UNITED STATES COMMISSION ON SECURITY AND COOPERATION IN EUROPE
(HELSINKI
COMMISSION) HOLDS BRIEFING WITH EDWARD LUCAS OF "THE ECONOMIST"
FEBRUARY 20,
2008
COMMISSIONERS:
REP. ALCEE L. HASTINGS,
D-FLA., CHAIRMAN
REP. LOUISE M. SLAUGHTER, D-N.Y.
REP. MIKE
MCINTYRE, D-N.C.
REP. HILDA L. SOLIS, D-CALIF.
REP. G.K.
BUTTERFIELD, D-N.C.
REP. CHRISTOPHER H. SMITH, R-N.J.
REP.
ROBERT B. ADERHOLT, R-ALA.
REP. MIKE PENCE, R-IND.
REP. JOSEPH
R. PITTS, R-PENN.
SEN. BENJAMIN L. CARDIN, D-MD., CO-CHAIRMAN
SEN. CHRISTOPHER J. DODD, D-CONN.
SEN. RUSSELL D. FEINGOLD, D-WIS.
SEN. HILLARY RODHAM CLINTON, D-N.Y.
SEN. JOHN F. KERRY, D-MASS.
SEN. SAM BROWNBACK, R-KAN.
SEN. GORDON H. SMITH, R-ORE.
SEN. SAXBY CHAMBLISS, R-GA.
SEN. RICHARD BURR, R-N.C.
WITNESSES/PANELISTS:
CLIFF BOND, SENIOR ADVISER, CSCE
EDWARD LUCAS,
CENTRAL AND EASTERN EUROPE CORRESPONDENT
AND FORMER MOSCOW BUREAU CHIEF,
THE ECONOMIST
The briefing was held at 10:00 a.m. in Room
B-318, Rayburn House Office Building, Washington, D.C., Cliff Bond, Senior
Adviser, moderating.
[*]
BOND: Before I begin, let me just mention
there are background materials for the briefing on the table to my left, if you
didn't pick them up on your way in.
It's my pleasure to welcome you all
here today on behalf of Chairman Hastings and Co-chairman Cardin and other
members of the Helsinki Commission to our briefing today. Congressman Hastings
and the co-chairman, Senator Cardin, would very much have liked to join us
today, but they're both attending the OSCE's Parliamentary Assembly, its winter
session of its Parliamentary Assembly, in Vienna now.
We've invited today
Edward Lucas to brief us and give us his analysis of current political
developments in Russia. This is a very timely briefing, in view of the upcoming
presidential elections on March 2 in Russia and in view of the current strained
relations between Russia and the West, including over Kosovo's recent
declaration of independence from Serbia.
Developments in Russia have been
very much a focus of the commission's work, and we're very pleased to have Mr.
Lucas here. He has unique experience to provide this briefing. He is currently
the Central and East European correspondent to The Economist magazine. He's
also the author of a recently published book, "The New Cold War: How the
Kremlin Menaces Russia and the West," and he's now in Washington to promote this
book.
He has a long and distinguished career as a journalist in Eastern
Europe and the Baltics and also in Russia itself. Our paths actually first
crossed back in the late 1980s when I was the political counselor at our embassy
in Prague, and I remember Ed as being a very energetic and perhaps one of the
best connected correspondents in terms of his connections with independent and
dissident figures in Prague at that time.
We both found ourselves, in
fact, on the night of November 17th, 1989, on Narodni Trida in the heart of
Prague, when the riot police dispersed a peaceful student demonstration. And it
was that action that sparked the Velvet Revolution in Czechoslovakia and the
fall of communism in that country.
I recall, Ed, that the police handled
you a little bit more roughly that night than they did me.
LUCAS: It
still has, sometimes.
BOND: The 1990s were a period of hope in Eastern
Europe, and in Russia itself and for the people of Russia. Unfortunately, in
the memorable words of that former Russian prime minister about the Yeltsin era,
"We all hoped for the best, but things turned out as usual."
Let me ask Ed
Lucas now to share with us his thinking and observation about how things have
turned out on political developments in Russia and what they mean to the
international community and the Russians themselves. Thank you.
LUCAS:
Well, thank you very much indeed, Cliff, for that introduction and the
invitation. As a reporter in Washington, I very often sat in these seats. I
didn't think I'd ever in my wildest dreams actually be sitting on this side of
the table, and so I put on my NFC tie to show that this is a really serious and
important occasion.
Thank you very much for inviting me.
It's a
provocative title -- "The New Cold War" -- and it's particularly provocative for
those of us -- and I guess there are many here -- who remember the last one.
Cliff and I were both in our different ways involved in the struggle for freedom
in Eastern Europe and to try and undermine communist rule there. And when we
remember how bad it was then, it's not a comparison to draw lightly.
We
had a complication that was military -- military and existential threat. We had
missile-to-missile crises and other misunderstandings, which could have very
easily meant the end of civilization on the planet. And it was global. It
stretched to every corner -- planets don't have corners -- every corner of the
map. There was this issue of complication.
And it was very sharply
ideological. Totalitarian communism, the dictation for the proletariat on the
one side -- although it was increasing confidence, as it proved less and less
possible to make it work -- and the different brands of welfare, capitalism,
democracy on the other. And I'd make it absolutely clear, even if you only read
into the first few pages of this book, you will see I'm not saying that this old
Cold War is coming back again. Our relations with Russia are profoundly
different.
Russia is culturally integrated into the world in a way that
would have seemed inconceivable in Soviet times. There are hundreds of
thousands of Russians living in cities such as New York, London and other
western capitals, and tens -- maybe even hundreds of thousands -- of westerners
living in Russia. You can travel back and forth relatively freely. A select
few of us sometimes can't get visas for Russia. And incidentally, very few
Russians can't get visas to the United States. Perhaps there should be more.
But anyway, these are the exceptions, not the rule.
Russia is a partner
for the West in issues about nukes, not only the old Cold War nuclear bargain,
but also nuclear safety, new forms of nuclear talks. It's a partner on North
Korea. It's a partner on all sorts of big global issues. It's a big country,
and we talk to big countries with respect.
The ideological confrontation
is gone, because Russia, at least on the surface, tends to be a democracy.
There are multi-party elections of a kind. There is free media of a sort --
maybe not television, but certainly on the margins, newspapers, a radio station,
quite a bit on the Internet. So Russia is not a closed society in that way.
And I think that's the first big starting point I want to make.
The second
point I want to make is that I'm not saying in this book that everything Putin
has done is bad and everything that Yeltsin did was good. There is a kind of
naive tendency in the West to rewrite history and say during the 1990s Russia
was a democracy and it was going in the right direction. It was a friend, and
then Vladimir Putin came along, and he mystified the Russians and re-introduced
a semi-totalitarian system. That is not what I'm arguing.
It is very
important for Russia's friends from outside to understand the trauma of the
1990s and perhaps the delayed action trauma. We used to sometimes say it was
just amazing that Russians are so stoical and cheerful and that these incredible
changes, which were a culmination of if you imagine the American Civil War and
the Great Depression combined, yet life goes on and people seem to be coping.
But actually the aftershock from that has been a great desire for stability and
an appreciation for it.
It's also important to recognize that some of the
criticism of Russia is highly self-interested and not to be taken seriously. If
you are a Russia expert, or even a rather amateurish, a Russia inexpert, but if
you have some influence in writing about Russia, you need never pay for your own
lunch, because on the one hand you have the PR companies that work for Gazprom,
Rosneft, Rusal, all the others, very keen to improve their image and entertain
lavishly.
And on the other hand, you have an oligarch whose name begins
with "B." He lives in London, an oligarch -- no, not that one, because he's
dead -- another oligarch whose name begins with "B" and who lives in London, and
another oligarch whose name begins with "K," who lives in Russia in rather
confined circumstances, but he has a lot of money in the West.
And some of
the kind of demonization of what's going on in Russia is just paid-for
propaganda from the other side. And I make it very clear in this book -- I was
at pains to point out -- that I do not regard Mr. Khodorkovsky as a political
prisoner. I didn't want anyone to think this is part of a pro-Khodorkovsky
campaign.
And I had many attempts to describe Mr. Berezovsky in a way that
was both true and would get past the British libel-mongers. And sadly, even the
First Amendment in this country does not protect me from being sued in London
for something I published here. And so you have to read between the lines. And
every time I say, "And vehemently denies all wrongdoing," you can see that was
the bit lawyer put in, and you just have to guess what the sentence was that
might have gone there in its place.
So with these provisos, let's move on
to what has happened on the Putin. There have been huge losses of transparency,
of freedom and of legality. And the way I like to look at this is it's
constraint and redress. These are fundamentals of a law-governed society.
I've tried in the book not to use the word "democracy" at all, because it's such
a stretchy label. I lived in the Soviet zone, the Soviet occupied zone of
Germany, which called itself the Germany Democratic Republic. Some people here
have had dealings with the Democratic Peoples Republic of Korea. I don't like
the word "democracy." It's been overused. I stick to political freedom and the
rule of law, which are much punchier concepts.
And these have been
hollowed out and crushed in Russia, and constraint and redress for the system
have been almost completely removed. If something goes wrong in Russia, you
cannot expect the electoral process and your elected representatives to help
you.
We have the extraordinary situation of this presidential election,
which is both completely predictable and totally mystifying. It's completely
predictable, because we know who's going to win, and it's totally mystifying,
because we have no idea what it means.
Is Mr. Medvedev a liberal, as he
has suddenly started talking this liberal talk? Is he just keeping the seat
warm for Mr. Putin to come back maybe after a few months, maybe after a few
years? Is he going to play soft cop to Mr. Putin's hard cop?
We don't
know. But the political system is now no longer something that reflects the
interests, the wishes, the complaints, the process. It's become part of the
Kremlin power machine. And Kremlinology, which some of us here used to practice
in the 1970s and 1980s, has seemed to become so out of date it was like it was
as obsolete as knowing how to use a Telex machine.
Some of you here might
not know. A Telex machine was kind of low bandwidth, point-to-point electronic
messaging system that predated e-mail. And people like me, and I suspect Cliff,
used to know how to type on these Telex machines, and paper tape would come out,
and you'd feed it in, and then you'd send your message. Kremlinologists seem to
have gone the way of that.
Now Kremlinology is back. We are using
techniques of Kremlinology to try and understand the political system.
The
legal system is a shambles. Now, it's easy to say, "Oh, that's just Western
ignorant criticism, and it's actually working fine." Well, who was it who said
that Russia had a stated, unparalleled legal nihilism? That wasn't a communist
leader. That wasn't Garry Kasparov. That wasn't Mikhail Kasianov. That was
Dmitry Medvedev.
And it's astonishing to me that the critique that
Medvedev makes of the Putin years is so powerful. I don't quite understand the
strategy behind it, but he's complaining about all the right things --
extraordinary corruption, grotesque levels of state interference in the economy,
the legal nihilism and lack of recently found freedom.
So these are not
outlandish criticisms. These are ones that are made at the heart of power in
Russia.
What are the forms of constraint and redress? Well, most certainly,
the outside world doesn't have much purchase. There used to be a time when the
IMF would say, "You can have some more money, but you have to do this." But
others always were unhappy about that kind of leadership and argued against it
strongly in The Economist.
It seems to me that if things are good to do,
then you should do them anyway. And if you view, as outsiders, as bribery to do
them, then that's some less likely to stake. But certainly, the outside capital
markets have no ability to discipline Russian companies at the moment, and the
international financial community has none, because Russia has paid off all its
debts.
And even the international legal order doesn't have much constraint
now. And Russia has recently been signally contemptuous of the judgments of the
European Court of Human Rights in Strasbourg from the few outside legal
constraints.
So constraint and redress have gone. We are left with this
hollowed out fiscal system and mystifying political processes we don't
understand, and at the top, the feuding clans of Chekhists or civilitiers (ph)
as they are sometimes called, sometimes with one in the ascendant, sometimes in
the other. And every now and again, something remarkable leaks out into the
paper, and we just get a glimpse of what's going on.
Now, why should we
mind about that, because lots of countries are back in line? Zimbabwe is back
in line. Burma is back in line. North Korea is back in line. China is back in
line -- Kazakhstan, which is a strategic ally of the United States in some
senses, where an opposition leader committed suicide with three shots.
Authorities said it was suicide. He had tried three times, and he succeeded in
the end -- that is, two in the head and one in the chest.
So why are we
still worried about the bad things that seem to be happening in Russia,
particularly when we seem to have the support of so much of the Russian
population? And one is that it leaks, and the trajectory is worrying.
And
if you speak Russian, I urge you to look at some of the propaganda that is
produced by Nashi and the other pro-Kremlin youth movements, because they are
really disgusting and scary -- the xenophobia, the nationalism, the subliminal
racism, the message that Russia is a besieged fortress surrounded by malevolent
hypocrites. This is really bad.
Now, I don't know whether the people at
the Kremlin really believe this or not. In my optimistic moments, I think
they're just crooks. I think the whole thing has just been made up as a way to
steal billions and billions and billions of dollars. And that's the optimistic
scenario, because in a way we know how to deal with crooks.
But if they
believe it -- and I suspect that some of them do -- this is taking on a momentum
of its own. And you can see from all the opinion poll data this trajectory from
the 1990s, where people pretend to get disillusioned with the West because of
the failure, or the perceived failure, of economic policies discussed with the
(inaudible), but now that's crystallized into solid data. Every poll seems to
show a more anti-Western, more nationalist, more liberal, sometimes even more
racist approach, and that is a consequence of Kremlin propaganda. We have to
ask where that's going.
Just one small thing, which I think is quite
illustrative. The history is central -- and I have a lot about history in the
book -- and in the 1990s historiography was extremely diverse in Russia. There
were lots of different interpretations. And under Putin in this strong cushion
of very top (inaudible) history, not just demonizing the Yeltsin years, but also
satirizing the Stalin ones, that if anybody can, he's reminded that Mr. Putin
said that Russia was the greatest geopolitical catastrophe -- that perhaps the
Soviet Union was the greatest geopolitical catastrophe of the century.
But
I'm particularly interested in the Katyn massacre, because that's really
emblematic. It was a classic bit of Stalinism to follow the crime with a lie --
first of all, 30,000 Polish officers shot in cold blood by the NKVD, and then
the lie, the idea that it was the Nazis that had done it. He blames it on the
Nazis. He's going to complain.
And all through the '50s and '60s and '70s
and '80s, that lie was enforced at gunpoint. I was a student in Poland in the
mid-1980s, and I remember our Polish teacher trying to keep a straight face and
saying, "Yes, I'm afraid that actually Western propaganda is quite wrong, and
this was actually the Nazis who did that." And I thought, "How awful. This
young woman is forced to spout these lies, because if she doesn't, she's going
to lose her job."
And in 1990 the lie about Katyn was buried, and the
documents came out. It was absolutely unambiguous. This had been done by the
NKVD -- all the forensic evidence, all the archival evidence, no question about
it. And as far as the Poles were concerned, that issue was over.
And in
the last six months, on no fewer than four occasions, mainstream Russian media
have reprinted this lie that it was the Nazis, and not the NKVD. It started
with Rossiiskaya Gazeta. It continued with Komsomolskaya Pravda, and it was on
TV Tsentr, which is the Moscow municipal channel, and most recently in
Nezavisimaya Gazeta.
And that's when I started getting really nervous,
because that is going straight back to an era that we thought was gone forever.
I might have done that -- almost more I might have done the psychiatric
incarceration district, which is another very ominous act out of the Stalinist
past.
So that's one reason. This trajectory is really ominous. But the
second is leakage. This leaks into Eastern Europe. It leaks into Western
Europe. It leaks into Eastern Europe, where I think we needed another 10 years.
If we had another 10 years, the countries, the former captive nations in
Eastern Europe, would have been so much stronger.
A new generation of
politicians would be in power, the old compromised. Sometimes eccentric,
sometimes greedy politicians of the transition era would lose offstage, or at
least had more competition. The institutions of state would have been stronger.
The anchoring of these countries in the Euro-Atlantic community would have been
complete. It has come a bit too early.
And it seems people at the State
Department have coined the phrase "swing the states." They haven't used it
publicly, because the states concerned would be upset, but it's no secret that
people in this town and in Brussels are really worried about what's happening in
Bulgaria. They're really worried about what's happening in Latvia.
They're really worried about the way in which Kremlin money and the offer of
(inaudible) gas deals has been enough to take it politically, at least in terms
of orientation around like that. These countries turned on a dime in our
direction after 1991, and that was great. They can turn the other way, too.
And we are in real danger of losing some of the gains we've taken really for
granted.
I'm not talking about Moldava here. I'm talking about countries
in the EU and in NATO and which Russia is buying -- which gets us to Western
Europe.
If I sat here as your guest five, six years ago and said that the
Serbian chancellor of Germany in his final weeks in office would sign off on an
energy deal which directly threatened not only Europe's collective energy
security, but particularly the energy security of Germany's eastern neighbor,
Poland, and of the Baltic states, it might have -- and not only that, but after
he left office, within weeks of leaving office, the same German chancellor would
take on the lucrative job of the head of the consortium building this pipeline,
of which the economics are totally untransparent...
We have no idea about
the internal commercial structure. All we know is that it's being promoted by
Gazprom, supported by their German partners. It's going to be immensely
expensive. It's going to be guarded by Gazprom's own military forces, who have
been authorized under Russian law to use military force as protection. It's
going to extend to the Baltic Sea.
And you'd have said I was absolutely
crazy. You would have called security. You would have said, "Take this madman
out. Send him back to England or to the asylum or somewhere." This would have
been completely impossible. You couldn't imagine Helmut Schmidt doing that.
You couldn't imagine Konrad Adenauer doing that. You couldn't imagine Helmut
Kohl doing that. But that's exactly what Gerhard Schroeder has done. And
that's just the tip of the iceberg.
It's astonishing to me that the
European Union's ethos to have a collective energy policy, which is so important
that everybody agree on paper that if Europe is going to be secure, it must
bargain collectively with Russia, it must diversify its gas supplies, and the
American government understands this, and it's astonishing that actually it's
the deputy assistant secretary, Matt Bryza, who's doing more to defend my energy
independence than my own government, and certainly more than the European Union
in Brussels, because their efforts are systematically disrupted and humiliated
by the very effect of gas diplomacy in Russia.
And so we see the Nabucco
pipeline. I'm sorry I didn't bring a map with me, but Nabucco was a logical,
but far-fetched, but logical idea to bring gas from Central Asia through Turkey
up through the Balkans and into Europe. It doesn't need to carry much gas.
Even the plan to build it was already showing that the east-west gas monopoly
that it has is not absolute. It will give us leverage.
But at every stage
of the way Nabucco has been sabotaged. The Russians have stitched up the
Caspian, because the Kazakhs see no reason to expose themselves on our behalf,
when we appear, they say, irresolute. The EU has managed to cold shoulder
Turkey to the point that Turkey doesn't want to help out. The Russians have
managed to buy out Bulgaria and pretty much got the Romanians to give up on
Nabucco as well. And worse, Austria -- the country that was meant to be in
charge of Nabucco -- has now got a lucrative gas deal and is in bed with
Gazprom. Game, set and match to Gazprom, and woe betide Europe.
So these
are the threats, and weave cohorts. It's not about tanks. It's about banks.
It's about pipelines. The fifth column is not communist trade unionists wearing
suits. It's people wearing body suits. It's pinstripe capitalists, who are
willing to betray the fundamental values of Western democracy and freedom in
order to get a good fee.
And I'll finish with an illustration. If I
turned up in New York or in London or Frankfurt with a suitcase full of stolen
Faberge eggs, and maybe some Kavinskys that I managed to swipe from Heritage or
some other great Russian art gallery, and I said, "Look, this stuff is not
strictly legal. I need a bank to help me sell it and I need a lawyer to make it
look legal and I need a PR firm to kind of polish the image up," they'd call
security.
If I turn up with a stolen oil company, which has stolen the
money -- $17 billion worth of Western shareholders' money -- that is absolutely
fine, and nobody turns an eye.
And then, when the people trying to defend
the interests of those Western shareholders in Moscow cite the audit from
PricewaterhouseCoopers that says that in the years 2000, 2001, 2002, 2003, those
companies' books were kosher, and so you depend on the auditors -- the office
had given those orders, which Pricewaterhouse states now it is questionable they
should ever got involved in Yukos in the beginning, when it was a very fledgling
company, that was the time that Yukos was at the height of its transparency, and
then the Kremlin comes calling and says, "Mm, you could lose a lot of business
here in Russia if you stick by your client."
And so what do those heroes
do? They withdraw the audit with the weasely explanation, which I put here in
the book, that they'd been forced to withdraw the audit, because people were
relying on it. That's what audits are for.
And so the new Cold War is not
really a confrontation just between a resurgent Russia and a weakened, divided
West. It's a conflict inside Russia and inside the West. It's a conflict
inside Russia between Russians who see that Putin is phony, that this fantastic
windfall of oil and gas money, which could have been used so effectively to
modernize Russia, is instead going into the pockets of the crooks and spooks in
the Kremlin, and it's a conflict in the West between people who think that only
money matters and who think that the three principles which we fought in the
last Cold War still matter.
And while I'm delighted that the book is
selling so well and I'm delighted to be here, I'm very sorry that it was
necessary to write this book, because I didn't think in the early 1990s it would
be necessary. And I really I'm wrong. That's annoying.
BOND: Thank you
very much, Ed. It's a very sharp, very pointed analysis, and I'm sure we'll
have a number of questions.
I believe the mike at the end of the dais
there is working. If you'd like to pose a question, I'd ask that you just
identify yourself and your affiliation. And I think we have a...
KEREMOZO
(ph): Thank you very much. I'm Zorin Keremozo (ph) of RGI (ph) Television.
You mentioned the lack of leverage from the West to present day Russia because
of the changed economic situation from the 1990s. But probably the one
remaining leverage that there is are the constant threats, coming from this town
anyway, to suspend Russia's membership in G-8. And certainly it has been coming
from Senator John McCain, who now seems to be the Republican national
front-runner.
Do you think (inaudible) when he is elected as president and
comes into office next year, do you think it's feasible that he might, for
instance, refuse to invite Mr. Medvedev, someone who has been elected,
quote-unquote, in a clearly illegitimate election, and how big an impact do you
think this might have?
LUCAS: It's a really good question. I think we
have to separate symbolic stuff based on values and perhaps good stuff based on
interests. And we need to talk to Russia about nukes. There's no doubt Russia
is a nuclear power. Russia is a space power. Russia has interests in the
Middle East. Russia has interests with North Korea.
I'm not arguing that
we should isolate Russia on things where we can talk in a heart and head and
pragmatic way, just as we talk to the communist dictatorship in China, Red
China.
But I think we have to draw a line of values. And I argue in the
book two things, apart from the G-8, which obviously are (inaudible). One is
the Council of Europe. We admitted Russia into the Council of Europe in a great
sea of optimism in, I think, 1992, '93, perhaps before even the shunning of
parliament and before the first rigged election. That's right.
And we
suspended Belarus shortly afterwards on what almost looks like a technicality --
one rigged election and a bit of intimidation of the opposition. Things are far
worse in Russia now than they were when we suspended Belarus. Russia makes a
mockery of its Council of Europe commitments.
It's not just a psychiatric
incarceration of dissidents. It's not just the rigged elections. It's not just
that you have people being woken from their beds in the middle of the night to
be interrogated about the crime of working for foreign organizations.
It's
so much. It's just the open contempt with which Mr. Putin speaks of Western
values. He thinks it's (inaudible) -- well, fine, OK. You cannot be a member
of the Council of Europe if you think that way. So I think that would be my
first tip.
The second thing is I think we have to make the OECD into a
much more effective policeman for good governance of all kinds. The OECD is the
Organization for Economic Cooperation and Dependence in Europe, and it is based
in Paris. Economic Cooperation and Dependence -- sorry, I'm going a bit fast,
aren't I? You're right.
It's a rich country plum. Russia's just started
to get membership negotiations. She's going to find it really difficult to meet
the test of like-mindedness, which is the OECD's hallmark.
And the OECD
used to be a very boring organization of statistics, but thanks to pressure from
the American government's numbers, it's turned into the global policeman on
money laundering. It's set up some financial action task force, which is
actually really effective, because 30 years ago, you could go into a bank in a
Western country with a suitcase full of high denomination bills and pay it in,
and that was just normal.
And people said you'll (inaudible) understand
between banks and money. It can't be done. Fine. We did. And that's made
(inaudible) more difficult. I think we have to do the same with Western
financial markets.
We should say to Russian companies, "If you have a real
business, real shareholders, real costs, real customers, real competition, sure,
list, sell bonds, that's great. If you are the gas division of Kremlin, Inc.,
or the oil division of Kremlin, Inc., and your related cost transactions are
totally unfair and your beneficial ownership is totally unfair, and your
business model is based on stealing assets from other companies, sorry. Try
Minsk, but don't come to London. Don't come to New York. Don't come to
Turkey."
We have to say there is some moral dimension, some smell test for
getting into Western financial markets.
On the G-8 itself, I think the
real answer is to drop the whole democracy thing and have a G-15, which talks
about serious things, and then Russia can come. If we want to have a caucus
beforehand of democratic countries, then let it be free, low governed countries.
Then fine, Russia won't be invited.
But I think it's too important to
engage Russia on these global issues, and it's important not to send a message
that we're just snubbing Russia as a whole and snubbing the Russian people. But
I think simply that on its own would be right.
I also think that if we're
going to have these tough measures of the Council of Europe and elsewhere, that
the United States should reopen serious talks on strategic nukes. I think this
administration has been wrong on that.
KEREMOZO (ph): If I could just ask
you about the OSCE, another organization. Russia is a member of it, very
critical of it. ODIHR is not going to be monitoring the Russian elections.
What's the future here of OSCE? It's been based on consensus, and Russian
opposition and demands for change in the organization may threaten its future.
LUCAS: I think they have not only threatened its future. I think they've
doomed it. I think consensus based organizations are great among like-minded
countries, and the OSCE was set up in an era when we thought the consensus was
going to stretch from the West Coast of America to the eastern shores of
Kazakhstan and Turkmenistan, let alone Vladivostok. And that premise has
unfortunately proved (inaudible).
It's done some good things. I think
that the right thing to do on the OSCE is say to the Russians, "Fine. You broke
it; you fix it. We're going to have something else now. You've systematically
tried to ruin everything we've done, so you want to share organization? You've
got to show organization. When you want to talk seriously, let us know."
But I think we should sense this. I think we should just walk away from these
confrontations, stop expending physical capital in trying to persuade Russia to
do things it doesn't want to do. But I think ultimately we weaken our own
credibility by going along with the pretense that there's anything to talk
about.
So we should set up a new election monitoring organization of
countries that believe in free and fair elections, and then say, "Anybody who
wants to join has to have a complete electoral cycle before you join, and then
when you're in, then you accept monitoring that everybody else does." But make
it clear that this is based on real values, real habits, real attitudes, and if
you don't show them, you can't be in the club.
BOND: I understand we also
have a mike on the right side.
DUBINSKY: Yes, Voice of America, Inna
Dubinsky. You're writing a book that people who are in power in Russia now want
to weaken and to harm the West. What makes you think that? And why do you
think that Russia confirms to it?
LUCAS: Well, take energy security. It
is in the West's interests to have a deep and liquid energy market inside Europe
and have diversity of supply. That is of paramount interest for all of Western
Europe that we should not be dependent on any one supply and any one means of --
and that we should have a system that's robust.
I don't get too technical,
because I know we're all fascinated by the structure of the European gas
industry, but basically Europe is a series of energy islands. The natural
thing, if you're managing a monopoly, is not to build lots of interconnectors
with the next-door energy monopolies. It's to raise the funds in your own
thing. And this is particularly true in Germany, where you have vertically
integrated energy systems where the same people could use the power themselves.
Now, the EU quite rightly has been trying to liberalize that, and it has
been trying to encourage a greater interconnection and has been trying to build
the stockpile. Well, that is something that is very good for Europe. And being
energy dependent is bad for Europe. And the Kremlin has very successfully
sabotaged that.
And at Ukraine, you're seeing Germany coming along saying,
"We don't want this. We're not having it." And you say, "Why?" "Our energy
industry doesn't like it." If that happened to be E.ON BASF, they're in bed
with Gazprom. Yes, fine. So the Kremlin has a direct voice in European
decision making on Europe's energy security.
Now, I don't see that the
Kremlin wants to make Europe into a nuclear wasteland, but they want us to be in
a position where we can't determine our own future.
MARINO: Hi, Mr.
Lucas. I'm Paul Marino with EIR News. I'd like to ask you why should the
United States restart the Cold War with Russia? I think it's very dangerous to
do that. Remember, Putin has offered us an updated version of Reagan's SDI.
He's also offered us some interesting nation building projects in the Bering
Straits.
With all their internal problems, we have something that's very
similar. We have very similar strategic interests. So why should we begin
another confrontation and encirclement with Russia, because, Mr. Lucas, most
Americans remember how World War I and World War II were started by the British
Empire, and we don't want to...
LUCAS: Sir, are you from EIR? Is that
Mr. LaRouche's paper?
MARINO: That's what I said when I introduced
myself.
LUCAS: I thought...
MARINO: So why should we take your
analysis seriously and try to provoke a war with Russia? I think it's not in
our strategic interests.
LUCAS: Right. Let me think how to answer this
best. I always recommend to my British friends, if they're going to France, to
go to the Normandy beaches. For a generation that doesn't remember the Second
World War, it's really important to see the physical reminder of the American
sacrifice for European freedom, and I take that tremendously seriously.
I
lived in divided Berlin, where the memory of the airlift, my landlady was kept
alive by those Raisin bombers that brought to Germany during the airlift. And
despite all the blunders of American administrations and all the cynicism and
shortsightedness and general wuffishness of European leaders, that is still a
really important relationship.
I'm always profoundly grateful and
awestruck by the fact that people in America care about European security. I
wish we did more. We should do more of the heavier thing ourselves, and I'm
always arguing for The Economist, obviously, very strongly that battered and
faded though it is, that relationship is still there. And we still need it. We
need it now with Russia.
And it's completely preposterous -- the way you
framed your question is completely preposterous. We are not starting a new Cold
War. The change has been in Russia. We have expanded NATO to countries that
felt threatened by Russia. We were right to do so, and every case we've done it
has been a success.
Is anybody going to stand up now and say it was a bad
idea to bring Estonians into NATO -- it was a bad idea to bring Latvians into
NATO? If not bringing countries into NATO is such a great idea, wasn't Moldava
doing better now? NATO expansion has been a great success.
Missile
defense, while it is totally friendly, this is a system that has not yet been
built and probably won't work. Its 10 interceptor rockets cannot possibly
threaten a nuclear arsenal the size of Russia's. Russia doesn't care about the
rockets. It doesn't actually care about NATO. All it cares about is sowing
division within Europe and between European and America. And that's exactly
what it's succeeding in doing.
BOND: Is that the way you'd interpret the
very developments in the Balkans recently?
LUCAS: Yes. Russia doesn't
care about Serbia. (inaudible) Montenegro here. When Montenegro broke away,
Russia didn't go, "Oh, no! This is a terrible violation of international law.
How dare these Montenegrans upset Serbia's territorial integrity." They said,
"Ooh, yummy. We should buy that." And boy, they did.
It was just totally
hypocritical behavior by Russia. They don't really care about Serbia. What
they do see, and what they're very good at, is this sort of opportunistic
foreign policy. And they see that as a chance to sow division in Europe and
make Europeans feel that they're being interfered with through America. And
they're doing that very well.
The real chore is we have to try and make a
success across them. A question I always ask the Russians is, "OK. We're going
to bring the rule of law to Kosovo. We're going to send policemen, lawyers and
prosecutors and judges and bureaucrats. And we'll train them to use government.
And we're going to do this to try and make Kosovo work. What are you doing to
make Transmistria work -- apart from selling them cheap gas and training their
secret police?"
Where's the Russian ethos in good governance amidst the
world edict? We bring a lot to the table. You bring nothing. So why don't you
join us and try to make a success of Kosovo instead of stirring the pot and
trying to get more and more people killed, or something like that?
BOND:
That's a good question.
HOMER: I'm wondering how long you think the
current behind-the-scenes coalition that's running Russia is going to be able to
hold together? As you indicated, there's been an oil windfall. It won't go on
forever. There's been kind of behind-the-scene seizure of companies. Do you
think it will last another 10 years? Or is it something that's brittle and may
break apart?
LUCAS: It's a great question. And I do think this whole
idea that Putin has brought stability is very questionable, and there's clearly
tremendous frolics going on in the Kremlin all the time. And I lately have
followed this closely, when one fascinating interview with a man called
Schwartzman gave to Kommersant in November -- I'm not quite sure of the timing
-- and he outlined what he called velvet reprivatization on behalf of his boss,
Igor Sechin, a former GRU Stalinist.
And it basically went like this.
First of all, we use administrative means to bankrupt companies. Then when
they're cheap, we buy them. And then we sell them off to our friends at a large
profit so they can run them lucratively. And we just thought, "Hey, what about
whose interest does this come out?" And so we get some fascinating glimpses.
Or the Cherkesov interview as well -- again, very, very strange -- and why
does this guy suddenly speak up? Who's on which side? And you can sit there
with sheets and wade through paper and draw diagrams of FSB here, prosecutor's
office here, terror ministry here, Putin's office here -- who's with who and
who's related to who? Who owes money to whom? Who owes favors to whom?
And it's very hard to tell. And I suppose the best of way of looking at it is
to say, "Are we watching 'Casablanca' or are we watching 'Gone with the Wind'?"
Because "Gone with the Wind" -- the audience may be on the edge of their seats,
but the actors know how it's going to end. To box an idea, I don't give a damn.
But if it's "Casablanca," that makes me substantively go along. And so
sometimes I think they sat there and they said, "What? Now we need to achieve a
goal. It's A, B, and C, and we're going to do it by this, that and that. And
that means that you tune up against B, the president, for X amount of time.
Fine. And then you have a big row with him, and we will sell this to him, and
that's how it's all going to be."
And sometimes people just sat there in
the balcony saying, "What do we now? We can't do this. We can't do that. We
can't do that. I know. Beemer, you do it." I just think in like mind --
sometimes I think it's not; sometimes I think it's another, though it is clearly
unstable.
I must ask you actually where it's peace in Moscow at times. Do
you think there's going to be putsch, because the Chekhists have lost out so
badly? Maybe it's yes. Maybe it's right. There's been no sign of it yet. But
I think the best is if you speak Russian. I think the best way of putting this
is to be saying, (UNTRANSLATED). We have no facts -- only theories.
MCNAMARA: Ron McNamara with the Helsinki Commission. Perhaps "The Godfather"
might be applicable in some instances.
LUCAS: Yes.
MCNAMARA: You
refer to seeming support of the Russian people. And I guess I wonder if you
could develop that a little bit more.
I know one of the researchers in
town, Sarah Mendelson, has done quite a bit of research in terms of popular
views of Russians of all ages. And it seems that Russian youth very much have
bought into this notion of the collapse of the USSR being the most catastrophic
event of the 20th century. So it doesn't seem as though iPods necessarily
translate into buying into Western ideologies, and so forth.
And this
notion that the Russian people should be a bit more concerned about this perhaps
shrinking space in terms of breathing room and so forth -- so we're in this odd
situation of trying to convince them that it's in their interest to be more
concerned about the situation than they seemingly appear to be.
LUCAS:
Yes. Well, I think this is a real paradox we see here which, coming from a kind
of Western, law, government, physical freedom tradition, they're really hard to
understand.
One is that the majority of Russians don't like democracy --
the majority of Russia. And there are lots of polls on this, and you can find
all sorts of polls that prove almost anything, but there's consistent sign of
Russians who want less media freedom and less physical freedom, who don't think
that the opposition should be allowed to contend for power.
The most
troubling for me -- and I mention this in the book; I haven't mentioned it here
-- is there is a very powerful theory that in the autumn of 1999, the FSB
murdered hundreds and hundreds of Russians in their beds in order to create a
climate of fear the idea that Russia was under attack from Chechnyans, the
Chechnyan terrorists, which would then send Putin from zero to hero in the space
of a few months.
And that would just be a kind of way-out conspiracy
theory, if it wasn't for the fact that one of the bombs didn't go off, and it
was discovered in Ryazan. And the official explanation for it is preposterous.
The fuse was placed by two FSB officers, who stole a car, drove from Austria in
the middle of the night, bought some sacks of sugar in the market, put them in
an unguarded basement with real detonators and timers. And this was somehow
part of an anti-terrorism exercise to test security.
I'm trying to present
the official version as honestly as I can. The alternative is this was a
genuine attempt to blow up an apartment block, which didn't succeed.
Now,
this has been discussed before Putin goes to (inaudible). It was discussed a
lot since then. It's been rumbling on. Most of the people who've tried to
investigate it have been killed, as a matter of fact -- Yushenkov,
Shchekochikhin; later, Politkovskaya and Litvinenko.
Now, it's very
troubling for me, though. A plurality of Russians think that the authorities
had a hand in those bombings, and yet they consent to support Putin, which is a
bit like having a plurality of Americans thinking that 9/11 was an inside job,
but at the same time Bush having an 80 percent approval rate. It's almost
baffling (inaudible).
And so we have to try and step outside this normal
framework analysis and try to see what's going on. I think to some extent it's
all a reaction to the 1990s. The 1990s were so upsetting that people are
prepared to cut the authorities an awful lot of slack just with the knowledge
that tomorrow is going to be pretty much like yesterday, but a bit better.
But the effect of all this propaganda, whether or not it's sincere or not, has
been really troubling. I think Sarah Mendelson in Ted Gerber's piece is
excellent, except the footnote is wrong. Footnotes 44 and 45 are the wrong way
around, I guess. She told me this last night. The study is still accurately
named, and you can find it on the edwardlucas.com Web site.
But she showed
the most anti-Western people in all the categories they surveyed were the young
male university educated Muscovites, the upward generation, exactly the sort of
people you would think would be the most liberal.
BOND: Just to follow up
on that one, you seem to be suggesting that it's intrinsic in the system. It
isn't just the leadership. There is the legacy of communism and the state of
Russian society that contribute to all of this.
LUCAS: Yes.
BOND:
What really are the prospects? First, is there something to date the resumption
of the transition that is urgent or something that more resembles the Western
system? Or are we looking at something that's a point of view that's long term.
LUCAS: I think it's taken some time to embed, and it may take some time
to get out. I think that the good news -- and it is good news -- is that
Russia's problems are pretty severe, and just with the Soviet Union, that it's
the contradictions within the system, coupled with the relative amiability of
the West that brought it down.
Certainly, the contradictions are there.
They're not a demography -- atrocious demography, just terrifying. We just got
a blip up at the moment, because 20 years ago it was a blip, and lots of young
women were born then, and they're having babies now. The gates go instant crash
in the early '90s, and the women who should have been born to give birth to the
next generation of Russians just don't exist, so we're going to see scary
acceleration of the demographic collapse. Main life expectancy has actually
dropped under Putin, despite everything.
There haven't been improvements
in the infrastructure. Where are the motorways? Where are the power stations?
Where is the new housing? All that money has come in. It's a trillion dollar
investment program they're talking about and just first of all highly
inflationary, and inflation is kept artificially under control for now because
of the elections. Well, that's an event that has control, since inflation is
already a big problem.
What a shame -- their inability to spend large
amounts of money on capital projects. It always tends to get stolen, as indeed
none other than Mr. Medvedev has been complaining. So my hope is that these
things, while tragic, not desirable for their own sake, will make Russians
increasingly question the incompetent, authoritarian Chekhistocracy, which runs
the country.
DIANA: Hi. My name is Diana with EIR News. And I have a
question on Kosovo. Do you think some of the advocates working on some of the
forces in the United States and some in Europe, that their support for Kosovo
independence is not one of a gesture of a concern for their sovereignty per se,
but one to create division?
LUCAS: I don't understand. Sorry. I didn't
catch you.
DIANA: I was asking do you think that some of the avid support
coming out of the U.S. and some forces in Europe for Kosovo independence is not
one of a concern for Kosovo's independence or their sovereignty per se, but if
it is a move to create another destabilization against Russia.
LUCAS: No.
DIANA: No. Can you elaborate?
LUCAS: I just don't know where to
start. It's Russia that makes this into an issue. During the 1990s, Russia --
I think at probably the high point of constructed Russian diplomacy --
Chernemidian (ph) went to Belgrade and got the opposition to stand down. And
Russia's a constructive part of Balkan peacekeeping. And we haven't reached a
chance of stitching the Balkans back together again -- Bosnia, very fragile;
Macedonia, fragile -- but we are trying.
What will not work is keeping
Kosovo in limbo. And what the Russians have done has been to say, "We'll accept
the settlements, as long as Serbia agrees." Serbia won't agree, so nothing
happens. And we've been round and round the track on that, trying to find
something that will please everybody.
Now, I think the Russians could have
gone to the Serbs and said, "Guys, this is the best deal you're going to get,
and we'll be there. And we can send Russian peacekeepers to patrol the Serbian
enclaves, and we can do this and this and that and the other."
But in the
end, Russia prefers to see Kosovo as a continuing open wound with all the
division in the open, which it implies. And I think the Russian support of
Serbia is taken cynically. It's a great business opportunity for them. And
they've bought Montenegro, and they have bought the energy industry in Serbia,
and they'll buy more first.
I just think your framework approach is so
different from mine. I'm not sure I can give you more decent an answer than
that.
BOND: Any more questions?
LUCAS: Any Russians here who would
like to ask a really confrontational question? Is there someone from the
Russian embassy who'd like to come tell me I'm talking nonsense?
BOND:
Edward, thank you very much. Very interesting, very...
LUCAS: I'd be
happy to take more questions informally afterwards. I have a few minutes. And
the books are available on Amazon, blah, blah, blah.
BOND: Very good.
Thank you very much.
(APPLAUSE)
[Whereupon the
briefing ended at 10:56 a.m.]
END
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