The autocratic regime propagated by Putin threatens us all

Sifting through the looming challenges of the coming year, it looks like the threat of Covid will subside in a way that geostrategic threats won’t – as Russia inexorably returns to the peak of Cold War belligerence . The difference between yesterday and today is simple: unlike the present, the West at that time knew it was facing an existential challenge and acted accordingly. Moscow is clearly determined to take back its empire. The West remains in denial. The Kremlin has aligned invading forces with Ukraine, a country it has invaded with impunity twice since I co-authored two books in my mid-twenties warning of such events to come. Since then, we have not given Putin any reason to give up. A sort of cheeky chest slap entered the tone of the official Russian demands of the United States: Washington must negotiate directly with Moscow above the head of Europe; spheres of interest must be re-established; the Warsaw Pact countries must be returned. If you don’t believe it, read this absolutely fascinating and very alarming summary of the Kremlin’s position (“Americans… must take seriously what is put on the table, or they face a military-technical alternative”).

How did we get there ?

For starters, we have offered no retreat against all of the myriad attacks, large and small, on the credibility of the West. The incessant cyber warfare, the incidents of Havana Syndrome, the interference in American and allied elections with money and disinformation, the complicity of the Taliban insurgents, the assassinations of political dissidents in our territory, the instrumentalization of Kremligarchs and black money networks around the world, the abuse of Interpol, the maintenance of authoritarian regimes, the corruption of Western elites, and much more. Perhaps the biggest tangible difference between the peak conditions of the Cold War and the present is the astonishing amount and flow of Kremlin money deployed overseas. This was once the great insurmountable advantage of the West – we had all the money. No more. Yet much of it still comes from the West and we are helping financially support the Cold War against us – through petrodollars, by investing and buying Russian commodities and companies, at least to the extent that they can also do. of business in the global economy. To keep the process going, Moscow continues to appoint former Western politicians to Gazprom’s board of directors, especially Germans. The argument for appeasement is that it returns favorably – in purchases of German cars, American real estate, French wines, tourism everywhere, etc. But it also amounts to subverting our rule of law.

The decades-old model for such economic recycling stems from the West’s dealings with oil kingdoms such as Saudi Arabia, where petrodollars went east for oil and returned as spending on oil. armaments, political public relations, real estate, luxury goods, consumer goods, etc. Russia is playing the same oil state game, but in a more malicious way. And it sets the example that other countries with autocratic systems now freely emulate. Let’s break down the tracks focusing on the oligarchs / Kremligarchs. Their funds have infiltrated the arteries of the West by using and abusing legitimate institutions. Lawyers and public relations professionals hired by oligarchs, especially in the UK, readily target journalists whose work causes unease. Author Catherine Belton and her publisher Harper Collins have been sued for defamation by Roman Abramovich and the Russian state-owned energy company Rosneft. The book in question is Putin’s people: how the KGB took over Russia and attacked the West. The case was recently settled, with the author and publisher agreeing to remove certain passages, including the allegation that Abramovich bought the Chelsea football team at Putin’s request.

But the super-expensive, apparently drawn-out trial has caused great concern among advocates of transparency. Here is a link to a petition from concerned groups fearing the effect of muzzling on freedom of expression. Lawsuits like this cool the scrutiny of the oligarch’s affairs, now more necessary than ever, and can serve as a weapon of disinformation.

If one accepts the premise that the oligarchs only keep their billions with the tolerance of the Kremlin, then the way they deploy their funds abroad certainly deserves a closer look. Take the example of Dmitry Ryboloviev who, for a few years, has been suing his former art dealer Yves Bouvier, alias the king of free ports, in many jurisdictions for having (essentially) overloaded the oligarch with works of art ( among others). Here is a BBC article developing free ports. So far, Ryboloviev has lost in all jurisdictions while causing a huge scandal in Monaco which led to the resignation of the Monaco prosecutor for being in Ryboloviev’s pay. Details are summarized in this Artnet article.

Bouvier pursues the oligarch with multiple allegations, including the rather pointed one according to which “he wanted to steal my free port business in Singapore and build his own for the Russian Federation in Vladivostock”. Vladivostock is a border town through which flow all kinds of profits from Siberian raw materials such as logging and diamonds and everything in between. Suffice it to say that free ports, if misused, can be a very effective channel for money laundering and for evading US sanctions. Indeed, Bouvier accuses Rybolovyev of having played for the Kremlin. We must not forget that it was Rybolovyev who paid an additional $ 50 million for Donald Trump’s property in Palm Beach. Rybolovyev made his money from Russian potash and invested heavily in the Belarusian potash industry, the country’s main export, helping to keep the regime there. The regime has since moved towards integration with Russia.

The alternative black money economy in the world, worth several trillions of dollars, works in symbiosis with the oligarchs and helps to corrupt the countries where the oligarchs operate. The process began in the 1990s when tough oligarchs intimidated or outright murdered their rivals and took over industries by force. In Ukraine, they then invested money in politics to fund politicians who in turn would protect the power and money of the oligarchs. In Russia, a different result prevailed. Putin simply allowed the bosses to stay if they complied with his demands. He imprisoned or replaced others. Whether oligarch-kleptocrats control the state or vice versa, or something in between, a rough version of this structure has proliferated around the world and threatens the West in various ways.

Take the Ukrainian oligarch Ihor Kolomoisky, now under official US sanctions for corrupting Ukrainian governance. He is also under investigation by the Fed for siphoning billions from a Ukrainian bank and placing them in assets across Central America, such as major real estate in downtown Cleveland and worn-out steel plants in small towns. Against which he and his partners have borrowed huge loans from local authorities and defaulted on the loans, according to the allegations.

The great Achilles heel of the autocratic-oligarchic world system periodically arises and massive street protests erupt, as they inevitably do – hence the riots in Kazakhstan now. The consolation that such regimes offer citizens – stay out of politics and we’ll take care of you – fails at predictable stress points (Moscow’s version differs slightly; the deal is “you stay out of politics and we make you feel good by rebuilding the Empire ‘). The elites monopolize power and funds, which leads to inefficiency and corruption. A lot of money disappears abroad. The value of the country’s basic raw material often drops in world markets and hits domestic subsidies. Inevitably, they fail, at various times, to deliver their end of the bargain. Here is a terrific essay on the phenomenon titled “Can ‘good’ economics coexist with ‘bad’ politics? ”

The author, among others a former senior official of the World Bank, identifies how corruption spreads externally to affect global standards. The World Bank’s Ease of Doing Business rankings include one such example. “There are invariably,” he writes, “large public sectors – particularly where natural resources are important – in which state-owned enterprises continue to play a prominent role. The latter operate in symbiosis with strategically placed private companies, some of which have been acquired through privatization ”. He evokes the famous Yukos dispute in Russia and the Tristan Oil affair in Kazakhstan.

Here’s another way post-Soviet autocratic regimes are inundated with money – the uncertain national rule of law allows the privatization of assets of outside investors. The issue can then be argued endlessly in several Western jurisdictions, thus exploiting Western institutions against Western interests. Governments in the UK and US have launched various initiatives to stop the incursions of black money, to improve transparency and the like (for example, to stop the abuse of Interpol by autocratic regimes, see the TRAP law). But too many separate jurisdictions, states and cities still prefer to turn a blind eye as funds pour in, especially in the age of Covid. Until sufficient weight and coordination is demonstrated at the federal level, there is little hope of a real response.

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