Daily Archives: September 21, 2007

Annals of the Energy War, Part I

Pajamas Media presents a report by the New European blog on the coming energy war with Russia.

State-owned businesses are inefficient, expensive and, more importantly, subject to political change and decision-making. Yet the European energy market is mainly state-owned. A perfect environment for the Russian strategy of dividing and conquering Europe, not with tanks, but with oil and natural gas. Today, September 19, the European Commission is set to put forward today an “unbundling” package, in order to weaken the hold of big energy companies in Europe like Gas de France or E.oN and make the market more flexible and consumer-friendly.

It is also set to restrict access on the European market to foreign, non-EU companies – an attempt to counter Russian state-controlled monopoly Gazprom’s increasing presence not only as a supplier, but also as a shareholder in European companies, transport networks and storage facilities. Russia called the EU strategy a “nearly hysterical reaction” and accused Europe of “economic nationalism.” Meanwhile, the EU-strategy is hardly set to be “half so radical as a compulsory dismantling,” especially of the opposition encountered in France and Germany, estimates The Economist.

Just like any other strategy that starts with a good idea – like the European decision to open labor markets within the EU, so that service providers from one country could easily enter a market in another country – this energy package is likely to be totally watered down by the time it reaches the national parliaments that need to enact it. Meanwhile, the EU states will continue to make bilateral deals with Russia, thus cementing Russia’s “superbundling” strategy.

The most-publicized example: Germany and the last-minute-before-the-elections Putin-Schroeder deal regarding a direct pipeline through the Baltic Sea connecting the Siberian gasfields to Germany, bypassing the Baltic countries and Poland. But Austria is also increasingly Putin-friendly, Belgium and Italy’s Eni too, Hungary, Bulgaria, Greece – just to name a few.

And if it’s not a Russian state giant like Gazprom, it’s their neighboring countries who are imitating the Kremlin strategy: not only as an energy supplier for Europe, but also an owner of strategic energy assets in Europe. Kazakhstan, for instance, run by its “president for life” Nursultan Nazarbaev, has recently managed to buy the largest oil refinery in the new EU-member state Romania, on the Black Sea coast. Now Kazakhstan is competing with Russia for Serbia’s biggest refinery, NIS.

In a free market economy, there’s nothing wrong with takeovers and competing companies. But neither KazMunayGaz, the Kazakh state company, nor Gazprom, Rosneft or Transneft, the Russian gas, oil and transportation state companies are free market players. They are state-owned, politically controlled and act in the manner of monopolies, trying to gain as much control as possible and to shut down any kind of competition. While the Kazakhs haven’t had the chance yet to show their political ambitions in Europe, they seem to be rapidly learning from Russia how to pressure the Western companies drilling in the Caspian Sea Kashagan oil field in order to obtain more stocks.

The Kazakh-Romanian deal also raises some questions regarding privatization in the former Communist countries. The Romanian oil refinery, Petromidia, had been privatized in 2000, to Rompetrol, also a previously state-owned company that was bought in 1998 by a member of the National Liberal Party. Dinu Patriciu, the owner of Rompetrol and later Petromidia, became a senior party member and is a very close friend of the current Prime Minister and his cabinet, for whom the media has come up with the nickname of “petroliberals.”

They are in the habit of influencing the judiciary, issuing “emergency ordinances” that are enacted as laws immediately, thus avoiding the long and uncertain process of parliamentary lawmaking. “Laws with dedication”, as the former Justice minister Monica Macovei called these kind of ordinances, are tailor-made for the political clients of the “petroliberals.” And in some cases, privately-owned companies are sold again to the state – only this time, they are foreign states, raising questions about the political implications of this transaction. Romtelecom, the Romanian state telephone operator, has been privatized to the Greek state company OTE. Petrom, the countries’ main oil company, is now part of OMV, an Austrian company, 30% state-owned.

In an interview for “Romania libera,” John Nellis, former World Bank expert for the privatizations in Eastern European countries discusses the mistakes made by his institution with its enthusiastic approach towards privatizing state companies in former Communist countries, without first ensuring that there are solid institutions who enforce the rule of law.“When you privatize in a legal system that is still tied to the Communist regime, without clear rules about what is allowed and what not in a market economy, several people benefit from it – which is not necessarily illegal, because the laws permitted it, but certainly unjust.”

Annals of the Energy War, Part II

Writing in the Eurasia Daily Monitor, Vladimr Socor reports good news from the energy battlefront; Europe is getting its act together on the Nabucco pipeline, designed to circumvent deliveries of gas from Russia.


by Vladimir Socor

PART I: The Project

All players involved in the Nabucco gas pipeline project got their act together at a conference on September 14-15 in Budapest. The European Union demonstrated for the first time a hands-on commitment to the project. The Hungarian government announced its re-commitment after a year’s wavering. Azerbaijan’s Energy and Industry Minister, Natig Aliyev, confirmed his country’s willingness to help kick-start Nabucco’s first phase from the Shah-Deniz gas field’s first and second production phases, pending solutions to Central Asian gas supplies for Nabucco’s second phase.

The United States had worked quietly with all these parties.The European Union’s Energy Commissioner, Andris Piebalgs, termed Nabucco “an embodiment of the existence of a common European energy policy” in his speech at the conference. He announced the appointment of Jozias van Aartsen, former minister of foreign affairs of the Netherlands, as EU coordinator of the Nabucco project, with a four-year mandate. The EU had included Nabucco among the four top-priority energy projects already last year, but the Commission took a long time before filling the coordinators’ posts.

The proposed pipeline would originate in eastern Turkey and run for 3,300 kilometers via Bulgaria, Romania, and Hungary to Austria, with a projected capacity of 30-35 billion cubic meters of gas annually. The consortium includes Turkey’s pipeline company Botas, Bulgaria’s pipeline operator Bulgargaz, Romania’s Romgaz, Hungary’s MOL, and Austria’s OMV as project leader. The initial feasibility study, funded by the EU and completed in 2004, awaits updating. The cost of building the pipeline is currently estimated at €5 billion.The consortium seeks a sixth participant company in Western Europe.

At the Budapest conference, top executives of Germany’s RWE and of Gaz de France announced the respective companies’ willingness to seriously consider joining the consortium. RWE, a major energy conglomerate in northwestern Germany, also announced its availability to invest up to €1 billion in Caspian upstream operations. Gaz de France — which is now merging with the other French champion, Suez, into GDF-Suez, to be 35% state-owned — had earlier begun negotiations to join Nabucco and confirmed its interest at this conference.

French President Nicolas Sarkozy, on a visit to Hungary that coincided with the Nabucco conference, encouraged GDF to support the Nabucco project. Sarkozy, who is the son of a Hungarian post-war refugee to France, addressed the Hungarian parliament to underscore his support for a common EU policy on energy and, specifically, for the Nabucco project to reduce dependence on Russian gas.Hungarian government leaders did their best to dispel the year-old perception that they would go for Gazprom’s Blue Stream-Two pipeline project, which is Nabucco’s rival. Prime Minister Ferenc Gyurcsany and Economics Minister Janos Koka (Socialist and Free Democrat, respectively) delivered keynote addresses re-committing the government to Nabucco. The prime minister pledged “Hungary’s total support,” as “it would be dumb for a country or a region to feel content with a single supplier.” In an accompanying statement, Koka admitted, “We were mistaken in repeating too often that the [Nabucco] project was just a dream, and so we actually contributed to the project’s remaining a dream.”

Left almost unsaid was the opposition Fidesz party’s consistent political support for Nabucco, leading ultimately to the formation of a cross-party Hungarian consensus in favor of the project.The project’s financial picture looks encouraging, on the whole. The consortium expects to cover 70% of the construction costs through bank loans, primarily from the European Investment Bank, which clearly shows interest in the project. The consortium is also in discussions with the European Bank for Reconstruction and Development and other institutions. Some of the consortium’s companies or governments are, however, reluctant to contribute to the remaining 30% portion of the construction costs.

The consortium, Nabucco Gas Pipeline International, hopes to reach decisions in the coming months with regard to choosing the sixth participant company, preparing the inter-governmental agreements, front-end engineering for the pipeline’s construction, and its first-phase financing. The consortium’s managing director, Reinhard Mitschek, presented a rather ambitious calendar for these steps, expecting construction work to begin in 2009. In that case, the first gas should flow through the pipeline in 2012.

Azerbaijan is waiting to be approached with specific, binding contracts on a take-or-pay basis for gas supplies to the Nabucco pipeline’s first phase. But this can only be a stopgap solution, if the pipeline is to be used at the projected capacity — that is, if the project looks commercially viable in order to line up the investment funds. That issue in turn hinges on opening direct access to Central Asian gas or Iranian gas, assuming a major U.S. and EU engagement to resolve the political issues involved.

Part II: The Obstacles

[As described above, t]he Nabucco gas pipeline project is back on track, preparing for an actual start. However, this project has a history of being derailed before even starting. In order to avoid any more derailments, this project needs to resolve a number of strategic issues, some of which necessitate consistent and hands-on involvement by the European Union and the United States. Most of these issues are long-standing, but some have only arisen recently for the planned Turkey-Bulgaria-Romania-Hungary-Austria gas pipeline.

The latest pitfall is the attempt by one Nabucco consortium member, Austria’s OMV, to orchestrate a hostile takeover of another consortium member, Hungary’s MOL. The OMV chief, Wolfgang Rutterstorfer, has directly or indirectly reaffirmed this goal in several statements ahead of the September 14-15 Budapest conference, which firmed up the commitments by all parties to the Nabucco project. Meanwhile, MOL is defending itself through market and legislative mechanisms against the takeover attempt, behind which many observers discern possible Russian interests (see EDM, July 24, 25, August 7, 17, September 4). It is not only for Hungary, but also for the EU to make clear to OMV that the latter must not jeopardize the Nabucco project by targeting MOL’s assets.

The consortium and the EU need to make a clear decision in Nabucco’s favor regarding the Baumgarten terminal. Baumgarten, the 100% OMV-owned gas distribution junction near Vienna, has long been designated as the final station of the Nabucco pipeline, as well as a storage and distribution center for Nabucco’s Caspian gas in Central Europe and beyond. However, in May of this year, OMV and the Austrian government (part-owner of OMV) changed their mind and signed an agreement of intent with Gazprom during Russian President Vladimir Putin’s visit. Under this agreement, Baumgarten would become a Gazprom-OMV joint venture, to be expanded as a Central European Gas Hub and Gas Transit Management Center, complete with storage sites, for Russian-delivered gas (see EDM, May 29, 31).

Moscow lured the Austrians with the promise of turning Baumgarten into the largest gas hub in continental Europe. That promise is a dubious one, as Gazprom’s own output is stagnant. Ironically, Russian gas commitments to Europe might only be sustained if Russia absorbs more Central Asian gas, thereby depriving Nabucco of a gas source and raison d’etre. EU authorities would be justified to ask Austria to clarify where it actually stands on European energy security.

Russia played off Austria and Hungary against each other on the “hub” issue. The Nabucco project — an Austrian initiative originally — reserved the hub’s role for Austria, while Hungary would participate as a transit country and national recipient of the gas. However, not unreasonably from a Central European perspective, the Hungarian government and MOL also sought a hub role for Hungary to some extent. Moscow seemed to offer Budapest this chance by proposing to extend Gazprom’s Blue Stream pipeline from Turkey to Hungary: not only to “guarantee” gas supplies to Hungary, but also to build there a 10 billion cubic meter storage facility for further transmission of the gas in Central Europe.

Gazprom’s Blue Stream extension, Blue Stream-Two, would follow the same route as Nabucco from Turkey to Hungary, thus preempting the regional markets and killing the Nabucco project. During the last year or so, the Hungarian government gave serious consideration to Blue Stream-Two. The government and MOL are now on the same page with the Nabucco project again. To keep them on the same page, it would seem reasonable for EU authorities to encourage Austria and other Nabucco consortium members to give Hungary a share of the hub’s function. With Baumgarten retaining the main role, Hungary could also host on its territory a storage and transmission site for Nabucco gas, not for the rival Gazprom.

Initially planned to carry Iranian gas, the Nabucco project has yet to identify accessible and commercially viable sources of gas. Azerbaijan’s Shah-Deniz production can only help kick-start Nabucco’s first phase; but a kick-start also requires confidence that supplies would be available later for the second phase. This is also an issue of political signals. Implacable-looking U.S. opposition to development of Iranian gas is depriving the Nabucco project of that source, despite Washington’s equally ardent well-wishing for Nabucco. The United States is threatening to impose sanctions against Austria if the latter proceeds with gas field development in Iran. Washington is also asking Turkey to give up the memorandum of understanding it recently signed with Iran on gas field development and supplies for the Nabucco project (Turkish Daily News, The New Anatolian, September 19).

In this situation, Turkmen gas has become the fallback option for the projected pipeline. However, this issue is clearly beyond the ability of the five countries in the Nabucco consortium to resolve. Russia has recently made some further strides in controlling Turkmenistan’s gas export and gas field development (see EDM, May 16, 17, June 5, 7). Only high-level engagement by the United States and the EU can change this situation in the West’s favor through Nabucco. The years since 2002 have been wasted in this regard, leading to a real crisis of confidence in the Nabucco project and a temptation by some European countries to seek bilateral deals with Russia. Along the proposed Nabucco route, only Romania remained fully and steadfastly loyal to this project during these years.

That crisis of confidence has been overcome thanks to the demonstration of coherent planning at the Budapest conference just held by all players. However, confidence could not possibly have been fully restored from one day to the next, just by this event. Key participants mused aloud in media interviews that Russian gas volumes — that is, Russian-delivered Central Asian gas — may after all be necessary for making the Nabucco pipeline viable.

For example, four different news agencies cited Hungarian Economics Minister Janos Koka as suggesting that Russia be given access specifically to the Nabucco pipeline, in the event that not enough gas becomes available to it from Central Asia or Iran (Reuters, Dow Jones, AFP, MTI, September 11). And Hungary may continue looking at Blue Stream-Two in such a situation (Nepszabadsag, Portfolio Hungary, September 17). Similarly, the EU’s Nabucco project coordinator Jozias van Aartsen, Nabucco managing director Reinhard Mitschek, and Gaz de France top executive Jean-Marie Dauger underscored the need to dispel the real concerns about the availability of sufficient gas to justify the investment in building the pipeline (Financial Times, September 17, 18).

These are some of the strategic issues that need to be addressed by Washington and Brussels convincingly in the wake of the conference, building on its momentum and weighing in at the highest official level, particularly with Turkmenistan.

Felgenhaur on Zubkov IN THE MOSCOW TIMES!!!

Returning triumphant to the Moscow Times after his dustup with the former editor, the brilliant Pavel Felgenhaur analyzes the Zubkov question:

The newly appointed prime minister, Viktor Zubkov, told journalists in Sochi on Tuesday that acting Defense Minister Anatoly Serdyukov had submitted a letter of resignation to President Vladimir Putin. Zubkov said he discussed the matter with Serdyukov, who is his son-in-law, and they decided it would be appropriate to resign.

In Soviet times, close relatives were strictly forbidden to be in direct subordination to each other on all levels of Communist Party and government administration. There was a special term — semeistvennost, or nepotism. The restriction was established as the Bolsheviks took power in 1917, and it was aimed at preventing the formation of family clans within the system. It also was a political rebuke of the practices of imperial Russia, in which members of the ruling Romanov dynasty and a handful of other aristocratic families occupied high positions in the military and civil administration of the country, forming circles of kin relationships.

Of course, the sons of high Communist officials were appointed anyway to important positions within the Soviet Union. There was a line that was never crossed, however — direct subordination. It was acceptable if there was at least one other official in the line of command between father and son.

Zubkov is an old Communist hand and knows all the rules of the game. It’s possible that powerful Kremlin clans were pressing for Serdyukov’s resignation. If Zubkov and Serdyukov were allowed to remain in their respective positions, this would have constituted a powerful clan in and of itself, while Zubkov on his own is a lonely figure who will need time to establish a constituency.

It is not guaranteed, however, that Serdyukov will indeed leave his post. He was appointed defense minister in February to fulfill a specific mission that Putin believes to be of utmost national importance: to fight massive graft in the Defense Ministry.

Under Putin, the defense budget has multiplied as petrodollars poured into the country. In 2000, it was 146 billion rubles ($5.8 billion); this year, it is 870 billion rubles ($34 billion). But it is unclear where all this money is going. Contract soldiers today get on average only 8,000 rubles ($315) a month; officers get 12,000 ($470) to 15,000 ($590). Moreover, service conditions in the military continue to be appalling and the ranks are full of discontent. This year’s procurement budget for new weapons is some 300 billion rubles ($11.8 billion), but the only procurement to speak of consists of 30 new tanks, several helicopters, missiles and other small items.

Under Sergei Ivanov, who was defense minister from 2001 to 2007, billions of defense rubles were apparently going into a bottomless pit. Ivanov, who is Putin’s old-time buddy, was promoted to first deputy prime minister, while Serdyukov was told to clean up the Defense Ministry. A number of Ivanov’s appointees in the Defense Ministry have been replaced. Vedomosti reported last week that Lyubov Kudelina, the budget chief of the Defense Ministry, might lose her post. In addition, Interfax said Monday that the chief of the General Staff, Yury Baluyevsky, who had an extremely good relationship with Ivanov, might be on his way to a speedy retirement.

Serdyukov’s reforms in the Defense Ministry have been put in full swing, but the mission has a very long way to go before it is fulfilled. Replacing Serdyukov now with anyone else would mean that there is no time left before the presidential election in March to achieve any real progress in fighting graft in the Ministry. Putin may not like this outcome.

Putin is a divine figure who can bend any rule in any direction. He can simply order Serdyukov to continue carrying on his duties without any particular clarification. If necessary, justifications can be easily found for this. Under the Constitution, the defense minister, like other so-called “power ministers,” reports directly to the president, not the prime minister. Serdyukov could, for example, temporarily divorce Zubkov’s daughter, and Moscow’s Basmanny District Court may legalize the divorce in a split second, if the Kremlin orders. Or Putin may in fact replace Serdyukov with someone else.

The speaker of the Federation Council, Sergei Mironov, has praised Serdyukov for doing the right thing and resigning, but he told journalists that Putin might not accept the resignation. Mironov also said the new Cabinet would be named within a week. In short, Mironov has no clue, just like everyone else in Moscow. Putin keeps his cards close to his chest.

Serge Schmemann: Scumbag Russophile Liar

When last we met Russophile scumbag Serge Schmemann (the freakish looking loser shown at left), he was lying to us about Russia and sports, barely able to conceal his sick Russophilic glee as he repeated absurd neo-Soviet propaganda he heard on state-owned Russian TV. Now, listen to him sing the praises of dictator Vladmir Putin (but first, grab your air-sick bag). From the New York Times with La Russophobe‘s running commentary exposing his naked, disgusting, treacherous propaganda.

Before turning to the author’s text, let’s have a word or two about the author himself, and the paper that’s publishing him. As for the Times, its financial fortunes are foundering and it’s embroiled in a massive controversy in which it gave the crazed left-wing propaganda outfit Moveon.org, funded by George Soros, a massive discount on a full-page ad so it could launch a treacherous attack on General David Petraeus. All through the Cold War, the Times took Russia’s side, blaming misguided U.S. policy for antagonizing the Russians and predicting that, given the chance, they’d build a democracy. When that didn’t happen, the Times needed to paint Putin as a “transitional figure” and “necessary strongman” in order to cover up its prior error. So it has a vested interest in minimizing Putin’s downside.

As for Serge Schmemann? Who is this pathetic loser who thinks he can “educate” us about the “real Russia”? Well,to start with, his tiny little stub entry in Wikipedia should clue you in. The reason his column gets published is that he’s the editorial page editor of the International Herald Tribune, a subsidiary of the New York Times company, hence he sometimes gets onto the Times pages as well. He lives in Paris and was born in France, so let’s just say that American national security isn’t exactly his number one concern.

Vladimir Putin enters the hall preceded, as usual, by Koni, his glossy black Labrador, and a swarm of acolytes and cameramen. He greets every member of a delegation of foreign Russia-watchers personally, with a firm handshake and a direct gaze.

LR: A “delegation of Russia watchers”? Could he be referring to the all-expenses-paid bribe-fest known as the Valdai Club, a sick and perverted propaganda exercise which we’ve previously exposed for what it is ? Maybe Stalin and Hitler also had firm handshakes. Maybe that was one of the reasons Neville Chamberlain found Hitler so impressive. How much of Putin’s caviar did Mr. Schmemann scarf down before writing these words, we wonder . . .

The Russian president is at the top of his game, and he knows it. He is powerful, popular and the master of a country that he has led from bankruptcy and despair to wealth and power in the space of less than eight years.

LR: Wealth? Is he drunk? The Kremlin might have more money than it used to, but that’s only because the price of oil skyrocketed — Putin had absolutely nothing to do with that. And the Kremlin isn’t wealthy by the standards of European government, it’s budget is rivaled by many large cities in the West. Russian people, by contrast (of course, this elitist maniac couldn’t care less about them, just as the Kremlin couldn’t) still work for $3/hour average wages and the men don’t live to reach age 60.

Two days earlier, he had regally replaced one obscure prime minister with another, setting Kremlin-watchers in Russia and abroad scrambling for clues as to what this might mean for the presidential election, now only six months off, and for his own future. He and his government maintain the myth that a real race is under way: there are five viable candidates already, including the new prime minister, Viktor Zubkov, Mr. Putin tells the visitors. But nobody really doubts that the next president will be Mr. Putin’s pick.

LR: As we’ve previously reported, Putin said that one of the “viable candidates” was walking charade Grigory Yavlinsky. He was either joking (as when he joked to an Israeli diplomatic delegation about rape) or he was quite simply insane. “Journalist” Schmemann chooses to ignore this fact because it gets in the way of his idol worship.

Nor does Mr. Putin leave any doubt that he will remain on the scene. “Naturally, this is a factor the next president will have to contend with,” he says, adding, seemingly unaware of the contradiction, “I will do everything to ensure his independence and effectiveness. I worked all these years to make Russia strong. Russia cannot be strong with a weak president.” But how will Mr. Putin retain power in a system in which he himself has gathered all the levers of power in the presidency? Is he so secure in his popularity that he can continue to rule from behind the scenes, like Deng Xiaoping did in China, or is he really worried that his successor might turn Russia in some other direction? Is Mr. Zubkov, 66, an apparatchik who had been dealing with financial crimes, really a candidate?

LR: This is an opinion piece, being written by someone who lives in a democratic country. Yet, not one single critical word is said by the author about this outrageous anti-democratic machinations, as if he’s some kind of biologist studying creatures under a microscope. It’s this kind of gibberish that, if we were Russian, would offend us far more than the “attacks” of so-called “enemies.”

While Moscow churns with these questions, Putin heads off for a day among the people in the Belgorod countryside, questioning them about their lives and patting their cows, all duly transmitted across the Russian expanse by loyal television networks. A strong president is above the political fray. Now, back at the president’s Black Sea residence here, one of many such lavish compounds Russia’s leaders inherited from the Soviet elite, Putin sits down in a cavernous hall with the foreign group, organized by RIA Novosti, the official Russian news agency. He spends the next three hours rattling off facts, figures and lessons. He is very good at this, as good as Bill Clinton was, and he clearly enjoys it, even throwing out the occasional joke. Asked about nepotism, he recalls a Soviet-era anecdote: “Can the son of a general become a general? Yes. Can he become a marshal? No, the marshal has his own sons.”

LR: Bill Clinton? Is this maniac trying to suggest some sort of similarity between Clinton, elected twice in real democratic elections faced by a powerful opponent, forced to endure debates and endless hostile questioning, and dictator Vladimir Putin? If so, how is that any different from what the KGB would do if they were writing this garbage?

The implication is clear: those quaint days are behind us. He does not disown the Soviet Union, for which he served as a K.G.B. agent, but the Russia he repeatedly invokes is a great, powerful, divinely ordained state that stretches back a thousand years. He is there to restore its glory, its power, its faith and, above all, its proper place in the world. And that is the unifying context of his presidency: Russia will be great and strong. It explains the repeated contradictions in the world view he expounds: Russia must have a multiparty democracy, but it cannot exist without a strong president. The economy is free, but the state must control its wealth. He is prepared to cooperate with the West, but readily switches to confrontation. He bristles at criticism of Russian democracy, which he sees purely as a Western ploy: “If you need something from Russia, you need to talk about the substance, not to approach it from another angle. If you need to resolve Kosovo, talk about Kosovo. If you need to resolve the nuclear issue with Iran, talk of Iran. Not democracy in Russia.”

LR: Pure propaganda. Not one single critical word. Channeling the KGB. Disgusting. Outrageous. Just what you’d expect from the moonbats of the New York Times.

There are distinct echoes of the Soviet Union in this blend of bluster, insecurity and pride. But Mr. Putin’s Russia is definitely a new hybrid. There’s no threat of a new cold war, no ideology of world domination. The president enjoys a level of popularity and legitimacy Soviet leaders never had. However authoritarian Mr. Putin’s rule might be, argues Grigory Yavlinsky, an opposition politician who is highly critical of the president, his rise is a logical consequence of the brutal disappointment of the Russians after the collapse of Communism — hyperinflation, political wars, cronyism and the financial crisis of the 1990s, humiliations inflicted by the West.

LR: Just when you think it can’t possibly get any more breathtakingly revolting, it does. Did this neanderthal cretin actually say that “there’s no threat of a new cold war” from Vladimir Putin? How then does he explain Putin repeatedly buzzing various NATO states with nuclear bombers, totally unprovoked by similar acts on their part? How does he explain Russia’s attacks on Georgia, or its weaponization of energy (as documented above)? How does he explain Russia’s massive increases in defense spending, and its provision of weapons to rogue states like Iran and Venezuela and Hamas and Hezbollah? Hmm . . . apparently he explains it all by simply not mentioning it. How very neo-Soviet. How very treacherous. This individual is the scum of the Earth. Oh, how we despise him.

Now, Russians have a combination of personal freedoms and prosperity they’ve never had before. They can travel abroad and surf the Internet; their culture is booming; they can make money. Politics? There’s a problem there, but in new Russia, with its glittering stores and fast pace, who cares?

LR: People who earn $3/hour can travel abroad? Surf the Internet? People who don’t live to 60? Culture is booming? Care to give one single example of how Russian culture is infiltrating the West? Care to give ANY actual facts about ANYTHING? No, he just wants us to take his word for it. He probably thinks Anna Politkovskaya is enjoying her new personal freedom right now, and so is Alexander Litivnenko and Mikhail Khodorkovsky. What a demon! What filth! Today’s Russia is no different than the Russia of 100 years ago — a tiny class of super elite with lots of privileges and the vast majority of the country suffering untold horror. In fact, come to think of it, that’s just the way it was in Soviet times too, wasn’t it?

This is Mr. Putin’s Russia. No matter that the oil boom is in great part responsible for his successes; he has brought a measure of stability and pride where his predecessor, Boris Yeltsin, the “democrats” and the West all failed. He will not be preached to. He will not be pushed around on Iran or Kosovo. He will be treated with respect. So look for more of Mr. Putin. In what guise, we will soon learn. With what goal and style, there is no doubt.

LR: Oil boom? Suddenly now in the very last paragraph he acknowledges the oil boom? Oh, that’s mighty generous of Mr. Schmemann. Exactly what a KGB propagandist would have done. He even seems to admit that Putin’s worldview isn’t exactly based on facts . . . but do you notice that he doesn’t give us one single word of advice about how we should deal with that kind of evil (much less all the evil that he chooses not to mention).

No wonder the New York Times‘ stock price is plummeting! No wonder we can’t get a correct policy on Russia, when these kind of idiots are being published in the “paper of record.” It’s not that hard to understand how we missed the opportunity to nip the first cold war in the bud, allowing Stalin to consolidate his power, when one reflects on gibberish of this kind.

It must be stopped. This man and his ilk are our enemies, as much as Vladimir Putin. Maybe more, because at least Putin doesn’t pretend to be one of us.

Annals of Svetlichnaya

The situation between the Aftenposten newspaper and Julia Svetlichnaya (click here to read our numerous prior reports on Ms. S.) appears to have resolved itself in a draw. On September 6th the paper published the following announcement:

Svetlichnaja and Litvinenko: Clarifications

In connection with the death of Alexander Litvinenko in London last year, Aftenposten reported on statements made by Russian-born doctoral student Julia Svetlichnaja of the University of Westminster in London. She had reported in the British media on her several meetings with Litvinenko including claims that he told her he planned to extort money from leading Russian businessmen. Aftenposten cited unnamed Russian experts who in turn claimed that Julia Svetlichnaja had been assigned by the Russian authorities to discredit Mr Litvinenko. Aftenposten clarifies that the newspaper has no basis for asserting that these claims are correct.

In reference to its front-page summary of the story on 9 December 2006 and an article published in Aftenposten’s online English-language news service on 11 December, Aftenposten also clarifies that it was not Julia Svetlichnaja who tried to prevent Aftenposten’s correspondent from asking questions at a press conference held in London. Aftenposten clarifies that their correspondent’s questions were answered in full by Julia Svetlichnaja at the press conference. Aftenposten also clarifies that the headline on their report of the conference “Litvinenko’s Accuser Turns Her Fury on Aftenposten” was incorrect.

Aftenposten’s online English-language news service also noted in its article that British media had linked the website of Russian Investors which featured Ms Svetlichnaja’s name to the Russian state. The company is registered as privately owned. Ms Svetlichnaja had in fact formerly worked for a British services company which had designed a website for Russian Investors in 2005.

In March of this year, a court in London granted Ms Svetlichnaja compensation from The Sunday Times for an article published 10 December last year. The newspaper had suggested that she may have taken part in a Kremlin effort to discredit Litvinenko. The Sunday Times was also ordered to withdraw its report, and apologize in open court and pay to Ms Svetlichnaja substantial undisclosed damages.

So Aftenposten does not apologize to Svetlichnaya, much less pay her any damages, nor does it even issue a “correction” much less a “retraction.” All it does is “clarify” certain points of the story. It does not state that the central accusation made against Svetlichnaya (that she was acting in the interests of the Kremlin, and for political reasons, to discredit Alexander Litvinenko when she spoke to the British press to him after his demise) was false. Rather, it merely states that it does not have the ability to independently verify that accusation (hardly surprising, given that the Kremlin is ruled by a proud KGB spy trained to hide such evidence, a spy who could easily have intimidated the witnesses into silence), and admits that it too-aggressively characterized Svetlichnaya’s personal efforts to obstruct their investigation (the efforts, it seems, came mostly from her entourage, which includes an avowed Marxist who uses a pseudonym). It says that the Russian firm Svetlichnaya previously worked for “is registered as privately owned” — but anyone with half a brain knows that the Kremlin controls plenty of businesses that are so registered, so this says nothing about the extent of her connections to the Russian government or the murky figure Alexei Golubovich.

To date, as far as we know, Svetlichnaya has still not sat down for an aggressive interview with any significant journalist to defend herself on the merits against the charges that have been made against her (for instance, [1] the fact that her name was suddenly removed from the Russian firm’s website, as reported by the Komisar Scoop (which also reported that Litvinenko was investigating Golubovich, Svetlichnaya’s employer) or [2] the fact that, whilst claiming not to be a supporter of the Kremlin, no record of Kremlin-critical statements has been produced, or the fact that [3] no explanation has yet been given for how Svetlichnaya contacted Litvinenko or began to work with him when such work has no apparent relations whatsoever to her doctoral research). There has been much discussion about what Aftenposten can and cannot prove, but virtually none about what Svetlichnaya can and cannot prove concerning her accusations smearing Alexander Litvinenko — allegations which she oh-so conveniently waited until he was dead to make, hence unable to defend himself, allegations which Litvinenko’s wife has repudiated. We challenge Svetlichnaya to come out from behind her lawyers and face the music in the court of public opinion, as she should have done long ago.

More important, Svetlichnaya could have gone to a court of law. She could have insisted on it. Once there, she could have laid out all her evidence before a jury, and allowed the newspapers to do likewise, and allowed the court to make a formal finding as to exactly who she is and what she was up to when she spoke about Litvinenko. Instead, she apparently opted for murky settlements behind closed doors. Granted, the newspapers involved could have insisted on a court battle as well, but corporate businesses very rarely take stands based on principle when they can avoid it, it’s just good business. The Sunday Times settled with Svetlichnaya simply because it wasn’t their story and they could not treat it as if it were, and because Britain has rather draconian libel laws that err on the side of the subject rather than on the side of the press, as American law does. It was Aftenposten‘s story, and as shown above the paper is largely standing behind it, with the very limited “clarification” stated, which Svetlichnaya has apparently accepted as an end to the matter rather than proceeding in a Norwegian court. The net result is that the whole sordid business has now been swept under the carpet, and we may never get the full story from Svetlichnaya.

Interestingly, that’s exactly how the Kremlin would have wanted it.

September 20, 2007 — Contents


(1) Another Sign of the Neo-Soviet Apocalypse

(2) Zhirinovsky Smears All Britain, Queen

(3) Nashi Rounds up the Usual Suspects

(4) Annals of Russian Racism: Nobody is Safe

(5) Sarkozy Confronts Putin!

(6) The Best-Laid Plains of Mice . . . and Rats Named Putin

NOTE: One can’t praise highly enough the yeoman efforts of the heroic reporters, editors and publishers at the Moscow Times — the little paper that could. It’s simply indispensible for truly understanding what is going on in today’s Russia, and this is clearly seen in the fact that every single one of today’s posts is drawn from the two most recent editions of the paper. It goes without saying that the only reason the Times gets away with this work is that it’s published only in English and therefore not accessible to the vast majority of Russians. But despite that, one can’t help but feel that the paper’s days are numbered as the paranoid, thuggish neo-Soviet noose of dictator Vladimir Putin constricts ever closer around the nation’s throat. The paper is to be especially commended for arranging the return, in today’s issue, of the brilliant columnist Pavel Felgenhauer, something La Russophobe had specifically written the MT’s new editor to request some time ago (the previous benighted editor had terminated Felgenhauer in the worst decision the paper ever made). Bravo! Encore! Thank heavens for the Moscow Times!