force in Russian politics, even though both draw support from those who feel uneasy about the processes of globalization. Putin, as well as Orban and his Fidesz party in Hungary and Kaczynski and the Law & Justice party in Poland, are, one way or another, the result of public irritation from the economic transit in these countries and dissatisfaction with the results of reforms and the desire to acquire stability, often seen as a return to the past.

Since political and economic transitions happen simultaneously in our respective countries, we similarly tend to blame democracy for our own economic problems. People simply do not separate that these countries simultaneously democratized and conducted market reforms. In people’s minds, these processes overlapped. Accordingly, the situation often results from economic problems within the population, but democracy is still the scapegoat. In Russia, democracy was destroyed, but the tightening of screws was approved by the majority.

Recall the discourse from the beginning of the 2000s, that we need a strong hand, we need to temper the chaos of sovereign democracy, and in Orban’s words – the chaos of illiberal democracy. In this sense, there is a parallel, in my opinion, between the European right-wing populists and Putin. However, Alexei Navalny joins the populism trend as well by addressing the migration issue.

It is important to clarify that the Russian system is undemocratic. It is essential because the traditional understanding of the political field as a zero-sum game, where parties compete for certain groups of target electorate, does not quite fit. Just try to distinguish the “Fair Russia” party from the “United Russia”: one is leftish, another slightly right, but in practice, they have no ideological differences.

Alexei Navalny has a lot of freedom of action. He has fertile soil, because the government parties have no real ideological platform, except for “we will elect Putin for a new term, he does everything right”. This is important to remember.

Russia has the same problem as in the rest of the world. That is, there is a crisis of globalization, there is a population group, the “second Russia” where incomes do not grow or stagnate and adaptation to the market is fraught with problems. The stagnation of the Russian economy is happening because the regime has reached the point where all the incentives for growth are destroyed, and oil prices are not high enough to give an impetus to the economy. In this situation, from the political point of view, Aleksei Navalny now faces the task of expanding his electorate, he seeks to get beyond the 10% marginal opposition. And in order to expand, he needs to talk about the problems that are relevant for a great many of people.

Navalny tries to find, as far as I understand his approach, points that would unite people around his campaign. The topic of corruption is what most Russians care about, they understand this as a problem.

Of course, Alexei and other pro-democratic politicians react to the same challenges as the European political forces. That’s why, in my opinion, he is now combining a cultural right program, in the sense that he combines the rhetoric about immigration, the nation, the construction of the Russian nation, “Russia for Russians” and “stop feeding the Caucasus” with a fairly left economic platform. This approach allows you to go beyond the narrow marginal opposition niche, as the stagnation of income worries many Russians today.

Such a combination of the national agenda with redistribution is characteristic of many Western right populist parties. Navalny and his allies are learning from successful Western politicians. In this sense, there is certainly a similarity between the Russian and European processes.

The Return of the Prodigal Trillion

Gorgeous fall colors in Washington, DC. The perfect season for tourists. Including businesspeople. This fall, a new and growing class of tourists is roaming the DC streets: Russian billionaires.

All of these Russian billionaires can easily recite the now-famous Section 241 of “An Act to Counter aggression by the Governments of Iran, the Russian Federation, and North Korea.” In unison, these tourists confide that they certainly opposed Russia’s annexation of Crimea from the very start. And then they ever so delicately inquire, um, to whom (and where) they can offer a very substantial reward to make sure their names stay out of the US Treasury’s report to the Congress on assets of “senior political figures, oligarchs and parastatal entities in the Russian Federation, as determined by their closeness to the Russian regime.”

The Act adopted by the US Congress almost unanimously and signed by President Trump, kicking and screaming, on August 2, 2017, is a machine already operating, and it is now unstoppable. It is set to freeze around $1 Trillion ($1,000,000,000,000 per National Bureau of Economic Research valuation) of criminal “Russian assets.” The report is due on February 2, 2018. Under the Congress’ watchful eye, the US Treasury is hard at work putting it together, including compiling a comprehensive list of the owners and beneficiaries of these Trillion Russian Dollars in America, as well as “identifying indices of corruption with respect to those individuals.” Trying to halt or somehow interfere with this process in today’s US political climate would be suicide for any American politician, including Trump.

Political Washington is a city of leaks, and unofficial lists of corrupt individuals are no secret. The August 2, 2017 Act essentially criminalizes the entire Russian leadership that uses the United States to hoard the treasures it looted in Russia. The list truly reads like a “Who is Who” of Russian Kleptocracy, and includes Russia’s top officials (after all, how can you steal a whole Trillion without the assistance and involvement of top brass)?

A conscientious American police officer who confiscates a stolen wallet from a criminal certainly has to return the wallet to its rightful owner. In our case, the rightful owners are the Russian state and the Russian people. But what do you do if the criminal (the Russian leadership) is the rightful owner’s plenipotentiary representative? It is a legal conundrum to be sure, but I see a way out.

Step one: The US Congress publishes the detailed report it receives from the US Treasury regarding the Russian Trillion’s owners and beneficiaries – this way the report will become accessible to the Russian public and the world.

Step two: The US government announces that it’s ready to transmit, without delay, all the frozen assets to the Russian Federation on just one basic precautionary condition: The RF must adopt a law committing itself to full lifetime lustration of all the officials who embezzled these funds.

Many readers will certainly recall that, initially, the EU and US sanctions were introduced in order to stop Russia’s aggression in Ukraine. These readers will thus insist that returning the Prodigal Trillion to Russia should be postponed until Ukraine’s territorial integrity is restored. But for now, it wouldn’t be a bad idea to send some of these funds to the victim of this aggression as pecuniary and non-pecuniary damages.

These arguments make sense, but such an approach seems wrong to me, both politically and psychologically.

Embezzling from Russia and Aggression against Ukraine are two distinctly different crimes, although they were committed by essentially the same individuals (through no coincidence, but through a distinct pattern of behavior).

Here is what yours truly said about this  on the fatal day of March 1st, 2014:

The criminal venture of the Kremlin Kleptocrats who see the February 2014 crime-fighting revolution in Ukraine as a threat to their lifetime power, can be stopped if EU countries, Switzerland, Liechtenstein and the US adopt a very simple measure: Heeding their own laws, these nations’ governments can identify and freeze Russian Federation’s highest officials and their business partners’ assets held at Western financial institutions.

Those guilty of unleashing the war on Ukraine will be publicly exposed as criminals who launder the colossal funds obtained through robbing the Russian people and other ethnicities residing in the RF.

To many, including those living in Russia, this measure will reveal the true motives of the Kremlin’s adamant refusal to accept the Ukrainian revolution that overthrew the power of the Kremlin Kleptocracy’s clone – the Yanukovich crew.

“We can’t foresee how our word will echo through the ages…” My word finally did echo three and a half years later in the clear language of Section 241. I will, therefore, allow myself to make a couple more modest recommendations.

The stolen goods must be returned to the owner with no preliminary political conditions. Just one technical condition has to be set in stone: making sure the money doesn’t go back to the gangsters who stole it.

New Russian leadership, now free from the white-collar criminals who turned out to be war criminals as well, will be able to (on its own, without outside financial or political pressure) resolve the existential issue of Russia’s relationship with Ukraine, including serious brotherly financial support for Ukraine in overcoming the consequences of Putin’s aggression. Especially now that funds will be available for this noble mission. And a great many people (including most of those living in Crimea) will recall with absolute sincerity that they were definitely against the annexation of Crimea from the get-go.

US-Russian relations will radically change as well. Russian citizens will certainly appreciate the US justice’s decisive role in returning to Russia the immense assets stolen from Russia – the assets that were the product of several generations’ labor, deprivations, suffering, and heroism.

The horizon ends with Putin’s forth term

With Ksenia Sobchak entering the race, and Alexey Navalny continuing his campaign trail though Russian regions, the presidential elections have finally become topic number one within Russian media and social networks. Nevertheless, one of the most important questions of this campaign is still unanswered: when Vladimir Putin will officially bid for his fourth term and how his new political platform will look like? We discussed this question with Russian political analyst Aleksandr Morozov.

Where is the Putin’s political platform going and what can we expect from his upcoming campaign?

In short, Putin does not need any program at all, this is the first and most important point. He is simply passing to the fourth term automatically, even if he does not offer anything to the public. Even if he does not offer anything to the ruling groups, he will pass to the fourth term without any problems and will stay in the position until the very end, in other words for 6 more years.

However, there is a bigger discussion which is independent of the electoral situation. Can the Kremlin formulate a long-term strategy for itself, regardless of the elections? Where is it all leading to in terms of the relations with the West and public expectations?

It is a bigger problem as everyone feels that the agenda that Putin has been implementing for the last 15 years is already fulfilled. He has built the country he wanted.

In my opinion, Putin will be concentrating exclusively on the following 3 tasks in relation to his fourth term:

1. To create conditions for the young generation.

To live somehow in the country, develop themselves and be in demand as people who have income and can be more or less secure in the future due to money, mortgage and status. It is an important issue as