Tag Archives: Sanctions

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

This publication is the product of an initial effort undertaken by Free Russia Foundation in 2018 to stimulate public discussion of Russian scenarios, mitigate the likelihood of a bad surprise or missed opportunities, and support the country’s transition to a more positive future. Continue reading Russia scenarios 2030

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.

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.

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.”

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.

As part of my work for Free Russia Foundation, I am carrying out research on two projects. The first one is devoted to influencing that Gazprom and its pipeline projects have in the EU. The second is an ongoing project called Underminers which focuses on agents of post-Soviet corruption in the West and will be fully launched in the fall. Between May and July this year we presented some of the findings from these two projects in Washington and in six European capitals. We got some insightful feedback and would like to share it here.

On May 24, our report paper The Kremlin’s Gas Games in Europe: Implications for Policy Makers was presented at the U.S. Senate, where Senator Jeanne Shaheen formulated her long standing opposition to the pipeline due to its security implications for the European Union and transatlantic relations. A few days later Kremlin-controlled media outlet Life.Ru commented on our event with deceitful propaganda, saying that “Russian opposition lobbies new sanctions against Gazprom” and that the real reason for that is the greed of US LNG companies that simply want to replace Russian gas in Europe. Incidentally, just a few days ago this outlet was reportedly defunded by Kremlin which shows that lies do not sell forever.

Meanwhile, about the same time, Trump administration signed long awaited legislation to fight corruption and gross human rights violators around the world called Global Magnitsky Act. However, we at FRF remain skeptical about actual political will within the executive to use this instrument wholeheartedly against post-Soviet kleptocracies, although we remain hopeful that the Congress will not reduce its pressure in this policy area.

In Europe, we started in Sofia where we held two presentations at The Centre for the Study of Democracy of which the paper on Gazprom was the most publicly discussed. Bulgaria is heavily influenced by Russian energy companies and Gazprom’s proposal to extend Turkish Stream into the country remains one of the most contentious issues in the region. Our colleagues from CSD suggested that Gazprom’s pipeline projects by-passing Ukraine represent a financial and security threat to Bulgaria itself, not only to Ukraine, and that corruption of Russian energy companies has a pervasive negative impact on democratic institutions and domestic politics. However, there was a lot of discussion about the need for a wider and more coherent European and US response to Kremlin’s aggression. There is a strong pro-Putin faction among Bulgarian policy-makers that has been continuously supported by Moscow with money, propaganda and other destructive means, including through what CSD calls Russian amplifiers, i.e. Kremlin-connected kleptocratic operatives in Bulgaria.

Our next stop was in London at Chatham House and The Henry Jackson Society. The first meeting was under Chatham House rules, so without giving any concrete affiliation, I can say that there was a number of Gazprom’s European partners who advocated in favor of Nord Stream 2, claiming that it is strictly a commercial project financially lucrative to Europe, that its construction might give impetus to Eastern Europe to reform its gas networks after transit payments from Russia stop and that Ukraine has been “a basket case for 25 years.” We offered our counter arguments, claiming that Nord Stream 2 as previously Nord Stream 1 and expansion of pipelines within Russia for the South Stream had been highly corrupt and benefited Putin’s cronies, that such corruption at the expense of taxpayers would not be confined to Russia alone and is being already exported to Europe, that Ukraine has proven to be a more reliable partner despite Kremlin’s provocations in 2006 and 2009, especially in the last three years and that security implications of Kremlin’s gas plans are much wider than just bypassing Ukraine.

Discussion of post-Soviet underminers of democracy in London had to be timid because of the outdated libel laws of the country that really favor oligarchs, not free press and critically minded researchers, but the turnout at the event was impressive. I was personally surprised to see a former master of a major Oxford college who previously approved donations to the University from Russian kleptocrats but now seemed to have changed his views on this subject. The need to distinguish between corruption and corrosive practices and other key takeaways from the event was brilliantly summarized here.

At our next event in Warsaw jointly held with Za Wolna Rosja association and Buziness Alert we primarily focused on political and security threats of Gazprom to Central and Eastern Europe and EU laws, principles and institutions. Ernest Wyciszkiewicz, Director of the Centre for Polish-Russian Dialogue and Understanding, rightfully pointed out that German policymakers, when not talking to the press, treat Gazprom’s pipeline projects as political and so should each country in the EU without any pretense that this is only about economics and commercial gain. Interestingly, Belarussian TV station (not controlled by Minsk) covered the event in detail, showing that this Russian-speaking Belarusian diaspora also understands the problem and does not want Belarus to end up at the mercy of Gazprom and its partners in Berlin if Germany became the main receiving hub for Russian gas in Europe.

We then had a closed session organized by https://www.martenscentre.eu with EU parliamentarians from the ruling EPP coalition in Strasbourg (covered only by Latvian media as one of the organizers was from Latvia), where there was almost a total unity on understanding threats from Kremlin-led pipeline projects and corruption for European aspirations of transparency, governance and energy competition and diversification. However, one deputy said that EU is a hopeless place where we won’t be able to overcome the influence of lobbyists and politicians paid by Kremlin and that FRF should concentrate its efforts of changing attitudes in Washington, D.C., a stance that shows how bleak the EU picture is for some policymakers. Notably, as if to prove his point, we subsequently learned that this event was somehow crashed by representatives of Gazprom lobbyists and Russian diplomats who quietly recorded our discussion.

However, the most complicated event was in Berlin at the German Council on Foreign Relations where I had to face two panelists in favor of Nord Stream 2 and an audience which was heavily attended by Gazprom’s representatives, partners and supporters. We had to discuss some of the same points as proposed by energy companies at the Chatham House few days before, while Kirsten Westphal from Berlin fund of science and politics (SWP) offered a very narrow gas supply/demand view of Western European security and both panelists and representatives of energy companies questioned my “allegations” of widespread corruption in Gazprom and its export to Germany and Europe. This took place despite me citing concrete and multiple undisputable investigations carried out both by western and Russian independent media outlets.

Even more shocking was a remark of one of the organizers of the event to me that “your position against Gazprom was too American and this is why your actual points were not properly appreciated by the audience.” While I definitely spoke as a representative of the Free Russia Foundation and an expert on gas with a background in both Russia and the U.S., I think the commentator was actually right and the anti-American sentiment and ways how Moscow skillfully exploits it are indeed highly present in Germany nowadays. Luckily later that day we met with a group of Russian-speaking activists residing in Berlin that are not duped by Kremlin propaganda and appreciates the need to counter kleptocratic export to the EU.

Our last stop was in Kyiv where we did not have to explain these obvious things about the corruption of Gazprom and Kremlin’s subversive propaganda in Europe. The most prominent event was at Ukrainian Crisis Center together with local think tanks and Deputy Minister of Energy Natalia Boyko. While experts had different views on the actual prospects of Gazprom pipelines intended to by-pass Ukraine, all seemed to agree that Kyiv should remain proactive and its response should be focused on domestic reforms: liberalization of its own gas sector, strict abiding by existing international contracts and being a reliable partner keen to be integrated into European gas regulatory and business norms. TV and radio interviews showed that there is genuinely free journalism now in Ukraine capable of asking critical questions about our expert abilities, EU and US adherence to democracy and joint security, pervasive power of trans-border corruption and stumbling blocks in Ukrainian politics.

Notably, very similar topics – such as US and EU ability to counter post-Soviet kleptocracy – were raised at the Helsinki Commission upon our return to Washington, D.C. I have been raising the issue of influence of Kremlin-controlled oligarchs on the US for years, including lately on Trump’s administration, and was pleasantly surprised that this topic got attention and brought large audience to the event (see here) and comments from top-level experts like Dan Fried, a former top State Department official on sanctions policy.

Finally, the topic of corruption of Gazprom and Kremlin-connected oligarchs in the energy sector also got a brilliant coverage for a Russian-speaking audience, as an expert of the Free Russian Foundation, Vladimir Milov, who is a former deputy minister of energy, is now part of the main opposition movement in Russia led by Aleksei Navalny. Milov runs his own YouTube show in Moscow and his program on economy called Where Is the Money? is part of NavalnyLive YouTube program and has hundreds of thousands of views. For those of you who understand Russian here is an hour-long program from early August where we freely discuss all main Kremlin state energy companies and infrastructure projects and how they influence the whole region with their pervasive corruption.

We continue active research and exposure of post-Soviet corruption. The Free Russian Foundation is going to issue a special report on Nord Stream 2 pipeline in the fall, while the project Underminers will see a major boost for its launch scheduled for the end of September. Mark your calendars, as on October 11, 2017 Kleptocracy Initiative of the Hudson Institute will present our research paper on How Non-State Actors Export Kleptocratic Norms to the West (exact time and announcements will be provided closer to the event). This study seeks to provide some theoretical basis and key concepts for the very practical ideas of the Underminers project which we hope will educate about the export of corrosive practices from Eurasia and we welcome your interest and participation in this discussion and research.

The “presidential election” in Russia on March 18, 2018, is not going to resolve the issue of who is going to rule Russia. This is because this question is already being addressed.  It is not being done by one hundred million voters, but by the approximately one hundred members of the Russian kleptocracy’s expanded Politburo.

To be sure, Putin’s last name is on the short list compiled by influential government officials-come-businessmen. However, for the first time during the seventeen years of his rule, he is facing some complications.

The “elite” has developed a doubt in his ability to effectively perform over the next six years the function that is the most important one for this gang – interaction with the eternally hated and adored West. The failure of Putin’s neo-imperial exploits has become the greatest foreign policy defeat of the regime and lowered the Kremlin’s relations with its Western partners, who control the foreign assets of Russia’s rulers, to the worst possible condition.

An existential threat to the most valuable facet of life for the Russian rulers has emerged – not just to their holdings in the West, but to their whole life style in the West – their children’s education, medical services, vacations, well-being of wives and concubines, long happy life, organ transplants,  and their political and biological immortality can finally be assured with the billions robbed in Russia. All of this has been thrown into doubt by a single man, who through his adventurous braggadocio has ruined the business-based mutually advantageous relations of the Russian “elite” with the West.

In Paris, French President Emmanuel Macron tormented Putin by putting him in his place and showed him how the leaders of the West will talk to the Kremlin from now on. Putin appeared weak, and as a result of the surprise, lost. It was clear that psychologically and physically he was diminished, which has only intensified the growing concerns of his entourage.

On July 7th in Hamburg, Putin went through what was possibly the most important casting session of his life. Not in front of the G20, of course, but in front of his own palace dwellers’ audience.  Putin desperately needed some kind of “victory”. It was important for him to show that he is involved in resolving critical world issues. Our dear Trump did not fail his friend Vladimir. He gave Putin his first “victory” back in Washington, where members of the cabinet discussed the format of the pending meeting – full format bilateral negotiations or an unexpected talk in the hallway next to a john.  The majority of the Secretaries gravitated towards the hallway option. Trump insisted on a 45-minute long negotiation with the participation of the Secretary of State and the Foreign Minister.

In reality, the meeting actually lasted for more than two hours. Trump started it with a meek admission. He said that to get acquainted with the global scale “fixer” Putin is a great honor for him, a modest provincial realtor. Apparently, an even greater honor for Trump was the creation of a joint counter- cyber terrorism commission together with the organizer of the hacking attacks on the USA. He called the results of the Big Two Summit with his daring ally in the fight against Islamic terrorism “tremendous”.

On that day, insane foreign policy talk shows on the Russian government’s TV channels broadcasted round-the-clock and flatteringly relished all the physiological details of the triumph of our dominant male. Propagandist talking head Vladimir Soloviev displayed a photo-shopped picture “Supplicants and Putin”.

Our faithful servant felt that he had managed to seize his fortune and had created the required impression for his colleagues, who were beginning to doubt him. Straight from Hamburg, he dashed to the Valaam Monastery to kiss an artifact that servile priests had supplied to him, which in the language of his PR people meant – our great chief has arrived at a fateful decision to ”run for office” again.However, this triumph of Putin’s would last only a few days. Once back in Washington, Trump ran into very harsh criticism of his behavior in the Putin meeting and faced new accusations of collusion with the Kremlin during the election campaign. “Why, oh why does Trump love Russia so much?” – is how Farid Zakaria titled his unprecedentedly hard-hitting column in the “Washington Post.” Its ending reflects the mood which is dominant in the American capital and which does not bode well for Trump:

“It is possible that there are benign explanations for all of this. Perhaps Trump just admires Putin as a leader.  Perhaps he has bought into the worldview of his senior adviser Stephen K. Bannon, in which Russia is not an ideological foe but a cultural friend, a white Christian country battling swarthy Muslims. But perhaps there is some other explanation for this fawning over Russia and its leader. This is the puzzle now at the heart of the Trump presidency that special counsel Robert S. Mueller III will undoubtedly try to solve.” 

While Mueller is trying to unscramble this puzzle, Speaker of the House Paul Ryan announced on July 12th that a bill containing harsh sanctions against the Kremlin, which was adopted by the Senate on a vote of 97 to 2, will be presented to the House without any changes. Trump’s administration insisted on amendments in vain.  On July 25th, it was adopted by the House with a crushing majority of 417 to 3 (with additional language on North Korea). On the next day, leaders of both chambers agreed to send to the President’s desk the final text in a matter of days. The Senate did it on July 27th by a vote of 98 to 2. If Trump refuses to sign it would be for Trump a political suicide.

The domestic political victory for Putin that Trump granted him for undetermined reasons in Hamburg has turned-out to be a pyrrhic one. The simple fact that the President of the United States is not the Capo di tutt’i capi of criminal society, as is the case traditionally in Russia, and that even if his loyalty to Moscow could be achieved one way or another, it would still not be possible for Moscow to direct the American political system. This is something that does not fit into the minds in the Kremlin.

On the contrary, any step that Trump takes in Putin’s direction causes exactly the opposite reaction in Washington and immediately translates into absolutely concrete legislative actions.

Trump turned out not to be one of Putin’s assets, but a millstone around Putin’s neck. Putin is also now a millstone around Trump’s neck. This has been the actual result of the large scale special operation “Trump is ours.” The conclusion, which was arrived at on July 7th by the Kleptocracy expanded Politburo – that the Boss is still handling it – once again turned out to be premature.

As an article in the Washington Post reveals, the measures against Putin’s Russia that were discussed within the Obama administration once the scale of the Kremlin’s involvement in the US election campaign became clear. None of the sanctions, aside from the confiscation of the two vacation complexes, were implemented. However, the list is very interesting. It impacts the most sensitive pressure points of the Russia “elite.” The list includes, specifically, publication of information on and freezing of all the accounts of the Russian domestic kleptocracy, starting with that of Putin, and visa bans. Obama didn’t dare to introduce these harsh measures. Today they are key articles of unanimously adopted bipartisan legislation.

In retrospect, it is clear what a tremendous error the Kremlin made in betting on Trump.  In fact, the possibility of Mrs. Clinton’s becoming president did not carry any kind of threat to the denizens of Kremlin. Today’s fierce anti-Putin position of the Democrats is the result of the domestic political situation. In reality, it is more anti-Trump than anti-Putin. Democrats feel that Putin is the president’s most vulnerable spot and that’s where they hit him without mercy. If Mrs. Clinton had come to power, most likely some new little “resetting [perezagruzka]” would have taken place. Now, all the bridges between Putin’s people and the American establishment have been burned.

 

Keeping U.S. financial sanctions enforced for an indefinite period could slow down Russia’s efforts to rebuild its economy.

Continue reading The new old sanctions: why the U.S. Senate’s decision is so dangerous for Russia

Earlier this month the White House sent a letter to Congress pledging a commitment to the “robust and thorough enforcement” of the 2016 Global Magnitsky Act (GMA).

Continue reading Trump’s Pledge To Enforce the Global Magnitsky Act – A Skeptical View

Atlantic Council’s Dinu Patriciu’s Eurasia Center and the Free Russia Foundation presents “The Kremlin’s Gas Games in Europe: Implications for Policy Makers,” a new brief by our expert Ilya Zaslavsky.

Continue reading The Kremlin’s Gas Games in Europe: Implications for Policy Makers

For nearly a week now, food products that fall under sanctions have been destroyed in Russia. Obviously, such a decision has provoked massive dissatisfaction among Russians and for the first time in the last year and a half, has shaken the government’s authority.

Continue reading Will the Burning of Food Lead to a “Conflagration” of Russia?