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Monday, December 22, 2014         

NEW YORK TIMES


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Cables offer dim view of Russia and putin

By C.J. CHIVERS

POSTED:



Early in 2009, as recession rippled around the world, the U.S. Embassy in Moscow sent to Washington a cable summarizing whispers within Russia’s political class. Prime Minister Vladimir V. Putin, the rumors said, often did not show up at his office.

The embassy titled the cable “Questioning Putin’s Work Ethic.”

“There are consistent reports that Putin resents or resists the workload he carries,” it said, citing Putin’s “fatigue,” “hands-off behavior” and “isolation” to the point that he was “working from home.”

The cable, approved by the U.S. ambassador, John R. Beyrle, assessed the Kremlin rumors not as indicators of Putin’s weakness but of the limits of his position in a period of falling commodity prices and tightening credit. Russia’s most powerful man sat atop Russia’s spoils. The recession left him with less to dole out, eroding “some of his Teflon persona.”

“His disengagement reflects,” the cable concluded, “his recognition that a sharp reduction in resources limits his ability to find workable compromises among the Kremlin elite.”

Officially, the United States has sought since last year what President Barack Obama and his Russian counterpart, Dmitry A. Medvedev, have called a “reset” in relations.

But scores of secret U.S. cables from recent years, obtained by WikiLeaks and made available to several news organizations, show that beneath the public efforts at warmer ties, the United States harbors a dim view of the post-Soviet Kremlin and its leadership, and little hope that Russia will become more democratic or reliable.

The cables portray Putin as enjoying supremacy over all other Russian public figures, yet undermined by the very nature of the post-Soviet country he helped build.

Even a man with his formidable will and intellect is shown beholden to intractable larger forces, including an inefficient economy and an unmanageable bureaucracy that often ignores his edicts.

In language candid and bald, the cables reveal an assessment of Putin’s Russia as highly centralized, occasionally brutal and all but irretrievably cynical and corrupt. The Kremlin, by this description, lies at the center of a constellation of official and quasi-official rackets.

Throughout the internal correspondence between the U.S. Embassy and Washington, the U.S. diplomats in Moscow painted a Russia in which public stewardship was barely tended to and history was distorted. The Kremlin displays scant ability or inclination to reform what one cable characterized as a “modern brand of authoritarianism” accepted with resignation by the ruled.

Moreover, the cables reveal the limits of American influence within Russia and an evident dearth of diplomatic sources. The internal correspondence repeatedly reflected the analyses of an embassy whose staff was narrowly contained and had almost no access to Putin’s inner circle.

In reporting to Washington, diplomats often summarized impressions from meetings not with Russian officials but with Western colleagues or business executives. The impressions of a largely well-known cadre of Russian journalists, opposition politicians and research institute regulars rounded out many cables, with insights resembling what was published in liberal Russian newspapers and on websites.

The cables sketched life almost 20 years after the Soviet Union’s disintegration, a period, as the cables noted, when Medvedev, the prime minister’s understudy, is the lesser part of a strange “tandemocracy” and “plays Robin to Putin’s Batman.” All the while, another cable noted, “Stalin’s ghost haunts the Metro.”

GOVERNMENT CORRUPTION

In the secret U.S. description, official malfeasance and corruption infect all elements of Russian public life — from rigging elections, to persecuting rivals or citizens who pose a threat, to extorting businesses.

The corruption was described as a drag on the nation of sufficient significance to merit the attention of Medvedev and Putin, who, paradoxically, benefited from cronies who orchestrate graft but otherwise support the Kremlin.

A cable describing the government and style of Yuri M. Luzhkov, then the mayor of Moscow, presented the puzzle.

Since 2008, Medvedev has been the face and cheerleader for the nation’s supposed anti-corruption campaign. Yet a veritable kaleidoscope of corruption thrived in Moscow, much of it under the protection of a mayor who served at the president’s pleasure.

The embassy wrote of a “three-tiered structure” in Moscow’s criminal world, with the mayor at the top, the police and intelligence officials at the second tier and those regarded as a municipality’s predators — “ordinary criminals and corrupt inspectors” — at the bottom.

In this world the government effectively was the mafia. Extortion was so widespread, the cable noted, that it had become the business of the Interior Ministry and the federal intelligence service, known by their initials in Russian, the MVD and the FSB.

“Moscow business owners understand that it is best to get protection from the MVD and FSB (rather than organized crime groups) since they not only have more guns, resources and power than criminal groups, but they are also protected by the law,” the cable noted, citing a Russian source. “For this reason, protection from criminal gangs is no longer so high in demand.”

The cable further described a delicate balance.

On one hand, the prime minister and the president benefited from votes Luzhkov delivered to the country’s ruling party, and perhaps from corruption that one embassy source said was so profligate that witnesses saw suitcases, presumably full of cash, being carried into the Kremlin under armed guard.

On the other, the corruption and a flagrantly rigged election in 2009 for the city’s legislature had raised the question of whether Luzhkov was worth the trouble.

The cable ended on a prescient note.

“Ultimately, the tandem will put Luzhkov out to pasture,” it said.

Eight months after this cable was written, Medvedev dismissed Luzhkov.

The embassy’s consistent assessments left little hope that removing one person would be enough. Russian corruption, the cables said, was structural.

One foreign citizen, whom the embassy described as having “made a fortune in Russia’s casino business,” said in 2009 “that the ‘levels of corruption in business were worse than we could imagine’ and that after working here for over 15 years and witnessing first-hand the behavior of GOR (government of Russia) officials at all levels, he could not imagine the system changing.”

The same cable noted that even if the government wanted to change it might not be able to, given that “in 2006 — at the height of Putin’s control in a booming economy — it was rumored within the Presidential Administration that as many as 60 percent of his orders were not being followed.”

SECRETIVE BUSINESS DEALS

In Russia, the separation between the most important businesses and government officials runs from blurry to nonexistent. The cables rendered darkly how Russian companies — often relying on what one cable called “secretive deals involving intermediary companies with unknown owners and beneficiaries” — conducted their affairs.

The cables also detailed two separate but related concerns about Russia’s oil and gas sectors: a lack of modern management and capital-improvement programs, and a tendency in Putin’s circle to see energy resources as political levers.

One prominent Western oil executive told Beyrle that the inefficiencies “are so huge” that “a well that would take 10 days to drill in Canada would take 20” in Russia.

“Multiply that by hundreds or thousands and you can start to imagine the costs to the economy,” the cable quoted the executive as saying.

The embassy’s 2009 assessment of state-owned Gazprom, Russia’s largest company, was similar.

“Gazprom, it said, ”must act in the interests of its political masters, even at the expense of sound economic decision-making.“

The cables also showed how bureaucratic, national and economic power often all converged in the Kremlin, and how the state’s suitors grasped that access often equaled results.

The summary of a meeting between an Italian and U.S. diplomats in Moscow documented the Italian diplomat’s exasperation with Putin and Silvio Berlusconi, Italy’s prime minister, who had gained Russia’s ear.

The diplomat said that the pair enjoyed such a close relationship that they shared a ”direct line,“ and that the Italian Foreign Ministry and Embassy ”only learn of conversations“ between the premiers ”after the fact, and with little detail or background.“

The diplomat then ”explained that while the close relationship is not ideal from the bureaucracy’s perspective and more detrimental than beneficial, it can be useful at times.

“He cited,” the cable added, “the case of the sale to Gazprom by Italian energy giant ENI of its 20 percent share in Gazprom’s oil subsidiary Gazpromneft. He said Gazprom had insisted on paying far below the market price, but that it ultimately paid the market price after Berlusconi weighed in with Putin.”

Other cables described how Western businesses sometimes managed to pursue their interests by personally engaging senior Russian officials, including Medvedev, rather than getting lost in bureaucratic channels.

The experience in late 2009 of the Intel Corp., which hoped to import 1,000 encrypted computers for its Russia offices, offered insights into the benefits of courting the top.

“Several high-level Intel officers, including CEO Craig Barrett, and other officials, such as American Chamber of Commerce President Andrew Somers, highlighted to the GOR interlocutors, including Medvedev, the role Intel plays in employing over 1,000 Russian engineers,” a cable said.

“This high-level lobbying secured Intel a meeting with key FSB officials to explain its needs,” it continued. “Intel was able to demonstrate the reasonableness of its request and, as a result, by-passed the current extensive licensing requirement.”

Chuck Mulloy, an Intel spokesman, said that the meetings were not about one shipment of computers; they created an expedited process for importing such equipment, not only for Intel but for their customers and distributors.

“We didn’t get this as a one-time thing,” he said.

The cables further revealed how the nexus of business and state interests among Russia’s ruling elite had fueled suspicions in Washington that Putin, in spite of his vigorous denials, had quietly amassed a personal fortune.

A confidential cable pointedly mentioned the Swiss oil-trading company Gunvor, as being “of particular note.”

The company, the cable said, is “rumored to be one of Putin’s sources of undisclosed wealth” and is owned by Gennadi N. Timchenko, who is “rumored to be a former KGB colleague of Putin’s.” One estimate said the company might control half of Russian oil exports, potentially bringing its owners billions of dollars in profit.

Gunvor’s profits were especially high, the cable claimed, because in one of the few deals in which details were known, a source said that the firm included a surcharge of $1 per barrel of oil. More competitive traders, the source said, might mark up a barrel by only a nickel.

The cables provide no evidence to support the allegations about Gunvor and Luzhkov, the former Moscow mayor; neither has been charged with any crimes.

PATIENCE UNREWARDED

If two words were to summarize the secret U.S. assessment of its relations with the Kremlin, it would be these: suspicion and frustration.

A cornerstone of Washington’s approach to the relationship has been patience. Privately, U.S. diplomats have described the hope that by moderating public criticism of Russia and encouraging market principles, Russia’s government and important companies might with time evolve.

The cables underscore how frustrating the patience has been.

A summary in November 2009 of the security dialogue between the United States and Russia coolly stated that in spite of warm words between Medvedev and Obama and the establishment of a new military-to-military working group, there remained “challenges in effecting real, substantive and ongoing” dialogue.

The Defense Ministry, the cable said “has not changed its modus operandi for information exchange nor routine dialoguing since the end of the Cold War.”

Russian attendees at meetings, the cable said, “are closely monitored by their Military Intelligence (GRU) handlers,” and are reluctant “to engage in any dialogues outside of tightly controlled statements recited from prepared texts.”

When diplomats did meet Russian officials who chose to be candid, the message they heard was sometimes blunt.

In June 2009 a delegation of Washington analysts who were accompanied by diplomats met with Aleksandr Y. Skobeltsyn of Russia’s Department for Military-Technical Cooperation to discuss U.S. concerns about sales of anti-tank guided missiles and shoulder-launched antiaircraft missiles.

The latter are a special worry in the West, where security officials fear terrorists could fire them at civilian passenger jets.

Skobeltsyn said that Russia “shared U.S. concerns about re-transfer vulnerabilities, noting that Latin America and Middle East were especially sensitive areas.”

“But, he argued, if Russia did not provide these weapons to certain countries, then ‘someone else’ would.”

Outright distrustful relations between the Kremlin and the Soviet Union’s former vassals were also evident in the records. At an appearance in Washington in 2009, Foreign Minister Radoslaw Sikorski of Poland said that U.S. forces would be welcome in Poland “to protect against Russian aggression.”

The comment, unwelcomed by Russia and the United States alike, ignited a minor flare-up. In a cable after Sikorski’s appearance, the U.S. Embassy said that Poland had established a Bureau of European Security, which “Polish diplomats jokingly refer to as the ‘Office of Threats from the East.”’

The back-channel quip eventually provided insight into the diplomatic climate in Moscow. A Polish official, formerly posted to Moscow, noted that Russia’s Foreign Ministry “threw this moniker back at him during a meeting.”

He told his U.S. colleagues that the “only way” that Russia’s Foreign Ministry could have known of the nickname “was to have been listening in on his phone conversations with Warsaw” — a clear suggestion that his office in Russia had been bugged.







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