Monday, November 24, 2014


The Power Vertical

The Kremlin's New Deal

'Let me make you an offer you can't refuse.'
'Let me make you an offer you can't refuse.'
Tsar Peter I once proposed to his prosecutor-general that corrupt officials be either exiled to Siberia or executed.

"But then who will be left?" the prosecutor responded, according to the oft-repeated historical anecdote. "We're all thieves."

President Vladimir Putin repeated this tale during his press conference in December to illustrate how difficult it is to combat corruption. He was, of course, painting himself as the good tsar who, regretfully, had to discipline his bad boyars.

But if Putin wanted to be more honest, he could have chosen a popular Soviet-era joke about a minor bureaucrat imprisoned for graft:

"The poor guy. Why'd they pick on him?" one colleague asked.
"He stole too much for someone of his rank," another answered.

The second anecdote is more appropriate for the simple reason that it illustrates that official corruption is not a bug in Russia's operating system, but an essential feature. And it's a feature that Putin has used very effectively to keep the elite motivated and in line.

Putin's deal with the elite was always pretty straightforward: Steal (but not too much for your rank) and nobody will mess with you as long as you give unwavering loyalty to the national leader.

But now, one year after Putin won election to a third term in the Kremlin, he is rewriting the terms of the bargain. Putin's "New Deal" with the elite could turn out to be one of the riskiest and trickiest initiatives of his rule.

And it has nothing to do with fighting corruption. It's all about reestablishing control and ensuring loyalty -- both of which the Kremlin leader apparently believes are slipping.

This week, the State Duma is expected to pass the final version of legislation forbidding certain categories of officials from keeping their assets abroad. According to the daily "Nezavisimaya gazeta," the bill forbids officials from having a bank account abroad, keeping money in any foreign account, or holding bonds issued by any foreign entity. They will also be required to declare any foreign real-estate holdings.

The Russian media calls this the "re-nationalization" of the elite, and part of the logic behind it is the fear that Russian officials keeping assets abroad could turn out to be disloyal.

Such fears were redoubled by new legislation in the United States providing for visa bans and asset freezes against Russian officials who violate human rights. Some European countries are considering similar legislation, and Putin is clearly worried that this would give Western governments unacceptable leverage.

According to the respected political analyst Yevgeny Minchenko, Putin believes officials "should be completely independent of foreign countries and fully accountable to the president."

Additionally, the opposition's successful rebranding of the elite as "swindlers and thieves" has stuck in the public consciousness -- meaning the Kremlin will now need to more convincingly pretend to care about official graft. Some officials who thought they were untouchable will be vulnerable.

"This is a fundamentally new Putin with regard to the elite," political analyst Igor Bunin, director of the Center for Political Technologies, told the daily "Moskovsky komsomolets."

"Previously, he kept the balance between the interest groups; now he has decided to reformat the elite. It had lived comfortably in symbiosis with the regime, and suddenly it was told that it needed to be nationally oriented, and not have accounts abroad."
 
If Putin follows through with all this, it will change his relationship with the ruling elite pretty dramatically. Putin's elite support was largely based on two services he provided: He was the ultimate arbiter in disputes between warring factions and he was the protector of their wealth and privilege.

Both could now come under question.

"This law is about political, and not legal, control," Dmitry Gorovtsov, a Duma deputy from the center-left A Just Russia party, told "Nezavisimaya gazeta."

"It will be applied selectively and subjectively."
 
Putin, in essence, is asking the elite to give something up they had become accustomed to, while offering nothing in return. And this comes at a time when many of them are uncomfortable with the traditionalist and xenophobic line the Kremlin has recently adopted.
 
Whether this is an offer the elite can't refuse is still an open question. Lilia Shevtsova of the Moscow Carnegie Center told "The Washington Post" that Putin risks losing the support of key sectors of the ruling class, which could begin seeking ways to replace him.

Such fears may be the reason the Kremlin toned down an earlier, much stricter, version of the legislation now pending in the Duma.

Meanwhile, all this attention on the elite's property has been a godsend for oppositionists like anticorruption blogger Aleksei Navalny -- who appears to be delighting in stealing the Kremlin's thunder on the issue.

Navalny was instrumental in detailing and publicizing the undeclared real estate in Miami owned by lawmaker Vladimir Pekhtin, which was initially exposed by the Spain-based blogger Dr. Z.
 
Pekhtin was forced to resign his seat in the Duma as a result. His departure was followed by the resignations of two more lawmakers with undeclared property issues, Anatoly Lomakin and Vasily Tolstopyatov.
 
And last week, Navalny turned his sights on Andrei Turchak, the governor of Pskov Oblast whose father was once Putin's judo partner. According to documents Navalny posted on his blog, Turchak is the proud owner of an undeclared villa, worth 1.27 million euros.

And as the whole thing plays out, a funk is settling in among the elite, according to Gleb Pavlovsky, a onetime Putin adviser.
 
"It seems that Vladimir Vladimirovich’s general idea is that only he should manage everyone, trusting no one. But this is impossible," Pavlovsky told "Moskovsky komsomolets."
 
"Officials at all levels perceive the president’s strange behavior as a signal: Remain silent, don't act, and don't stand out. Remain sitting, do not move, and be afraid. Stagnation is setting in."
 
-- Brian Whitmore

Tags: Vladimir Putin,Russia corruption,Aleksei Navalny

This forum has been closed.
Comment Sorting
Comments
     
by: Babeouf from: Ireland
March 11, 2013 21:26
Why bother with all the paragraphs. Just write 'Russian regime' its a bad thing. After all that's what you do in practice but more wordily. You run stories on the Regimes corruption 'Russian regime' its a bad thing. Then you run stories essentially about the regime actually trying to do something about corruption. Guess what. ' Russian regime' targets corruption, its a bad thing. Not exactly Russia Today is it. The US government should look for a refund for your amateurish productions.
In Response

by: Alik from: Lithuania
March 12, 2013 17:05
In fact, Putin's moves are not "about the regime actually trying to do something about corruption". They are about making the bureaucracy members isolated from any western ties and trying to even more control Russian MPs and other designated gentry, because there are little people elected, most of them are designated by Putin's ruling group.

by: Jack from: US
March 12, 2013 02:01
Ugh these corrupt Russian officials with Putin at the helm.. they clearly have a lot to learn from one freedom-loving syndicate called US federal government. For example how a fellow named Bernanke can print trillions of dollars out of thin air and give it out to his fellow tribesmen from Wall Street under clever disguise of "bailout funds". The fellows then safely stash the cash in their offshore accounts or launder through real estate purchases in Dubai, where property prices went astronomically high not because there is some "business activity" among sand dunes but because some poor fellow from US feel their money can be used better in Al Qaeda-run mid-eastern bank
In Response

by: Camel Anaturk from: Kurdistan
March 12, 2013 20:57
Thats right jackie,dear,its high time we scrape the hot thin air $$$ and use the mighty rouble instead-its backed with the iron clad stalin assurances of mother Russia-its enormous billion roubles` worth vodka and selyodka deposits guaranteed by the russian politicians`verbal assurances-and what else do we need for the recovery from the economic crisis-well a coupla Natashkas maybe,if not Eugenio and Jack will do!!!

by: Alex from: Baltimore, MD
March 12, 2013 20:15
Brian, welcome back, you've been missed. Nice piece, trenchant analysis, as always. You know you're doing good work when the pro-Putin/anti-American trolls come after you! Write on.

by: Dane from: Washington
March 12, 2013 22:08
Only on Radio Liberty would Russia combating corruption be a bad thing. Why must the American taxpayer fund such an organization?
In Response

by: Brian Whitmore from: Prague
March 13, 2013 08:00
Nowhere does this post say fighting corruption is a bad thing.
There are two main points:
1) The current campaign is about control and loyalty, not corruption
2) This is changing Putin's relationship with the elite, which has broader political implications.
It is probably a good idea to read the post carefully before commenting.

by: Ben
March 13, 2013 19:07
While "thinkers" like Minchenko discussed Putin`s successor,the late decided to lead the changes himself.Soviets pinched everything they managed to reach,Russian empire`s official has his post as kormlenie(feeding).Putin`s attempt was to change it for the private busines but Navalnys of allkindes spoil this happy practice.The answer can be- the communists in Duma, who will make Russians nostalgic about these days!

The Power Vertical Feed

In this space, I will regularly comment on events in Russia, repost content and tweets I find interesting and informative, and shamelessly promote myself (and others, whose work I like). The traditional Power Vertical Blog remains for larger and more developed items. The Podcast, of course, will continue to appear every Friday. I hope you find the new Power Vertical Feed to be a useful resource and welcome your feedback. More

19:16 November 21, 2014

POWER VERTICAL PODCAST: A YEAR OF LIVING DANGEROUSLY

On this week's Power Vertical Podcast, we use the one-year anniversary of the Euromaidan uprising to look at how it changed both Ukraine and Russia. My guests are Sean Guillory and Alexander Motyl.

09:14 November 21, 2014
09:11 November 21, 2014

AND AS TENSIONS RISE IN THE BALTICS...

09:09 November 21, 2014

MORNING NEWS ROUNDUP

From RFE/RL's News Desk:

UKRAINE MARKS START OF EUROMAIDAN PROTESTS WITH NEW HOLIDAY
By RFE/RL
Ukrainians are marking a new national holiday on November 21 -- the anniversary of the start of Kyiv’s Euromaidan protests that led to the ouster of the country’s former pro-Kremlin regime.
Ukrainian President Petro Poroshenko signed decree on November 13 that declared the holiday for annual “Day of Dignity and Freedom” celebrations.
The protests began with a few hundred people who met spontaneously on a vast square in central Kyiv of November 21, 2013 – disappointed by then-President Viktor Yanukovych’s rejection of a landmark deal with the European Union in favor of closer ties with Russia.
After that first night, as the protests quickly swelled to tens of thousands of demonstrators, brutal police efforts to disperse the crowds with batons and teargas backfired.
As the crowds got bigger, the protesters began to call for Yanukovych’s ouster – which came in February 2014 after more than 100 people were killed in clashes with police that failed to end the demonstrations.

BIDEN TO MEET UKRAINIAN LEADERS, ANNOUNCE NONLETHAL U.S. AID
By RFE/RL
U.S. Vice President Joe Biden was expected to announce an increase in nonlethal U.S. military assistance to Ukraine on November 21 as he meets in Kyiv with Ukrainian President Petro Poroshenko and Prime Minister Arseniy Yatsenyuk.
The talks come on the first anniversary of the start of the Euromaidan protests in Kyiv that toppled Ukraine's former pro-Kremlin regime.
As Biden arrived in Kyiv on the evening of November 20, U.S. officials told reporters that he will announce the delivery of Humvee transport vehicles that are now in the Pentagon’s inventory of excess supplies.
They said Biden also would announce the delivery of previously promised radar units that can detect the location of enemy mortars.
The U.S. officials, who spoke on condition of anonymity, did not specify a dollar value for the assistance. 
Russia on November 20 warned the United States not to supply weapons to Ukrainian forces.
Russian Foreign Ministry spokesman Aleksandr Lukashevich cautioned against "a major change in policy of the (U.S.) administration in regard to the conflict" in Ukraine. 
He was commenting on remarks by U.S. President Barack Obama's choice to fill the number two spot at the State Department, Anthony Blinken, who told a congressional hearing on November 19 that lethal assistance "remains on the table. It's something that we're looking at."
The U.S. State Department's Director of Press Relations Jeffrey Rathke on November 20 told reporters that "our position on lethal aid hasn't changed. Nothing is off the table and we continue to believe there's no military solution."
He added, "But, in light of Russia's actions as the nominee mentioned [on November 19] in his testimony, as he indicated, this is something that we should be looking at."
The aid expected to be announced by Biden on November 20 falls short of what the Ukrainian president requested during a visit to Washington in September when he appealed for lethal aid - a request echoed by some U.S. lawmakers in response to what NATO allies say is Russia's movement of tanks and troops into eastern Ukraine.
In September, Washington promised Ukraine $53 million in aid for military gear that includes the mortar detection units, body armor, binoculars, small boats, and other nonlethal equipment for Ukrainian security forces and border guards in the east.
The United States and its European allies have imposed several rounds of economic sanctions on Russia for its seizure of Crimea and incursion into eastern Ukraine.
(With reporting by Reuters, AP, AFP, dpa, and TASS)

RUSSIAN OLYMPIAN CHARGED WITH SPOUSAL ABUSE IN UNITED STATES
Russian Olympian hockey player Slava Voynov – who plays with the Los Angeles Kings NHL hockey team – has been charged with felony domestic violence against his wife.
Voynov faces one felony count of spouse abuse with a maximum penalty of nine years in prison. If convicted, he also could be deported.
Prosecutors say Voynov “caused his wife to suffer injuries to her eyebrow, check, and neck” during an argument at their home in October.
Voynov has been suspended from the NHL since his arrest early on October 20 at a California hospital where he took his wife for treatment.
Voynov’s attorney, Craig Renetzky, says his client didn’t hit his wife.
Renetzky blames the charges on a misunderstanding between police and Voynov’s wife, who speaks very little English.
Voynov – who played on Russia’s team at the 2014 Sochi Winter Olympics -- faces arraignment on December 1.
(Based on reporting by AP and Reuters)

NATO: RUSSIAN ACTIVITY IN BALTICS POSES RISK
NATO says Russia's growing military presence in the skies above the Baltic region is unjustified and poses a risk to civil aviation.
NATO Secretary General Jens Stoltenberg said in Tallinn on November 20 that the aircraft regularly fail to file flight plans or communicate with air controllers and also fly with their transponders off.
Speaking at the Amari air base, he said alliance fighters have intercepted planes more than 100 times in the Baltic region alone so far this year, a threefold increase over 2013. 
He did not say how many of the intercepted aircraft were Russian.
Stoltenberg also said that, overall, NATO aircraft have conducted 400 intercepts to protect the airspace of its European alliance members in 2014 -- an increase of 50 percent over last year.
(Based on reporting by AP and AFP)

 

16:55 November 19, 2014

MORE ON THE SOURCES OF RUSSIAN ANTI-AMERICANISM

Konstantin Eggert has a commentary in "Kommersant" on Russia's anti-Americanism. He opens like this:

"Sometimes I have this feeling that there are only two countries in the world - Russia and the United States. Of course, there is Ukraine, but it either to join us or the Americas. Russian politicians and state television are constantly in search of the 'American hand' in all spheres of our life. In Soviet times, the United States was formally considered to be our number one military and ideological enemy. But even then it didn't occupy such a large space in the minds of the political leadership and citizens. And the paradox is that, on one hand, officials and the media regularly talk about the decline of America as a great power, and on the other declare it to be the source of all evil in the world. This contradiction does not seem to disturb anybody."

And closes like this:

We still have not been able to use the opportunity that we were given with the collapse of the communist regime - to arrange our lives based on liberty and civic virtue. And today, we, as a people, want to go back to the starting point, to beat everyone. And the Soviet Union, with its absence of sausage and freedom, again suddenly seems sweet and dear. But it won't happen. I will put it banally: you can't go into the same river twice.

Read the whole thing here (in Russian, with audio)

15:53 November 19, 2014

UNDERSTANDING THE INFORMATION WAR

MIchael Weiss, editor-in-chief of The Interpreter magazine, appearing on Hromadske TV to talk about Russia's information war.

Michael and Peter Pomarantsev recently co-authored an excellent report "The Menace of Unreality: How the Kremlin Weaponizes Information, Culture, and Money." Both also appeared recently on The Power Vertical Podcast to discuss the report.

15:42 November 19, 2014

WHY IS PUTIN PICKING A FIGHT WITH THE U.S.?

Oleg Kosyrev has a snarky and clever blog post on the subject up on the Ekho Moskvy website. 

1) The United States is the ideal opponent. "It is big and strong and your self-esteem increases when you fight somebody really influential."

2) The United States is not fighting with Russia. "They aren't really interested. They have enough of their own problems and dreams. It's nice to fight somebody who is not fighting you."

3) It is a substitute for the authorities' inability to benefit Russians. "How convenient. Who is to blame for rising food and gas prices? The U.S.A.. Who is to blame for the fact that Russian has political prisoners? The U.S.A. Who is to blame for people demonstrating on the streets? The U.S.A. Who is to blame for the fact that independent international courts denounce the Russian court system? The U.S.A. You can even blame the U.S. for the fact that the light doesn't work in the entrance to your apartment building."

Read it all (in Russian) here.

15:23 November 19, 2014

UKRAINE SAYS MHI7 SHOT DOWN BY RUSSIAN CREW

14:47 November 19, 2014

AFTERNOON NEWS ROUNDUP: THE SEQUEL

From RFE/RL's News Desk:

KYIV, WEST SAY RUSSIA CANNOT BAR UKRAINE FROM NATO

Ukraine says it will not tolerate pressure from any other country over whether or not it seeks to join NATO.

Foreign Ministry spokesman Yevhen Perebyynis spoke made the remark to reporters in Kyiv on November 19, after the BBC quoted Kremlin spokesman Dmitry Peskov as saying in an interview that Moscow wants "a 100 percent guarantee that no-one would think about Ukraine joining NATO."

Hitting back with a reference to Russia's annexation of Crimea and support for pro-Russian separatists in eastern Ukraine, Perebyynis said Kyiv would like guarantees that Moscow will not interfere in Ukraine's internal affairs, send in troops, or annex Ukrainian territories. 

The U.S. Ambassador to Ukraine, Geoffrey Pyatt, told journalists on November 19 that any decision on seeking to join NATO could be made only by the Ukrainian people, not by Russia, Europe, ar the United States.

The Canadian Ambassador to Ukraine, Roman Waschuk, made a similar statement on November 19.

(Based on reporting by UNIAN and Interfax)

PUTIN TELLS U.S. ENVOY TIES MUST BE BASED ON EQUALITY

President Vladimir Putin says that Russia is ready for cooperation with the United States as long as Washington treats Moscow as an equal, respect its interests, and refrains from interfering in its affairs.

Putin spoke November 19 at a Kremlin ceremony during which he received the credentials of foreign envoys including John Tefft, the new U.S. Ambassador to Moscow.

Putin said, "We are ready for practical cooperation with our American partners in various fields, based on the principles of respect for each other's interests, equal rights and non-interference in internal matters." 

The remark echoed a formula Putin set out in a foreign policy decree at the start of his third term in 2012.

Tefft, 64, is a career diplomat who previously served as U.S. ambassador to Ukraine, Georgia and Lithuania. 

His posting starts at a time when ties are badly strained over the Ukraine crisis. 

Tefft replaces Michael McFaul, who was ambassador from January 2012 until February 2014. 

(Based on reporting by Reuters and TASS)

RUSSIA SAYS 2010 NUCLEAR ARMS PACT STILL IN RUSSIA'S INTERESTS

By RFE/RL

Russian Foreign Minister Sergei Lavrov has signaled that a landmark nuclear arms treaty with the United States is not in jeopardy despite severe tension over Ukraine.

Speaking to Russian lawmakers on November 19, Lavrov said the 2010 New START treaty "meets our basic strategic interests and, on condition of its observance by the United States, we are interested in its full implementation."

The treaty, one of the main products of President Barack Obama's first-term "reset" of ties with Russia, requires Russia and the United States to have their long-range nuclear arsenals under specific ceilings by 2018.

But Lavrov said the Conventional Armed Forces in Europe (CFE) treaty, which President Vladimir Putin suspended in 2007, is "dead" for Moscow. 

NATO has refused to ratify a revised version of the CFE treaty without a full withdrawal of Russian troops from Moldova and Georgia.

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The Power Vertical is a blog written especially for Russia wonks and obsessive Kremlin watchers by Brian Whitmore. It covers emerging and developing trends in Russian politics, shining a spotlight on the high-stakes power struggles, machinations, and clashing interests that shape Kremlin policy today. Check out The Power Vertical Facebook page or