|Home||Switchboard||Unix Administration||Red Hat||TCP/IP Networks||Neoliberalism||Toxic Managers|
May the source be with you, but remember the KISS principle ;-)
Bigger doesn't imply better. Bigger often is a sign of obesity, of lost control, of overcomplexity, of cancerous cells
Actually an interesting metamorphose happen right at the border crossing. A crook instantly became the staunch defender of western democracy and its (aka neoliberal) values against Russian backwardness, paranoia and kleptocratic state headed by evil Putin who personally torture innocent girls from Pussy Riot wearing his old KGB uniform ;-)
I would call this sudden attraction to democratic values at the border crossing a “crooks survival instinct” in action. Crooks are always crooks.
BTW I would object about the term “Stubborn Deniers of Reality” applied to Western Journalism. I think a more proper definition is “Creators of artificial reality”. Masters of illusion, so to speak. And that’s would be a proper classification of Bachelor and Masters degree in journalism instead of “Bachelor of arts”, etc. used today. And truth be told this esoteric art reached the level of perfection and sophistication in comparison with which all those circus magicians are just children.
Apr 08, 2019 | www.nakedcapitalism.com
https://acdn.adnxs.com/ib/static/usersync/v3/async_usersync.html<img src="http://b.scorecardresearch.com/p?c1=2&c2=16807273&cv=2.0&cj=1" /> Has Privatization Benefitted the Public? Posted on April 7, 2019 by Jerri-Lynn Scofield Jerri-Lynn here. Another succinct post by Jomo Kwame Sundaram that makes clear the "benefits" of privatization are not evenly distributed, and in fact, typically, "many are even worse off" when the government chooses to transfer ownership of the family silver.
Note that SOE is the acronym for state owned enterprise.
For those interested in the topic, see also another short post by the same author from last September, debunking other arguments to promote the privatization fairy, Revisiting Privatization's Claims .
By Jomo Kwame Sundaram, former UN Assistant Secretary General for Economic Development. Originally published at Inter Press Service
In most cases of privatization, some outcomes benefit some, which serves to legitimize the change. Nevertheless, overall net welfare improvements are the exception, not the rule.
Never is everyone better off. Rather, some are better off, while others are not, and typically, many are even worse off. The partial gains are typically high, or even negated by overall costs, which may be diffuse, and less directly felt by losers.
Privatized Monopoly Powers
Since many SOEs are public monopolies, privatization has typically transformed them into private monopolies. In turn, abuse of such market monopoly power enables more rents and corporate profits.
As corporate profits are the private sector's yardstick of success, privatized monopolies are likely to abuse their market power to maximize rents for themselves. Thus, privatization tends to burden the public, e.g., if charges are raised.
In most cases, privatization has not closed the governments' fiscal deficits, and may even worsen budgetary problems. Privatization may worsen the fiscal situation due to loss of revenue from privatized SOEs, or tax evasion by the new privatized entity.
Options for cross-subsidization, e.g., to broaden coverage are reduced as the government is usually left with unprofitable activities while the potentially profitable is acquired by the private sector. Thus, governments are often forced to cut essential public services.
In most cases, profitable SOEs were privatized as prospective private owners are driven to maximize profits. Fiscal deficits have often been exacerbated as new private owners use creative accounting to avoid tax, secure tax credits and subsidies, and maximize retained earnings.
Meanwhile, governments lose vital revenue sources due to privatization if SOEs are profitable, and are often obliged to subsidize privatized monopolies to ensure the poor and underserved still have access to the privatized utilities or services.
Privatization Burdens Many
Privatization burdens the public when charges or fees are not reduced, or when the services provided are significantly reduced. Thus, privatization often burdens the public in different ways, depending on how market power is exercised or abused.
Often, instead of trying to provide a public good to all, many are excluded because it is not considered commercially viable or economic to serve them. Consequently, privatization may worsen overall enterprise performance. 'Value for money' may go down despite ostensible improvements used to justify higher user charges.
SOEs are widely presumed to be more likely to be inefficient. The most profitable and potentially profitable are typically the first and most likely to be privatized. This leaves the rest of the public sector even less profitable, and thus considered more inefficient, in turn justifying further privatizations.
It is often argued that privatization is needed as the government is inherently inefficient and does not know how to run enterprises well. Incredibly, the government is expected to subsidize privatized SOEs, which are presumed to be more efficient, in order to fulfil its obligations to the citizenry.
Such obligations may not involve direct payments or transfers, but rather, lucrative concessions to the privatized SOE. Thus, they may well make far more from these additional concessions than the actual cost of fulfilling government obligations.
Thus, privatization of profitable enterprises or segments not only perpetuates exclusion of the deserving, but also worsens overall public sector performance now encumbered with remaining unprofitable obligations.
One consequence is poorer public sector performance, contributing to what appears to be a self-fulfilling prophecy. To make matters worse, the public sector is then stuck with financing the unprofitable, thus seemingly supporting to the privatization prophecy.
Benefits Accrue to Relatively Few
Privatization typically enriches the politically connected few who secure lucrative rents by sacrificing the national or public interest for private profit, even when privatization may not seem to benefit them.
Privatization in many developing and transition economies has primarily enriched these few as the public interest is sacrificed to such powerful private business interests. This has, in turn, exacerbated corruption, patronage and other related problems.
For example, following Russian voucher privatization and other Western recommended reforms, for which there was a limited domestic constituency then, within three years (1992-1994), the Russian economy had collapsed by half, and adult male life expectancy fell by six years. It was the greatest such recorded catastrophe in the last six millennia of recorded human history.
Soon, a couple of dozen young Russian oligarchs had taken over the commanding heights of the Russian economy; many then monetized their gains and invested abroad, migrating to follow their new wealth. Much of this was celebrated by the Western media as economic progress.
diptherio , April 7, 2019 at 9:11 am
SOE must stand for "state owned enterprise."
Jerri-Lynn Scofield Post author , April 7, 2019 at 9:30 am
Yes it does. I've now added a sentence to my introduction to make that clear. I noticed the omission when I was uploading the post, but wasn't sure whether readers would be confused.
Thanks for your comment.
caloba , April 7, 2019 at 10:45 am
As a rule of thumb, I'd say that any privatisations that require the introduction of convoluted pseudo-market structures or vast new regulatory bureaucracies or which derive most of their ongoing income from the public sector are likely to be contrary to the long-term public interest. In the UK, unfortunately, all these ships sailed a long time ago
DJG , April 7, 2019 at 11:15 am
After the recent Chicago municipal elections, I wrote up some notes on the reasons for the discontent. This article by Sundaram explains exactly how these schemes work. Further, you can apply his criteria of subsidies for the rich, skimming, and disinheriting the middle class and poor to all of the following instances in Chicago.
If I may–some for instances of how Sundaram's observations turn up in U.S. cities:
Chicago is the proving grounds for thirty or so years of the Democrats' surrender to neoliberalism and austerity politics. Let us not forget, brethren and sistren, that Rahm is the Spawn of Bill + Hill as well as dear friend and advisor of Obama. So there is the work of Daley to undo and the work of the Clintonians to undo. It will take more than one term for Lightfoot.
–Parking meters and enforcement have been privatized, starving the city of funds and, more importantly, of its police power.
–Taxes have been privatized in TIFs, where money goes and is never heard from again.
–There have been attempts to privatize the park system in the form of the Lucas museum and the current Obama Theme Park imbroglio, involving some fifty acres of park land.
–The school system has been looted and privatized. The Democrats are big fans of charter schools (right, "Beto"), seeing them as ways to skim money off the middle class and the poor.
–Fare collection on public transit has been privatized using a system so deliberately rudimentary and so deliberately corrupt that it cannot tell you at point of service how much you have paid as fare.
–Boeing was enticed to Chicago with tax breaks. Yes, that Boeing, the one that now deliberately puts bad software in your airplane.
–Property tax assessment has been an opaque system and source of skimming for lawyers.
–Zoning: Eddie Burke, pond scum, is just the top layer of pollution.
–And as we have made our descent, all of these economic dogmata have been enforced by petty harassment of the citizenry (endless tickets) and an ever-brutal police force.
And yet: The current Republican Party also supports all of these policies, so let's not pretend that a bunch of Mitch McConnell lookalikes are headed to Chicago to reform it.
California is no better , April 7, 2019 at 5:16 pm
Providing professional services i.e. architecture, engineering, etc. for a public entity, local or federal, does not yield unreasonable profits. Typically, the public agencies have their own staff to monitor and cost control a project. The professional services provided to private developers yields far more profit- oftentimes twice the profits associated with public agency work. Most professional services companies will transition their work to the public agencies during a recession.
At any rate, especially in Illinois, privatizing the work to avoid pension liabilities is no longer a choice. Michael Madigan pension promises will require the public to maintain a public service budget with no staff to fill potholes. Essentially, these are the no work jobs made popular by the Soprano crew twenty years ago.
Discussion of the downside of the privatization of public services is merely an oscillation from discussing the weather, the Bears or any other kitchen table discussion – nothing more than pleasant small talk to pass the time.
Privatization, at any cost, is no longer a choice. We have abused the pension system and now the public must pay for private companies to provide the most basic services.
stan6565 , April 7, 2019 at 6:36 pm
The question is, what can one do to help arrest this wholesale theft of public resources and their expropriation into the hands of well connected. " Public", as in, it is the working public over the last 100 or 200 years that created (or paid for), the electricity grid, or public schools, or entire armed or police forces
I keep thinking that perhaps an Act could or should be introduced here in UK (same for the States, i suppose), which should ensure that all politicians that enable any type of privatisation of public resources or PFI arrangement (yes that old chesnut), should be made personally responsible for the results therof.
And any losses to the public accidentally or "accidentally" occasioned by such commandeering over public resources, to be treated like deliberate misappropriation by the said public officials.
With the financial and custodial penalties as may be appropriate.
Anybody out there with similar thoughts or should i really try harder and give up on drugs?
eg , April 7, 2019 at 12:04 pm
Michael Hudson, to his immense credit, explains the pernicious effects of privatization of common goods repeatedly throughout his work, and demonstrates that it has been with us at least as long as the ancient practice of land alienation and rural usury.
Natural monopolies ought to be nationalised, full stop.
Grizziz , April 7, 2019 at 12:39 pm
I support public ownership of natural monopolies, however it would be helpful if these pieces contained data, case studies or footnoted entries providing some empirical evidence of the author's thesis.
Thuto , April 7, 2019 at 1:00 pm
This article comes at a time when the clarion call for privatizing Eskom, SA's electricity utility, is hitting deafening levels. To the private sector, efficiency = maximizing profits by making the "bloated" enterprise lean (aka cutting the workforce) and quite literally mean (aka cutting services to "unprofitable" segments of the market, iow, the poor and vulnerable). When profits soar because the holy grail of efficiency is achieved, the mainstream business press brings out the champagne and toasts this "success" as proof that the previously "moribund" (they always exaggerate the state of things) monopolistic monolith has been given a new lease on life by privatizing it and the template is set for rescuing other "ailing" SOEs.
The drawbacks are never laid out as cleary as they are in this article and the plight of those worst affected, whether laid-off workers or those whose services have been cut, never makes it into the headlines.
PhilB , April 7, 2019 at 2:53 pm
And then there is prison privatization where the burden of operation and maintaining the institution should clearly be on the public so as to be constant reminder of the burden, among others reasons. The motivations by private prison operators to reduce services and costs out of site of the pesky prying eyes of the public are manifold.
RepubAnon , April 7, 2019 at 7:54 pm
Privatization is a great way to avoid having user fees wasted by providing services, and instead put to better use funding the re-election campaigns of politicians supporting privatization. Plus, it provides much-needed consulting fees for former politicians as well as job-creating 7-figure salaries for the CEOs,
(/snark, if you couldn't tell)
On a side note, the Dilbert comic strip is written about private industry ,
Iapetus , April 7, 2019 at 3:39 pm
There was a rudimentary plan put forward last June that recommended some pretty substantial privatizations of U.S. government assets and services which include:
-Privatizing the US Post Office ( through an Initial Public Offering or outright sale to a private entity ).
-Sell off U.S. government owned electricity transmission lines ( U.S. government owns 14% of this nations power transmission lines through TVA, Southwestern Power Administration, Western Area Power Administration, and Bonneville Power Administration ).
-Spin-off the Federal Aviation Administrations air traffic control operations into a private nonprofit entity.
-Spin-off the Department of Transportations operations of the Saint Lawrence Seaways Locks and Channels into a private non-profit entity.
-End the federal conservatorship of Fannie Mae and Freddie Mac, then regulate a new system of private guarantors for their MBS securities.
Not sure if these are still being considered.
Tom Stone , April 7, 2019 at 3:54 pm
There's no way I could ask that question with a straight face.
Jack Parsons , April 7, 2019 at 6:35 pm
At heart, the problem with privatization is that marketing to a government-employed purchaser or "purchase influencer" is ridiculously cheap, due to their poor accountability strictures.
This is abetted by the Katamari Damacy process (self-accretionary tendency) of money and power.
The Rev Kev , April 7, 2019 at 7:50 pm
In Oz the electricity grids were privatized as they would be cheaper that way – or so people were told. Instead, the cost of electricity has risen sharply over the years to the point that it is effecting elections on both the State and Federal level as the price hikes are so controversial. A problem is that those companies have to pay back the loans used to buy the public electricity grids and as well, the senior management award themselves sky-high wages because they are totally worth it. These are factors that were never present when it was publicly owned. And just to put the boot in, those very same companies have been 'gold-plating' the electricity grid for their gain-
Meanwhile, whatever money the governments made selling their electricity companies has been long spent on white elephants or buying themselves re-elections by giving out goodies to voters.
Procopius , April 7, 2019 at 8:54 pm
buying themselves re-elections by giving out goodies to voters.
I don't reside in the states, so I don't see much of the detail of daily life. What are these "goodies" of which you speak? In what I am able to read on the internet, people aren't being given goodies any more. At least the old-time politicians handed out jobs, and turkeys at Christmas. The current crop do hand out jobs to their kids and immediate family, but not so much to anyone else.
Apr 03, 2019 | www.propublica.org
Wealthy politicians and businessmen suspected of corruption in their native lands are fleeing to a safe haven where their wealth and influence shields them from arrest.
They have entered this country on a variety of visas, including one designed to encourage investment. Some have applied for asylum, which is intended to protect people fleeing oppression and political persecution.
The increasingly popular destination for people avoiding criminal charges is no pariah nation.
It's the United States.
An investigation by ProPublica, in conjunction with the Stabile Center for Investigative Journalism at Columbia University, has found that officials fleeing prosecution in Colombia, China, South Korea, Bolivia and Panama have found refuge for themselves and their wealth in this country, taking advantage of lax enforcement of U.S. laws and gaps in immigration and financial regulations. Many have concealed their assets and real-estate purchases by creating trusts and limited liability companies in the names of lawyers and relatives.
American authorities are supposed to vet visa applicants to make sure they are not under active investigation on criminal charges. But the ProPublica examination shows that this requirement has been routinely ignored.
One of the most prominent cases involves a former president of Panama, who was allowed to enter the United States just days after his country's Supreme Court opened an investigation into charges that he had helped embezzle $45 million from a government school lunch program.
Ricardo Martinelli, a billionaire supermarket magnate, had been on the State Department's radar since he was elected in 2009. That year, the U.S. ambassador to Panama began sending diplomatic cables warning about the president's "dark side," including his links to corruption and his request for U.S. support for wiretapping his opponents.
Soon after Martinelli left office in 2014, Panamanian prosecutors conducted a widely publicized investigation of corruption in the school lunch program, and in mid-January 2015, forwarded their findings to the country's Supreme Court.
On Jan. 28, 2015, just hours before the Supreme Court announced a formal probe into the charges, Martinelli boarded a private plane, flew to Guatemala City for a meeting and then entered the United States on a visitor visa. Within weeks, he was living comfortably in the Atlantis, a luxury condominium on Miami's swanky Brickell Avenue. He is still here.
The State Department declined to comment on Martinelli's case, saying visa records are confidential and it is the U.S. Customs and Border Protection that decides who is allowed to enter the country. CBP said privacy regulations prevent the agency from commenting on Martinelli.
Efforts to reach Martinelli, including a registered letter sent to his Miami address, were unsuccessful.
In September this year, Panama asked to extradite Martinelli, but the former president is fighting that request, arguing there are no legal grounds to bring him back to his home country where the investigation has broadened to include insider trading, corruption and abuse of authority. Last December, Panama's high court issued a warrant for his arrest on charges that he used public funds to spy on over 150 political opponents. If found guilty, he could face up to 21 years in jail.
Rogelio Cruz, who is defending Martinelli in Panama's Supreme Court, said that the former president "will return to Panama once adequate conditions exist with respect to due process, where there are independent judges -- which there aren't."
The United States has explicit policies that bar issuing visas to foreign officials facing criminal charges in their homelands. In 2004, President George W. Bush issued a proclamation designed to keep the United States from becoming a haven for corrupt officials. Proclamation 7750, which has the force and effect of law, directed the State Department to ban officials who have accepted bribes or misappropriated public funds when their actions have "serious adverse effects on the national interests of the United States."
Under the rules implementing Bush's order, consular officers do not need a conviction or even formal charges to justify denying a visa. They can stamp "denied" based on information from unofficial, or informal sources, including newspaper articles, according to diplomats and State Department officials interviewed for this report.
The State Department declined to provide the number of times Proclamation 7750 has been invoked, but insisted that it has been used "robustly."
Over the years, some allegedly corrupt officials have been banned from entering the United States, including former Panamanian President Ernesto Perez Balladares , former Nicaraguan President Arnoldo Aleman, former Cameroonian Defense Minister Remy Ze Meka, and retired Philippine Gen. Carlos Garcia , according to cables published by WikiLeaks. In 2014, the U.S. banned visas for 10 members of Hungarian Prime Minister Viktor Orban's inner circle because of corruption allegations.
But numerous other foreign government officials, including former presidents and cabinet ministers, have slipped through the cracks, according to court documents, diplomatic cables and interviews with prosecutors and defense attorneys in the United States and abroad. The charges involved a wide range of misconduct, from stealing public funds to accepting bribes.
Six months before Martinelli entered the United States, a former Colombian agriculture minister and onetime presidential candidate, Andres Felipe Arias, fled to Miami three weeks before he was convicted of funneling $12.5 million to wealthy political supporters from a subsidy program that was intended to reduce inequality in rural areas and protect farmers from the effects of globalization.
The U.S. embassy in Bogota had been following Arias' trial closely and reporting on the scandal in cables to Washington. The trial featured documents and witnesses saying that under Arias' watch, the agriculture ministry had doled out millions in subsidies to affluent families, some of whom, according to media reports, had donated to Arias' political allies or his presidential campaign.
Subsidies went to relatives of congressmen, companies owned by the richest man in Colombia, and a former beauty queen. One powerful family and its associates received over $2.5 million, according to records released by prosecutors. Another family, which included relatives of a former senator, received $1.3 million. Both families had supported Arias' chief political ally, former Colombian President Alvaro Uribe, with campaign contributions.
The law that established the program did not ban wealthy landowners from getting grants, but some elite families had received multiple subsidies for the same farm. They gamed the system by submitting multiple proposals in the names of different family members and by subdividing their land so they could apply for grants for each parcel, court records indicate.
Yet, in November 2013, while the trial was going on, the U.S. embassy in Bogota renewed Arias' visitor visa. The State Department refused to discuss the case, saying that visa records are confidential. But a recent filing in federal court showed that the U.S. embassy had flagged Arias' application, and asked him to provide documents to support his request to leave the country while charges were pending. Arias submitted documents from the Colombian court, including a judicial order that allowed him to travel. In the end, the embassy issued a visa because he had not yet been convicted.
On the night of June 13, 2014, three weeks before the judges convicted him of embezzlement by appropriation, a Colombian law that penalizes the unauthorized use of public funds to benefit private entities, Arias packed his bags and boarded a plane. The following month, the U.S. embassy in Bogota revoked the visa. But Arias hired an immigration attorney and applied for asylum.
"If you looked up 'politically motivated charges' in the dictionary, there would be a picture of Andres Arias next to it," said David Oscar Markus, Arias' lead attorney. "The case [against him] is absurd and not even one that is recognized in the United States."
Over the next two years, Arias built a new life in South Florida with his wife and two children, opening a small consulting company and renting a house in Weston.
On August 24, he was arrested by U.S. authorities in response to an extradition request from Colombia. He spent several months in a detention facility until his release on bail in mid-November. Arias argues that the United States cannot extradite him because it has no active extradition treaty with Colombia, but the U.S. Attorney's Office disagrees. A plea for asylum does not shield defendants from extradition if they are charged in Colombia with a crime covered by the treaty between the two countries.
Congress established the EB-5 immigrant investor program in 1990 as a way of creating jobs for Americans and encouraging investment by foreigners.
The agency that administers the program, the U.S. Citizenship and Immigration Services, has adopted regulations designed to prevent fraud, including requiring foreign investors to submit evidence, such as tax returns and bank statements, to prove they obtained their money legally.
But these safeguards did not stop the daughter-in-law and grandsons of former South Korean dictator Chun Doo-hwan from using Chun's ill-gotten gains to get U.S. permanent residency.
In 1996, a Korean court convicted Chun of receiving more than $200 million in bribes while in office in the 1980s, from companies such as Samsung and Hyundai. He was ordered to return the bribes, but refused.
Part of Chun's fortune was funneled into the United States through his son, who purchased a $2.2 million house in Newport Beach, California, according to South Korean prosecutors and real-estate records.
Millions of dollars from Chun's bribery proceeds were hidden in bearer bonds, which are notoriously difficult to trace. Unlike regular bonds, which belong to registered owners, there is no record kept about the ownership or transfer of bearer bonds. The bonds can be cashed out by whoever has them.
In 2008, Chun's daughter-in-law, a South Korean actress named Park Sang-ah, applied for an immigrant investor visa. Park listed her husband's bearer bonds as the source of her funds without mentioning that the money had been initially provided to him by Chun. Eight months later, Park and her children received their conditional U.S. permanent residency cards in the mail.
In 2013, at the request of South Korean prosecutors, the U.S. Justice Department launched an investigation into the Chun family's wealth in the United States and subsequently seized $1.2 million of the family's U.S. assets in the United States. The money was returned to South Korea. Despite that, Chun's family members have retained their residency status.
Chun's relatives obtained their permanent residency by investing in an EB-5 project managed by the Philadelphia Industrial Development Corporation, a nonprofit company. The PIDC pooled Chun's $500,000 with money from 200 other foreign investors to finance an expansion of the Pennsylvania Convention Center in downtown Philadelphia.
The same project in Philadelphia also helped to secure permanent residency for Qiao Jianjun, a Chinese government official accused of embezzling more than $40 million from a state-owned grain storehouse, according to reports in the People's Daily, the Chinese Communist Party's newspaper. Qiao had divorced his wife, Shilan Zhao, in China in 2001, a fact he did not disclose to U.S. immigration authorities. When Zhao applied for an EB-5 visa, Qiao qualified for U.S. permanent residency as an applicant's spouse.
The Justice Department launched an investigation only when it was tipped off by Chinese authorities. In January 2014, a federal grand jury indicted Zhao and her ex-husband, Qiao, for immigration fraud, money laundering and internationally transporting stolen funds. Zhao was arrested and released on bail. Federal authorities are pursuing Qiao, whose whereabouts remain unknown.
A trial has been set for February 2017. U.S. government attorneys have filed asset forfeiture cases to recover real estate linked to Qiao and Zhao in Flushing, New York, and Monterey Park, California.
In April 2015, Qiao appeared on the Chinese government's list of 100 "most wanted" officials who fled abroad after being accused of crimes such as bribery and corruption. He and 39 other government officials and state-owned enterprise leaders on the list allegedly fled to the United States.
The list, called "Operation Skynet," is part of Chinese President Xi Jinping's anti-corruption campaign, which has vowed to take down what Chinese officials describe as corrupt "tigers" and "flies" within the country's ruling Communist Party.
Fengxian Hu was another fugitive on China's list. A former army singer and radio broadcaster, Hu headed the state-owned broadcasting company that had a joint venture with Pepsi to distribute soft drinks in Sichuan province. In 2002, The Washington Post and The Wall Street Journal reported that Pepsi had accused Hu of looting the joint venture and using company funds to buy fancy cars and go on European tours.
The same year, in a widely publicized move, Pepsi filed a case with international arbitrators in Stockholm, asking that the joint venture be dissolved. Despite this, Hu was given a visa that allowed him to fly regularly to Las Vegas, where he was a VIP client at the MGM casino.
In January 2010, Chinese authorities investigated Hu for corruption. But the month before, Hu had entered the United States on a B1 visitor visa, joining his wife, a U.S. citizen living in New York.
Hu tried to obtain a green card through his wife, but the petition was rejected by U.S. immigration authorities. He applied for asylum instead.
Meanwhile, he had gotten into trouble in the United States for losing millions in a Las Vegas casino and failing to pay a $12 million gambling debt. In 2012, he was indicted in a Nevada court on two counts of theft and one count of intentionally passing a check without sufficient funds.
Hu pled not guilty to the charges; his lawyers claimed that his checks bounced because his bank account had been closed by Chinese authorities. The charges against him in the U.S. were considered an aggravated felony, which is a common basis for deportation. Hu, however, had a pending asylum case and so could not be deported.
In August 2015, a New York immigration judge denied the asylum claim. But Hu's lawyers argued that he would be tortured if he returned to China and invoked the United Nations Convention Against Torture , which says that an alien may not be sent to a country where he is likely to be tortured. In the end, the immigration court suspended Hu's removal order, allowing him to remain in the United States and work here indefinitely. He will not, however, be given permanent residency or be allowed to travel outside the country.
The absence of an extradition treaty -- coupled with a high standard of living -- makes the United States a favored destination for Chinese officials and businessmen fleeing corruption charges.
In April 2015, Jeh Johnson, the Secretary for the Department of Homeland Security , made a 48-hour trip to Beijing. The visit was intended to pave the way for Chinese President Xi Jinping's U.S. visit in September 2015, according to a memorandum Johnson wrote, which was obtained through a request under the Freedom of Information Act.
In the memo, Johnson said the Chinese government is seeking 132 people it said have fled to the United States to avoid prosecution. This represents a greater number of fugitives than Chinese authorities have publicly acknowledged.
"I'm told that in prior discussions, the Chinese have been frustrated by the lack of any information from us about the 132 fugitives," Johnson wrote.
The Chinese request for assistance posed a dilemma for the United States. American officials are concerned about a lack of fairness in China's criminal justice system. Human rights groups say that China continues to use torture to extract false confessions from suspected criminals. Torture has also been documented to be part of shuanggui -- a secretive discipline process reserved for members of the Chinese Communist Party.
Some analysts see the crackdown on corrupt officials as part of a purge aimed at the current regime's political rivals and ideological enemies. U.S. officials say this makes returning corrupt officials to China a delicate issue for the United States.
In 2003, headlines around the world reported widespread street protests in Bolivia that led to security forces killing 58 people, most of them members of indigenous groups. Not long afterward, as protesters massed up on the streets of La Paz demanding his resignation, Bolivian President Gonzalo Sanchez de Lozada resigned and fled his country along with his defense minister, Jose Carlos Sanchez Berzain.
The two men flew to the United States, where they continue to reside. In 2006, Berzain applied for political asylum, which he was granted in 2007. On his application, when the form asked, "Have you or your family members ever been accused, charged, arrested, detained, interrogated, convicted and sentenced, or imprisoned in any country other than the United States?" Berzain checked the box "no," even though by then he and de Lozada had been formally accused of genocide by Bolivia's attorney general. The indictment was approved by Bolivia's Supreme Court in 2007. Berzain also stated on his application that the State Department had arranged for his travel to the United States.
The de Lozada administration was vocally pro-American. Before it was ousted, officials had announced they would facilitate gas exports to the United States.
After their departure, Bolivia's attorney general publicly stated that the administration had embezzled millions from government coffers, but did not formally file charges. He said de Lozada had taken some $22 million from the country's reserve funds before fleeing.
De Lozada and members of his administration have dismissed the allegations as part of a politically motivated smear campaign, but there is evidence to suggest irregularities may have occurred in the handling of the reserve funds. The former president signed a decree shortly before leaving office authorizing the interior and finance ministers to withdraw money from Bolivia's reserve funds without going through the normal approval process. De Lozada's former interior minister pleaded guilty in 2004 to embezzlement after $270,000 in cash was found in an associate's home.
De Lozada, a mining mogul before he became president, moved to Chevy Chase, Maryland, an upscale suburb of Washington, D.C. He now lives in a two-story brick house bought for $1.4 million by Macalester Limited, a limited liability company that was formed in the British Virgin Islands and lists a post office box in the Bahamas as its principal address.
De Lozada's immigration status is unclear. He said in a sworn deposition in 2015 that he was not a U.S. citizen. His son-in-law, who spoke to ProPublica on his behalf, would not say whether de Lozada had applied for asylum.
Berzain, meanwhile, settled in South Florida. Records show that he and his brother-in-law personally own or are listed as officers or members of business entities that together control around $9 million worth of Miami real estate.
Some of the purchases were made in the names of entities that appear to list different variations of Berzain's name in business records.
In addition, in the purchase of two properties, Berzain's name was added to business records only after the deal had gone through. Berzain's brother-in-law incorporated a company called Warren USA Corp in October 2010, for example, and the company purchased a $1.4 million residential property the following month. Three weeks after Warren USA Corp became the owner of an elegant Spanish-style villa in Key Biscayne, Berzain was added as the company's secretary.
The following year, in May 2011, Berzain's brother-in-law created Galen KB Corp and registered as the company's president. A month later, Galen KB Corp purchased a $250,000 condo. In August, Berzain replaced his brother-in-law as the company's president, according to business records. Berzain is no longer listed as a company officer in either company.
During an interview in January, Berzain told ProPublica "I don't have any companies." When asked about several of the companies associated with his name or address in public records, the former defense minister said he had a consulting firm that helped clients set up companies and that he was sometimes added to the board of directors. Efforts to reach Berzain's brother-in-law, a wealthy businessman and the owner of a bus company in Bolivia, were unsuccessful. Berzain's brother-in-law has not been accused of any wrongdoing.
The practice of purchasing real estate in the name of a business entity like a limited liability company, or LLC, is a common and legal practice in high-end real-estate markets, and one that enables celebrities and other wealthy individuals to protect their privacy.
But the practice also allows foreign officials to hide ill-gotten gains. U.S. regulations allow individuals to form business entities like LLCs without disclosing the beneficial owner. The LLCs can be registered in the names of lawyers, accountants or other associates -- or even anonymously in some states -- and used to purchase real estate, making it nearly impossible to determine the actual owner of a property.
Government investigators and lawmakers have pointed out persistent gaps in U.S. policy that have enabled corrupt officials to evade justice and hide their assets in this country. But little has changed.
Last year, a U.S. Government Accountability Office investigation said it can be "difficult" for immigration officials to identify the true source of an immigrant investor's funds. Immigration officials told the government auditors that EB-5 applicants with ties to corruption, the drug trade, human trafficking and other criminal activities have a strong incentive to omit key details about their financial histories or lie on their applications.
"It's very easy to get lost in the noise if you're a bad person," said Seto Bagdoyan, the accountability office's director of forensic audits, who co-authored the GAO report.
Immigration officials, he added, have an "almost nonexistent" ability to thoroughly evaluate investors' backgrounds and trace their assets.
Despite such weaknesses, Congress has continually extended the EB-5 program with minor changes. The program is backed by real-estate lobbyists who argue that it is a crucial source of financing for luxury condos and hotels. The program is expected to thrive in a Trump presidency because the president-elect is a developer and his son-in-law Jared Kushner received $50 million in EB-5 funds to build a Trump-branded tower in New Jersey.
In 2010, a Senate report described how powerful foreign officials and their relatives moved millions of dollars in suspect funds into the United States. The report said investors bypassed anti-money laundering regulations with help from U.S. lawyers, real-estate agents, and banking institutions. Last year, ABC News reported that lobbyists for real estate and other business groups spent $30 million in 2015 in an effort to protect the EB-5 program.
Senate investigators proposed legislation that would require companies to disclose their beneficial owners and make it easier for authorities to restrict entry, deny visas and deport corrupt foreign officials.
A few of the proposals have been adopted, but they have not made much difference. Banks have stepped up their efforts to identify corrupt officials and monitor their accounts. Professional groups such as the American Bar Association have issued non-binding guidelines for their members on compliance with anti-money-laundering controls. The U.S. government has also worked with the Financial Action Task Force , an international body set up to fight money laundering, to bring its anti-corruption controls in accordance with the body's guidelines.
In May, the Treasury Department enacted a new rule that will take full effect in 2018 and will require financial institutions to identify the beneficial owners of shell companies. Some advocates see the rule as a step backward. The new rule allows shell companies to designate the manager of the account as the beneficial owner, concealing the identity of the person ultimately exercising control.
The State Department declined to say what progress, if any, it has made on the Senate subcommittee's recommendation to more aggressively deny visas through Proclamation 7750. "The Department takes seriously congressional recommendations and devotes resources to addressing corruption worldwide," a State Department official wrote in response to questions.
In 2010, then-Attorney General Eric Holder launched the Kleptocracy Asset Recovery Initiative. The small unit, which has grown to include 16 attorneys, aims to recover assets in the United States that are tied to foreign corruption and return the money to the looted countries.
Over the past six years, the unit has filed around two dozen civil asset forfeiture cases in an attempt to seize money, real estate and other assets tied to government officials from 16 countries. Assets have ranged from a lone diamond-encrusted glove worn by Michael Jackson that was purchased by Equatorial Guinea's Vice President, Teodoro Obiang, to a $1 billion fund tied to Malaysian Prime Minister Najib Razak.
Yet most of the money the Department of Justice has pursued remains in limbo. The case involving Chun, the former president of South Korea, is one of only two instances in which corrupt gains have been returned to the home country through the Justice Department's efforts. The other arose when Justice Department officials returned $1.5 million to Taiwan from property bought with bribes paid to the family of Chun Shui Bian, the former president of Taiwan.
The agency faces myriad challenges when attempting to seize and return assets acquired by corrupt foreign officials, including a lack of witnesses, said Kendall Day, head of the Department of Justice's Asset Forfeiture and Money Laundering Section. These officials often shield their transactions through shell companies, offshore companies or a network of associates.
"The mission of the Kleptocracy Initiative is really to target what we call grand foreign corruption that impacts the U.S. financial system," Day said, citing the Chun case as an example.
The 2012 Magnitsky Act gives the government power to deny visas and freeze the assets of Russian nationals accused of corruption or human rights violations. The Global Magnitsky Act would extend the same sanctions to the rest of the world, but it has yet to be passed by Congress. Unlike Proclamation 7750, the Magnitsky laws require the government to publish a list of foreign government officials who are barred from the United States.
In addition, the Treasury Department imposed regulations this year that aim to crack down on the use of shell companies to purchase real estate in places like Miami and Manhattan. Title insurance companies are now required to identify the real owners of companies purchasing high-end real estate without a mortgage. These regulations, however, are temporary.
Mar 31, 2019 | www.moonofalabama.org
S , Mar 30, 2019 8:51:37 PM | link@b:What is the purpose of making that claim?
The purpose is very simple: to create the perception that the government of Russia still somehow controls or manipulates the US government and thus gains some undeserved improvements in relations with the U.S. Once such perception is created, people will demand that relations with Russia are worsened to return them to a "fair" level. While in reality these relations have been systematically destroyed by the Western establishment (CFR) for many years.
It's a typical inversion to hide the hybrid war of the Western establishment against Russian people. Yes, Russian people. Not Putin, not Russian Army, not Russian intelligence services, but Russian people. Russians are not to be allowed to have any kind of industries, nor should they be allowed to know their true history, nor should they possess so much land.
Russians should work in coal mines for a dollar a day, while their wives work as prostitutes in Europe. That's the maximum level of development that the Western establishment would allow Russians to have (see Ukraine for a demo version). Why? Because Russians are subhumans.
Whatever they do, it's always wrong, bad, oppressive, etc. Russians are bad because they're bad. They must be "taught a lesson", "put into their place". It would, of course, be beneficial and highly profitable for Europeans to break with Anglo-Saxons and to live in peace and harmony with Russia, but Europeans simply can not overcome their racism towards Russians. The young Europeans are just as racist, with their incessant memes about "squatting Russians in tracksuits", "drunken Russians", etc., as if there's nothing else that is notable about a country of 147 million people.
The end goal of the Western establishment is a complete military, economic, psychological, and spiritual destruction of Russia, secession of national republics (even though in some of them up to 50% of population are Russians, but this will be ignored, as it has been in former Soviet republics), then, finally, dismemberment of what remains of Russia into separate states warring with each other.
The very concept of Russian nation should disappear. Siberians will call their language "Siberian", Muscovites will call their language "Moscovian", Pomorians will call their language "Pomorian", etc. The U.S. Department of State will, of course, endorse such terminology, just like they endorse the term "Montenegrian language", even though it's the same Serbo-Croatian language with the same Cyrillic writing system.
Feb 18, 2019 | www.moonofalabama.org
donkeytale , Feb 17, 2019 9:10:39 PM | linkvk, james, pft, et al
One would have to be incredibly naive on the order of say a 3 year old or maybe Forrest Gump to believe Putin isn't a very wealthy man who will never want for anything as long as he has billionaire cronies indebted to him politically in one way or the other.
Of course, some people must cling to their illusions, er I mean their idealism, of others no matter what. Dog knows why.
Thomas Piketty :More generally, the Soviet disaster led to the abandon of any ambition of redistribution. Since 2001, income tax is 13%, whether your income be 1,000 roubles or 100 billion roubles. Even Reagan and Trump have not gone as far in the destruction of progressive taxation. There is no tax on inheritance in Russia, nor in the People's Republic of China. If you want to pass on your fortune in peace in Asia, it is better to die in the ex-Communist countries and definitely not in the capitalist countries such as Taiwan, South Korea or Japan where the tax rate on inheritance on the highest estates has just risen from 50% to 55%.
But while China has succeeded in conserving a degree of control on capital outflows and private accumulation, the characteristic of Putin's Russia is an unbounded drift into kleptocracy. Between 1993 and 2018, Russia had massive trade surpluses: approximately 10% of GDP per annum on average for 25 years, or a total in the rage of 250% of GDP (two and a half years of national production). In principle that should have enabled the accumulation of the equivalent in financial reserves. This is almost the size of the sovereign public fund accumulated by Norway under the watchful gaze of the voters. The official Russian reserves are ten times lower – barely 25% of GDP.
Where has the money gone? According to our estimates, the offshore assets alone held by wealthy Russians exceed one year of GDP, or the equivalent of the entirety of the official financial assets held by Russian households. In other words, the natural wealth of the country, (which, let it be said in passing, would have done better to remain in the ground to limit global warming) has been massively exported abroad to sustain opaque structures enabling a minority to hold huge Russian and international financial assets. These rich Russians live between London, Monaco and Moscow: some have never left Russia and control their country via offshore entities. Numerous intermediaries and Western firms have also recouped large crumbs on the way and continue to do so today in sport and the media (sometimes this is referred to as philanthropy). The extent of the misappropriation of funds has no equal in history.
donkeytale , Feb 17, 2019 10:59:25 PM | link
Well, there can be no doubt Amerikkkans, Euros, Asians, Middle Easterners, grifters, entrepreneurs, lumpen proles and many others of all persuasions participated in the sacking of Russia's national wealth since the fall of the USSR. Probably even a few Canadiens took part. Lol.
Capitalust feeding frenzies of this magnitude are ugly sights to behold, like the Washington DC pig trough on a daily basis.
Russia's is truly a global phenomenon to be sure.
Or maybe a "globalist" phenomenon is a better way to putin words.
And of course, the chart at the top of Piketty's post is most interesting too....it shows the US equally as unequal as Russia. I'm not letting the US off the hook here in any way shape or form. But this thread is about Russia and worse exposits a demented sort of idealism by many posters about the country and its Dear Leader that is unwarranted, IMHO. Not you of course.
The heinous accumulation of Russian wealth is intertwined...leaving Russia and shunted through tax havens, laundered, anonymised and ending up invested in the West....not back home in Mother Russia....where it could lead to more economic development and opportunities for the non-oligarchs....instead of more growth in the US and West, where agin most ends up in the pockets of our own oligarchs, one Donald Trump among them.
This is a Russian Tragedy.
Jun 10, 2018 | www.defenddemocracy.press
A conversation in the radio studio "Komsomolskaya Pravda" with the Hero of the Soviet Union, the first and the last vice-president of Russia, Alexander Rutskoi and the former head of the President's Security Service (by definition, the closest person to Yeltsin's body), Alexander Korzhakov.
Twenty-two years ago, Moscow shuddered from the tank volleys, and people all over the country clung to TV screens, on which Western TV stations broadcasted how Yeltsin's loyal troops fire at the rebel troops of the Supreme Soviet (Parlament) of Russia. The opposition of the Armed Forces and the President Yeltsin with his team, on the one hand, and Rutskoi and Khasbulatov with the deputies, on the other, ended in great blood. Incongruous with the one that spilled two years earlier, when the Emergency Committee tried to keep the USSR.
This was the beginning of our conversation in the radio studio "Komsomolskaya Pravda" with the Hero of the Soviet Union, the first and the last vice-president of Russia, Alexander Vladimirovich Rutskoi and the former head of the President's Security Service (by definition, the closest person to Yeltsin's body), Alexander Vasilyevich Korzhakov.
... ... ...
– Yeltsin's main argument against the Supreme Council was that it prevented him from "carrying out reforms." What kind of reforms? – The privatization. I was appointed to lead the Interdepartmental Commission on Combating Corruption, and I had information about how it was conducted. Port Nakhodka went in ownership for 100 thousand dollars, Achinsk alumina plant for 180 thousand, Uralmash, giant, the pride of our country, went to Bendukidze's property for 500 thousand dollars, not for money but for vouchers. What is this nonsense? After all, we proposed alternative privatization. First, the service sector. I still, being a member of the Central Committee (of the Communist Party – author's note) , I was expelled from the party for factionalism, suggested: why should the state have hairdressers, tailors, canteens, cafes, restaurants? Let's privatize it, but on a competitive basis. A person wins a contest, gets this object into management and pays real estate, the cost of this object to the mortgage. The money goes to the social development fund of the country, which is subordinated to a collegial body, not to the executive branch, to the Supreme Council. And then the issues of building schools, hospitals, polyclinics, roads, housing and everything else would be resolved.
The port of Nakhodka was privatized for 100 thousand dollars, the Achinsk alumina plant for 180 thousand, Uralmash, the giant, the pride of our country, went into the ownership of Bendukidze for 500 thousand dollars. And it was not money, but vouchers.
This was our most important contradiction with Yeltsin and his team. And imagine how much money would go into this social fund. And today, the problems in the social sphere would be solved tenfold at the expense of that has touched.
– If I understand it, it was then when you collected "11 suitcases of compromising evidence" against Yeltsin's team? Which also played a role in the confrontation.
– I figuratively said that those are 11 suitcases. You know, such fireproof large metal cabinets. And there were documents in them. Not compromising evidence, but documents, including all of these scams with privatization . About 30 staff members of the CIA worked under the guise of consultants with reformers in the government. And much more. And these were imaginary auctions, state bonds, what was the way they all were thought out? This process was led by staff members of the CIA, who worked in the government of the Russian Federation.
I repeatedly asked Yeltsin: is it possible the work of foreign intelligence officers in the administration of the US President? He: Alexander Ivanovich, are you accidentally drunk? – No. I did not drink. I'm just asking you this question. – He: Of course not. – Why do we have 30 employees (of CIA)? And admitted them to top secret information? Where do we go? They are conducting these boys, who do not understand what they are doing, they get up these ugliness. And what will be the results?
30 staff members of the CIA worked in the government. They led the imaginary auctions, government bonds, were admitted to the top secret information.
– Alexander Vasilievich, I was 31 years old and I was sitting at that time in the company of Englishmen, who, going crazy, asked me: "Sasha, is this a movie?" And I answered them that yes, only documentary and live". And they, even more crazy, bawled: "They must not shoot the Parliament by tanks "
... ... ...They figured out Yeltsin but conductors directed the country
– Yeltsin's only correct decision for all his being in office was to resign and make his successor a worthy man who pulled the country out of this humiliating situation. Incidentally, I have repeatedly told Yeltsin who his security service is, I asked – remove these guys: both Barsukov and Korzhakov, they will then make you a gift that you will never wash off. And in 1996, Yeltsin had the intelligence to get rid of these persons.
– You do not like them.
– You know, I always went to Boris Nikolaevich and, before making any public statements, talked with him. And what did Korzhakov do? He resorted to Yeltsin and sang a song to him, that I saw a chair under him. If you want I tell an interesting episode. There were a strike at the automobile plant "ZIL". Boris Nikolayevich, as always, on vacation. It is clear what a vocation it was. I got a call with the command from the President to go to ZIL and to work out. I walk along the corridor, towards goes Viktor Palych Barannikov, the Minister of Security. "Where are you going?" – "To ZIL, there's a strike. I was given a commission from Boris Nikolayevich." – "Can I go with you?" – "Of course?". We had come, listened to the workers. I convinced them that we must go back to the machines, stop the strike and so on. And I allowed myself such a statement: "Boris Nikolayevich will come, I will ask him to give me an opportunity to attach my guard to Nechayev (he was an economy minister), I will give him your salary, three thousand rubles. And I'll see how this figure and rascal will live." Farther. We sit at the one birthday party. Boris Nikolaevich asks me a question. I look, there is a dictophone at his hands. He said me: Have you got three thousand rubles with you? I say that I got more. And my brains turn on here. I see the recorder. Yeltsin is on public, and this is the first circle, ministers, say, basically of the power structure. He turns on the dictaphone. And there goes this record, but in another form – that Yeltsin will come, and I'll give him three thousand, I'll attach my guard to him and so on.Read also: Hommage a Domenico Losurdo
– And what happened to the words about Nechaev?
They have deleted that part, and it turned out that I would do this to Yeltsin. Silent scene in the hall. And then Barannikov takes out a dictophone from his pocket. And turns on a full record, as it was. So, Yeltsin takes his recorder and launches in Korzhakov. Korzhakov bent down and the tape recorder flew to the wall, smashed to smithereens.
Yeltsin takes the recorder and launches in Korzhakov. Korzhakov bent down and the tape recorder flew to the wall, smashed to smithereens
– Listen, let's be honest. You were with Yeltsin in 1991 on one side of the barricades. You saw him, and thats why in the 1993 did not believe that he would go for blood, for assault. Was it so?
– Well, frankly, I hoped so. In 1991, there was a situation When some information arrived that the assault was about to begin, Yeltsin immediately got into the car and was going to leave for the US embassy. It was later learned that Gorbachev had created the State Emergency Committee back in March of 1991, it was his initiative. He flew to Foros when a cope started in August to absolve himself of responsibility.
It was later learned that Gorbachev had created the State Emergency Committee in March 1991, this was his initiative. He went to Foros to absolve himself of responsibility.
Once again, when Yeltsin was going to hide in the US embassy in 1991, I stopped him, I said: Boris Nikolayevich, you can not do this, you are the head of Russia, how are you going to escape, let me fly to Foros. So Yevgeny Maksimovich Primakov and I flew to Foros to take Gorbachev out of there and bring him back to his place.
But in 1993, everything was planned differently. Here is the Maydan in Kiev – this is one in one repetition, a little under another sauce, really. But the conductors were from the same address. All these orders came from Washington. Because the tele-shooting was done, the operators were at such profitable points to completely shoot this massacre. They were seated in advance. And when the "Alpha" (Special Force unit) refuses to storm the building, they kill their fighter Sergeev, sniper kills him in the back, to provoke "Alpha".
The Maidan in Kiev is one in one repetition of events in Moscow in 1993. But the conductors were from one place – from Washington. The operators were placed in advance so as to completely shoot this massacre. And when "Alpha" refuses to storm the building, the sniper kills their fighter Sergeev to provoke "Alpha".
Neither "Alpha" nor "Vympel" went to the assault.
– But after all "Alpha" and "Vympel" did not go to storm the Kremlin too. Remember, you ordered the pilots to bomb the Kremlin?
– I did not make such an order.
– You went on the air. I heard it with my ears.
– It was a psychological intimidation for the Kremlin – That is the first. And the second, what was the way to stop them? I think, at least they will come to their senses, stop doing it.
– And what did happen with those closets in which there was compromising material?
– The situation was such that I was put to Lefortovo (detention unit for state security – author's note) , and the next day, these non-combustible metal cabinets were cracked and under the direction of Korzhakov these folders were extracted. Where did they go, these folders, who gave the order to Korzhakov to withdraw everything related to the work of the interdepartmental commission? No answer.
– There is a feeling that personal scores are not all finished between you
– Korzhakov would better tell how at Vnukovo airport he met the snipers, who flew not from our country, how they went to Sofrino and got sniper rifles, how they planted these snipers on the roof and started killing policemen and representatives of the armed forces, gawkers and others. For what? – To provoke this assault.
Korzhakov would better tell how at Vnukovo airport he met the snipers, who flew not from our country, how they went to Sofrino and got sniper rifles, how they planted these snipers on the roof and started killing policemen and representatives of the armed forces, gawkers and others. For what? – To provoke this assault.
I have nothing to hide. I have published the minutes of my interrogations. And the book "Bloody Autumn" I wrote, deliberately, without even a hint on any emotions. I took the date, the documents of the Supreme Council, which were released on that date, the decisions of the Kremlin on the same date, and made a diary of events. In the end wrote: and now everyone draw conclusions themselves, who is to blame that the blood of compatriots was spilled, that our country was simply smeared, that the Soviet Union was destroyed, and people with far from a decent biography were given the national property of the country. That's what I and many of my comrades could not agree with, but it happened.
– It happened. And God grant us that we will never do it again.
Published at http://antiterror.one/en/node/38
Aug 19, 2018 | www.bostonglobe.com
FOR ONE OF THE world's major powers to interfere systematically in the presidential politics of another country is an act of brazen aggression. Yet it happened. Sitting in a distant capital, political leaders set out to assure that their favored candidate won an election against rivals who scared them. They succeeded. Voters were maneuvered into electing a president who served the interest of the intervening power. This was a well-coordinated, government-sponsored project to subvert the will of voters in another country -- a supremely successful piece of political vandalism on a global scale.
The year was 1996. Russia was electing a president to succeed Boris Yeltsin, whose disastrous presidency, marked by the post-Soviet social collapse and a savage war in Chechnya, had brought his approval rating down to the single digits. President Bill Clinton decided that American interests would be best served by finding a way to re-elect Yeltsin despite his deep unpopularity. Yeltsin was ill, chronically alcoholic, and seen in Washington as easy to control. Clinton bonded with him. He was our "Manchurian Candidate."
"I guess we've just got to pull up our socks and back ol' Boris again," Clinton told an aide. "I know the Russian people have to pick a president, and I know that means we've got to stop short of giving a nominating speech for the guy. But we've got to go all the way in helping in every other respect." Later Clinton was even more categorical: "I want this guy to win so bad it hurts." With that, the public and private resources of the United States were thrown behind a Russian presidential candidate.
Part of the American plan was public. Clinton began praising Yeltsin as a world-class statesman . He defended Yeltsin's scorched-earth tactics in Chechnya, comparing him to Abraham Lincoln for his dedication to keeping a nation together. As for Yeltsin's bombardment of the Russian Parliament in 1993, which cost 187 lives, Clinton insisted that his friend had "bent over backwards" to avoid it. He stopped mentioning his plan to extend NATO toward Russia's borders, and never uttered a word about the ravaging of Russia's formerly state-owned economy by kleptocrats connected to Yeltsin. Instead he gave them a spectacular gift.
Four months before the election, Clinton arranged for the International Monetary Fund to give Russia a $10.2 billion injection of cash. Yeltsin used some of it to pay for election-year raises and bonuses, but much quickly disappeared into the foreign bank accounts of Russian oligarchs. The message was clear: Yeltsin knows how to shake the Western money tree. In case anyone missed it, Clinton came to Moscow a few weeks later to celebrate with his Russian partner. Oligarchs flocked to Yeltsin's side. American diplomats persuaded one of his rivals to drop out of the presidential race in order to improve his chances.RELATED
Four American political consultants moved to Moscow to help direct Yeltsin's campaign. The campaign paid them $250,000 per month for advice on "sophisticated methods of polling, voter contact and campaign organization." They organized focus groups and designed advertising messages aimed at stoking voters' fears of civil unrest. When they saw a CNN report from Moscow saying that voters were gravitating toward Yeltsin because they feared unrest, one of the consultants shouted in triumph: "It worked! The whole strategy worked. They're scared to death!"
Yeltsin won the election with a reported 54 percent of the vote. The count was suspicious and Yeltsin had wildly violated campaign spending limits, but American groups, some funded in part by Washington, rushed to pronounce the election fair. The New York Times called it "a victory for Russia." In fact, it was the opposite: a victory by a foreign power that wanted to place its candidate in the Russian presidency.
American interference in the 1996 Russian election was hardly secret. On the contrary, the press reveled in our ability to shape the politics of a country we once feared. When Clinton maneuvered the IMF into giving Yeltsin and his cronies $10.2 billion, the Washington Post approved: "Now this is the right way to serve Western interests. . . It's to use the politically bland but powerful instrument of the International Monetary Fund." After Yeltsin won, Time put him on the cover -- holding an American flag. Its story was headlined, "Yanks to the Rescue: The Secret Story of How American Advisors Helped Yeltsin Win." The story was later made into a movie called "Spinning Boris."
This was the first direct interference in a presidential election in the history of US-Russia relations. It produced bad results. Yeltsin opened his country's assets to looting on a mass scale. He turned the Chechen capital, Grozny, into a wasteland. Standards of living in Russia fell dramatically. Then, at the end of 1999, plagued by health problems, he shocked his country and the world by resigning. As his final act, he named his successor: a little-known intelligence officer named Vladimir Putin. It is a delightful irony that shows how unwise it can be to interfere in another country's politics. If the United States had not crashed into a presidential election in Russia 22 years ago, we almost certainly would not be dealing with Putin today.
Mar 10, 2018 | www.rusjournal.org
From Yeltsin to Putin: Chubais, Liberal Pathology, and Harvard's Criminal Record
Matthew Raphael JohnsonJohnstown, PAWhen the USSR collapsed in 1990-1991, Gorbachev was incapable of handling thesituation. Boris Yeltsin came to power both bureaucratically and popularly. He was named theChief of the Presidium, but in June of 1991, he was elected in a popular election where heearned 57% of the popular vote.
With a small army of American advisers, Yeltsin began selling off Soviet era assets.The problem was that the process had nothing to do with markets. Privatization of assets wentto a handful of well-connected politicians and bureaucrats who came to control the economyas a whole.1 They had amassed a huge number of shares by 1995, and hence, the post-Sovietoligarchy was born. The fact is that the work of 70 years of Soviet labor went to the pocketsof two or three dozen people.2
The rising oligarchs could easily manipulate the court system and tax police, sincethere was no real law governing private enterprise. Russia was led to the brink of anarchy. By1998, according to a paper by Sergei Guriev and Andrei Rachinsky, the oligarchs comprisedabout 700 individuals that completely controlled Russia's economic assets.3
The Western Elites and the Ivy League as a Criminal SyndicateIn NS Leonov's book (only in Russian), The Way of the Cross: Russia from 1991-2000, he states, as the first "reform" of Yeltsin's government :
Government "reforms" that began Gaidar's privatization scam was the seizure of the savings of the people. These were taken by force, though not directly. Inflation and economic collapse made the transfer of funds easy. State control was removed from prices and the "free market" would ensure the enrichment of corruption. This was the level of cynicism the new democracy had reached, while simultaneously preaching the sanctity of private property. What did not melt away in the deliberate fleecing of the people was taken by other means. An estimate of the total taken thisway is about 300 billion rubles, and it had the proper effect: without money, rebellion was difficult. They cried out in frustration.4
Nothing was done according to democratic norms, which is odd since democracy was the buzzword that made these economic decisions seem political. At almost no time in the history of the USSR did one man, Chubais and his allies, have such total and irresponsible control over the Russian economy. When the voucher program was introduced in 1992, massive inflation resulted. Soon, each 10,000 ruble voucher was worth very little. It was rendered null regardless, since the state refused to consider the vouchers as legal tender.
1 Hoffman, D. The Oligarchs: Wealth And Power In The New Russia. Public Affairs Books, 2011 (cf esp ch12).
2 Kotz, D.M. Russia's Financial Crisis: The Failure of Neoliberalism? Z Magazine, (1998), 28-32
3 Guriev, S. and Andrei Rachinsky. The Role of Oligarchs in Russian Capitalism. Journal of EconomicPerspectives, 19(1), (2005), 131-150 http://pages.nes.ru/sguriev/papers/GurievRachinsky.pdf
4 Leonov, NS. The Way of the Cross: Russia from 1991-2000. Moscow: Russia House, 2002 (All citations aremy translations from the Russian.
Making the entire scam even more blatant, Chubais inserted a rider to the law stating that the value of the voucher would only exist until late 1993. In 1992, Yeltsin's popularity went from 50% in January to 30% in August, and from there to single digits.
By July of 1992, Chubais was hated. This led Yeltsin to limit the power of parliament, increase his executive power and totally dominate the regions. This was done with western backing and was a far greater centralization of power than Putin was later to be condemned for. He had already banned the Communist Party, helping to break his main opposition and prevent their imminent reelection in Parliament. The fraud of democracy was clearly open.
Soon Chubais and his crew stated that there was no benchmark value for any sold property. The institution in charge of this, the Russian Federal Property Fund and related agencies, therefore, began from arbitrary benchmarks. Ultimately, major firms were being sold for 1-5% of their value. Worse, some of these were defense plants, bought up by shallcompanies operates by the CIA – this was Hay's job. Therefore, scientific advances of the USSR were now entirely in American hands.
In 1992, Yeltsin did fairly well in a referendum, receiving about 50% approval, but at this date, privatization had just begun. Elections a bit later were to belie this vote. Yeltsin himself clearly had no confidence in this referendum. Having no confidence in that vote, Yeltsin then, again with western backing, banned all opposition protests in Moscow. Then, making matters worse, he signed order 1400 in September of 1993 which stripped the Congress of People's Deputies of all power. For the upcoming elections, Yeltsin passed a law saying that only 25% of voters needed to show for it to be valid. This was a means of making sure that opposition boycotts could not win. Yeltsin soon after banned the main opposition newspaper.
Russia's privatization scam was created, directed and imposed by Harvard University and carried out by two "professors" whose incompetence is rivaled only by their lack of accountability. Anatoly Chubais, probably the most hated man in Russia, was an old friend of Harvard "economist" Andrei Shleifer, who was also working with Harvard don Jonathan Hay (who according to the FSB, is CIA). Chubais, functioning as a Russian dictator since Yeltsin was not functional at the time, put the privatization scheme into Harvard's hands. Apparently having no workable knowledge of Russian life, the Harvard elite, believing themselves infallible, quickly proved their theories not only false, but directly responsible for ruining thelives of millions.5
1994-1995 was the period of the solidification of the oligarchic clans, their connection with the United States, and the complete collapse of the state. Oligarchic clans, created by Chubais, filled the vacuum with private armies, political machines and newspapers. In the US, conservative and liberal alike called this the "free market" and democracy. Vladimir Zhirinovsky, of Jewish origin and endlessly changing political positions, became the government's ace in the hole: whenever the US questioned the increasingly obvious destruction of Russia, Yeltsin would trot this clown out to make some typically outrageous statement. In 1995, it was clear that Zhirinovsky both "loved Hitler" and was "proud" of Russia's victory in the Great Patriotic War. Clearly in the pocket of Yeltsin, Zhirinovsky a)kept US aid money coming into his efforts, b) siphoned off serious criticism, c) easily associated nationalist views with this kind of rhetorical nonsense.
Chubais continued to hang onto power. Not being a Russian citizen (and yet having all that power), he clearly equated the oligarchic clans as "democracy." In Davos, 1996, he met with the heads of all the clans including Guzinsky, Berezovsky, Khodorkovsky, Friedman, Potanin and many others, and formed a political movement designed to keep nationalist and communists out of power.
5 McClintick, D. How Harvard Lost Russia. Institutional Investor, 2006. http://www.institutionalinvestor.com/Article/1020662/How-Harvard-lost-Russia.html?ArticleId=1020662&single=true#.UY7blLWG2So
This move shows that Chubais backed the oligarchs, did not consider them "unintended consequences" and sought their assistance to stay in power: All in the name of democracy.
Yeltsin, now at 3% (with the same margin of error) began to implement populist measures, but now was isolated. Winning a strangely high 33% of the vote in the 1996 elections, it can only be attributed to a) electoral fraud, or b) the fact that Gen. Alexander Lebed had been talked into entering a sort of coalition with Yeltsin. If they won, then Lebed's rival Pavel Grachev, would be history. Yeltsin won the second round with just over 50%, as the oligarchs and Chubais personally spend a small fortune bribing artists, journalists, writers and, making an even worse mockery of democracy, busing thousands of urban youth into Moscow to ensure their support.
Harvard's Sinister RoleHarvard University spent quite a bit of its money to restructure Russia. The US government sued some of them, specifically, Andrei Shleifer, for breach of contract. Many economists from Harvard worked for the State Department so as to be able to control Russia for the better. The fraud of the Russian economy was in part blamed on these advisers, whowere forced to pay more than $31 million to the US government for "conspiracy to defraud."
Harvard had authored the plan that Gorbachev had requested to turn Russia into a capitalist state. This was the plan that was enacted. The Harvard Institute for International Development in Russia was the group created at Harvard and sponsored by the US government. This is what was sued over. The US government argued that the reform program was a failure, and the planners, living in America, knew it was a failure and continued to defend it – with taxpayer money. Even worse, as it turns out, Shleifer was rigging some of the auctions himself, investing his own money in firms that he knew would turn a profit, even if overseas.
The US Justice Department in 2000 sued, among others, Shleifer and Hay for defrauding the US government. The Justice Department stated:
The United States alleges that Defendants' actions undercut the fundamental purpose of the United States' program in Russia -- the creation of trust and confidence in the emerging Russian financial markets and the promotion of openness, transparency, the rule of law, and fair play in the development of theRussian economy and laws.6
Since they were using $40 million in taxpayer money, the cold-blooded desolation of Russia implicated the US. The civil lawsuit argued, to simplify, that Harvard's economists, especially Shleifer (and his wife), was investing taxpayer money in Russian companies about which they were giving financial advice. Harvard admitted guilt in the form of a $25 million settlement. How much of this assisted their victims in Russia is not known.7
In response to the suit, lawyers for Shleifer and his co-conspirator, Jonathan Hay, sneered to the press: "We are confident that, as the civil case unfolds, the court will confirm that the Harvard program significantly fostered Russian reform and that the government received its money's worth." As it turns out, even their lawyers did not believe this, since their defense rested, not on the denial that conflict of interest existed, but that they were never bound by such ethical rules.8
6 "United States of America, Plaintiff v. the President and Fellows of Harvard College, Andrei Shleifer, Jonathan Hay, Nancy Zimmerman, and Elizabeth Hebert, Defendants" (2000)
7 His crimes and the full nature of the lawsuit and evidence can be found here: Wedel, J. Who Taught CronyCapitalism to Russia? How Harvard and the 'U.S. Government's Aid Agency became part of the RussianProblem. The Wall Street Journal Europe, March 19, 2001
In 2005, a federal judge found Shleifer guilty of professional fraud. The disgraced "professor" paid the US government $2 million, and his wife, operating yet another scam, settled out of court for $1.5 million. Harvard paid about $10 million in legal fees to defend their role in the starvation of Russia.9
For all that, Shleifer remains a celebrated professor at Harvard and the toast of academia worldwide. His academic stock has not suffered in theleast from this. Just as puzzling, Harvard suffered no diminution in prestige. This is especially puzzling in that ivy league scandals erupt seemingly on a daily basis. This Teflon world exists partly due to the protection of former Harvard President, World Bank economist and Treasury Secretary, Lawrence Summers, also a pivotal figure in the Russian fiasco.10
Summers is partly to blame for the American sub-prime mortgage disaster since hewas pivotal in removing many of the regulatory barriers that forbade predatory lendingpractices. Therefore, the execrable Summers is the co-author of not one but two national meltdowns. Summers, after being forced to resign from Harvard based on an unrelated set of sins,11 was quickly rehired as a "professor" by the government. Then, Summers became a leading figure in Obama's economic brain trust, was soon after appointed as part of the "oversight"panel for the UN's economic programs and became a member of the Group of 30, a highlyelite and secretive organization created by the Rockefeller family.
Like Summers and Shleifer, Chubais was also handsomely rewarded for his direct role in the Russian cataclysm. He was soon placed on the board of JP Morgan, and, to no one's surprise, was granted a seat on the ultra-elite Council on Foreign Relations, another powerful conclave within the Rockefeller cult.12
Summer's career, his almost comic legacy of failure and ignorance, and the criminal impoverishment of Russia (not to mention the 2007 US meltdown) wholly destroy the "elitestatus" of places like Harvard.13 This set of scandals, largely unknown to a bewildered and exhausted American public, shows the profound and pervasive putrescence of academia, especially in the Ivy leagues. It brought into question academic tenure, unearned salaries, and the famed academic insulation from consequences arising from their theories. The Harvard civil suit and all it entails demonstrates the incompetence of those paid to implement policy and their ability to get their hands on taxpayer money. It shows a reprehensible and reckless disregard for the welfare of others that is rewarded with academic posts, social prestige, ostentatious wealth and immense power.
It might be worth mentioning that the behavior patters of Chubais conforms almost perfectly to the Triarchic diagnostic model of psychopathy as developed by Skeem, et al in 2011. First, it is typified by a pathological arrogance. The victim has full confidence that he is above the law, or that the law only applies to others. Second, the victim shows an impulsive and anti-social temper that focuses only on short term gratification based on the lowest motives. Because of these two symptoms, the victim either does not perceive or does not have any restraints on his destructive behavior. Finally, and most significantly, the victim feels no remorse for the consequences of his actions. Other criteria related to these includeparasitic behavior, superficial charm, grandiosity, ingenious criminal ideas, and assertive narcissism.14 Yeltsin, quoted in Leonov's book, called Chubais "an absolute Bolshevik by temperament and mentality." The basic consensus about Chubais' behavior is that he cared little for construction, and only for destruction.
8 Seward, Z. Harvard To Pay $26.5 Million in HIID Settlement. Crimson, July 20059 The guilty verdict and settlement issues are summarized in the Crimson article above.
10 Finucane, M "Feds Sue Harvard over Russia Advisers." ABD News; also see Wedel, Janine R. The HarvardBoys Do Russia. The Nation, 2008; and "Larry Summers, Robert Rubin: Will The Harvard Shadow EliteBankrupt The University And The Country?" The Huffington Post, Jan 2010: http://www.huffingtonpost.com/harry-r-lewis/larry-summers-robert-rubi_b_419224.html
11 These had something to do with comments about intellectual differences between men and women. That this contrived controversy erupted just as Harvard was paying off the federal government is no coincidence.
12 Levy, Ari. Summers Joins Andreessen Horowitz as a Part-Time Adviser to Entrepreneurs. Bloomberg, June2011 and Greenwald, Glenn. Larry Summers, Tim Geithner and Wall Street's ownership of government.Salon, 2009
13 As far as ivy league fraud and incompetence go, this is just one scandal out of hundreds.
The political lesson of this is unfortunate: the diagnostic criteria for criminal psychopathy are precisely the qualities required for success in big business and government. Even the best intentioned politician or businessman must display some combination of thesevices in order to successfully compete in these fields. What passes as virtue in libera lcapitalism is actually an undisguised form of mental illness.
Leonov speaks in more detail about his pathology:
Evil lurks in Chubais' colorless eyes. He arrogantly uses his supporters in public. Assertiveness and phony composure is his cynical way. Yeltsin was seen by him as merely manageable. Yeltsin was easy to manipulate due to his unpopularity. He did not have the intellectual wherewithal to fight back. He was compliant and signed anything on cue. He saw the Duma as mere formalism that can be bypassed. In reality, he just relied on Presidential decrees.
Of course, all of this in the name of democracy. Rather than deal with the fallout for the sins of others, Yeltsin did one excellent thing for Russia – appointed Vladimir Putin astemporary president on new year's eve, 1999. As was proper, Putin guaranteed Yeltsin immunity from prosecution, which meant he could no longer be used as a scapegoat. Putin, to make a long story very short, brought Russia from a GDP that was 98th in the world to 2014,where it is 8th. For the period 1991-1997, the transfer of wealth from Russia to the oligarchs was roughly $1.75 trillion. This was not "lost" to Russia, since wealth is not "lost." It merely changed hands. Under Chubais and Harvard, the economic contracted by almost 90%.
For all that, Yeltsin's party received 15% of the vote. With instructions from the US, Yeltsin, after this humiliation, created the idea of a "consensus document." The point is to create the illusion of agreement. Several western NGOs designed a position paper which supported "free market" reforms. Representatives of the new rich in Russia signed this document, which was then trumpeted as proof of social cohesion around Yeltsin.
Bernard Black et al, writing in 2009, described the devastation of this shock treatment for Russia and Ukraine in 1994:Russia's mass privatization. . . permitted insiders (managers and controlling shareholders) to engage in extensive "self" or "inside" dealing. . . which the government did nothing to control. Later privatization "auctions" were a massive giveaway of Russia's most important companies at bargain prices to a handful of well-connected "kleptocrats". . . Medium-term prospects are grim; the Russian ruble has plunged; the Russian government has defaulted on both its dollar denominated and ruble-denominated debt; most banks are bankrupt; corruption is rampant; tax revenues have collapsed; capital flight is pervasive; and the government (whomever the Prime Minister happens to be at the moment) seems clueless about what to do next.15
14 Skeem, JL, Polaschek, DLL, Patrick, CJ, and S Lilienfeld. Psychopathic Personality: Bridging the GapBetween Scientific Evidence and Public Policy. Psychological Science in the Public Interest 12 (3): 95–1622011
15 Black, et al, 1
This scheme represents one of the most luridly thoroughgoing, colossal and overwhelming failures in economic history. The role of the US government, international financial agencies and elite academia in this monumental disaster is well known. During the well publicized destruction and starvation of Russia, the British journal Euromoney named Chubais the "Worlds Greatest Finance Minister," as yet another means of displaying theelite's lack of accountability. In the Financial Times of 2004, A. Ostrovsky states "Chubais makes no excuses and feels no remorse over the most controversial privatization of all - the 'loans-for-shares' deal, in which he handed control of Russia's largest and most valuable assets to the group of tycoons [sic] in return for loans and support in the 1996 election for the then ailing Yeltsin."16
Once this became plain, the architects of the plan backed off, blaming everyone else for the issues. He writes in Foreign Affairs that the "Russian people" must vote for "democracy" in the 2000 elections. At the time, his own popularity was running about 2-3%. Hence, he did not mean "democracy" in the normal sense of the word. The real change was between 1994-1996. Here, the oligarchs were openly ruling with Yeltsin, who was often drunk and would disappear for weeks on end. It didn't matter. The oligarchs bought up most of the banks, then issued licenses to trade internationally that only they could have. As the government got desperate, the oligarchs stepped in and loaned Moscow the money to continue to function. Russian was not a "government" in any sense of the word. About 700 major families controlled almost the entire Russian economy and hence, the state as well.
The Results of the ScamGovernment revenues went down by over 50% in this same time. Wages went down by about 75% by 1998. In 1992, the inflation rate was almost 1000%. Light industry, that is, the consumer sector, lost about 90% of its capital, the hardest hit sector of all. Machinery of all kinds fell by about 75%, meaning that 75% of the machines useful in the Russian economy had been liquidated (or were just not used) by 1998. The only thing that kept Russiaafloat was the black market.17
The state could no longer enforce its laws, and hence, men started not showing up for the draft. Republic after republics declared independence, to be immediately recognized by the US. So, what can we conclude here? Very few deny that Yeltsin was a failure, but a failure of the worst kind. This kind of economic destruction has never been seen before outside of warfare. Government revenues and expenditures collapsed, hence, an already bad infrastructure was made far worse. Believe it or not, from 1992-1999, the Russian government collected about $6 billion all told. Hence, the state did not function.
Interest rates were high, about 300% in 1994, so credit was available only to the very rich, who controlled the (now private) central bank in the first place. Nearly everyoligarchical bank was connected with organized crime. In fact, there is no substantial difference between the oligarchs and organized crime.18
Under the oligarchs, tax collection collapsed. Industrial production went down by 25% in just a few years. By 1997, Russia had defaulted on its debts. Between 1991 and 1998,Russian GDP fell by almost 40%. Life expectancy went down from 68 to 56 years. Russians became impoverished. Money was so scarce that, by 1996, most trade was done through barter. Importantly, these oligarchs became a state within a state. Tax collection had collapsed, and the new Russia was completely broke. With the Asian meltdown in 1998, interest rates for Russian borrowing went to 300%. 19
16 Arkady Ostrovsky, Father to the Oligarchs. Financial Times, 2004.
17 Graham, Thomas. From Oligarchy to Oligarchy: The Structure of Russia's Ruling Elite. Demokratizatsiya7(3), (1997) 325-340
Yeltsin's popularity by 1998 went to about zero. Since then, pro-western (that is, pro freemarket) parties have polled no more than 5-7% of the vote combined. Yeltsin resigned the Presidency in 1999 and appointed Vladimir Putin as president.
A man of immense mental and physical strength, he sought to discipline the oligarchs, rebuild Russia and create a modern economy. As soon as Putin took office, he went after the media monopoly of Vladimir Guzinsky. Soon, numerous oil firms and banks were investigated for tax fraud. Some oligarchs fled the country, others like Mikhail Khordokovsky, ended up in prison. Attempting to split the oligarchs, playing one fraction against another, Putin's popularity soared, and Russian economic growth recovered.20 Since the meltdown in 1998, the Russian economy has gone from $1 trillion to $2.5 trillion by 2011. Growth rates remain high, and Russia enjoys both a trade and budget surplus. In the first eight years of Putin's presidency, the Russian GDP increased by over 75%.
Near the end of 1993, about 18-20 billion rubles had fled the country. As 1994 dawned, the population was impoverished. Malnutrition was becoming a problem, and alcoholism was increasing, as was suicide and all manner of social pathology. By 1994, thedeputy interior minister, Vladimir Kozlov, stated that about 40% of the economy is nowcriminalized. Leonov writes,
V. Polevanov [deputy prime minister at the time] notes that the total nominal valueof the voucher fund (about $1.5 trillion rubles) was 20 times less than the cost fixed assets industry, fired up for auction. One Moscow, where privatization was notcarried out on the residual and by market value, gained 20% of the enterprises 1.8 trillion rubles, while income from the rest of Russia in the first two years of privatization amounted to only $1 trillion rubles.
The above argument is abstract. In this section, a case study will be analyzed in detail to show how these forces come to be, how they operate, and how they attempt to insulate themselves from its consequences. Traumatic economic events do not occur due to abstract or impersonal forces. People, very powerful people, create the conditions that destroy entire economies. Economic self-interest is the engine of these irrational policies. Economics depicts social actors and institutions as calculating machines with no identity or purpose. The result is that economics is always treated in the passive voice, which is a fundamental mystification.
The Second Half of the 1990sShowing Chubais complete rejection of supporting Russian interests, Leonov writes,
Soon, it became clear that Chubais committed his sins only because he was controlled by others. The real owners of Russia. In 1998, Russia was continuing to disaster, that is, total bankruptcy. At this point, even after the default, American investors finally got the message and moved their cash out of Russian securities. This strengthened the effect of the default. As he became CEO of RAO (etc), he sold to foreigners a 32% chunk of Russian energy concerns, which violated all Russian laws. This meant, of course, that foreigners now could block Russian energy policy.
Chubais and his Harvard friends did not believe in their own rhetoric. Their had quickly moved into the most luxurious apartments and appointed to themselves very high salaries. Nothing about their world was based on the market principles they hypocriticallyadvocated. While advocating the rule of law, the oligarchical firms allied with Chubais werenot paying taxes; but it just so happens that the criminal code recently passed did not considerthis a crime. In 1997, there was no question that Chubais was evading taxes as well.
19 Ibid, cf esp 330-332
20 Sakwa, R. Putin and the Oligarchs. New Political Economy, 13(2) (2008): 185-191
Admitting his guilt, he paid about 500 million rubles, which was just a small amount of what he owed. His power did not diminish, but it remains a fact that no dictator in Russian history had the power that Chubais had. In the name of market reform and the rule of law,Chubais was receiving millions from shall companies for non existent services. Alexander Lebed remained the sole source of opposition to Chubais once Yeltsin sought treatment for heart illness. Chubais, realizing the general's recent spike in popularity for negotiating successfully with Chechen rebels, invented a slew of charges that the general conspired with these same militants. Chubais had become so powerful that he was no longer required to be creative. Lebed was dismissed from his post, proving that Chubais was, in fact, a dictator.21
In the name of the rule of law, Chubais made mafia gangster Boris Berezovsky "deputy director of the security council." Potanin, another underworld billionaire, was named "Deputy Prime Minister." Chubais was rubbing Russia's face in his power, typical of thepsychotic. Soon, all major television channels were in the hands of two mafia dons, Berezovsky and Guzinsky.
By 1996, all the financial power was concentrated in the hands of a small group of businessmen almost exclusively Jewish. It consisted of Boris Berezovsky, Vladimir Gusinsky, Alexander Smolensky, Pyotr Aven, Boris Chait, and Vitaly Malkin. Major bankers also included gentiles Potanin and Vinogradov, the only two.
Since the state had collapsed, these oligarchs acted as the state treasury and profited from it. Billions continued to be looted and wound up in banks in Israel, Britain and the US. Yet, elections were coming up. An ailing Yeltsin dismissed Chernomyrdin's "government," which included Chubais. Boris Berezovsky began, in his words, to rally all the "democraticand reformist forces in Russia" to prevent his own possible dispossession.
Typical of the psychotic, these men knew no limits. They began issuing high yield junk bonds, eventually promising to pay out, in some cases, 180%. Foreigners were buying these bonds to the point where almost 30% of all marketable securities of the Russian "state"were owned by outsiders. It was another scam, and the bankers refused to pay anypercentage, and even more, demanded the return of Chubais to government. Chubais quicklyflew to Washington, warning of a communist-nationalist resurgence. $6 billion was quickly given, which was never seen again.
Forming a shadow government, Russia's bankers dictated terms to Yeltsin. In their generosity, they agreed to not demand immediate debt payment from the Russian taxpayer. Yet, to punish Yeltsin, this oligarchy declared that it will reduce the sale of foreign currency. Putting downward pressure on the ruble, the oligarchs got their revenge for the tepid rebellion of Yeltsin. This is what drove the junk bonds as high as 180%; the ruble was suddenly worth nothing. In fear, Yeltsin put the banker's friend, Chernomyrdin, back in power in late summer, 1998.22
21 Ostrovsky, Arkady. Father to the Oligarchs. Financial Times, 2004
22 Russian Federation: Selected Issues 2012 International Monetary Fund IMF Country Report No. 12/218http://www.imf.org/external/pubs/ft/scr/2012/cr12218.pdf and Oliker, O, and T. Paley. Assessing Russia's
As typical of capitalist democracies, the political clique took the fall for the private sector. Yeltsin was blamed for the disaster, though his power was nil. That winter, Russia froze with millions unable to buy fuel. The perfect man was chosen for the prime ministership, Yevgeny Primakov, with no apparent beliefs of any kind. Quickly, Primakov demanded the return of Chubais and others who caused the mess, in order to repair it.
The default that August destroyed any bank not immediately under the oligarchs. GDPfell by 200-300 billion rubles. Industry was devastated. In one month, September of 1998, the average Russian income fell by over 30%. The Federation Council, too late, officially declared Chubais and crew as "negligent and incompetent." At the same time, the banking oligarchy was speculating in currency markets, making a profit estimated at the time of 5.5billion rubles in 1997.
Bill Clinton at the time cared only about the possibility of the Lebed coup. Primakov, however, began to strengthen the state as the only possibly solution to the total dissolution of Russia as a political entity. Soon, the dependable Zhirnovsky was again trotted out, with the occasional spray painted swastika to re-direct attention and create the "extremist" threat. More political groups, heretofore unknown, showed up in Moscow with strange uniforms and rallies. Gaidar was quick to link them with the communists, creating a convenient, single group for the masses to visualize.
In the midst of the meltdown, the system took advantage of the perfectly timed murder of Galina Starovoitova, a westernizing politician. 15,000 members of the opposition were rounded up and the "democratic forces" demanded emergency powers. The westenizers even created their own "nationalist" political group, "Fatherland" in order to siphon off opposition activists. In a display showing excellent acting, Yeltsin, in December of 1998, disbanded the group as a "threat" to "democracy." Of course, western Russia experts breathed a sigh of relief that "fascism" was not coming to Russia.
Solzhenitsyn refused to be a part of the charade, refusing to accept the Medal of St. Andrei from Yeltsin. A long time nationalist, Solzhenitsyn realized that in giving this award, Yeltsin was currying favor. Another misdirection was the attempted impeachment of Yeltsin in 1998, as if he was in charge of the disaster he only vaguely understood. Like the Clinton impeachment, it was an absurdity, deliberately designed to protect those with actual power (that is, the private sector) who created the disaster. The Commission decided that Yeltsin had "exceeded his power" as president, as if this is the reason why Muscovites just froze the previous winter. Using political figures to cover for the banking cartel is as old as the Medicis in Florence. Then, in another mockery of Russia, Yeltsin was blamed 100% for the disaster ofthe previous decade.23
Given all this, you are now ready to understand Putin. He came to power as Premier under Yeltsin when the latter resigned in 1999. Yeltsin's popularity rating was between 3-5%. All aid from the IMF was stolen and funneled into the hands of the oligarchs. Oil and gas firms had their profits pocketed in the same way, tax free. As Yeltsin retired, he gave many of his friends immunity from prosecution.
Putin as the Restorer of SanityPutin's leadership restored confidence in the currency, the state and the law. Oligarchystill exists in Russia (as elsewhere), but the monopoly position they used to wield is no more.Russian oil firms have come under the control, though not the ownership, of the state, sinceoligarchs were planning on selling assets to Exxon-Mobil, which led to the "KhordokovskyDecline. The Rand Corporation, 2002http://www.rand.org/content/dam/rand/pubs/monograph_reports/2007/MR1442.pdf23 Guriev, S. and Andrei Rachinsky (2005). The Role of Oligarchs in Russian Capitalism. Journal of EconomicPerspectives, 19(1), (2005) 131-150 http://pages.nes.ru/sguriev/papers/GurievRachinsky.pdfaffair." Mikhail Khordokovshy was an oligarch who controlled YUKOS, one of Russia's mostpowerful oil firms. In the interest of national security, Putin placed Khordokovsky under arrest. He was indeed guilty of tax evasion, but his plans to see Russian strategic assets to Americans was too much for Putin to stomach. The more oligarchs Putin put in jail, the more popular he becomes.
Putin's policy has been to tread softly, taking on only the most powerful and obnoxious of the oligarchs. He has made strategic alliances with some in order to intimidate others While Russia has been rebuilt and the state became powerful, the oligarchs still have fight left in them, and Putin acts cautiously. Putin's basic approach has been to guide investment and control the flow of investment funds so they benefit Russia, not the oligarchy. The state does not own the economy, but it does oversee it. The oligarchy gave Putin no other choice.
The oligarchs financed all of Yeltsin's election campaigns and public image in Russia at the time. The point was to keep Yeltsin in power long enough so that the oligarchs could get their cash out of the country. They knew that eventually, a popular government would punish them. Putin, to a great extent, was this punishment.
Putin created an entirely new Russian government, when local districts under his control. Needless to say, the regional governments had been bought, and Putin could have no dealings with them. Some of them even had their own foreign policy! All those sent to govern the regions were from the security services or the army. This was no accident. Putin restructured the Upper House (the Federation Council) so as to permit his government to have a say in who gets appointed to it. 24
Putin insisted that local law must be consistent with federal law. This is because local leaders were creating their own countries, and this could not stand. Putin then permitted oligarchs and their puppets to be tried as violators of the constitution. Let me give you one example. In 2003, the oligarch Mikhail Khodorkovsky had taken over the Russian oil giant Yukos. Now, Putin got intelligence that Khodorkovsky was planning on entering intobusiness with Exxon-Mobil, permitting their penetration into the Russian market. Realizing this was a security threat (which it was, since it would mean that Exxon would control much of Russia's oil), he had Khodorkovsky arrested. Is list of crimes was well known, but the stategot him on taxes, which was a no-brainier. Putin was immediately attacked or "authoritarianism" by the press in the west.
So why does the west heap abuse on this man?
He reformed the tax code, putting in place a 13% flat tax on all income and investments. About half of regional prosecutors were removed from their positions due toe xtreme corruption. All Russians knew that already. He quickly ended the war in Chechnya, making sure a Chechen, pro-Russian government was put in charge.
He brought together the top 13 oligarchical families to a conference he organized. He told them that their rule was over. He forced them to pay millions in back taxes to the state, and to create several important charitable funds with their stolen money.
He was going to use the state to pressure their media into being more objective, pro-Russian and pro-state. Since the oligarchs controlled the press, it made sense that this had to be fought. To call this "assaulting press freedom" is absurd.
He realized that the political opposition in Russia was created by the oligarchy. Hence, there was no actual party development. Few parties had an agenda (except the communists, who did well), and these were mostly personal vehicles for their founders.
Putin also shifted investment away from oil and towards higher end items. This was needed to diversify the economy. The judiciary is independent. Today, about 70% of people who sue the state for various reasons win. Putin also introduced the jury.25
24 Sakwa, R. Putin and the Oligarchs. New Political Economy, 13(2), (2008), 185-191
It's tough to argue with Putin's success:
Labor productivity grew 49 percent 1995-2005, ranging from a 23 percent improvement in retailing to a 73 percent rise in construction. Total factor productivity grew by 5.8 percent per year, and the World Bank estimates that only one third of that increase came from increased capacity utilization. Firm turnover (i.e. the exit of inefficient firms and the entry of new ones) accounts for half the total improvement. Stock market capitalization rose to 44 percent of GDP by 2005, while the RTS index went from 300 in 2000 to 2,360 in December 2007.
In September 2006 the market capitalization of the 200 biggest firms was $833 billion (one third of which was Gazprom). The percent of the population living in poverty fell from 38 percent in 19998 to 9.5 percent in 2004, and the share of family budgets spent on food fell from 73% in 1992to 54% in 2004.
The only macroeconomic indicator that gives cause for concern is inflation, which dropped from 20 percent in 2000 to 9 percent in2006, before creeping back up to 11-12 percent level.26
Now, "market capitalization" and other such elite measures are not the whole story. They can exist with an economy failing in other respects. However, before wealth can b eredistributed, it has to exist. Accumulating what can then be redistributed are what these numbers are telling us. Given all this, however, it should come as no surprise that those who are condemning Putin today backed the privatization deals 20 years ago.
W. Thompson, writing in the Guardian in the Summer of 2003, states:
Fiscal consolidation has probably contributed more than any other single factor to restoring the authority and legitimacy of the formerly bankrupt state. Exceptionally favorable economic circumstances account for much of this improvement, but so also do better expenditure management, the reform of tax legislation and more efficient administration. The state's rule-making capacity has also grown markedly.
Unlike Yeltsin, Putin has a compliant parliament and presides over a government that, for all its internal divisions, is not riven by the factional conflicts that marked the 1990s. The result has been a flood of new legislation, much of it directly concerned with state reconstruction.27
Thompson speaks the truth. "Exceptionally favorable economic circumstances "can not cause national success. They do not in Ukraine, much of Africa or Detroit. They must be identified and utilized with substantial skill. Circumstances, of themselves, tell us nothing. The "compliant parliament" exists because of Putin's popularity, though Thomas seems to suggest that such legislative cooperation is required in times of emergency. Worried about bureaucratic corruption, Putin passed several laws limiting the discretionary power of federal agencies. Reform has reduced corruption, endemic at onepoint. Business is much easier to accomplish. Putin's reelection numbers roughly mirror his popularity in the country, and his opposition, backed by the US, has no agenda whatsoever.
25 Lavelle, P Putin's "Authoritarianism" vs. the "Commentariat". Commentary, 2004ahttp://www.futurebrief.com/peterlavelle004.asp and Lavelle, P Russia's Economic Future. Commentary,2004 http://www.futurebrief.com/peterlavelle.asp
26 Rutland, P. Putin's Economic Record. Wesleyan University, CT, 2008
27 Thompson, W. Putin's Success. The Guardian; June 2003 http://www.guardian.co.uk/world/2003/jun/08/russia.theworldtodayessays
They simply want more Yeltsinism.
As of January 1 of this 2013, Russia's anti-bribery legislation is the toughest in the world. In Russia, about 92% of American businesses think that Russian investment is a good thing, and that Russia is a decent place to do business. The IMF has stated that part of Putin's success is is utilization of capital that was left idle. Utilization of the country's resources has increased from about 50% in 2000 to over 76% today. But in order to do this, he needed to destroy the power of the oligarchs at the regional level.
ConclusionThe simple fact is that Putin's authoritarianism was forced upon him. He did use a heavy hand, but not nearly as heavy as Yeltsin. He realized that it was either a strong hand or chaos. As the state has been rebuilt, so have oversight bodies empowered to check it'sbehavior. Putin launched a bunch of commissions to look into corruption in different areas o the country, knowing full well that his popularity is based on that, plus economic growth.Putin needed to increase the potential of the state before the state itself could grow. Hence,the reformation of all police agencies gave them a direct line to the Kremlin, but, by 2002,crime was still rife. Now, all that has changed.
It makes sense to call Putin a reaction to Yeltsin, chaos and oligarchy. His policies make no sense without the background. Things appear differently when contrasted with the free-fall collapse of the Yeltsin years.
Putin then did two things: first, to build up the rudiments of a new state, one that can permit business to thrive and destroy oligarchy. He needed a new law code, more centralized structures and an end to regional independence. Second, he was to create a new macroeconomic structure, with strong fiscal and oversight measures. Russia now runs a trade and budget deficit. He then stabilized the currency.
Once economic growth took off, he tried to get as much money out of foreign banks as possible. He first backed big business (for the sake of growth), then shifted more recently to backing smaller business. He then engaged in education and pension reform. He turned Russia to the east, allying with China to cooperate in their tremendous economic growth.
It is easy to forget that all that Putin is "blamed" for was suggested by western elites for Yeltsin. Liberal democracy in the eastern bloc has, without exception, merely been a cover for the most cynical sort of exploitation. In the name of "democracy" the eastern bloc melted into the bank accounts of both foreign and local elites. Warlords developed with private armies that, in the 1990s, were the subject of some journalistic treatment. A Russia in collapse is far more dangerous for the west than anything Putin has dreamed about.
Rationally, the enforced, rehearsed and studied contempt of Putin can only exist because the west had other plans for Russia, as a hinterland for cheap, educated labor and resources. Western collapse is assured precisely because Russia is not prostrate and under the thumb of Exxon-Mobil. Putin will have the last laugh, which, when the smoke clears, is the only real cause of the west's irrational hatred.
... ... ...
Mar 08, 2018 | marknesop.wordpress.com
kievite , June 1, 2013 at 8:48 am
Actually an interesting metamorphose happen right at the border crossing. A crook instantly became the staunch defender of western democracy and its (aka neoliberal) values against Russian backwardness, paranoia and kleptocratic state headed by evil Putin who personally torture innocent girls from Pussy Riot wearing his old KGB uniform :-)
I would call this sudden attraction to democratic values at the border crossing a "crooks survival instinct" in action. Crooks are always crooks.
BTW I would object about the term "Stubborn Deniers of Reality" applied to Western Journalism. I think a more proper definition is "Creators of artificial reality". Masters of illusion, so to speak. And that's would be a proper classification of Bachelor and Masters degree in journalism instead of "Bachelor of arts", etc. used today. And truth be told this esoteric art reached the level of perfection and sophistication in comparison with which all those circus magicians are just children.
BTW who would explain to me the meaning of the term of BS in English. Is this about deception, or an attempt to cover own incompetence (posturing as an expert in subject about which the BS artist has no clue) or about pure propaganda or about meaningless drivel designed to hide the real motives ?Reply kirill ,
Feb 08, 2018 | turcopolier.typepad.com
David Habakkuk , 08 February 2018 at 09:57 AMAll,SmoothieX12 -> David Habakkuk ... , 08 February 2018 at 11:28 AM
A number of points.
1. Not only large elements of the American and British intelligence services, but the 'Borgistas' in both countries, now including large elements of the academic/research apparatus and most of the MSM, really are joined at the hip.
It is thus an open question how far it is useful to speak of British intelligence intervening in the American election, rather than the American section of the 'Borg' and their partners in crime 'across the pond' colluding in an attempt to mount such an intervention with a greater appearance of 'plausible deniability.'
2. A relevant element of such collusion has to do with the creation of the Yeltsin-era Russian oligarchy. On this, a crucial source are interviews given by Christian Michel and Christopher Samuelson, who used to run a company called 'Valmet', to Catherine Belton, then with the 'Moscow Times', later with the 'Financial Times', in the days leading up to the conviction of Mikhail Khodorkovsky in May 2005.
(See http://mikhail_khodorkovsky_society_two.blogspot.co.uk .)
This describes the education in 'Western banking practices' given to him and his Menatep associates by Michel and Samuelson, starting as early as 1989, and also their crucial involvement with Berezovsky.
We are told by Belton that: 'With the help of British government connections, Valmet had already built up a wealthy clientele that included the ruling family of Dubai.' As to large ambitions which Michel and Samuelson had, she tells us: 'Used to dealing with the riches of Arab leaders, they found Menatep, by comparison still relatively small fry. By 1994, however, Menatep had started moving into all kinds of industries, from chemicals to textiles to metallurgy. But for Valmet, which by that time had already partnered up with one of the oldest banks in the United States, Riggs Bank, and for Menatep, the real prize was oil.'
Try Googling 'Riggs Bank' -- a lot of interesting information emerges, on matters such as their involvement with Prince Bandar. So, what we are dealing with is a joint Anglo-American attempt to create a 'comprador' oligarchy who could loot Russia's raw materials resources.
3. On the subject of the competence of MI6, what seems to me a total apposite judgement was provided by the man whom Steele and his associates framed over the death of Litvinenko, Andrei Lugovoi.
In the press conference in May 2007 where he responded to the request for his extradition submitted by the Crown Prosecution Service, he claimed that: 'Litvinenko used to say: They are total retards in the UK, they believe everything we are telling them about Russia.'
(See http://webarchive.nationalarchives.gov.uk/20160613090333/https://www.litvinenkoinquiry.org/evidence ">https://www.litvinenkoinquiry.org/evidence">http://webarchive.nationalarchives.gov.uk/20160613090333/https://www.litvinenkoinquiry.org/evidence .)
It seems to me quite likely, although obviously not certain, that this did indeed represent the view of many of the 'StratCom' operators around Berezovsky of people like Steele.
Throughout life, I have repeatedly come across a game played on certain kinds of élite Westerners, which, in honor of Kipling, who gave brilliant depictions of it, I call 'fool the stupid Sahib.' Both people from other societies, and their own, often play this game, and the underlying mentality not infrequently involves a combination of a sense of inferiority and contempt for the gullibility of people who are thought of -- commonly with justice -- as not knowing how the world really works, and thus being open to manipulation if one tells them what they want to hear.
Some fragments of a mass of evidence that this was precisely what Litvinenko did were presented by me in a previous post.
Irrespective of whether Lugovoi was accurately reporting what Litvinenko said, however, a mass of 'open source' evidence testifies to the extreme credulity with which officials and journalists on both sides of the Atlantic treat claims made by members of the 'StratCom' groups created by the oligarchs whose initial training was done by Valmet.
(One good example is provided by the way that Sir Robert Owen and his team took what the surviving members of the Berezovsky group told them on trust. Another is the extraordinary way MSM figures continue to claim made by Khodorkovsky and his associates seriously.)
Accordingly, when I read of anyone treating practically anything that Steele claims as plausible, I try to work out how much of a 'retard' they must be, starting with a baseline of about 50%.
4. In the light of the way that the reliance on the dossier in the FISA applications absent meaningful corroboration is being defended by Comey and others on the basis that Steele was 'considered reliable due to his past work with the Bureau', the question is how many people in the FBI must be considered to have a 'retard' rating somewhere over 90%.
When I discover that John Sipher is a 'former member of the CIA's Clandestine Service', who also worked 'on Russian espionage issues overseas, and in support of FBI counterintelligence investigations domestically,' then his apologetics for Steele seem not only to suggest he may be another 'total retard' -- but to point towards how the Anglo-American collaboration actually worked. (See https://www.politico.eu/article/devin-nunes-donald-trump-the-smearing-of-christopher-steele/ .)
5. Another characteristic of these 'retards' is that they seem unable to get their story straight. In his piece last September defending the dossier, Sipher wrote that 'While in London he worked as the personal handler of the Russian defector Alexander Litvinenko.' Apparently he didn't know that the 'party line' had changed -- that when Steele emerged from hiding in May, his mouthpiece, Luke Harding of the 'Guardian', had explained: 'As head of MI6's Russia desk, Steele led the inquiry into Litvinenko's polonium poisoning, quickly concluding that this was a Russian state plot. He did not meet Litvinenko and was not his case officer, friends said.'
(See http://www.slate.com/articles/news_and_politics/jurisprudence/2017/09/a_lot_of_the_steele_dossier_has_since_been_corroborated.html ; https://www.theguardian.com/uk-news/2017/mar/07/former-mi6-agent-christopher-steele-behind-trump-dossier-returns-to-work .)
6. In his attempts to defend the credibility of the dossier, Sipher also explains that its -- supposed -- author was President of the Cambridge Union. Here, two profiles of Steele on the 'MailOnline' site are of interest.
In one a contemporary is quoted:
"'When you took part in politics at the Cambridge Union, it was very spiteful and full of people spreading rumours," he said. "Steele fitted right in. He was very ambitious, ruthless and frankly not a very nice guy."
The other tells us that he born in Aden in 1964, and that his father was in the military, before going on to say that contemporaries recall an 'avowedly Left-wing student with CND credentials', while a book on the Union's history says he was a 'confirmed socialist'.
(See http://www.dailymail.co.uk/news/article-4115070/Chris-Whatsit-brilliant-Cambridge-spy-spent-life-battling-KGB-MI6-agent-wife-s-high-heels-stolen-Kremlin-spooks-revealed-Litvinenko-poisoned-Putin-s-thugs.html ; http://www.dailymail.co.uk/news/article-4115070/Chris-Whatsit-brilliant-Cambridge-spy-spent-life-battling-KGB-MI6-agent-wife-s-high-heels-stolen-Kremlin-spooks-revealed-Litvinenko-poisoned-Putin-s-thugs.html .)
From my own -- undistinguished and mildly irreverent -- Cambridge career, I can testify that there was indeed a certain kind of student politician, whom, if I may mix metaphors, fellow-students were perfectly well aware were going to arse-lick their way up some greasy pole or other in later life.
It was a world with which I came back in contact when, after living abroad and a protracted apprenticeship in print journalism, I accidentally found employment with what was then one of the principal television current affairs programmes in Britain. In the early 'Eighties I overlapped with Peter -- now Lord -- Mandelson, who became one of the principal architects of 'New Labour.'
7. Given that at this time British intelligence agencies were somewhat paranoid about CND, there is a small puzzle as to why on his graduation in 1986 Steele should have been recruited by MI6. In more paranoid moments I wonder whether he did not already have intelligence contacts through his father, and served as a 'stool pigeon' as a student.
But then, people like Sir John Scarlett and Sir Richard Dearlove may simply have concluded that someone with 'form' in smearing rivals at the Union was ideally suited for the kind of organisation they wanted to run.
8. From experience with Mandelson, and others, there are however other relevant things about this type. One is that they commonly love Machiavellian intrigue, and are very good at it, within the worlds they know and understand.
If however they have to try to cope with alien environments, where they do not know the people and where such intrigues are played much more ruthlessly, they are liable to find themselves hopelessly outclassed. (This can happen not simply with the politics of the post-Soviet space and the Middle East, but with some of the murkier undergrowths of local politics in London.)
Another limitation on their understanding is that the last thing they are interested in his how the world outside the bubbles they prefer to inhabit operates, and they commonly have absolutely contempt for 'deplorables', be they Russian, British or American. This can lead to political misjudgements.
9. So it is not really so surprising that, when Berezovsky's 'StratCom' people told them that the Putin 'sistema' really was the 'return of Karla', people like Steele believed everything they said, precisely as Lugovoi brought out.
There is I think every reason to believe that, from first to last, the intrigues in which he has been involved have involved close collusion between them and elements in American intelligence -- including the FBI. As a result, a lot of people on both sides of the Atlantic have repeatedly got into complex undercover contests in the post-Soviet space which ran right out of control, creating a desperate need for cover-ups. A similar pattern applies in relation to the activities of such people in the Middle East.Another limitation on their understanding is that the last thing they are interested in his how the world outside the bubbles they prefer to inhabit operates, and they commonly have absolutely contempt for 'deplorables', be they Russian, British or American. This can lead to political misjudgements.
It is not just "can" it very often does. The whole situation with Russia, of which, be it her economy, history, military, culture etc., is not known to those people, is a monstrous empirical evidence of a complete professional inadequacy of most people populating this bubble.
Most of those people are badly educated (I am not talking about worthless formal degrees they hold) and cultured. In dry scientific language it is called a "confirmation bias", in a simple human one it is called being ignorant snobs, that is why this IC-academic-political-media "environment" in case of Russia prefers openly anti-Russian "sources" because those "sources" reiterate to them what they want to hear to start with, thus Chalabi Moment is being continuously reproduced.
In case of Iraq, as an example, it is a tragedy but at least the world is relatively safe. With Russia, as I stated many times for years--they simply have no idea what they are dealing with. None. It is expected from people who are briefed by "sources" such as Russian fugitive London Oligarchy or ultra-liberal and fringe urban Russian "tusovka". Again, the level of "Russian Studies" in Anglophone world is appalling. In fact, it is clear and present danger since removes or misinterprets crucial information about the only nation in the world which can annihilate the United States completely in such a light that it creates a real danger even for a disastrous military confrontation. I would go on a limb here and say that US military on average is much better aware of Russia and not only in purely military terms. In some sense--it is an exception. But even there, there are some trends (and they are not new) which are very worrisome.
Red Herrings for sale!! Fresh Red Herrings for sale!!yalensis
From McGraw-Hill: "Red Herring – A piece of information or suggestion introduced to draw attention away from the real facts of a situation. A red herring is a type of strong-smelling smoked fish that was once drawn across the trail of a scent to mislead hunting dogs and put them off the scent".
Actually, most of these are not even that fresh, but are merely recycled assaults on common sense that have achieved the status of conventional wisdom through relentless repetition.
The Kremlin Stoogekirillkievite
May 31, 2013 at 8:20 pm
Every crook in Russia who feels the long hand of the law about to nab him runs off to the west and claims asylum. This says much more about the west than about Russia.June 1, 2013 at 8:48 amkirill
Actually an interesting metamorphose happen right at the border crossing. A crook instantly became the staunch defender of western democracy and its (aka neoliberal) values against Russian backwardness, paranoia and kleptocratic state headed by evil Putin who personally torture innocent girls from Pussy Riot wearing his old KGB uniform ;-)
I would call this sudden attraction to democratic values at the border crossing a "crooks survival instinct" in action. Crooks are always crooks.
BTW I would object about the term "Stubborn Deniers of Reality" applied to Western Journalism. I think a more proper definition is "Creators of artificial reality". Masters of illusion, so to speak. And that's would be a proper classification of Bachelor and Masters degree in journalism instead of "Bachelor of arts", etc. used today. And truth be told this esoteric art reached the level of perfection and sophistication in comparison with which all those circus magicians are just children.
BTW who would explain to me the meaning of the term of BS in English. Is this about deception, or an attempt to cover own incompetence (posturing as an expert in subject about which the BS artist has no clue) or about pure propaganda or about meaningless drivel designed to hide the real motives ?Alexander Mercouris says:
June 1, 2013 at 9:36 am
"BS" does not have that level of nuance. It is merely a rude way of describing "crap" produced for whatever reason. This "crap" can be deliberate to facilitate the brainwashing of the masses. But it can also be a reflection of the individual(s) spewing it.
Western BS about Russia is overwhelming. It totally floods any rational discourse based on facts. So it is propaganda and not some failure to understand Russia. There are too many injection points for said BS, all of the same quality of BS, for this to be accidental and some misunderstanding. It is willful malice towards Russia. To call Pussy Riot political prisoners is outright intellectual insult. Some samizdat writer spreading the truth and being sent to the gulag has no resemblance whatsoever to punk ass twats waving their asses at the iconostasis of a Russian cathedral and being sent away for 2 years for hooliganism. The samizdat writer faced gulag time from wherever they operated. Pussy Riot would have gotten a $17 fine if they stayed outside the cathedral.ReplyMoscow Exile says:
June 1, 2013 at 4:37 pm
"Actually an interesting metamorphosis happens right at the border crossing. A crook instantly becomes the staunch defender of western democracy and its liberal values…"
So true. Just consider how many have undergone this miraculous metamorphosis: Berezovsky, Guzinsky, Chorney, Borodin – why the list is endless. Like a hideous caterpillar being transformed into a beautiful butterfly.ReplyJune 1, 2013 at 10:32 pm
"Bullshit baffles brains" as an old pal of mine was fond of saying.Reply
June 2, 2013 at 3:35 am
Mercouris says that "Bullshit Baffles Brains" (BBB) 's an official legal term. So I am trying to figure out what it would be in Latin.
faeces bovinae cerebra frustrat ? – would be my best guess.