Our latest efforts to counter Kremlin’s “festival of thiefdom” in the West

Dec 27 2017

This article summarizes our results and is a follow up to our initial work on it in 2017.

As far as Gazprom is concerned up to July we have been promoting our joint report with the Atlantic Council on Kremlin’s Gas Games in Europe, which laid out an independent and realistic vision about subversion activity of Russian leadership through the gas industry in the West. However, we quickly understood that that report alone was not enough, as many Western counterparts of Gazprom remain totally uninformed about rampant corruption of the monopoly that has spread into Europe in various forms a long time ago. For this reason, in autumn we analyzed key anti-corruption investigations related to Gazprom’s management and published a report with a self-explicable title Corruption Pipeline: The Threat of Nord Stream 2 to EU Security and Democracy

This analysis is only a tip of the iceberg. If we had to uncover the full magnitude of how Putin’s regime uses corruption to undermine EU countries in the energy sector, it would take a series of reports. However, this paper specifically deconstructs historical myths about Germany’s supposed success in transforming USSR positively through gas trade and shows never fulfilled promises of benefits from Nord Stream 1 inside Russia. It also challenges established consensus among German corporations and elsewhere among Gazprom partners that Russian monopoly will never succeed in bringing grand corruption schemes inside Europe because EU law enforcement and regulators are apparently so efficient. In fact, they are not, Gazprom has already brought its criminal practices into Europe and in our paper, we show how it does it.

In October we visited Visegrad countries discussing the menace of Nord Stream 2 for Central and Eastern Europe (CEE), as the pipeline will potentially cut off and disrupt not just Ukraine but the whole region to the east of Germany. In Czech Republic we presented at Prague Security Studies Institute (PSSI), a meeting which was attended primarily by officials from relevant government agencies, various Embassies and experts on Russian security. While the audience agreed with postulates about the extent of Kremlin’s corruption and meddling in Europe through energy, the overall feeling was that the Republic had turned away from opposing Nord Stream 2 to a quiet neutrality. Czech energy companies had by now invested heavily into new capacity in anticipation for the launch of the pipeline and want a proper return on their initially reluctant investment.

We arrived in Prague when an anti-EU billionaire Andrej Babic won in parliamentary elections, and since then there has been a fear that the country will fall prey to Putin’s influence even further. However, there are many other parties and views in the Czech Republic and we found that our vision is being widely shared. The battle for hearts is not finished and the long-term position of the country towards Putin’s regime is something worth fighting for in public fora in Prague.

Another country on the fence about Nord Stream 2 is Slovakia. Bratislava’s GlobSec think tank has extensively covered this issue. This meeting had fewer policy-makers and more local analysts who seemed to share our view on the growing correlation between national security weakened cohesion between NATO members and Russia’s use of corruption in hybrid warfare against the West.

On the latter broad topic Free Russia made a joint report with the Kleptocracy Initiative (KI), Hudson Institute called How Non-State Actors Export Kleptocratic Norms to the West and on 11 October the Institute convened different experts on post-Soviet space and corruption to discuss the issue at a two-part panel. Just a few weeks before that a preliminary copy of the report was presented to current and former U.S. foreign policy professionals at the Dacor Beacon House.

In Visegrad countries we discussed the KI report at the cultural festival “Kulturus” which resulted in a collaboration article with Prague-based political analyst Alexander Morozov Toxic Money from Kremlin: Where is the Red Line?. In this expert comment, Alexander looked at the issue that Free Russia monitors closely: what Kremlin oligarchs will be sanctioned under the upcoming Countering America’s Adversaries Through Sanctions Act (CAATSA), the much-anticipated decision in the US government is slated for February. In a move that we believe is connected to CAATSA, today US Treasury sanctioned 10 thieves-in-law (kingpins of Eurasian mafia) acknowledging the extent of their power and penetration into politics and business.

In November Free Russia made another round of presentations of both reports in Europe, this time in Denmark and Norway. Copenhagen’s CEPOS think tank kindly gave a platform to discuss all burning issues that we wanted to raise and the turnout, as the video of the event shows, has been tremendous. One of the reasons for that was a pending vote in the Danish parliament on the fate of Nord Stream 2. On 30 November, just ten days after our presentation, the parliament decided that its foreign policy ministry can from now on prohibit use of Denmark’s territorial waters for Gazprom’s pipeline on the grounds of national security. We believe our report on Gazprom’s corruption that was passed to Danish policy-makers may have played its part in tilting the vote in support of the motion.

In Oslo there was a closed presentation of both reports at Civita think tank and then a public hearing on the adoption of the Magnitsky Act as part of 40th anniversary of Norwegian Helsinki Committee (NHC). This great event brought together dozens of activists and researchers from CIS and EU countries. I talked about my research on Russian law enforcement officials that are already on U.S. Magnitsky list and how it showed that these people have been implicated in multiple cases abusing human rights and promoting corruption in Russia and beyond. I also placed that research in the broader context of the KI report mentioned above to show that violations in Russia go hand-in-hand with the multi-layered export of corruption to the West. NHC is planning to release select video recordings of the hearing shortly.

Finally, the year is ending on a very positive note – our colleagues have launched a long-awaited project Underminers. The idea is to publish 100 concise and easy-to-share profiles of agents and other intermediaries of post-Soviet kleptocracies that actively undermine democratic institutions and values in the West. The project was launched in early December and states two fundamental goals – to raise awareness among Western audiences and to increase support for the development and implementation of a comprehensive containment strategy against kleptocrats. The project kicked off with several profiles and an inaugural expert comment by Arkadiy Babchenko, a popular Russian blogger, and journalist, with a provocative polemical piece If Putin’s thieves become respected in the West, why should one obey laws? We expect this project to publish all 100 profiles in a speedy fashion over the course of several weeks in early 2018 (but without dumping all of them at once) and become a platform for learning and debate.

by Ilya Zaslavsky

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