Is Washington’s concern over the ‘Russian menace’ in the EU energy market justified?

JRL/2013/ 41/28

Practically the moment hydrocarbons were discovered in the Caspian Sea we were solemnly informed by the anti-Russia lobby that Russia must be cut out of the loop. Moscow was fomenting wars in order to control pipeline routes, its dearest desire was to dominate these routes, and, presumably, being Russians, would then force the world to its knees like some mad scientist in a movie. These hysterias cropped up again in the 2008 war – Moscow was going to seize the pipeline through Georgia. US business interests were never mentioned at all – it was all geopolitics and security – the so-called New Great Game. And it was a zero-sum game in which Russia could not be allowed to score a point. (Or cut into the profits of a US company.)

But here we are today and all is calm. Customers have various routes and suppliers; producers have various customers and routes. This is one of the meanings of “energy security”.

The American campaign to – what is the word? – contain? hamper? impede? circumscribe? cripple? Russia is not working very well. The “coloured revolutions” are gone leaving nothing in their place; Russia is building pipelines and customers are participating in the building; Russia’s economy is growing and forcing people to take it seriously.

It hasn’t conquered Georgia and seized the pipeline; neither has it conquered Azerbaijan to get at its oil; it isn’t demanding rack-rents from its customers using its “gas weapon”. Indeed it is proceeding rather normally and quietly.

Even though the wolf doesn’t come, the boys keep shouting. Better they, and we, should pay attention to real threats.

Should Obama listen to calls for a full-scale containment of Russia

Should Obama pay any attention to Freedom House’s rating of Russia? No, and neither should anyone else. They are not “independent” ratings of freedom.

Freedom House doesn’t like Putin very much: Russia’s “democracy score” has declined from 4.96 in 2003 to 6.18 in 2012 on a scale where 1 is the best and 7 the worst. Worse today, oddly enough, than either Libya or Kosovo but at least not quite as bad as Zimbabwe or North Korea. It doesn’t like Russian elections either. In 2006 we were told “Russians cannot change their government democratically.” But the fact that they have not chosen to elect the Communists, Zhirinovskiy or any of the ephemeral and self-destructive “liberal” parties is not evidence that they cannot; only that they have not.

The goalposts are always moving: new regulations on registering political parties reduced pluralism in 2003 but the registration of many new parties in 2012 “seemed designed to encourage division and confusion among the opposition.” The centralised appointment of regional governors was condemned in 2005 but the return to election in 2012 apparently only helps pro-Kremlin incumbents. Even going uphill, Russia is going downhill.

In 2013 Russia gets a downward arrow “due to the imposition of harsh penalties on protesters participating in unsanctioned rallies and new rules requiring civil society organizations with foreign funding to register as ‘foreign agents’”. It’s OK for Washington to require permits to demonstrate and charge hefty fines or imprisonment for violations, but wrong for Moscow. It’s OK for the USA to demand foreign financed organisations register as such, but wrong for Russia to do so. Why? This is “decision-based evidence making”. To Freedom House, elections, whether the ruling party wins two-thirds of the vote or drops to one half, are always “deeply flawed”. Press freedoms, no matter how many are free to travel to Washington to complain, are always “curtailed”. Demonstrations, no matter how many, are “consistently reduced”.

How “non-government” is Freedom House? Well, it is certainly very much government funded. How about the freedom part? The cynic, looking at these scores over 2003-2012: Latvia from 2.25 to 2.11. Georgia, 4.83 to 4.86. Ukraine 4.71 to 4.82, Armenia 4.92 to 5.39, Kazakhstan 6.17 to 6.54 might be forgiven if he saw a pattern. A pattern that, oddly enough, was replicated in the famous “colour revolutions”. In Ukraine and Georgia NATO membership suddenly shot to the top of the new “democratic” governments’ priorities and in the Kyrgyz Republic a NATO base became very important. Could it be that Freedom House’s assessment correlates closely with geopolitical purposes?

Every now and again, someone gives the game away. The Executive Director of the US branch of Amnesty International when Pussy Riot was declared to be prisoners of conscience was Suzanne Nossel. In and out of US Administrations and NGOs, at AI she boasted she was the author of a 2004 article in Foreign Affairs magazine entitled ‘Smart Power’. “Progressives now have a historic opportunity to reorient U.S. foreign policy around an ambitious agenda of their own… the great mainstay of twentieth-century U.S. foreign policy: liberal internationalism… liberal internationalists see trade, diplomacy, foreign aid, and the spread of American values as equally important.” She now heads PEN American Center and is still proud of “smart power”. She evidently sees no conflict of interest between advancing “human rights” and advancing US foreign policy.

So, not so “non-governmental” or “human rights” after all; more like a government funded organisation supporting US foreign policy.


CORRUPTION: IS ANYTHING REALLY HAPPENING? I recommend reading our discussion. But, if you don’t read the whole thing you must read Anatoly Karlin’s entry: all we ever hear is that Transparency International puts Russia near the bottom. But other ratings contradict its: Karlin names them, gives their scores and discusses about the implications. His conclusion is that Russia is pretty much at the world average. Myself, I don’t take these ratings on Russian corruption, press freedom, human rights or anything else very seriously because they’re all too affected by the prevailing memes and I suspect the motives of most of the raters. But Karlin’s point is that TI’s ratings fit poorly with other indicators. Russia is certainly very corrupt but 133rd worst? I doubt it. (TI, by the way, rates Georgia at 51; let’s watch that rating under Georgia’s new management.) Meanwhile the investigations roll on. More in the military, which some observers rate as the most corrupt part of the body politic: one of the principals in the OboronServis scandal has been released with movement restrictions; she fully cooperated with the investigation, they say, so we’ll be hearing more. A case about soldiers being left to starve has been opened. And the Audit Chamber says it has uncovered nearly US$4 billion in waste and misappropriation in 2012 (more than 10% of the budget). A former Agriculture Minister is questioned in a fraud case revealed last November. And a brand new embezzlement case at the Skolkovo high-tech centre of which Medvedev was so proud. Come to think of it, you should read Sergei Roy’s entry too. “Appropriation of budgetary resources”; that’s what Russia’s big-time corruption involves: the transformation of public money into private benefit. Too many investigations now to keep track of.

OLYMPICS. And, tomorrow’s corruption news today: it was announced that the Sochi games site has already accounted for $US36 billion! While things have been built starting from a rather decayed base, you could build a small country for that kind of money. Obviously a lot was “appropriated” there too.

NGOs. As everyone knows Moscow imitated Washington and passed a law that NGOs (as they are called – but how “Non G” are they really if some government pays for their existence?) had to state the amount of foreign funding they received. At the time I wondered how these organisations would survive if they had to get their money from actual Russians. Not so well it seems: 11 have lodged a complaint with the European Court of Human Rights about the law. Of the eight named in the reference, a Google search shows six getting US founding (four from USAID). The sad thing is that, before they took Washington’s shilling, Memorial and Moscow Helsinki Group were home-grown. I expect the European Court to make the usual-Russia-has-sinned ruling and Moscow to ignore it. I reiterate: I believe it is a real human right to know whose money and interests are trying to get inside your head. By the way, I regard any group that states “Journalists are killed with impunity in Russia” to be, ipso facto, a political organisation.

LEFT FRONT. The essence of this matter is that the authorities accuse Udaltsov and his confreres of starting riots after an otherwise peaceful anti-Putin demo last May. (For what it’s worth, my contacts agree that the violence was started by a few of the demonstrators). A TV program in October had film purportedly showing him conspiring with Givi Targamadze, at that time chair of the Georgian parliamentary committee for defence and security and one of Saakashvili’s close associates. Udaltsov is now under house arrest as is Konstantin Lebedev; the third accused, Leonid Razvozzhayev, will be returned to Moscow for further questioning. He confessed but says it was forced out of him. All three absolutely deny the charges. I don’t have an opinion: I can imagine either that they’re innocent and a case is being manufactured or that the authorities are genuinely mistaken. On the other hand, Left Front is pretty extremist (rather Bolshevik indeed) and Saakashvili was quite capable of doing anything. But I am interested that the Investigative Committee is going to the length of filing charges against Targamadze who, as a sitting Georgian parliamentarian, is not likely to show up in Moscow to answer them and Tbilisi is very unlikely to extradite him.

LITVINENKO. This could be interesting: British High Court Judge Owen has granted the Russian Investigative Committee status of an interested party in the May 2013 inquest on Litvinenko’s death. I have never wavered in my conviction that Putin and official Russia had nothing to do with it.

GOLD. Russia’s been buying quite a bit of it lately, they say. Not so trusting of Western currencies perhaps. Russia holds more than half a trillion USD in various currencies. Some concern about “currency wars”.

© Patrick Armstrong Analysis, Ottawa, Canada (

Is Russia’s anti-corruption drive the real thing?

(Other discussion


Vlad Sobell mentioned two theories: Putin might be seriously attacking corruption or it’s only inter-clan fighting.

“Clannology” has been a popular notion for years. In the early Putin years I remember an intelligence agency proudly presenting its typology. Three clans were fighting: “Family”, “Siloviki” and St Petersburg? – I can’t recall now. Unimpressed, I asked: What have we learned from this? What is explained? What is predicted? “Clannology” has nothing to offer: it has Popper’s fatal sin of not being falsifiable. Whatever happens will be fitted into the theory: Putin and Medvedev fall out, different clans; they don’t, same clan. A theory that explains everything, explains nothing.

So we must (Popper again) make a falsifiable hypothesis that Putin really is making a serious attack on big scale corruption and ask what would be the evidence that he is. Let us consider three hypothetical corruption examples. A hospital exists, but the staff demand bribes to do their jobs. The hospital exists, but the money for many items was stolen. No hospital exists because the money was stolen before anything happened. Arresting the bribe-taking staff is not evidence of a serious anti-corruption drive: they’re little guys and easy to catch. Arresting the locals who divert some of the money is better but the real effort must be getting the big thieves – the connected people who can make money disappear before it appears. Big Russian corruption – vide the OboronServis case – resembles the third example: money allocated for some public purpose is diverted to private benefit by people at the top of the money flow. This is much more serious than some traffic cop scoring a free lunch: more money is stolen, further up the power chain and it therefore corrupts the body politic more. Putin has to bite into this layer to reverse behaviour and send the message to the big thieves who think they are immune.

In short, someone high up must be arrested; otherwise thieves just learn that it’s better to steal big than steal small. No such arrest has yet been made although the dismissal of Serdyukov has put us within sight of one. (And, pace the clannologists, Serdyukov, appointed and retained by Putin in a very important ministry, would surely have been considered a member of Putin’s clan). Former Moscow Mayor Luzhkov’s fate, or his wife’s, while they are a few orbits away from the inner ring, is also something to watch. Talk about their malfeasances has quieted but the Prosecutor General’s Office moves slowly. And investigations must be done properly, with evidence, otherwise it’s not a real campaign.

Can we put a time limit on this? I would suggest, given that Putin recently described corruption as “the biggest threat to our development”, that we should see someone in the inner ring, or an orbit away from it, charged before the end of Putin’s current term. (Unless they are all pure. Which no one believes.)

But it’s possible Putin will try but fail: in 2007 he was asked “How can you control corruption?”, “Unsuccessfully” said he, “We are addressing this issue unsuccessfully.” It won’t be easy to take a bite out of people who have been stealing for years.

Medvedev recently said that there were about 50,000 corruption cases being investigated. If half of these go nowhere and 90% of the rest are small fry, that still leaves several hundred potentially big cases that we may hear about. I believe that an effort is indeed being made, but it has not yet passed the test of one of the inner ring being punished.