Thursday, August 25, 2016


Why The Russia Spy Story Really Matters

Gazprom Chief Executive Aleksei Miller attaches the Russian national flag to a pipe of the Nord Stream pipeline near the town of Vyborg in April. The pipeline should bring Russian gas directly to Germany, bypassing transit countries.
Gazprom Chief Executive Aleksei Miller attaches the Russian national flag to a pipe of the Nord Stream pipeline near the town of Vyborg in April. The pipeline should bring Russian gas directly to Germany, bypassing transit countries.
By Gregory Feifer
Invisible ink, instructions concealed in images posted on the Internet, a laptop in a Barnes & Noble flashing messages to a passing van: the high-tech spycraft used by the 10 now-confessed Russian intelligence agents arrested last month intrigues us because it rings of good old spy fiction -- and the exchange of the spies for four Russians convicted of spying for the West only adds to that feeling -- but it's less astounding than the farce.

A former KGB officer who handled the KGB's biggest-ever spies -- Aldrich Ames and Robert Hanssen -- in Washington during the 1980s calls it so absurd as to be unbelievable. "It's as if a kindergarten class decided to go into espionage," says Viktor Cherkashin, "not the intelligence service I knew."

But dismissing the latest spy scandal as indication the Russians are ineffectually still fighting the Cold War is to miss the big picture. In fact, Moscow is skillfully advancing its interests in the West, not through intelligence but business, often supported by crafty industrial espionage, influence-buying, and under-the-table deal-making.

Since Vladimir Putin took power a decade ago, Russia, the world's biggest energy exporter, has been extending an ever-tighter grip over Europe's energy market by vying for control over the pipeline networks, storage facilities, and utilities that deliver Russian oil and natural gas to European consumers. It has been doing that partly by rebuilding the influence it lost after the Cold War in former Soviet bloc countries that are now members of the European Union and NATO. "Russian energy companies are using their old, communist-era contacts," former Czech Environment Minister Martin Bursik says.

The contacts include lobbyist Miroslav Slouf, a former communist youth leader whose Slavia Consulting company brokered a deal by Russia's LUKoil to supply 20 percent of the jet fuel used at Prague's international airport last year. No other companies bid for the deal, despite a promise by then-Prime Minister Mirek Topolanek to diversify energy supplies. LUKoil's main promoter in the Czech Republic, Slouf also happens to be the right-hand man of popular former Prime Minister Milos Zeman, a social democrat who many believe to be eyeing the presidency.

State-controlled Gazprom has lost billions pursuing Russian foreign policy.
Fair enough, perhaps -- many officials say Russian companies behave no differently than their Western counterparts. "I don't think ordinary investments from Russia, the United States, Italy, China, Japan, Brazil, Germany, France, or anywhere else are a threat to our national independence," says another former prime minister, Social Democrat Jiri Paroubek.

But others disagree. Unlike Western firms, which lobby largely in their own interests, Russian state-controlled and private enterprises play an integral role in Kremlin foreign policy.

Surely no Western company would have agreed to lose billions of dollars by cutting off supplies to its customers. That's what Russia's Gazprom did when Moscow twice shut down gas pipelines to Ukraine in what looked very much like punishment for Kyiv's pro-Western policies.

Influence By Stealth

To conceal its designs, the Kremlin relies on a dizzying web of shell companies nominally owned and operated by Europeans but in reality controlled by Moscow to attack by stealth. Among them, a gas-trading company named Vemex has taken 12 percent of the Czech domestic market since its establishment in 2001 to sell Russian natural gas. Although there's nothing on Vemex's website to indicate it, the company is Czech in name only. It's actually controlled by Gazprom through a series of companies based in Switzerland, Germany, and Austria, including Centrex Europe Energy and Gas, which has helped spearhead the Russian drive to buy energy assets across Europe.

Centrex is registered in Austria and, according to Gazprom's website, founded by its own Gazprombank. But the company's real ownership is impossible to trace. According to the European Commission, Centrex is owned by Centrex Group Holding Ltd., registered in Cyprus, a company controlled by Gazprom's German subsidiary, and RN Privatstiftung, a Vienna foundation whose stockholders are unknown.

Why go to the trouble of hiding the real owners of companies either already known or believed to be controlled by Gazprom? Vemex is just one of a large number of enterprises Gazprom has set up in countries across Central and Eastern Europe to jockey for stakes in European energy utilities. By disguising the real owners, Gazprom makes its actions more palatable to Europeans wary of expanding Russian influence.

Investigative journalist Jaroslav Plesl points the finger at his own countrymen for enabling Moscow. Czechs are "willing to sell anything," he says of the staggering corruption in his country, something Russian companies have been able to exploit by taking advantage of nontransparent tenders. They also lobby to prevent the development of regulations that would prohibit those kinds of activities, with the effect of exporting the kind of corruption that dominates Russia.

Former foreign-intelligence chief Karel Randak fears there's little that can be done to counter those activities. "If the Russians want to gain control over some strategic assets in the Czech Republic," he says, "they will do it via companies in Switzerland or Western Europe, and no one's able to say the Russians are behind this or that firm."

Commerce As Politics

In Western Europe, Moscow has operated by making lucrative arrangements with foreign energy companies that become de facto lobbyists for the Kremlin within their own countries.

Italian Prime Minister Silvio Berlusconi (left) is known to be close to his Russian counterpart, Vladimir Putin, while Italy has backed a key Russian pipeline.
Germany, Italy and Austria are among those that have joined projects to build two major new gas pipelines from Russia that would deepen Europe's dependence on Moscow. The North Stream project -- which is building a pipeline to Germany directly from Russia, cutting out troublesome transit countries such as Ukraine -- is headed by none other than Germany's former Chancellor Gerhard Schroeder, who shocked many by taking the highly paid job only weeks after leaving office. His efforts in Berlin are aided by a network of former agents of the East German secret police, the Stasi. Among them is the head of Gazprom's German subsidiary, who worked with Putin recruiting spies when he was a KGB officer stationed in Dresden in the 1980s.

Signing up Schroeder, Plesl says, was the equivalent of "spitting in Chancellor Angela Merkel's face," an unmistakable reminder of Russia's influence among German elites, and something she couldn't ignore. The usefulness of such influence, on a country that relies on Russian gas for 30 percent of its supplies, is clear.

Taking office in 2005, Merkel talked tough about Russia, urging a fractious European Union to develop a common energy policy toward Moscow. But EU countries have failed to agree on a common policy toward Russia, while Germany's dependence on Russia continues to grow, partly because the Kremlin has persuaded customers it's too risky to look elsewhere for their gas.

Instead, when Washington campaigned to put former Soviet Ukraine and Georgia on a path to NATO membership in 2008 -- an issue that provoked fury in Russia -- Merkel led the successful opposition to the U.S. plan, despite international outrage over Russia's invasion of Georgia that year. At the same time, Germany blocked proposed EU regulations that would have restricted foreign companies from buying European energy utilities, a policy that could have slowed Gazprom's advance into Western Europe.

For Russia, which depends on its oil and gas exports, commercial energy interests and political power are inseparable. In 2008, Gazprom agreed to buy control over the entire Serbian energy industry just when President Boris Tadic was seeking crucial support from Moscow during his reelection campaign. This year, Ukraine turned its back on the Orange Revolution under a new, enthusiastically pro-Moscow president who extended Russia's lease of a Black Sea port of Sevastopol in return for a 30 percent gas discount. Ultimately Moscow expands its influence by eroding political autonomy in the target countries.

Although Russia is a long way from enjoying that kind of influence in the United States, Moscow has already enlisted extremely influential lobbyists, including former Secretaries of State Henry Kissinger and James Baker, who has worked as a consultant for Gazprom and Russia's pipeline monopoly Transneft. "They're not spying. They're shaping American foreign policy absolutely legally," says political scholar Andrei Piontkovsky. "So why does the Kremlin need to groom a dozen super-spies to gather information any competent journalist can compile in Moscow?"

Perhaps they were plants for a much longer-term project than we give Moscow credit for. What's clear is that their Keystone Kops bumbling shouldn't distract us from the fact that while Moscow's intelligence service may be lost still fighting the Cold War, Russia has been very busy on other fronts building an effective web of influence well beyond its borders.

Gregory Feifer is a senior RFE/RL correspondent. His book "The Great Gamble: The Soviet War In Afghanistan" was published in paperback this year. The views expressed in this commentary are the author's own and do not necessarily reflect those of RFE/RL
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Comments page of 2
by: Johann from: USA
July 09, 2010 15:24
The spy story is also connected to Iceland. The name of a female involved,
came again and again up in investigation in Iceland, in connection with Icelandic banks, that led to the Bank Crises there in Oktober 2008.
That female was connected to international elements, that were partly responsable for what happened .

I was born in Iceland and have been reading a offical copy from the investication of Parliament of Iceland.
In Response

by: Johann from: USA
July 10, 2010 20:36
Two of persons involved in the Icelandic Bank Crisis used to live in Russia.
One still lives there. One Icelandic lives in London, and is fighting extradition to Iceland.
Icelandic police might want one of this 10 Russians now in Moscow to come to Iceland for questioning.
One of the Icelandic Central Bank directors announced a few days after the
D- day in October 2008 that Russia was going to lend Iceland many hundred millions of Euros. It never happened.
Iceland very likely has oil in the ocean north east of the island, and now a Chinese oil company is preparing for oil drilling there !!!
In Response

by: Johann from: USA
July 11, 2010 23:05
I am still digging into this spy story and Iceland.
Icelandic investor in Russia that bought a Beer company there and sold it for a huge profit, also bought 65 % of Vivacom in Bulgaria when it was privatized.
His company, Novator that bought this 65 % was sold in 2007 for
1.2 billion American dollars. This investor then invested that money in British Virgin Islands and in Iceland. 2010 this investor declared bankruptcy in
Iceland. Sources from London ( internet and newspapers) clams that this Guy might have had common business interest with a famous female !!!
Sources from THE WORLD tell me that it is a competition between
Russia and China about influence in Icelandic oilfields.
China presently bought a lot of Icelandic currency and have the biggest embassy of all nations in Iceland. The building is 6 floors high !!!

by: Ray F. from: Lawrence, KS
July 09, 2010 15:25
Wow! Gregory, you need to look at the links between politics, business, energy the military, intelligence, journalism and banking in the U.S.. We've created a multi-headed complex to keep the energy-dependent, four-wheeled, Frankenstein-like American dream alive and well. Ten measly spies! Remove all the labels and clever political slogans, examine who is actually consuming what, and you'll re-discover that the business of America is business-even if we have to destroy 3/4 of the planet.

by: BS Buster
July 09, 2010 16:51
For accuracy sake, one shouldn't get carried away with hypocrisy given the legacy of other instances like J. Pollard and orgs. like AIPAC.

DC is structured to pay people to influence one view or another, as some countries deemed as allies spy on each other.

Russia seems to have screwed itself a bit in this instance, via a clumsy operation that was taken advantage of in what might've been a calculated way to arrange for the spy swap which occurred. Russia has screwed itself in some other instances when it comes to media and PR.

The coverage of the spy scandal serves to cover the effectiveness that neolib and neocon leaning elements have had in Russia when compared to the image of Russia trying to influence the West in a certain direction.

The analysis on who got the better of the most recent spy swap serves to further underscore this point.

by: Anonymous from: USA
July 09, 2010 17:11
Scary article. It would be different if Russian companies acted in their own corporate interests, but they instead act on behalf of the Russian government. Perhaps the US should start doing the same...setting up non-transparent shell companies that are secretly owned by the US government, especially in the energy sector. As for the spy scandal, I still believe there is more to the story. I do not understand how the US can compromise 10 Russian agents for 10 years or more and not gather important information on other agents not yet apprehended. The Obama administration appears naive when dealing with Russia. Deporting the 10 incompetent agents for 4 imprisoned Russians who won't be living in the US just to save the "reset" seems an insult to those who played a role in carrying it out.
In Response

by: BS Buster
July 10, 2010 06:15
"Scary" as is the seeming image presented by the article's author.

Actually, Gazprom has been known to act as a state unto itself, suggesting that its government ties are limited.

Other countries have some business interests closely tied to government.

Note the horrid situation concerning BP. The orthodox libertarian economic outlook has flaws.

FYI, the 10 individuals in question were tailed for quite some time. There's a reasonably well founded view that they weren't of great intelligence value.

The Russians wanted hem back to perhaps limit the disclosure of how inept they were. The US saw them as trade bait. Deals are done when both sides see some benefit for their side.

On a mass scale, the otherwise obvious isn't always clear, due to what does and doesn't get selected as astute commentary.

The saying you're what you eat can apply to what one relies on as source material.

In Response

by: Anonymous from: USA
July 10, 2010 15:33
"Russia seems to have screwed itself a bit in this instance, via a clumsy operation that was taken advantage of in what might've been a calculated way to arrange for the spy swap which occurred. Russia has screwed itself in some other instances when it comes to media and PR."

Never thought I would see comments like these from the likes of you! LOL

"Actually, Gazprom has been known to act as a state unto itself, suggesting that its government ties are limited."

Gazprom is entirely owned by the Russian government and close to the Kremlin. It is state-owned.

"FYI, the 10 individuals in question were tailed for quite some time. There's a reasonably well founded view that they weren't of great intelligence value."

Correct BS! But there are still a number of unanswered questions like:
1. What happened to the diplomats that were caught communicating with these 10 agents? Why weren't they expelled too?
2. Are there other agents that have yet to face arrest?
3. Will there be more arrests in the near future?
4. Is Russia going to call all of its agents home now that there is a "reset"?

President Obama is already getting criticism from some former members of the CIA. Some people are saying that Obama is getting too cozy to the Russian government without actually looking at what we are getting (or not getting) from the "reset".

In Response

by: BS Buster
July 11, 2010 09:13

One can be simultaneously pro-Russian and a constructive critic of that country. The debate shouldn't be limited between a Russian government selected individual and a funded darling of Western neocons and/or neolibs.

I'm fully aware of Gazprom's formal status. That aspect doesn't contradict what I said. This particular matter relates to the state within a state concept.

I don't buy into the belief that Obama is soft on Russia.

It has been disclosed that the idea of a swap was discussed within the Obama administration before the arrests were made. The consensus is that the Russians didn't get the qualitatively better of the deal.

Diplomatic personnel the world over are known to periodically rotate to other assignments in other countries. Offhand, I suspect that what might be considered a crime for an American citizen or non-citizen minus diplomatic immunity might not be in the same category for a non-citizen with diplomatic immunity.

Within diplomatic and intelligence circles, there's an understanding that rocking the boat too much can backfire in a reciprocal manner.

by: Anonymous from: usa
July 10, 2010 03:03
LUKoil? I would rather buy Russian gas instead of Arab gas, because Russians can be trusted to blow their money on nuclear weapons they will never use.

Anna Chapman is so hot, like that girl from the Firefly series. With that in mind, I'd say the story is a distraction away from something else. Or an attempt to undermine the Obama-Medvedev Grindr meetings. :)

by: A Good Treaty from: Washington, DC
July 10, 2010 08:40
Something tells me a Western company might cut off supplies if the customer refused to pay for the product. A Western oil company would also not likely sell its product at a reduced price to former Soviet vassals.

On the other hand, claiming that energy interests and political interests are delinked in the West is surely the highest hypocrisy imaginable.

Does anybody proofread this stuff?
In Response

by: BS Buster
July 11, 2010 09:29
I take it that you find this article to be lacking.

If so, consider the thought that if this piece made a certain email list, that instance is a further example of the lack of quality control out there - relative to some of other sources not getting similar recognition.

by: observer from: Central Europe
July 10, 2010 09:44
The analysis in this article is accurate and professional. The descriptions given are only the 'tip of the iceberg,' however. Post Soviet 'old structure' Russian commercial and their background political interests are, in fact, far more pervasive than the article details, however. The issue is one of high level linkage between long range strategic state politics and the perquisites of being a permitted major industrial players in the Post-Soviet space of prevailing tolerated oligarchs in the former Soviet sphere of influence. Of special note, however, is that this is not typical behavior of normal every day 'Russians,' but rather only of a special subset of the 'old structure and their groomed Western contacts who benefit financially, or more often, indirectly, in ways that are known but ~difficult~ to 'print,' even online. Private and personal discussions offline with typical Russians, both resident 'there' and recent emigrants, both comparatively simple people and the highly educated, will often reveal a rarely spoken but very real and palpable quiet fear of such 'vested interests' and a conscious private effort to personally stay away from such individuals and the organizations which they promote. Let us just say that some people consider it personally physically dangerous 'to get too close,' and prefer to get 'as far away as possible.'
Mafia type organizations in many countries has also historically generated such quiet fears, it might be remembered. Several thousand years ago was widely known the message about 'Reading the writing on the wall...' -30-
In Response

by: Andy
July 10, 2010 17:05
Does anyone here really think that the engergy sector in the US and other Western countries is completely decoupled from government policy? It is nothing but! The "revolving doors" system in the US with former oil executives enter politics and vice versa is but one example. Let's dispense once and for all with the notion that linking trade and government policy is only done by the big, bad, evil Russians.
In Response

by: BS Buster
July 11, 2010 09:20
Good point Andy.

Ssome people seem to be living in a prior situation that doesn't accurately reflect present circumstances, while overlooking certain aspects of the past

by: Sergey from: USA
July 11, 2010 01:34
You know what, it's obvious by now, that some west folk struggle with russophobia in chronic stage. Nothing can change their view of Russia, even when new generation of people was born in Russia, who even did not saw communist state, since it's 21 years past, when soft form communism failed. Whatever Russia will do, it always will be "evil Empire" for those, who hate Russia. But why, why someone would behave like that: spewing lies after lies (even on this blog), which make Russia look bad in eyes of the west people? Why they spend their time to bash Russia in every chance they have? Answer is simple: Russia is the only independent state in the world who have can stand tall against those, who behave like Hitler Germany and bully whoever they want in the world. Russia has it's might and enough good consciousness to wag a finger and say "NO". In fact the West already marred it's hands of millions innocent slaughtered around the world, in countries of choosing to invade and murder without consequences of being punished on international tribunal, like it was after ww2. When all guns stopped firing in 1945 and people of the world rejoiced to be free of the worst regime humanity has seen in it's entire history- we see guns still firing to this day. And it's not russian guns, it's western guns. The person, who wrote this article should be ashamed of himself to post lies. As it was with "Georgia invasion" the same is now. Lies and nothing more. Osetian people were exterminated by Georgia since 1989, and Russia saved them in 2008, where West was supplying Georgia with weaponry and approval of murder. As a christian i see words of Christ true: "entire world contain in evil". People, who lost ! 26 million it's citizen in titanic struggle of ww2 to save the world from brown shirt death -never been stopped bashed , cursed and scared by ww3. As muslims of the surrounding of Israel want only death to Israel- West wants death to Russia to brake last wall on the way of being masters of the Planet. Thanks God that there is Russia. Let all west haters put to shame for evil lies they spew and blood of millions they spilled!
In Response

by: Taras from: Australia
July 11, 2010 12:01
I can understand the dfensive point you are trying to make and I can see from you perspective it makes some sense, however do not become confused by Soviet and Russky empire's propaganda, the brown shirts were a real menace but ultimately they were replaced with the greatest evil the world has ever experienced, Stalin and his commissars exterminated more people than the brown shirts, and they were their own faithfull citizens, and this continued as state policy until the fall of the USSRR quite recently.
And even worse, this political ideology of rule by state enforced terror against own citizens was exported to and taken up by countless happless third world countries across Asia as a model for economic development. It has not worked anywhere in the world but millions of innocent people have had to pay the price for the failed experiment.
When you say" thank God there is Russia" people all around the world still remember the contribution that Russia has made in reducing the global population.
This, you see, is the legacy of Rossia's standing in the world.
In Response

by: BS Buster
July 11, 2010 16:30
Your thoughts are in a bigoted direction.

Such views have been sheltered under the bogus premise of having an academic quality to them.

The uncritical acceptance of what you posted can be likened with doing the same with a supporter of the Third Reich and someone else negatively noting the German contribution to Nazi and Communist ideas as a suggested basis for continuing ill will towards Germany.

It's duly observed how you lump oppressive dictatorships on Russia and Asia without doing likewise with other parts of the world - including parts of Europe besides Russia.

by: Konstantin from: Los Angeles
July 12, 2010 06:22
Johann is right, Russia always setup other nations to fall,
Like Hungary and Germany by Lenin during 2-nd Commintern,
Like Eastern Europe and Central Asia for centuries - it's their goal.
Like Chili, they promissed money but sent instead general-provoker.

Ray is right, USA and West always cheating to promote their interest,
But when West and East collide in their interests, both are warried,
Ballance of powers in the World could fall - this time in the West.
Then again, Russia, UK and USA together plagiarize as hord.

So, whether USA was concearn, or with Russia plaing game,
To misslead World opinion from telepathic armies plagiarize,
Rest of Human Civilization and Caucasian race still maimed.
An improvized prisons - West and East steal royalties of mine.

Swap, Buster, is just good face in bad game plus practicallity
Wouldn't count for much - unless they cover-up by wrong tech
The main "race war" of Normo-Germo new "axes" Imperiallity,
Or Russia-UK-USA real total plagiarism by telepaths - or both.

Also, Baster, Gasprom is not just a Government-Coorporative
Like in US - it is new "Nazi Axes" link resurection of 4 empires,
Russia, Austria, Germany and Britain under two Seas to steal
And circumvent for re-colonization by Miller and German Czars.

British Petroleum is part of conspiracy - it is planed sabotage.
Is Sergey one of not yet arrested in USA? What an arrogance!
Russia save World? Stalin's non-Russians did! Saling lazha?
Read Osetian Chronology!

Sergey is somethying! If one combines all Russia expressed
Through its hate and lies history, Sergey managed to say it all,
Just a reply of anti-non-Russia and anti-semitic compressed!
A lie by Russia, perpetreating genocides since 9-th A.D.! Wild!


by: kewjigsaw from: prague
July 12, 2010 10:41
Comments page of 2