Category Archives: Russia

The Real Russian Interference in US Politics

If Russia were trying to interfere in U.S. domestic politics, it wouldn’t be attempting to change the U.S. system but to prevent it from trying to change Russia’s, argues Diana Johnstone.

The Cold War between the United States and the Soviet Union was ostensibly a conflict between two ideologies and two socio-economic systems.

All that seems to be over. The day of a new socialism may dawn unexpectedly, but today capitalism rules the world. At first glance, it may seem to be a classic clash between rival capitalists. And yet, once again an ideological conflict is emerging, one which divides capitalists themselves, even in Russia and in the United States itself. It is the conflict between American unipolar dominance and a multipolar world.

The defeat of communism was brutally announced in a certain “capitalist manifesto” dating from the early 1990s that actually proclaimed: “Our guiding light is Profit, acquired in a strictly legal way. Our Lord is His Majesty, Money, for it is only He who can lead us to wealth as the norm in life.” The authors of this bold tract were Mikhail Khodorkovsky, who went on to become the richest man in Russia (before spending ten years in a Russian jail) and his business partner at the time, Leonid Nevzlin, who has since retired comfortably to Israel.

Loans for Shares

Those were the good old days in the 1990s when the Clinton administration was propping up Yeltsin as he let Russia be ripped off by the joint efforts of such ambitious well-placed Russians and their Western sponsors, notably using the “loans for shares” trick.

In a 2012 Vanity Fair article on her hero, Khodorkovsky, the vehemently anti-Putin journalist Masha Gessen frankly summed up how this worked:

The new oligarchs—a dozen men who had begun to exercise the power that money brought—concocted a scheme. They would lend the government money, which it badly needed, and in return the government would put up as collateral blocks of stock amounting to a controlling interest in the major state-owned companies. When the government defaulted, as both the oligarchs and the government knew it would, the oligarchs would take them over. By this maneuver the Yeltsin administration privatized oil, gas, minerals, and other enterprises without parliamentary approval.”

This worked so well that from his position in the Communist youth organization, Khodorkovsky used his connections to get control of Russia’s petroleum company Yukos and become the richest oligarch in Russia, worth some $15 billion, of which he still controls a chunk despite his years in jail (2003-2013).

His arrest made him a hero of democracy in the United States, where he had many friends, especially those business partners who were helping him sell pieces of Yukos to Chevron and Exxon. Khodorkovsky (image below), a charming and generous young man, easily convinced his American partners that he was Russia’s number one champion of democracy and the rule of law, especially of those laws which allow domestic capital to flee to foreign banks, and foreign capital to take control of Russian resources.

Vladimir Putin didn’t see it that way. Without restoring socialism, he dispossessed Khodorkovsky of Yukos and essentially transformed the oil and gas industry from the “open society” model tolerated by Yeltsin to a national capitalist industry. Khodorkovsky and his partner Platon Lebedev were accused of having stolen all the oil that Yukos had produced in the years 1998 to 2003, tried, convicted and sentenced to 14 years of prison each. This shift ruined U.S. plans, already underway, to “balkanize” Russia between its many provinces, thereby allowing Western capital to pursue its capture of the Russian economy.

The dispossession of Khodorkovsky was certainly a major milestone in the conflict between President Putin and Washington. On November 18, 2005, the Senate unanimously adopted Resolution 322 introduced by Senator Joe Biden denouncing the treatment of the Khodorkovsky and Lebedev as politically motivated.

Who Influences Whom?

There is an alternative view of the history of Russian influence in the United States to the one now getting constant attention. It is obvious that a Russian who can get the Senate to adopt a resolution in his favor has a certain influence. But when the “deep state” and the corporate media today growl about Russian influence, they aren’t talking about Khodorkovsky. They are talking about alleged collusion between Russia and the Trump campaign. They are seizing, for example, on a joking response Trump made to a reporter’s snide question during the presidential campaign. In a variation of the classic “when did you stop beating your wife?” the reporter asked if he would call on Russian President Vladimir Putin to “stay out” of the election.

Since a stupid question does not deserve a serious answer, Trump said he had “nothing to do with Putin” before adding, “Russia, if you’re listening, I hope you’re able to find the 30,000 [Hillary Clinton] e-mails that are missing. I think you will probably be rewarded mightily by our press.”

Many Trump opponents think this proves collusion. Irony appears to be almost as unwelcome in American politics as honesty.

When Trump revoked his security clearance earlier this month, former CIA chief John Brennan got his chance to spew his hatred in the complacent pages of The New York Times. Someone supposed to be smart enough to head an intelligence agency actually took Trump’s joking invitation as a genuine request. “By issuing such a statement,” Brennan wrote, “Mr. Trump was not only encouraging a foreign nation to collect intelligence against a United States citizen, but also openly authorizing his followers to work with our primary global adversary against his political opponent.”

As America’s former top intelligence officer, Brennan had to know that (even if it were true that Trump was somehow involved) it is ludicrous to suggest that Trump would have launched a covert intelligence operation on national television. If this were a Russian operation to hack Clinton’s private server it would have been on a need-to-know basis and there is no evident need for Trump or his campaign team to have known.

Besides, Clinton’s private server on the day Trump uttered this joke, July 27, 2016, had already been about nine months in possession of the Department of Justice, and presumably offline as it was being examined.

Since Brennan knows all this he could only have been lying in The New York Times.

The Russians, Brennan went on, “troll political, business and cultural waters in search of gullible or unprincipled individuals who become pliant in the hands of their Russian puppet masters.”

But which Russians do that? And who are those “individuals?”

‘The Fixer-in-Chief’

To understand the way Washington works, one can focus on the career of lawyer Jonathan M. Winer, who proudly says that in early 2017 the head of the Carnegie Endowment, Bill Burns, referred to him as “The Fixer-in-Chief.” Let’s see what the fixer has fixed.

Winer served in the Clinton State Department as its first Deputy Assistant Secretary for International Law Enforcement from 1994-1999. One may question the selectivity of Bill Clinton’s concern for international law enforcement, which certainly did not cover violating international law by bombing defenseless countries.

In any case, in 1999 Winer received the State Department’s second highest award for having “created the capacity of the Department and the U.S. government to deal with international crime and criminal justice as important foreign policy functions.” The award stated that “the scope and significance of his achievements are virtually unprecedented for any single official.”

After the Clinton administration, from 2008 to 2013, Winer worked as a high-up consultant at one of the world’s most powerful PR and lobbying firms, APCO Worldwide. As well as the tobacco industry and the Clinton Foundation, APCO also works for Khodorkovsky. To be precise, according to public listings, the fourth biggest of APCO’s many clients is the Corbiere Trust, owned by Khodorkovsky and registered in Guernsey. The trust tends and distributes some of the billions that the oligarch got out of Russia before he was jailed.

Corbiere money was spent to lobby both for Resolution 322 (supporting Khodorkovsky after his arrest in Russia) and for the Magnitsky Act. APCO president Margery Kraus is a member of the Institute of Modern Russia, which is headed by Khodorkovsky’s son Pavel, with the ostensible purpose of “promoting democratic values” – in other words, of building political opposition to Putin.

When John Kerry replaced Hillary Clinton as secretary of state, allowing Hillary to prepare her presidential campaign, Winer went back to the State Department. Winer’s extracurricular activities at State brought him into the public spotlight early this year when House Intelligence Committee Chairman Devin Nunes (R-CA) named him as part of a network promoting the notorious “Steele Dossier,” which accused Trump of illicit financial dealing and compromising sexual activities in Russia, in a word, “collusion” with Moscow.

By Winer’s own account, he had been friends with former British intelligence agent Christopher Steele since his days at APCO. Back at State, he regularly channeled Steele reports, ostensibly drawn from contacts with friendly Russian intelligence agents, to Victoria Nuland, in charge of Russian affairs, as well as to top Russia experts. Among these reports was the infamous “Steele dossier,” opposition research on Trump financed by the Clinton campaign and the Democratic National Committee.

But dirt seemed to pass the other way too. According to a Feb. 6 Washington Post story, Winer passed on to Steele the story of Trump being urinated on by prostitutes in a Moscow hotel with Russian agents allegedly filming it for blackmail material. The Post says the story was written by Cody Shearer, a Clinton confidante. A lawyer for Winer told the paper that Winer “was concerned in 2016 about information that a candidate for the presidency may have been compromised by a hostile foreign power. Any actions he took were grounded in those concerns.” Shearer did not respond to a request for comment from Consortium News. (Full disclosure: Cody Shearer is a member of the advisory board of the Consortium for Independent Journalism, which publishes Consortium News, and has been asked to resign.)

All this Democrat paid-for and created dirt was spread through government agencies and mainstream media before being revealed publicly just before Trump’s inauguration. The Steele dossier was used by the Obama Justice Department to get a warrant to spy on the Trump campaign. 

Winer and the Magnitsky Act

Winer played a major role in Congress’s adoption of the “Sergei Magnitsky Rule of Law Accountability Act of 2012” (the Magnitsky Act), a measure that effectively ended post-Cold War hopes for normal relations between Washington and Moscow. This act was based on a highly contentious version of the November 16, 2009 death in prison of accountant Sergei Leonidovich Magnitsky as told to Congress by hedge fund manager Bill Browder.  According to Browder, Magnitsky was a lawyer beaten to death in prison as a result of his crusade for human rights.

However, as convincingly established by dissident Russian film-maker Andrei Nekrasov’s investigative documentary (blacklisted in the U.S.), Magnitsky was neither a human rights crusader, nor a lawyer, nor beaten to death. He was an accountant jailed for his role in Browder’s business dealings, who died of natural causes as a result of inadequate prison care. The case was hyped as a major human rights drama by Browder in order to discredit Russian tax fraud charges against himself.

By adopting a law punishing Magnitsky’s alleged persecutors, the U.S. Congress acted as a supreme court judging internal Russian legal issues.

The Magnitsky Act also condemns legal prosecution of Khodorkovsky. Browder, on a much smaller scale, also made a fortune ripping off Russians during the Yeltsin years, and later got into trouble with Russian tax collectors. Since Browder had given up his U.S. citizenship in order to avoid paying U.S. taxes, he had reason to fear Russian efforts to extradite him for tax evasion and other financial misdeeds.

It was Winer who found a solution to Browder’s predicament. As Winer wrote in The Daily Beast:

When Browder consulted me, he wanted to know what he could do to hold those involved in the case accountable. As Browder describes in his bookRed Notice, I suggested creating a new law to impose economic and travel sanctions on human-rights violators involved in grand corruption. Browder decided this could secure a measure of justice for Magnitsky. He initiated a campaign that led to the enactment of the Magnitsky Act. Soon other countries enacted their own Magnitsky Acts, including Canada, Estonia, Latvia, Lithuania, and most recently, the United Kingdom.”

Meanwhile, Russian authorities have been trying for years to pursue their case against Browder (image on the right). Putin brought up the case in his press conference following the Helsinki meeting with Trump. Putin suggested allowing U.S. authorities to question the 12 Russian GRU military intelligence agents named in the Mueller indictment in exchange for allowing Russian officials to question individuals involved in the Browder case, including Winer and former U.S. ambassador to Moscow Michael McFaul, among others. Putin observed that such an exchange was possible under the Mutual Legal Assistance Treaty signed between the two countries in 1999, back in the Yeltsin days when America was posing as Russia’s best friend.

But the naïve Russians underestimated the craftiness of American lawyers.

As Winer wrote, “Under that treaty, Russia’s procurator general can ask the U.S. attorney general … to arrange for Americans to be ordered to testify to assist in a criminal case. But there is a fundamental exception: The attorney general can provide no such assistance in a politically motivated case (my emphasis). I know this because I was among those who helped put it there. Back in 1999, when we were negotiating the agreement with Russia, I was the senior State Department official managing U.S.-Russia law-enforcement relations.”

The clever treaty is a perfect Catch-22. It doesn’t apply to a case if it is politically motivated, and if it is Russian, it must be politically motivated. (The irony is that Mueller’s indictment of 12 GRU Russian military intelligence agents appears to be more a political than a legal document. For one thing, it accused the agents of interfering in a U.S. election but never charges them under U.S. electoral law.)

On July 15, 2016, Browder’s Heritage Capital Management firm registered a complaint with the U.S. Department of Justice accusing both American and Russian opponents of the Magnitsky Act of violating the Foreign Agents Registration Act (FARA); adopted in 1938 with Nazis in mind.

As for Russian lawyers attempting to bring their case against the Act to the U.S., the Heritage Capital Management brief declared:

While lawyers representing foreign principals are exempt from filing under FARA, this is only true if the attorney does not try to influence policy at the behest of his client. By disseminating anti-Magnitsky material to Congress, [lawyer Natalia] Veselnitskaya is clearly trying to influence policy and is therefore in violation of her filing requirements under FARA.”

Veselnitskaya was at the infamous Trump Tower meeting in the summer of 2016 to lobby a possible incoming Trump administration to oppose the Magnitsky Act. A British music promoter, not a spokesman for the Russian government, offered dirt on Clinton in an email to Donald Trump Jr. No dirt was apparently produced and Don Jr. saw it as a lure to get him to the meeting on Magnitsky. Democrats are furiously trying to prove that this meeting was “collusion” between the Trump camp and Russia, though it was the Clinton campaign that paid for opposition research and received it from foreigners, while the Trump campaign neither solicited nor apparently received any at that meeting.

The Ideological Conflict Today

Needless to say, Khodorkovsky’s Corbiere Trust lobbied hard to get Congress to pass the Magnitsky Act. This type of “Russian interference intended to influence policy” goes unnoticed while U.S. authorities scour cyberspace for evidence of trolls.

The basic ideological conflict here is between Unipolar America and Multipolar Russia. Russia’s position, as Putin made clear in his historic speech at the Munich security conference in 2007, is to allow countries to enjoy national sovereignty and develop in their own way. The current Russian government is against interference in other countries’ politics on principle. It would naturally prefer an American government willing to do the same.

The United States, in contrast, is in favor of interference in other countries on principle: because it seeks a Unipolar world, with a single “democratic” system, and considers itself the final authority as to which regime a country should have and how it should run its affairs.

So, if Putin were trying to interfere in U.S. domestic politics, he would not be trying to change the U.S. system but to prevent it from trying to change his own.

U.S. policy-makers practice interference every day. And they are perfectly willing to allow Russians to interfere in American politics – so long as those Russians like Khodorkovsky, who aspire to precisely the same unipolar world sought by the State Department. Indeed, the American empire depends on such interference from Iraqis, Libyans, Iranians, Russians, Cubans – all those who come to Washington to try to get U.S. power to settle old scores or overthrow the government in the country they came from and put themselves in power. All those are perfectly welcome to lobby for a world ruled by America.

Russian interference in American politics is totally welcome so long as it helps turn public opinion against “multipolar” Putin, glorifies American democracy, serves U.S. interests, including the military industries, helps break down national borders (except those of the United States and Israel) and puts money in appropriate pockets in the halls of Congress.

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This article was originally published on Consortiumnews.

Diana Johnstone is the author of Fools’ Crusade: Yugoslavia, NATO, and Western Delusions. Her new book is Queen of Chaos: the Misadventures of Hillary Clinton. The memoirs of Diana Johnstone’s father Paul H. Johnstone, From MAD to Madness, was published by Clarity Press, with her commentary. She can be reached at diana.johnstone@wanadoo.fr. She is a Research Associate of the Centre for Research on Globalization  (CRG). 

Russia Is Buying Gold: Will It Save Russia From Dollar Sanctions? End of Dollar Hegemony?

Interview with Peter Koenig


Putin-gold

REUTERS/Alexsey Druginyn

The German newspaper “Die Welt” announced that Russia actively seeks to get rid of dependency on the US dollar by purchasing gold and selling the bulk of the Moscow-owned US Treasury bonds.

According to political advisor and author James Rickards, cited by the newspaper, the Russian government pursues “a strategic plan” aimed at protecting the country from “dollar sanctions” by building up Russia’s gold reserves.

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Sputnik: The author of the article for “Die Welt” called gold ‘a perfect investment’ for Russia in the face of US sanctions. How much does this assessment correspond to reality? If it is true, why?

Peter Koenig: Yes, Mr. Zschäpitz, from the German “Die Welt“, quoting James Rickards, makes some good points.

The fact that Russia is stocking up on gold is not new. They have been doing this for years, especially during Mr. Putin’s leadership and more so since the imposition of the totally illegal sanctions that are based on falsehood and fabricated reasons in the first place – and continue on fabricated reasons, mostly by the US and the UK.

And to add injury to insult, the Swiss bank Crédit Swiss has just frozen roughly 5 billion dollars of money linked to Russia to avoid falling out of favors with Washington and risking sanctions. This is of course further increasing pressure on Moscow to de-dollarize as quickly as possible. Washington must know, of course, what these “sanctions” do. They are talking to Russian Atlantists – or Fifth Columnists – of whom there are still too many in Russia. And the sanctions against Russia are also propaganda-speak “we still command the world”.

These sanctions call for de-dollarization – which is already happening, and this on a rapidly increasing scale, as Mr. Zschäpitz points out. At the same time as Russia is buying gold, Russian dollar reserves have been reduced drastically over the past years.

They were replaced by gold and the Chinese Yuan (Renminbi) – since about two years the Yuan has been an officially recognized reserve currency by the IMF. The accumulation of gold, has made Russia the world’s fifth largest gold owner. They have increased their gold holdings from less than 500 tons in 2008 to almost 2000 tons in July 2018, including the latest purchase of 26 tons in July 2918.

The Russian Ruble today is covered twice by the value of gold. The ruble is no fiat currency like the dollar-based western monetary system, including the euro. The ruble is a solid currency, despite contrary western propaganda. When the western media demonizes the Russian currency as having lost 50% of its value due to sanctions – it is a manipulated half-truth. The 50% loss of value as compared to what? – Compared to the US dollar and other western currencies? With a western de-linked economy – a 50% devaluation, or any devaluation is irrelevant.

Being decoupled from the dollar, Russia will no longer be vulnerable to western sanctions – and no longer needs the western economy – which is already almost the case today. Russia has embarked on an effective “Economy of Resistance”.

As President Putin pointed out already years ago, the sanctions are the best thing that happened to Russia since the collapse of the Soviet Union. They forced Russia to rehabilitate and boost her agricultural production for food self-sufficiency, and likewise with the industrial sector. Today Russia is not only food-autonomous, but is by far the world’s largest wheat exporter; and Russia has developed a cutting-edge industrial park, no longer dependent on ‘sanctioned’ imports from the west.

And take this – as Mr. Putin pointed out, Russia will be supplying the world exclusively with organic food!

All of this confirms that investing in gold as a reserve currency and in Yuan, is a move away from the western dollar economy – and towards economic sovereignty. Besides, Russia has had for years a Yuan-Ruble swap agreement with the Central Bank of China, a sign of close economic and trade relations.

By the way – China has also been on a gold-buying spree for years. The Chinese Yuan is also covered by gold, plus by a solid national economy. Therefore, sanctions or ‘Trump’s tariff war’ have also only limited effect on China, if any. They serve more western anti-Yuan propaganda, alleging that tariffs and sanctions may weaken the yuan, thereby discouraging countries to buy yuans for their reserve coffers. It is a fact that the Yuan is rapidly replacing the dollar as a reserve currency.

Besides, both Russia and China are part of the Shanghai Cooperation Organization – the so-called SCO – and along with 6 other countries the SCO encompasses already close to 50% of the world population and controls about a third of the globes GDP. – Dependence on the west is no longer necessary.

Sputnik: The author also speaks about the growing importance of gold. What effect could its increased role have in the international financial system?

PK: It is half-secretly speculated that as a last-ditch effort to save the dollar, the US may return to some kind of a gold standard, thereby massively devaluing the dollar – and the US international debt – all those dollars currently still in many countries’ treasuries as reserves.

Having alternatives to dollars in a country’s reserve coffers, like gold and yuans, is of course a great defense mechanism. On the other hand, if such a move back to a kind of gold-standard by Washington, introduced by the FED and the US Treasury-controlled IMF, would take place – it would most likely boost the market value of gold – a good thing for those who have converted their reserves into gold.

Those who would suffer from such a move are as always, the poor countries, those that are highly indebted by IMF and World Bank loans, and may now be asked to pay back their debt in gold-convertible dollars.

Sputnik: What will happen to the dominance of dollar? What impact could it have on the US position on the world arena?

PK: It would most likely accelerate the fall of the dollar, meaning the end of US-dollar hegemony. It would probably also trigger the fall of the US economy which depends so much on the dollar hegemony – on being able to pressure countries into their following by ‘sanctions’.

I’m not a believer in gold as a sustainable ‘currency-alike’ in the long-run – because gold is also vulnerable to high-stakes manipulation and speculation. I more believe in a country’s economy as the true backing of a country’s currency. This is already happening in China, where the currency in circulation is backed by its strong economy. It may be soon, or is already, the case in Russia.

The use of gold, in my view, is but a temporary measure, and will last as long as the world still believes in the godly and historic and ancient powers of this precious metal. Today only about 10% of the available gold is for industrial use, the rest is “reserve money” and for pure speculation. If the world discovers that there is about 100 times more paper gold – gold derivatives – in circulation than physical gold – this miracle perception of gold may disappear. If all the derivative-paper gold would be cashed in at once – guess what would happen?

So, gold is good for now, but a temporary solution, in the longer run to be replaced by the actual strength of a country’s economy.

Sputnik: Amid US sanction policy, there have been calls for switching to national currencies in trade and ditch dollar. How efficient is this approach?

PK: Very efficient.

This is already happening. Russia and China are for years no longer trading in dollars but in local currencies, or even in gold, or in the case of China in gold-convertible yuan, especially for trading hydrocarbons, oil and gas. So are largely India, Iran, Venezuela and other countries that are eager to escape the dollar- hegemony with sanctions.

I think one of the ways out of the nefarious neoliberal globalization, is returning to sovereign country economies, with local currencies and satisfying local market needs. External trade with friendly nations, that share similar cultural and ideological values.

This is what China has done. China opened its borders to the west gradually in the mid-eighties, when she was self-sufficient in alimentation, health, education and shelter. And this practice is paying off until today. It is very difficult – if not impossible – to pressure China into anything – political or monetary – as Trump may soon find out – or knows already. China is fully autonomous and controls the Asian market, doesn’t really need the west in the long.

What Mr. Putin said, about the sanctions being the best thing that happened to Russia – for achieving economic sovereignty – which is really the key, goes in the same direction.

So yes, local production for local markets wit local currencies and trading with friendly nations – i.e. the SCO nations and nations participating in President Xi’s Belt and Road Initiative (BRI) is the future.

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Peter Koenig is an economist and geopolitical analyst. He is also a water resources and environmental specialist. He worked for over 30 years with the World Bank and the World Health Organization around the world in the fields of environment and water. He lectures at universities in the US, Europe and South America. He writes regularly for Global Research; ICH; RT; Sputnik; PressTV; The 21st Century; TeleSUR; The Vineyard of The Saker Blog, the New Eastern Outlook (NEO); and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe. He is also a co-author of The World Order and Revolution! – Essays from the Resistance.