RUSSIA'S OLIGARCHS, AMERICA'S OLIGARCHS ... WHAT A "PRESIDENT TRUMP" WORLD MIGHT LOOK LIKE

Last week conservative George Will pointed out that Donald Trump won't release his tax returns, and then speculated that he's not sharing his tax returns because they might show that he's "deeply involved" with Russian oligarchs, the small group of billionaires who help Vladimir Putin manage post-Soviet Russia (oligarchy = rule by a few; oligarch = a member of the oligarchy).

While doing business with Russian oligarchs is not new, it does raise serious questions if you're the presidential candidate for the White House. Let's try and understand what the Russian oligarchs are all about, and then circle back to Trump.

OLIGARCH'S DO WHAT THEY DO
At the outset we want to understand the Russian oligarchs, just like America's early oligarchs, are rich industrialists who took advantage of a system where the rules had not caught up with the business environment. After the collapse of the Soviet Union there was an opening for well connected and quick thinking Russians who understood there was a Wild West market window opening up, which they elbowed their way through.

In many ways, the Russian oligarchs did what America's did in the 19th century; they went after anyone and anything that got in their way, used the political system to game their position, and got rich in the process.

This story is not new, and even helps explain the evolution of democracy in America. After America's oligarchs took advantage of their situation - creating financial empires that dwarfed those of Europe's monarchs - and ran roughshod over America's political process, a populist movement rose up to challenge America's new oligarchic class. This was accompanied by the rise and political conversion of Teddy Roosevelt, who challenged the interests of America's new elites at the beginning of the 20th century.

While this process helped make democracy, and markets, work for more Americans it still wasn't enough. The oligarchs continued to get rich(er) in America.

The rise of Wall Street and new industries after WWI made it difficult for Washington to catch up with market players. This, in part, is what allowed them to game the system in ways that led to the market collapse of 1929 and the Great Depression. It took Franklin D. Roosevelt and a second world war to challenge America's dominant elites and to change the rules of the game.

To be sure, FDR ran into many obstacles, including an attempt to overthrow his government by several of America's financial mandarins. The key point here is recognizing that oligarchs - whether they're from the U.S. or Russia - will do what they can to influence politics and game the system. This is especially the case today as we look at the current crop of global oligarchs, which include American elites as well.

This is what makes claims that Donald Trump is in bed (or wants to be in bed) with the Russian oligarchs such a problem. Here I want to make it clear that my concern isn't necessarily that Russia's new elite class want to enhance or protect their interests. This is what oligarchs do. Dogs bark. Birds fly. Snakes slither. The Founding Fathers understood this, and wrote about the need for the state to mediate and counter balance "those with property" if democracy was going to work (see especially the Federalist Papers on this).

What should worry every American is that Donald Trump may either already owe, or is looking to secure, money that he can no longer get elsewhere. We need to remind ourselves that banks and the largest financial institutions in the U.S. don't want to do business with Donald Trump. There's a reason why. And, yes, his 4 bankruptcies and his long history of stiffing contractors don't help his cause.

What this tells us is that the issue isn't the oligarchs, and the demands they will make. We understand their game. The issue is Donald Trump.

THE TRUMP FACTOR
My concern is Donald Trump has demonstrated little understanding that "business is business" is a fine way to live; but it only applies if you're the only one exposed to the negotiated terms. It's an entirely different ballgame when you're capable of putting the United States of America at risk because you don't want to upset your financial backers in another country - in this case Russia.

This is why Donald Trump's much bragged about Florida real estate deal with a Russian oligarch, and his many attempts at trying to gain access into Moscow's real estate and hotel market are so important. He's desperate to break into the Russian game but his ignorance of their business culture, combined with his temperament and personality, don't necessarily fit into the Russian business style. All indicators suggest that he's been locked out so far. And if Trump has secured business it would most likely be high interest loans with Russian oligarchs, as George Will suggested.

The key here is understanding that Trump's golden ticket into the world of the oligarchs in Russia appears to be Vladimir Putin. Imagine a "President Trump" winning Putin over with, say, shifting the U.S. position on the Crimea - where we're officially opposed to Russia's intervention in the region - so that we support Russia's presence there. That's got to be worth a wink and a nod from Putin for Trump's business interests, wouldn't you agree?

Look, at the end of the day I'm not saying Trump's position vis-a-vis Russia in the Crimea is a bad one. I happen to believe that Russia has legitimate historical and strategic interests (which you can read about here and here), though I am pretty sure Trump doesn't understand these interests. What I'm concerned about is how Trump has no problem mixing his very toxic business interests in with larger U.S. foreign policy interests.

This is a serious issue. It's also what makes Trump so dangerous.

We need to remind ourselves that Trump is about Trump, and no one else. His long and well publicized personal and business history make this clear.

WHAT A "PRESIDENT TRUMP" WORLD MIGHT LOOK LIKE
If Trump becomes president the Russians will effectively gain influence without having to do all the hard work of creating and molding a super spy to infiltrate the American political system. Vladimir Putin will play him like a drum. This is what makes Donald Trump an ideal Manchurian candidate - i.e. a Russian agent/tool - of the first order. Putin gets America's acquiescence, in effect, for the promise of a few loans from the oligarchs and some real estate developments in Moscow.

Europe, on the other hand, sees the collapse of NATO's security umbrella and an emboldened Russia.

For their part, China, realizing they can probably have the South China Sea for a song, becomes more aggressive, and figures out a strategy that promises to let the Trump organization in on their resource or petroleum interests in the region. America's SEATO promises, not surprisingly, vanish with the wind (unless South East Asian partners "pay up", of course).

In effect, everyone in the global community is on their own, just like in the good old days.

With America's security treaties abandoned or compromised in Europe and Asia, what could possibly go wrong?

At the end of the day, we need to remember that U.S. oligarchs became part of an empire they helped push around the world. It's what oligarchs do. One would assume that Russia's oligarchs - and Vladimir Putin - understand how all of this works. In fact, bet on it.

Does anyone seriously believe if the Russians want to buy access and enhance their global influence under a "President Trump" that Trump would be one step ahead of them and capable of saying no?

If you do I have a bridge to sell you, in Iraq. Cheap too.

- Mark

VLADIMIR PUTIN'S REAL LONG GAME ... YES, IT HINGES ON AMERICAN DECLINE

I want to start the new year off by pointing to a must read article that captures the new world order (disorder?) we are seeing unfold before our eyes. It's from Politico Magazine, and is titled, "Putin's Real Long Game."

THE SETTING
In a few words the article by Molly K. McKew argues the world we know is over, and Russia is moving quickly to manipulate trends to their advantage.

The big question is whether President-elect Donald Trump can figure out how the new world is evolving in time to maintain America's global position. Things don't look good.

Since the article is a relatively long read (for many) I'll synopsize the broader argument below.

* THE CRUMBLING WEST: The post-WWII world order, built around Western democratic ideals, global institutions, and free markets (called "liberal internationalism"), is crumbling.

* RUSSIAN LONG-TERM STRATEGY: Russia is doing all it can to undermine what remains of U.S.-led ideals and global institutions, and has been preparing for what's transpiring today since Vladimir Putin's arrival on the global stage.

* TRUMP'S CONFUSION: There's no real confidence that Donald Trump cares about these global trends, or that he really understands Putin's larger global play.

The real issue is that Russia has already abandoned the post-WWII liberal order created by the West. They may have benefited from it's stability when the Soviet Union collapsed, but the Russians feel no special tug to maintain the system today. This is especially the case if it means they must continue playing second fiddle to the United States and Western Europe.

This shouldn't be a surprise. It's the essence of power politics, a game world leaders have modified but haven't abandoned over the millenniums.

This explains, in part, why Russia has worked to undermine NATO, and is opposed to virtually all western-led trade treaties. They only maintain the status quo, which is not good for Russia.

Worse, Western-led institutions are collaborative and nominally transparent. Authoritarian states like Russia don't work well in these kind of environments.

WHAT'S DRIVING RUSSIA
The fact that Russia neither wields influence nor controls these international institutions only makes them a nuisance in the eyes of the Kremlin. Additionally, institutions like NATO, the European Union, and the World Trade Organization aren't viewed as stabilizing institutions. They are tools of an oppressive system led by arrogant men who have it out for Russia.

Russia is engaged in a war, where strategic goals can only be met by pursuing political outcomes favorable to Moscow. If that means bombing Syria and creating refugee flows that destabilize European unity that's OK. If hacking an election and installing an illiberal, populist-nationalist regime  in America helps achieve Russian goals then this is what needs to be done.

Politically, Russia is an anti-democratic state. Putin's long tenure, the fact that Putin had members of Pussy Riot, a largely unknown punk band, imprisoned for criticizing him, while numerous journalists have been killed in Russia, is testament to Russia's undemocratic nature. From a market perspective, it's no secret that Russia is largely managed by insular oligarchs who have no problem operating in an environment of crony capitalism (so does Wall Street's biggest financial institutions, but that's another story for another day).

Put more simply, the Russian state is led by a gang of bikers who have no problem flaunting the law. But they also understand how the appearance of rules are necessary for them to keep order and make money off of the ignorant hoards who still believe democracy matters.

Why does this all matter? Because Vladimir Putin understands all of this. Putin is a smart man. He knows what he's doing. He's in this for the long haul. And he clearly understands the geopolitical stage, and how the game is played. He is a chess player on the world's global chessboard. And Donald Trump? Not so much.

RUSSIA'S STRATEGY
To achieve their ends Russian propaganda efforts have been consistent in their line that the post-WWII system built by the West is in decline. Specifically, Europe is in collapse mode. Brexit proved this. So did the 2008 market collapse.

Donald Trump's election, combined with tens of millions Americans having no interest in getting to the bottom of Russia's efforts to interfere with our 2016 elections, illustrate how transparency and democracy don't really matter in America. The fact that tens of millions of Americans don't care about Russian tampering is proof of American decline.

So Russia smiles as the strength of the West - confidence in the values of both our people and our political institutions - is battered by jubilant victors in the United States, who don't seem to care that winning domestic political battles with the help of Moscow moves America one step closer to losing the larger geo-strategic war.

Specifically ...

They don't seem to understand that chaos in Syria and the Middle East, plus streams of refugees into Europe, helps destabilize both the European Union and Western alliances by putting pressure on democratic institutions and relationships throughout the continent.

They don't care, or don't seem to understand, that Russian interventions in Chechnya, Ukraine, Georgia, and the Crimea (among others) are really part of a smoke & mirrors campaign designed to undermine NATO and rebuild the Russian empire.

They don't care that Donald Trump's financial interests have him involved with Russian oligarchs which, as I've pointed out elsewhere, compromises America's long-term strategic interests.

Fractured Western alliances ... an aggressive strongman-strategist with nuclear weapons rattling Europe's front door ... and an American president who's more interested in his own wealth than the future of a nation ... All of this contributes to the sense that the West is in chaos, if not outright decline.

Growing domestic divisions and doubts about internal institutions, coupled with crumbling alliances, doesn't paint a pretty picture for the future.

And it certainly doesn't help that Russia's figured out the purpose of war today is not just the physical destruction of a nation-state with an invading army. It also includes the slow erosion of a nation's confidence, unity, and sense of shared values.

On this score, Vladimir Putin is playing a good part of the American electorate, and the European continent, like a drum.

There's more to this story, which you can access by clicking here.

- Mark

Hat tip to Agulia for the link to the article.

IS VLADIMIR PUTIN'S RUSSIA A CRIMINAL ENTERPRISE? FIVE DEVELOPMENTS - ACCORDING TO BILL BROWDER'S SENATE TESTIMONY - SAY "YES"

While everyone was busy watching Survivor White House this past week, financier Bill Browder gave what can only be called bombshell testimony in front of the Senate Judiciary Committee on July 26th. Below are five developments that, pieced together by Browder, make it clear Donald Trump is in over his head.

For those who see the many moving pieces, Browder's testimony also goes a long way to explain why President Trump wants sanctions against Russia lifted, and why America may have its first Manchurian president.

* THE RUSSIA STATE IS A CRIMINAL ENTERPRISE: Browder effectively described Russia's government as a criminal enterprise that "operates in the shadows using corruption, blackmail, torture and murder - all led by Vladimir Putin" adding, "Effectively the moment that you enter into their world, you become theirs." The Mikhail Khodorkovsky story below is especially chilling.


* THE STATE PROTECTS PUTIN'S INTERESTS: Browder was a successful businessman in Russia, until he and his lawyer, Sergei Magnitsky, uncovered evidence of a huge $230 million corruption scandal. When he and his attorney, Magnitsky, reported the theft to the Russian authorities they "waited for the good guys to get the bad guys," only to learn "that in Putin’s Russia, there are no good guys." They also learned, eventually, that Putin and his network were the source of the corruption.


* BLACKMAIL & MURDER ARE TOOLS OF THE STATE:  After reporting the $230 million corruption scandal, instead of seeing an investigation Browder was accused of tax evasion and barred from reentering Russia. His attorney, Sergei Magnitsky was jailed, and is believed to have been beaten to death in 2009.

* THE MAGNITSKY ACT INFURIATES PUTIN: The Magnitsky case illustrated how corrupt and immune from retaliation the Putin network were/are. After passing in the House of Representatives (364-43) and the Senate (92-4), the Magnitsky Act was signed into law by President Obama in 2012. The Magnitsky Act freezes assets and bans visas for those who participated in the murder of Sergei Magnitsky, as well as other Russians involved in human rights abuse cases. Putin was infuriated.


 * THE ROOTS OF PUTIN'S IRE: Vladimir Putin responded to the Magnitsky Act in several ways. First he put a stop to the adoption of Russian children by U.S. citizens. But it wasn't babies that Putin cared about. It was the threats to his position and power that worried him. With much of his ill-gotten gains in western banks and financial institutions (because the rule of law is still respected and maintained), the Magnitsky Act meant that Putin's assets could be frozen. What really upset Putin, according to Browder, is that the Magnitsky Act meant that his network abroad could no longer operate with the impunity and freedom that Putin promised. His global playground now has restrictions, which he wants Donald Trump to remove.

The full text of Bill Browder's July 26th testimony to the Senate Judiciary Committee is attached below. Grab a cup of coffee, and get something to eat. This reads like the heart of a spy novel.

___________________________

Chairman Grassley, Ranking Member Feinstein, and members of the committee, thank you for giving me the opportunity to testify today on the Russian government’s attempts to repeal the Magnitsky Act in Washington in 2016, and the enablers who conducted this campaign in violation of the Foreign Agents Registration Act, by not disclosing their roles as agents for foreign interests.

Before I get into the actions of the agents who conducted the anti-Magnitsky campaign in Washington for the benefit of the Russian state, let me share a bit of background about Sergei Magnitsky and myself.I am the founder and CEO of Hermitage Capital Management. I grew up in Chicago, but for the last 28 years I’ve lived in Moscow and London, and am now a British citizen. From 1996 to 2005, my firm, Hermitage Capital, was one of the largest investment advisers in Russia with more than $4 billion invested in Russian stocks.

Russia has a well-known reputation for corruption; unfortunately, I discovered that it was far worse than many had thought. While working in Moscow I learned that Russian oligarchs stole from shareholders, which included the fund I advised. Consequently, I had an interest in fighting this endemic corruption, so my firm started doing detailed research on exactly how the oligarchs stole the vast amounts of money that they did. When we were finished with our research we would share it with the domestic and international media.

For a time, this naming and shaming campaign worked remarkably well and led to less corruption and increased share prices in the companies we invested in. Why? Because President Vladimir Putin and I shared the same set of enemies. When Putin was first elected in 2000, he found that the oligarchs had misappropriated much of the president’s power as well. They stole power from him while stealing money from my investors. In Russia, your enemy’s enemy is your friend, and even though I’ve never met Putin, he would often step into my battles with the oligarchs and crack down on them.

That all changed in July 2003, when Putin arrested Russia’s biggest oligarch and richest man, Mikhail Khodorkovsky. Putin grabbed Khodorkovsky off his private jet, took him back to Moscow, put him on trial, and allowed television cameras to film Khodorkovsky sitting in a cage right in the middle of the courtroom. That image was extremely powerful, because none of the other oligarchs wanted to be in the same position. After Khodorkovsky’s conviction, the other oligarchs went to Putin and asked him what they needed to do to avoid sitting in the same cage as Khodorkovsky. From what followed, it appeared that Putin’s answer was, “Fifty percent.” He wasn’t saying 50 percent for the Russian government or the presidential administration of Russia, but 50 percent for Vladimir Putin personally. From that moment on, Putin became the biggest oligarch in Russia and the richest man in the world, and my anti-corruption activities would no longer be tolerated.

The results of this change came very quickly. On November 13, 2005, as I was flying into Moscow from a weekend away, I was stopped at Sheremetyevo airport, detained for 15 hours, deported, and declared a threat to national security.

Eighteen months after my expulsion a pair of simultaneous raids took place in Moscow. Over 25 Interior Ministry officials barged into my Moscow office and the office of the American law firm that represented me. The officials seized all the corporate documents connected to the investment holding companies of the funds that I advised. I didn’t know the purpose of these raids so I hired the smartest Russian lawyer I knew, a 35-year-old named Sergei Magnitsky. I asked Sergei to investigate the purpose of the raids and try to stop whatever illegal plans these officials had.

Sergei went out and investigated. He came back with the most astounding conclusion of corporate identity theft: The documents seized by the Interior Ministry were used to fraudulently re-register our Russian investment holding companies to a man named Viktor Markelov, a known criminal convicted of manslaughter.

After more digging, Sergei discovered that the stolen companies were used by the perpetrators to misappropriate $230 million of taxes that our companies had paid to the Russian government in the previous year.I had always thought Putin was a nationalist. It seemed inconceivable that he would approve of his officials stealing $230 million from the Russian state. Sergei and I were sure that this was a rogue operation and if we just brought it to the attention of the Russian authorities, the “good guys” would get the “bad guys” and that would be the end of the story.

We filed criminal complaints with every law enforcement agency in Russia, and Sergei gave sworn testimony to the Russian State Investigative Committee (Russia’s FBI) about the involvement of officials in this crime.

However, instead of arresting the people who committed the crime, Sergei was arrested. Who took him? The same officials he had testified against. On November 24, 2008, they came to his home, handcuffed him in front of his family, and threw him into pre-trial detention.

Sergei’s captors immediately started putting pressure on him to withdraw his testimony. They put him in cells with 14 inmates and eight beds, leaving the lights on 24 hours a day to impose sleep deprivation. They put him in cells with no heat and no windowpanes, and he nearly froze to death. They put him in cells with no toilet, just a hole in the floor and sewage bubbling up. They moved him from cell to cell in the middle of the night without any warning. During his 358 days in detention he was forcibly moved multiple times.They did all of this because they wanted him to withdraw his testimony against the corrupt Interior Ministry officials, and to sign a false statement that he was the one who stole the $230 million—and that he had done so on my instruction.

Sergei refused.

In spite of the grave pain they inflicted upon him, he would not perjure himself or bear false witness.After six months of this mistreatment, Sergei’s health seriously deteriorated. He developed severe abdominal pains, he lost 40 pounds, and he was diagnosed with pancreatitis and gallstones and prescribed an operation for August 2009. However, the operation never occurred. A week before he was due to have surgery, he was moved to a maximum security prison called Butyrka, which is considered to be one of the harshest prisons in Russia. Most significantly for Sergei, there were no medical facilities there to treat his medical conditions.

At Butyrka, his health completely broke down. He was in agonizing pain. He and his lawyers wrote 20 desperate requests for medical attention, filing them with every branch of the Russian criminal justice system. All of those requests were either ignored or explicitly denied in writing.

After more than three months of untreated pancreatitis and gallstones, Sergei Magnitsky went into critical condition. The Butyrka authorities did not want to have responsibility for him, so they put him in an ambulance and sent him to another prison that had medical facilities. But when he arrived there, instead of putting him in the emergency room, they put him in an isolation cell, chained him to a bed, and eight riot guards came in and beat him with rubber batons.That night he was found dead on the cell floor.Sergei Magnitsky died on November 16, 2009, at the age of 37, leaving a wife and two children.

I received the news of his death early the next morning. It was by far the most shocking, heart-breaking, and life-changing news I’ve ever received.Sergei Magnitsky was murdered as my proxy. If Sergei had not been my lawyer, he would still be alive today.

That morning I made a vow to Sergei’s memory, to his family, and to myself that I would seek justice and create consequences for the people who murdered him. For the last seven and a half years, I’ve devoted my life to this cause.

Even though this case was characterized by injustice all the way through, the circumstances of Sergei’s torture and death were so extreme that I was sure some people would be prosecuted. Unlike other deaths in Russian prisons, which are largely undocumented, Sergei had written everything down. In his 358 days in detention, Sergei wrote over 400 complaints detailing his abuse. In those complaints he described who did what to him, as well as where, how, when, and why. He was able to pass his hand-written complaints to his lawyers, who dutifully filed them with the Russian authorities. Although his complaints were either ignored or rejected, copies of them were retained. As a result, we have the most well-documented case of human rights abuse coming out of Russia in the last 35 years.

When I began the campaign for justice with this evidence, I thought that the Russian authorities would have no choice but to prosecute at least some of the officials involved in Sergei Magnitsky’s torture and murder. It turns out I could not have been more wrong. Instead of prosecuting, the Russian authorities circled the wagons and exonerated everybody involved. They even went so far as to offer promotions and state honors to those most complicit in Sergei’s persecution.

It became obvious that if I was going to get any justice for Sergei Magnitsky, I was going to have to find it outside of Russia.

But how does one get justice in the West for a murder that took place in Russia? Criminal justice is based on jurisdiction: One cannot prosecute someone in New York for a murder committed in Moscow. As I thought about it, the murder of Sergei Magnitsky was done to cover up the theft of $230 million from the Russian Treasury. I knew that the people who stole that money wouldn’t keep it in Russia. As easily as they stole the money, it could be stolen from them. These people keep their ill-gotten gains in the West, where property rights and rule of law exist. This led to the idea of freezing their assets and banning their visas here in the West. It would not be true justice but it would be much better than the total impunity they enjoyed.In 2010, I traveled to Washington and told Sergei Magnitsky’s story to Senators Benjamin Cardin and John McCain. They were both shocked and appalled and proposed a new piece of legislation called The Sergei Magnitsky Rule of Law Accountability Act. This would freeze assets and ban visas for those who killed Sergei as well as other Russians involved in serious human rights abuse.

Despite the White House’s desire to reset relations with Russia at the time, this case shined a bright light on the criminality and impunity of the Putin regime and persuaded Congress that something needed to be done. In November 2012 the Magnitsky Act passed the House of Representatives by 364 to 43 votes and later the Senate 92 to 4 votes. On December 14, 2012, President Obama signed the Sergei Magnitsky Act into law.

Putin was furious. Looking for ways to retaliate against American interests, he settled on the most sadistic and evil option of all: banning the adoption of Russian orphans by American families.

This was particularly heinous because of the effect it had on the orphans. Russia did not allow the adoption of healthy children, just sick ones. In spite of this, American families came with big hearts and open arms, taking in children with HIV, Down syndrome, Spina Bifida and other serious ailments. They brought them to America, nursed them, cared for them and loved them. Since the Russian orphanage system did not have the resources to look after these children, many of those unlucky enough to remain in Russia would die before their 18th birthday. In practical terms, this meant that Vladimir Putin sentenced his own, most vulnerable and sick Russian orphans to death in order to protect corrupt officials in his regime.

Why did Vladimir Putin take such a drastic and malicious step?For two reasons.

First, since 2012 it’s emerged that Vladimir Putin was a beneficiary of the stolen $230 million that Sergei Magnitsky exposed. Recent revelations from the Panama Papers have shown that Putin’s closest childhood friend, Sergei Roldugin, a famous cellist, received $2 billion of funds from Russian oligarchs and the Russian state. It’s commonly understood that Mr. Roldugin received this money as an agent of Vladimir Putin. Information from the Panama Papers also links some money from the crime that Sergei Magnitsky discovered and exposed to Sergei Roldugin. Based on the language of the Magnitsky Act, this would make Putin personally subject to Magnitsky sanctions.

This is particularly worrying for Putin, because he is one of the richest men in the world. I estimate that he has accumulated $200 billion of ill-gotten gains from these types of operations over his 17 years in power. He keeps his money in the West and all of his money in the West is potentially exposed to asset freezes and confiscation. Therefore, he has a significant and very personal interest in finding a way to get rid of the Magnitsky sanctions.

The second reason why Putin reacted so badly to the passage of the Magnitsky Act is that it destroys the promise of impunity he’s given to all of his corrupt officials.

There are approximately ten thousand officials in Russia working for Putin who are given instructions to kill, torture, kidnap, extort money from people, and seize their property. Before the Magnitsky Act, Putin could guarantee them impunity and this system of illegal wealth accumulation worked smoothly. However, after the passage of the Magnitsky Act, Putin’s guarantee disappeared. The Magnitsky Act created real consequences outside of Russia and this created a real problem for Putin and his system of kleptocracy.

For these reasons, Putin has stated publicly that it was among his top foreign policy priorities to repeal the Magnitsky Act and to prevent it from spreading to other countries. Since its passage in 2012, the Putin regime has gone after everybody who has been advocating for the Magnitsky Act.

One of my main partners in this effort was Boris Nemtsov. Boris testified in front of the U.S. Congress, the European Parliament, the Canadian Parliament, and others to make the point that the Magnitsky Act was a “pro-Russian” piece of legislation because it narrowly targeted corrupt officials and not the Russian people. In 2015, Boris Nemtsov was murdered on the bridge in front of the Kremlin.Boris Nemtsov’s protégé, Vladimir Kara-Murza, also traveled to law-making bodies around the world to make a similar case. After Alexander Bastrykin, the head of the Russian Investigative Committee, was added to the Magnitsky List in December of 2016, Vladimir was poisoned. He suffered multiple organ failure, went into a coma and barely survived.

The lawyer who represented Sergei Magnitsky’s mother, Nikolai Gorokhov, has spent the last six years fighting for justice. This spring, the night before he was due in court to testify about the state cover up of Sergei Magnitsky’s murder, he was thrown off the fourth floor of his apartment building. Thankfully he survived and has carried on in the fight for justice.

I’ve received many death threats from Russia. The most notable one came from Russian Prime Minister Dmitry Medvedev at the World Economic Forum in Davos, Switzerland, in 2013. When asked by a group of journalists about the death of Sergei Magnitsky, Medvedev replied, “It’s too bad that Sergei Magnitsky is dead and Bill Browder is still alive and free.” I’ve received numerous other death threats from Russian sources through text messages, emails, and voicemails. U.S. government sources have warned me about a planned Russian rendition against me. These threats were in addition to numerous unsuccessful attempts that the Russian government has made to arrest me using Interpol or other formal legal assistance channels.

The Russian government has also used its resources and assets to try to repeal the Magnitsky Act. One of the most shocking attempts took place in the spring and summer of last year when a group of Russians went on a lobbying campaign in Washington to try to repeal the Magnitsky Act by changing the narrative of what had happened to Sergei. According to them, Sergei wasn’t murdered and he wasn’t a whistle-blower, and the Magnitsky Act was based on a false set of facts. They used this story to try to have Sergei’s name taken off of the Global Magnitsky Act that passed in December 2016. They were unsuccessful.Who was this group of Russians acting on behalf of the Russian state? Two men named Pyotr and Denis Katsyv, a woman named Natalia Veselnitskaya, and a large group of American lobbyists, all of whom are described below.

Pyotr Katsyv, father to Denis Katsyv, is a senior Russian government official and well-placed member of the Putin regime; Denis Katsyv was caught by U.S. law enforcement using proceeds from the crime that Sergei Magnitsky uncovered to purchase high-end Manhattan real estate (the case recently settled with the Katsyv’s paying $6 million to the U.S. government). Natalia Veselnitskaya was their lawyer.

In addition to working on the Katsyv’ s money laundering defense, Ms. Veselnitskaya also headed the aforementioned lobbying campaign to repeal the Magnitsky Act. She hired a number of lobbyists, public relations executives, lawyers, and investigators to assist her in this task.Her first step was to set up a fake NGO that would ostensibly promote Russian adoptions, although it quickly became clear that the NGO’s sole purpose was to repeal the Magnitsky Act. This NGO was called the Human Rights Accountability Global Initiative Foundation (HRAGI). It was registered as a corporation in Delaware with two employees on February 18, 2016. HRAGI was used to pay Washington lobbyists and other agents for the anti-Magnitsky campaign. (HRAGI now seems to be defunct, with taxes due.)

Through HRAGI, Rinat Akhmetshin, a former Soviet intelligence officer naturalised as an American citizen, was hired to lead the Magnitsky repeal effort. Mr. Akhmetshin has been involved in a number of similar campaigns where he’s been accused of various unethical and potentially illegal actions like computer hacking.

Veselnitskaya also instructed U.S. law firm Baker Hostetler and their Washington, D.C.-based partner Marc Cymrot to lobby members of Congress to support an amendment taking Sergei Magnitsky’s name off the Global Magnitsky Act. Mr. Cymrot was in contact with Paul Behrends, a congressional staffer on the House Foreign Affairs Committee at the time, as part of the anti-Magnitsky lobbying campaign.

Veselnitskaya, through Baker Hostetler, hired Glenn Simpson of the firm Fusion GPS to conduct a smear campaign against me and Sergei Magnitsky in advance of congressional hearings on the Global Magnitsky Act. He contacted a number of major newspapers and other publications to spread false information that Sergei Magnitsky was not murdered, was not a whistle-blower, and was instead a criminal. They also spread false information that my presentations to lawmakers around the world were untrue.

As part of Veselnitskaya’s lobbying, a former Wall Street Journal reporter, Chris Cooper of the Potomac Group, was hired to organize the Washington, D.C.-based premiere of a fake documentary about Sergei Magnitsky and myself. This was one the best examples of Putin’s propaganda.

They hired Howard Schweitzer of Cozzen O’Connor Public Strategies and former Congressman Ronald Dellums to lobby members of Congress on Capitol Hill to repeal the Magnitsky Act and to remove Sergei’s name from the Global Magnitsky bill.

On June 13, 2016, they funded a major event at the Newseum to show their fake documentary, inviting representatives of Congress and the State Department to attend. While they were conducting these operations in Washington, D.C., at no time did they indicate that they were acting on behalf of Russian government interests, nor did they file disclosures under the Foreign Agent Registration Act.

United States law is very explicit that those acting on behalf of foreign governments and their interests must register under FARA so that there is transparency about their interests and their motives. Since none of these people registered, my firm wrote to the Department of Justice in July 2016 and presented the facts.

I hope that my story will help you understand the methods of Russian operatives in Washington and how they use U.S. enablers to achieve major foreign policy goals without disclosing those interests. I also hope that this story and others like it may lead to a change in the FARA enforcement regime in the future.Thank you.

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While Browder's testimony reads like a great spy novel it also helps explain why, as I pointed out last year, President Trump doesn't want to release his tax returns. Because western financial institutions won't lend to the bankruptcy-riddled Trump, he has to go elsewhere to get the money he needs. He knows that his tax returns will reveal how deep he is into the Russian oligarchs.

They just might also show how compromised he is to Russians, and Vladimir Putin. 

Worse, the tax returns might even tell us why Donald Trump ran for president in the first place: to keep the Russians from closing in on him, and his debt-driven financial empire.

So, yeah, contrary to what many of his supporters want to claim, this has always been about Trump, and not service to America.

- Mark

UKRAINE: HOW WE GOT HERE, HOW WE BEGIN THE RESET

My latest article published in the Bakersfield Californian yesterday ...

Almost 60 years ago President John F. Kennedy was faced with the Cuban Missile Crisis. Alarmed over the Soviet Union’s placement of nuclear-armed missiles in Cuba, Kennedy imposed a naval blockade around Cuba which ended a crisis many believed would start World War III, or a nuclear exchange.

The Cuban Missile Crisis is instructive today because the U.S. is currently trying to force Russia out of strategically significant Ukraine. While the political players have changed – communist Russians replaced by a kleptocratic dictator – Russia’s objectives are again tied to broader geostrategic concerns. Unfortunately for Russia’s Vladimir Putin, the threats he sees are the product of a dictator’s delusional fantasies.

There’s no Cold War. Ukraine, unlike Cuba in 1962, wants nothing to do with Russian security obsessions. Perhaps more importantly, Vladimir Putin and his billionaire oligarchs have gotten fabulously rich playing in an international community made stable by a remarkably durable post-war world order created by a complex set of U.S.-led political, military, and economic alliances.

Put another way, Putin’s acting like a paranoid strongman from another era, complete with sycophantic oligarchs too self-serving to discourage his geostrategic delusions. The oligarchs inability to reign in Putin is a product of crushing tyranny at home and incremental developments around the globe which has Putin believing he’s smarter than he is.

Among these developments include how Putin’s aggressive political gambles in Georgia (2008), Crimea (2014), and eastern Ukraine (2014) paid off. In each of these instances Putin understood Western allies wouldn’t have the stomach to back up U.S. threats because of how both Presidents Bush and Obama bungled America’s post-9/11 responses in Afghanistan and Iraq. Bush’s war of aggression and Obama’s nation-building failed so miserably their blustering threats over Putin’s land grabs were effectively ignored.

Simply put, America had a credibility gap.

Putin’s also been buoyed by the ascent of the dictators. Kim Jung Un, Xi Jinping, Jair Bolsonaro and Recep Tayyip Erdoğan (among others) have created a sense around the world that democracy’s in trouble. Putin, in turn, believes democracies are too weak to respond to “muscular” policies from the world’s wannabe biker guys.

Perhaps the most disturbing development is what Robert Mueller characterized as Putin’s successful “interference” in America’s 2016 elections. What Putin got in return paid off in spades.

Because Putin’s position is strengthened every time Western alliances are weakened, his global hand was enhanced when Donald Trump applauded Brexit, undermined NATO unity by contemplating leaving the alliance after complaining about “deadbeats” (an untrue characterization), sabotaged the Trans-Pacific Partnership and pulled America out of the Iranian nuclear deal. But Putin really profited when Trump turned Ukrainian policy over to Rudy Giuliani and crafted pro-Russian policies his own national security advisors, Fiona Hill and John Bolton, have made clear undermined America’s security interests.

These geostrategic developments enhanced Russia’s position globally (while diminishing America’s). Putin’s meddling in American politics really paid off when his political avatar, Donald Trump, tried to extort Ukraine’s President Zelensky for already agreed upon weapons by asking for a personal “favor” – an investigation into Joe Biden’s son. For his troubles Trump would secure his first impeachment.

Trump’s national security advisor for Europe and Russia, Fiona Hill, saw through all of this and pointed out trying to extort President Zelensky –as Trump pursued Russian-friendly policies, while lavishly praising Putin – effectively told Russia “Ukraine was [their] playground.”

Putin understood how these developments were augmented by America’s growing political divide domestically, which was inflamed by the attempted overthrow of America’s democracy on January 6^th. Specifically, Putin learned millions of Americans have absolutely no problem abandoning America’s constitutional principles.

America’s growing political divide combined with the GOP’s cult of personality obsession reinforces Putin’s hand on many levels. A divided America – which the “Big Lie” and Trump’s praise for Putin’s Ukrainian invasion contribute to – ensures America’s Ukrainian response will be relatively muted.

This is unfortunate because as Fiona Hill points out, “The polarization of American society has become a national security threat, acting as a barrier to collective action” against legitimate external threats.

The world is now confronted with a genuine crisis in Ukraine that could spin out of control quickly. With Vietnam, Afghanistan, Iraq in America’s shadow, blustering macho buffoonery can no longer carry the moment with our allies. Reckless wars from our past, coupled with a divided America gripped in a toxic cult of personality environment, have created a precarious moment in our time.  

Incredibly, while past failed military engagements and the coup attempt inspired by the “Big Lie” have stained American prestige, know the world is once again looking to the U.S. for leadership. This is a good thing.

With sanctions applying pressure, air space cut off and Russian oligarchs seeing their assets seized around the world, Putin cannot be pleased knowing Ukrainians are preparing for a drawn-out urban warfare scenario – just as supplies begin arriving from Europe. Let’s remember the 13 days in October 1962 ended precisely because alliances, informed negotiations, and diplomatic entreaties – not always on the front pages – worked.

Expect these dynamics, along with the institutional relationships being rebuilt by Western leaders, to have a similar impact. Bet on it.

Mark A. Martinez, Ph.D., is professor and chair of the Department of Political Science at CSU Bakersfield. 

- Mark

OK, PRESIDENT TRUMP IS OFFICIALLY A RUSSIAN STOOGE ... BUT, WAIT, IT GETS BETTER

So the United States is pulling up its covert (CIA) stakes, and leaving Syria. What this means is that there is no longer "official" U.S. support for the rebels fighting the autocratic Bashar al-Assad, or the radical Islamic State in Eastern Syria, which the U.S. has been doing since 2013.

Russian leaders, as you can imagine, responded immediately, praising the move, and then vowing to cut ties to moderate rebels in Syria.

If this is part of Donald Trump's secret plan to rid the region of ISIS - because he has a secret plan built around the fact that he knows so much more about ISIS than the generals - I'm not impressed. The Free Syrian Army is not only upset, but they're making sure everyone knows they were blindsided by the move.

In their view, the jihadists and al Qaeda just got stronger.

But wait, it gets better (worse?).

On a broader geo-strategic level President Trump is effectively saying, "Let's leave Syria to the Russians ... and the Iranians" (who support al-Bashar). Acknowledging this, one Trump surrogate even went so far as to comment, "Putin won in Syria."

So, yeah, in one move, we just created a vacuum in the Middle East, and made Russia (and Iran) stronger in the region.

If you needed more evidence that Donald Trump is doing Russia's bidding around the world, walking away from Syria, just one week after meeting Putin in Europe, has to be the last piece you need.

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It fits with a longer Trump policy train (wreck) that I pointed out would happen at this time last year (more than once too).

Specifically, the United States is now ceding it's foreign policy positions around the world, both tactically and strategically. And all for what? Because Trump got into bed with Russian oligarchs, and owes them money. Throw in the fact that it looks like Vladimir Putin has some incriminating evidence on our president, and it's easier to understand why America's leadership positions around the world are being had for a song and a dance ... an American song, combined with a Russian dance, to be sure.

But, wait, it gets better (worse?). 

The Washington Post's Michael Gerson took a look at President Trump's superpower giveaway today, asked why, and came up with this:

There is nothing normal about an American president’s subservience to Russia’s interests and worldview. It is not the result of some bold, secret, Nixonian foreign policy stratagem — the most laughable possible explanation. Does it come from Trump’s bad case of authoritarianism envy? A fundamental sympathy with European right-wing, anti-democratic populism? An exposure to pressure from his checkered financial history? There are no benign explanations, and the worst ones seem the most plausible.

What we end up with is a Trump "strategery" that weakens NATO, dismisses Europe, abandons the mess in Syria, treads lightly around China, blusters in North Korea, and, quite frankly, hands the keys to the kingdom to Putin.

How we got here is a mystery to many. But make no mistake. Vladimir Putin has been putting his global chess pieces in order for the better part of the last decade. Michael Gerson writes:

Russia has employed a sophisticated mix of conventional operations and cyber-operations to annex territory and destabilize governments. It has systematically encouraged far-right, nationalist leaders and supported pro-Russian, anti-democratic parties across Europe. It is trying to delegitimize democratic processes on the theory that turbulence in the West is good for a rising East. This is a strategy that allows Russia to punch above its strategic weight, especially since Trump has chosen to abdicate the United States’ natural role in opposition.

But wait. It gets better (worse?).

President Trump is now the head of a Republican Party that has decided that they can put their twisted Ayan Rand inspired interests of their party ahead of the long term interests of our nation.

Even after being told by our nation's top intelligence agencies that the Russians intervened in our presidential elections, the GOP have chosen to sit on their hands, and say nothing. Indeed, 49 percent of Republicans now believe Russia is an ally or friend, for no other reason than because they've been told to believe it by their leader, Donald Trump.

To hell with Richard Nixon and Ronald Reagan. They knew nothing about Russia, compared to Trump.

My Republican friends are telling me, "Don't judge Trump today. Only time will tell."

Yeah, he could still hand over Alaska.

That is better, for the Russians.

Sigh ...

- Mark

"OH, WHAT A TANGLED WEB WE WEAVE" ... TRUMP'S SHADY BUSINESS PRACTICES NOT ONLY PUT HIM IN BED WITH RUSSIA AND PUTIN, BUT HELPS EXPLAIN THE LEAKED DNC EMAIL DRAMA

So, the Russians had a hand in hacking the Democratic National Committee's (DNC) emails, which show that the DNC was actively working to defeat Bernie Sanders in the primary. Because most of us have known for quite a while that the DNC was effectively working for Hillary Clinton the story of DNC collusion isn't a real bombshell. In fact, I expressed surprise that this was even a story yesterday morning on KGET 17 News when asked about the "leaked" emails.

As we are now learning, the real story is how and why this information emerged so suddenly, and right before the Democratic National Convention. 

This is where Donald Trump's past business incompetence and his current dealings with Russian money becomes a pretty big deal. Specifically, is Donald Trump - who can no longer secure credit from major U.S. banks - so dependent on Russian money that the Russians believe it's in their best interests to try and influence the American electoral process so that Donald Trump becomes the next U.S. president? You be the judge. 

Below is an edited version of TPM's story on "Trump & Putin. Yes, It's Really a Thing," which lays out some of the details that make the Trump-Russian-Putin political web an intriguing one. 

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1. TRUMP'S IN DEBT, BIG TIME (AGAIN)/CAN'T GET LOANS FROM U.S. BANKS: Trump's debt load has grown dramatically over the last year, from $350 million to $630 million. This is in just one year while his liquid assets have also decreased. Trump has been blackballed by all major US banks.

2. TRUMP'S DEPENDENT ON RUSSIAN MONEY: Post-bankruptcy Trump has been highly reliant on money from Russia, most of which has over the years become increasingly concentrated among oligarchs and sub-garchs close to Vladimir Putin. Here's a good overview from The Washington Post, with one morsel for illustration ...

Since the 1980s, Trump and his family members have made numerous trips to Moscow in search of business opportunities, and they have relied on Russian investors to buy their properties around the world.

“Russians make up a pretty disproportionate cross-section of a lot of our assets,” Trump’s son, Donald Jr., told a real estate conference in 2008, according to an account posted on the website of eTurboNews, a trade publication. “We see a lot of money pouring in from Russia.”

3. LAWSUITS EXPOSE TRUMP'S FINANCIAL WEAKNESS & DEPENDENCE ON RUSSIAN MONEY: 

One example of this is the Trump Soho development in Manhattan, one of Trump's largest recent endeavors. The project was the hit with a series of lawsuits in response to some typically Trumpian efforts to defraud investors by making fraudulent claims about the financial health of the project. Emerging out of that litigation however was news about secret financing for the project from Russia and Kazakhstan. Most attention about the project has focused on the presence of a twice imprisoned Russian immigrant with extensive ties to the Russian criminal underworld. But that's not the most salient part of the story. As the Times put it,

"Mr. Lauria brokered a $50 million investment in Trump SoHo and three other Bayrock projects by an Icelandic firm preferred by wealthy Russians “in favor with” President Vladimir V. Putin, according to a lawsuit against Bayrock by one of its former executives. The Icelandic company, FL Group, was identified in a Bayrock investor presentation as a “strategic partner,” along with Alexander Mashkevich, a billionaire once charged in a corruption case involving fees paid by a Belgian company seeking business in Kazakhstan; that case was settled with no admission of guilt."

Another suit alleged the project "occasionally received unexplained infusions of cash from accounts in Kazakhstan and Russia" ... Trump's tax returns would likely clarify the depth of his connections to and dependence on Russian capital aligned with Putin. 

4. TRUMP'S CAMPAIGN MANAGER'S RUSSIAN CONNECTION: 

Then there's Paul Manafort, Trump's nominal 'campaign chair' who now functions as campaign manager and top advisor. Manafort spent most of the last decade as top campaign and communications advisor for Viktor Yanukovych, the pro-Russian Ukrainian Prime Minister and then President whose ouster in 2014 led to the on-going crisis and proxy war in Ukraine. Yanukovych was and remains a close Putin ally. Manafort is running Trump's campaign.

5. TRUMP'S FOREIGN POLICY ADVISOR'S TIES TO RUSSIA:

Trump's foreign policy advisor on Russia and Europe is Carter Page, a man whose entire professional career has revolved around investments in Russia and who has deep and continuing financial and employment ties to Gazprom. If you're not familiar with Gazprom, imagine if most or all of the US energy industry were rolled up into a single company and it were personally controlled by the US President who used it as a source of revenue and patronage. 

6. PUTIN PUTS RUSSIAN CONTROLLED MEDIA BEHIND TRUMP: 

Over the course of the last year, Putin has aligned all Russian state controlled media behind Trump. As Frank Foer explains here, this fits a pattern with how Putin has sought to prop up rightist/nationalist politicians across Europe, often with direct or covert infusions of money. In some cases this is because they support Russia-backed policies; in others it is simply because they sow discord in Western aligned states. Of course, Trump has repeatedly praised Putin, not only in the abstract but often for the authoritarian policies and patterns of government which have most soured his reputation around the world.

7. TRUMP'S GOP PLATFORM INDIFFERENCE ... EXCEPT WITH UKRAINIAN POLICY:

The Trump Camp was totally indifferent to the platform. So party activists were able to write one of the most conservative platforms in history. Not with Trump's backing but because he simply didn't care. With one big exception: Trump's team mobilized the nominee's traditional mix of cajoling and strong-arming on one point: changing the party platform on assistance to Ukraine against Russian military operations in eastern Ukraine. 

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For those of you looking for more, you can access the rebuttal to the TPM article I've posted here, and TPM's response to the rebuttal here.

But, again, let's not lose sight of one thing: the fact that the DNC was working for Hillary isn't a story. I can assure you Democrats, and especially Bernie Sanders' supporters, have known about this for some time now. The real issue is who's behind the hacking, and why is evidence of Russian meddling suddenly so important?

Getting to the bottom of this might also help explain Trump's position on NATO, his constant praise of Russian foreign policy, and his seeming bromance with Vladimir Putin.

- Mark

SEEING RED IN COLORADO

GOP billboard seen in Colorado, about sums it up ...

- Mark

Addendum: Let me add a word for those who think the hammer and sickle - a holdover from the Soviet Union days of the past - is inappropriate because Russia is no longer a communist state ...

Because Russia today is an authoritarian state run by a dictator and his oligarchic hooligans, in effect what we have is a biker gang running Russia. In many ways, while the Russian state is not communist or Marxist-Leninist (nor remotely run to benefit the workers) Russia is run very much like the Soviet authoritarian state of the past.

In simpler terms, Russia's run for the benefit of Vladimir Putin and the oligarchs, much like it was run for the benefit of one man and the politburo (the Soviet Union's highest authority making body). In fact, we could probably use the politburo's flag - like the flag replica below - but most people don't understand the history or meaning of the politburo.

 

The hammer & sickle are important reminders of the Russian dictatorship. So, while the hammer & sickle may not convey the heyday of the "worker's state," they're quite appropriate for those who understand Russia's authoritarian DNA.

Addendum, II: For those of you who want to read more about how the GOP's trickle-down economic policies coincide with the Soviet Union's state-led policies you can read, "The Republican Tax Plan is Trickle-Down Economics, Soviet Style" by clicking here.

MY RUSSIAN FB FRIENDS HAVE RETURNED ... WELCOME BACK, AND За здоровье!

My Russian friends are back.

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A few years ago - specifically, during the 2016 election season - the number of hits that I received on my blog started to surge. I went from an average of 10,000 hits a month to a solid 15,000, then 20,000 and even managed to surpass 40,000 hits one month.

A quick check showed that the new audience was driven by clicks from Russia. Whether the clicks were driven by bots (most likely; I'm not that vain) or by the fact that I was writing a good deal about Russia - specifically, I was writing about Russian intrigue in Crimea, the Trump-Putin connection, or the developments surrounding the Russian Oligarchs - was unimportant. I'm not even interested in total clicks for financial reasons because I don't advertise anything (and ignore all requests to post ads).

As a political scientist my interest in the click surge was watching what was happening in real time as we were also learning how sophisticated the Russian social media and cyberwar game had become.

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In very simple terms, I was impressed with what the Russians had put in place, and how effective their cyber intrusions had become (I was/am also a little disappointed in how clueless our electorate has become, and how spineless the GOP has become when it comes to Trump and Russia, but those are stories for another day).

Then the Russians virtually disappeared about a year and half ago. To be sure, I stopped posting as much as I normally did, but the disappearance was noticeable in my overall number of hits.

Today, I'm not so much writing about Russia's foreign policies (Putin's getting what he wants), the Russian oligarchs (they're happy-ish) or the Trump-Putin connection (Putin's abusing him like a government mule) as I am writing about Trump's political free fall. And, it would appear, my Russian FB friends are back to monitor the collapse.

At least that's my take on their return.

In any event, I say welcome back. And while I'm not happy watching our great nation being torn apart by our compromised bumbling buffoon of a president, and his Republican sycophants, speaking as a political scientist, За здоровье!

- Mark