Some Ukrainian Background.

The first “Russian” state was Kievan Rus, created by conquering Vikings.[1]  In the 13th Century the Mongols showed up and put a stop to that.  “Independent” Russia came to mean a small territory around Moscow.  Over the following centuries, Ukraine became a contested ground between empires: the “Golden Horde” of the Mongols, the Polish-Lithuanian Commonwealth, the rising Austrian Empire, and an expanding Romanov Russia.  By the end of the 18th Century, the Austrians held Galicia, while the rest of the Ukraine belonged to Russia.

As was the case elsewhere in Eastern Europe in the second half of the 19th Century, local nationalism began to burn.  Tsarist Russia repressed this just as it did every other form of non-Russian nationalism.  Still, Ukrainian nationalism survived.  When the First World War wrecked the Austrian and Russian Empires, Ukraine declared its independence (1917).

Tragedy followed for Ukrainians: the territory and its people were savaged by Poles with an expansive definition of “historical” Poland; and by “Whites,” “Reds,” and a variety of crazy people like the Anarchist anti-semite Nestor Makhno during the Russian Civil War and the Russo-Polish War.  Then Ukraine fell under the hammer during Josef Stalin’s collectivization of agriculture in the 1930s.  About 3.5 million Ukrainians were starved to death during this “Harvest of Sorrow.”[2]

During the drive for industrialization that followed close on the heels of the “terror famine,” Stalin moved in millions of Russians to eastern Ukraine.  Their descendants still form a large part of the population of Ukraine.  Then the Second World War brought both massive suffering and deep divisions, as Ukrainians fought on both side.

In 1954, possibly trying to make amends to the Ukraine for the whole unfortunate “terror famine” thing, the Soviet Union transferred Crimea from Russia to Ukraine.  This remained something of a sore spot for the ethnic Russians of Crimea.

When the Soviet Union collapsed in 1991, Ukraine held a referendum on independence.  Overall, 90 percent of those who voted supported independence.   However, voter participation varied a good deal throughout Ukraine.  The Russians weren’t happy with this secession, but there wasn’t much they could do about it because Russia itself was in massive turmoil.

The post-independence history of Ukraine has not been a happy one.[3]  Corruption is endemic.  Mismanagement is widespread.  Bureaucracy is pervasive and stifling.  Investment in productive capacity fell far short of needs.  Where banks did lend, they often made bad loans.  Business law and an incompetent (or corrupt) judiciary make property insecure.  Investors don’t want to risk their capital.  By 2014, Ukrainians were among Europe’s poorest people.

In 2004, Viktor Yanukovych won election as president amidst charges of massive fraud and interference by the Soviet Union.  An “Orange Revolution” turned him out of office.  His “Orange” successors then mismanaged things on a grand scale.  Eventually, in 2010, Yanukovych managed to win election as president without charges of massive fraud.  In late 2013 he suddenly rejected a long-prepared economic agreement with the European Union.  This act sparked a new round of demonstrations that ended with Yanukovych chased from office once again (February 2014).

After that, things got even worse.  By 2015, the conflict with Russia cut Ukrainian-Russian trade by half.  Inflation and unemployment both rose.  Foreign-exchanges reserves at the central bank sank to their lowest point in a decade.  Experts estimated that the country would need $40 billion in financial assistance over the next four years.  In early February 2015, the International Monetary Fund granted Ukraine a $17.5 billion credit.

It was against this background that the Obama administration, the European Union, and the International Monetary Fund began pressuring Ukraine to root out corruption and address a host of other problems.

[1] “In Russia’s shadow,” The Week, 14 March 2014, p. 11.

[2] Robert Conquest, The Harvest of Sorrow: Soviet Collectivization and the Terror-Famine (1986); Anne Applebaum, Red Famine: Stalin’s War on the Ukraine (2017).

[3] David M. Herszenhorn, “Economic Woes Will Test Kiev, Even if Truce Holds,” NYT, 14 February 2015

The Origin of the Russia investigation.

In May 2016, a Trump foreign policy adviser, George Papadopoulos, told the Australian High Commissioner in London, Alexander Downer, that he had heard that the Russkies had “dirt” on Hilary Clinton.[1]  Downer immediately informed the Australian foreign ministry.

Six or seven weeks followed, during which time the Australian government did not inform anyone—officially or unofficially—that a hostile foreign power had breached the security of an American presidential candidate.

Christopher Steele had served in important positions in the British Secret Intelligence Service (MI-6), then had opened a private business intelligence company.  He had served in Moscow and had been the head of the “Russia desk” for MI-6.  In June 2016,[2] the Democrats had hired his company to conduct opposition research on Donald Trump.  Steele began investigating Trump’s Russian connections.  Between June and December 2016, Steele wrote 17 memos.  Steele’s memos suggested that a “well-developed” conspiracy linked Trump with the Russian government.  The Russian would help get Trump elected; President Trump would then end the economic sanctions imposed on Russia for its actions in Crimea and Ukraine.   Furthermore, the Russian possessed compromising personal information on Trump.

However, at this time, the FBI had no knowledge of Steele’s memos.

On 22 July 2016, Wikileaks began publishing the Democratic National Committee e-mails provided to them by the Russkies.  At this point, the FBI learned from the Australian government of the report on Papadopoulos.  [So, the FBI knew that the Russians had hacked the computers at the Democratic National Committee, that Russia was releasing stolen information through Wikileaks, and now had a report that the Trump campaign may have had fore-knowledge.]  On 31 July 2016, the FBI opened an investigation of Trump-Russia collusion: “Operation Crossfire Hurricane.”  The operation was conducted in great secrecy, with no leaks to the press.

After the launching of “Crossfire Hurricane,” the FBI sought a FISA warrant to surveil the communications of Paul Manafort,[3] Michel Flynn, Carter Page,[4] and George Papadopoulos.[5]  All four had varying degrees of prior contact with Russia.  [The warrant application was denied as “too broad.”]

In September, Steele shared his memos with the FBI.

[In late September, Michael Isikoff reported that a Trump campaign adviser was being investigated over contacts with the Russians.  The report was based on leaks.]

In October 2016, the FBI obtained a FISA warrant to surveil the communications of Carter Page.  A part of the supporting evidence for the warrant application came from the “Steele dossier.”

Thus, William Barr’s investigation isn’t likely to turn up compromising information.

[1] “The origins of the Russia investigation,” The Week, 28 June 2019, p. 13.

[2] Apparently at the time when the Australian government was not informing the American government of the remarks by Papadopoulos.

[3] The FBI had begun an investigation of Manafort after his candidate, the pro-Russian Ukrainian Yanukovich, had been ejected from power in early 2014.

[4] Page had been investigated by the FBI in 20013-2015 and found blameless.

[5] But not Jared Kushner or Donald Trump Jr. or Donald Trump Sr.  Why not?

Default Setting II.

Between 1775 and 1825, the revolts against the British and Spanish Empires in the Americas created a host of new nations.  In the minds of European leaders, formal “empire” sold at a deep discount.  However, the “empire of free trade” arose as a far more appealing idea.  If non-European countries would pursue Western economic[1] and legal[2] policies, then you could get the same benefits of empire without the costs and heartbreak.  The Western capital generated by industrialization could then safely flow toward the economic development of the rest of the world.[3]  All would benefit.

The world of international investment brimmed with challenging opportunities in the later Nineteenth Century: Latin America, the United States, the Ottoman Empire, Japan, and China for example.  However, a willingness to fulfill commitments to Western economic and legal doctrines in exchange for Western investment varied from society to society.

Russia came late to industrialization and wanted to hurry the process forward.  Russia possessed rich natural resources, but its primitive agriculture generated little wealth.  Where to find the capital for rapid industrialization?  Two solutions offered themselves.  Either the country could borrow from rich foreign lenders or the peasantry could be squeezed very hard.  Fearful of peasant unrest, Russian leaders sensibly opted for foreign borrowing.

Foreign lenders could discern positive and negative features in Russian borrowers.  On the plus side were two essential factors.  Russia’s gigantic territory housed vast amounts of minerals and other natural resources.  In the middle of the century, the Tsar Alexander II had shoved through a series of “Great Reforms” intended to begin the modernization of Russia.  Those reforms had not yet taken full hold, but they provided a foundation for further progress.  On the negative side the “Great Reforms” had compounded the turmoil inside Russia.  Rapid industrialization would intensify the strains.  Then, Russia remained an absolute monarchy.  After the death of Alexander II, the quality of leadership declined markedly.

Between 1890 and 1920 political considerations, rather than purely economic ones, exerted a growing influence over foreign investments in Russia.  First, seeking escape from the diplomatic isolation into which it had been forced by Bismarck’s diplomacy, the French government encouraged lending to the Tsarist regime.  This lending supported the eventual Franco-Russian alliance that surprised and alarmed German statesmen.  Second, during the First World War, the French and British tried to prop up their tottering ally by ample credit.  Third, the Bolshevik regime repudiated the Russian external debt.[4]  The Bolsheviks understood the Red default as a stroke against global capitalism.  It would—and, in France, did—gravely weaken the middle class savers who formed a vital support for bourgeois democracy.

At the same time, default contributed to making Soviet Russia an international pariah.  Within a decade, the Soviets turned to the alternative strategy of squeezing assets out of the peasantry.  As late Nineteenth Century leaders had foreseen, the human cost would be terrible.

[1] Raise no barriers to imports and exports; pursue “sound” money.

[2] Practice Western notions of the rule of law, especially the sanctity of contracts.

[3] See, David Landes, Bankers and Pashas: International Finance and Economic Imperialism in Egypt (1958).

[4] See: Hassan Malik, Bankers and Bolsheviks: International Finance and the Russian Revolution, 1892-1922 (2018).

Sessions Timed Out.

Much attention now focuses on the fate of the Mueller investigation into Russian interference in the 2016 election.  Many people fear that the acting Attorney General will seek to close down or hamstring the current investigation.  However, there is another possibility.  Rather than restricting the current investigation, the acting AG could instruct Mueller to expand his investigation to include the so-called “Steele dossier” and any links to the campaign of Hillary Clinton.

My Weekly Reader, 10 July 2018.

Russo-American relations had deteriorated under the simultaneous presidencies (2000-2008) of George W. Bush and Vladimir Putin.[1]  However, constitutional term limits meant that Putin could not run for a third consecutive term.  So, he became prime minister while his client, Dmitri Medvedev, became president.  However, all power remained in Putin’s hands.

Barack Obama also became president in 2009.  Obama made one of his campaign advisers on foreign policy, Michael McFaul, head of Russian affairs on the National Security Council.  McFaul then became a principle architect of the Obama administration’s attempt at a “reset” of the relationship with Russia.  The administration hoped to draw Russia toward the American-led international system.

The “reset” began well.  In July 2009, the Russians began allowing the United States to use Russian airspace to airlift supplies to Afghanistan.  In September 2009, the U.S. dropped its plan to build anti-missile defenses in Eastern Europe.   In March 2010, the two countries agreed to reduce their nuclear arsenals. In May 2010, the Russians agreed to impose sanctions on Iran in an effort to get it to end is nuclear weapons program.  The U.S. then lifted sanctions on Russia.

Then things went sour in a hurry.  Why?  There are two answers here.  One answer is that the Libyan Revolution from March to August 2011 began the breakdown.  In this account, the “Arab Spring” spread to Libya; the Gaddafi government set out to suppress it; Libya was a Russian client and Russia had a veto on any Security Council authorization; the Americans got Russia to abstain by limiting the resolution to “protecting civilians,” rather than overthrowing the regime; and then they went ahead and overthrew the regime.[2]

To make matters worse, in Fall 2011, Putin and Medvedev again switched jobs.  This infuriated many Russians.  Demonstrators filled the streets and the unrest continued during the run-up to the March 2012 presidential elections.  It doesn’t seem to have sat too well with Washington either.  In December 2011, Secretary of State  Hillary Clinton declared that “The Russian people, like people everywhere, deserve the right to have their voices heard and their votes counted. “And that means they deserve free, fair, transparent elections and leaders who are accountable to them.”[3]  This amounted to taking sides against Putin.

Michael McFaul, the American ambassador to Russia from 2012 to 2014, prefers another explanation.  He thinks that Putin is “paranoid” and sees the U.S. as “the enemy.”  He is possessed of “fixed and flawed views.”  The Russian people themselves follow Putin because of “a deep societal demand for this kind of autocratic leadership, and this kind of antagonistic relationship with the United States and the West.”

When Secretary of State Clinton made her statement on the Russian elections, the United States had already overthrown the autocratic governments of Afghanistan, Iraq, and Libya, and leaned on the Egyptian military to topple Hosni Mubarak.  The American government-funded National Endowment for Democracy was at work in Russia.  Is it a surprise that Putin is paranoid?  McFaul should have re-read Kennan before he entered government.

[1] Daniel Beer, Does Vladimir Putin Speak for the Russian People?” NYTBR, 8 July 2018, reviewing Michael McFaul, From Cold War to Hot Peace (2018).

[2] See: https://waroftheworldblog.com/2014/09/28/obama-versus-putin/

[3] See: https://www.cnn.com/2011/12/06/world/europe/russia-elections-clinton/index.html

Steele, Steal, Stolen, or Given?

Back when “President Donald Trump” was merely a twinkle in the eye of residents of the Baltimore Hospital for the Criminally Insane,[1] a conservative organization/web-site hired Fusion GPS to dig up some dirt on Trump, help run him off the road in a hurry so that normal people could chase the Republican nomination.[2]  Well, that didn’t work.  When the Republicans packed it in, the Clinton campaign, through a lawyer “cut out,” took over.  Only at this point did GPS Fusion hire Christopher Steele to investigate Trump’s Russia connections.[3]

Steele is an accomplished former British intelligence officer.[4]  He once headed the Russian department of the Secret Intelligence Service (MI-6).  He contacted a couple of Russian sources: a “former top-level intelligence officer still active in the Kremlin” and a “senior Russian Foreign Ministry official.”[5]  They provided him with a bunch of dirt on Donald Trump for the Clinton campaign to use.  Here’s the thing to my ignorant eye.  Vladimir Putin doesn’t like people to do stuff without checking with him first.  No way to run an organization according to American best business practice literature.  Still, Putin seems to like this approach.[6]

In Steele’s words, Moscow “cultivated” Donald Trump “for at least five years” before the election of 2016.  Both Donald Trump and some of his aides[7] “showed full knowledge [of] and support [for]” the Russian leak through Wikipedia of the e-mails stolen from the Democrats.  For its part, Trump and his aides would “sideline Russian intervention in Ukraine as a campaign issue” and ease up on sanctions against Russia.  Furthermore, Steele reported that the Russians have a it-would-embarrass-anyone-but-Donald-Trump video tape of Trump instructing Russian prostitutes to urinate on the bed of a Russian luxury hotel once used by the Obamas.

On 20 June 2016, Steele sent the first of his reports to Fusion GPS.  However, Steele was in a wee bit of a lather.  He also shared his reports with the EffaBeeEye and with journalists.  At the end of October 2016, Mother Jones ran an article reporting the existence of the “Steele dossier.”  This didn’t blunt Hillary Clinton’s drive for defeat.  Later, John McCain sent a copy of the dossier to the EffaBeeEye.[8]  Then BuzzFeed published the whole thing.

Common opinion holds that the Russians sought to harm Clinton’s chances of becoming president.  Often, journalists portray this hostility to Clinton as springing from a desire to favor Trump.  However, Putin had reason to hate Clinton, but he couldn’t just kill her.  He hates the United States, but can’t just nuke us.  So, vicious pragmatist that he is, he has settled for the next best thing.  He also trued to sink Trump as well.  “Like a rotten mackerel by moonlight, it shines and stinks.”—John Randolph.

[1] Thomas Harris, The Silence of the Lambs (1988).

[2] Sounds like a good idea to me.  So long as Ted Cruz or Marco Rubio or Sideshow Bob doesn’t become president.

[3] Why target only the Russian connections of a businessman with multi-national operations?  Did GPS Fusion have prior knowledge of Russo-Trumpian skullduggery that allowed them to target this particular issue?  Or did they pursue multiple lines of inquiry and the Russian one is the first to hit pay dirt?

[4] “The Steele dossier,” The Week, 2 February 2018, p. 11.

[5] Wait, there are a couple of Russian officials who have been “sources” for a senior intelligence officer of an enemy state and they’re still walking around? Not buying 20-30 Big Macs to tide them over on the train-ride to Siberia?

[6] For example, see: https://www.washingtonpost.com/news/worldviews/wp/2017/03/23/here-are-ten-critics-of-vladimir-putin-who-died-violently-or-in-suspicious-ways/?noredirect=on&utm_term=.ec13e0aab80b

[7] Steele names Paul Manafort, Carter Page, and Michael Cohen.

[8] Which would seem to have obtained a copy from Steele himself earlier on and was sitting on it.

Russia 31 July 2017.

Russia’s reclaiming of Crimea and its support for breakaway groups in eastern Ukraine led to American-led economic sanctions.  Putin’s sudden increased support for the Assad regime in Syria helped turn the tide in the civil war against American proxies.  Putin’s intervention in the American presidential election to the disadvantage of Hilary Clinton, led, first, to the expulsion of a number of Russian “diplomats” and, now, to the passage of further sanctions.

Vladimir Putin wanted Donald Trump elected president of the United States.  This is the gist of much of the explanation of the Russian intervention in the 2016 presidential election.  Trump had said many positive things about Putin, especially in comparison to President Barack Obama.  As President, Donald Trump would take a softer line toward Putin’s effort to get Russia back on its feet.  In particular, Putin hoped for an easing of the sanctions imposed after the Crimean and Ukrainian initiatives.[1]  “That bet has now backfired spectacularly.”  A huge majority in Congress supported the new sanctions.  Putin responded by ordering 755 American “diplomats” out of Russia.

That order has been portrayed as a dramatic further step in a downward spiral of Russo-American relations.  However, there is a certain dissonance between the American and Russian discourse on these developments.  Putin’s public announcement of the reductions “was free of bombast,” said one White House official.  Putin’s order on staff reductions doesn’t take effect until 1 September 2017.  So, there’s time to talk.  Then the staff reductions could be accomplished in a number of ways.  David Sanger calculates that there are 1,279 people employed at the American embassy in Moscow and three consulates.  Cutting 755 people from 1,279 would leave 524 people.  Of the 1,279 current total staff, 934 are “locally employed” people (i.e. Russians in non-sensitive areas).  That would leave 345 “diplomats” in place along with 119 over-weight, chain-smoking cleaning ladies.  Then there are all sorts of other American government employees from non-diplomatic agencies.

Rolf Mowatt-Larssen, a former American intelligence official and now director of intelligence and defense projects at the Belfer Center of the Kennedy School of Government, took a dispassionate approach.  He told Sanger that “We’ve been in a new Cold War for some time now.”  In his view, on the American side, “emotions took over the [Russo-American] relationship” late in the Obama administration.  First “fear,” and now “anger” drive American policy toward Russia.  “The Russians would have preferred not to head down this path, but Putin didn’t feel he had a choice but to respond in the classic tit-for-tat manner.”

In contrast, the American discourse emphasizes grave dangers.  Angela Stent argues that “One of Putin’s greatest goals is to assure Russia is treated as if it was still the Soviet Union, a nuclear power that has to be respected and feared.”  Dan Coats, the former Republican senator and current Director of National Intelligence (DNI), says that Russia is “trying to undermine Western democracy.”  James Clapper, predecessor to Coats as DNI, warned of “the very aggressive modernization program they’re embarked on with their strategic nuclear capability.”

Putin is wicked, but he doesn’t seem stupid.  He seems to hate Hilary Clinton, but he couldn’t have her killed.  So, he settled for trying to harm her chances of becoming president.  He could hardly have supposed that Russian intervention in the American election would not be discovered.  So, he was willing to suffer the consequences.  Where do we want the Russo-American relationship to go from here?

[1] For one recent example, see David Sanger, “Putin’s Hopes for Relief Under a Trump Presidency Backfire Spectacularly,” NYT, 31 July 2017.