Russia's Assassination Habit--What Happened to Mikhail Lesin?

Mikhail Lesin is dead but his unaccountable death lives on.  On Friday  BuzzFeedNews wrote,

"Vladimir Putin’s former media czar was murdered in Washington, DC, on the eve of a planned meeting with the US Justice Department, according to two FBI agents whose assertions cast new doubts on the US government’s official explanation of his death."

The report is part of a BuzzFeed series (cited in article) on assassinations by Russia against opponents or those who have fallen foul of Putin, including assassinations with seeming impunity in Western Europe, the most famous case being the murder of Alexander Litvinenko who ingested a rare radioactive isotope while drinking tea with two Russian agents in a London hotel.

BuzzFeed reports that some in the intelligence community fear Russia may be emboldened to carry out more assassinations in the US due to the lack of consequences for Mikhail Lesin's murder and the readiness to hide the true circumstances of his death.

Back in March 2016, I wrote about the oddly indifferent attitude of the police and the press to Lesin's death.  And on what the death of Mikhail Lesin suggested about Russian crime and corruption, I wrote,

A rogue Russia reaching out to murder its citizens in the United States and other countries, as well as conducting subversive acts including military aggression is a threat to everyone.  It has been months since Mikhail Lesin’s death but the DC police have only now released a brief, inconclusive description of what they know.  The case echoes the British government’s treatment of the Litvinenko murder, which was investigated only after Litvinenko’s wife got a court order for a public inquiry.  [BuzzFeed is now suing the US government to release more information about Lesin's death]

Not only are the DC police less than impressive in pursuing and making public the essential facts of Lesin’s death, US law enforcement appears derelict in pursuing obvious instances of money laundering by Russian citizens and their families, including Lesin, who establish themselves in legitimate enterprises in the US to “launder” criminal gains, which only facilitates the dangerous conduct of a rogue state with an unstable leadership that is capable of far greater harm.

There are lots of twists and turns to the Lesin story.  For those with the stamina to wade through the background, here's what I wrote in 2016.


The Unaccountable Death of Kremlin Insider, Mikhail Lesin
Photo Credit: thetimes.co.uk

DC police seem oddly confused about the death in a hotel room in Washington, DC, in November of prominent Kremlin insider, Mikhail Lesin.  Police have provided little detail other than the death was related to, a result of, or unrelated to extensive blunt force trauma over large parts of his body.  The cause of death, “undetermined”.  An investigation--such as it is--is ongoing.

Mikhail Lesin was Putin’s press minister (a post as Orwellian as you might guess) and Putin aide who helped shape Putin’s macho political image to appeal to the Russian electorate.  Lesin built the English language news service Russia Today (RT) and used it to serve the propaganda needs of the Kremlin.  Known as the “Bulldozer”, he aggressively went after independent news services critical of the Kremlin and closed them down.
Although he worked much of his career as a civil servant, Lesin was immensely wealthy.  He bought $28m in real estate in Los Angeles and owned a US$50m mega-yacht News.com/au.  He was also reported to have property in Europe and the British Virgin Islands.  As with many improbably wealthy Russians residing in the West, the origins of Lesin’s immense wealth was unexplained.

The circumstances of Lesin’s death are equally poorly understood.  What is known is that Lesin was found dead in his hotel room at the Dupont Circle Hotel shortly before noon on November 5, 2015.  DC police and the DC Medical Examiner briefly reported four months later on March 10 that Lesin’s cause of death was “blunt force injuries of the head” and that he also suffered “blunt force injuries of the neck, torso, upper extremities and lower extremities.”  However, the DC Medical Examiner also states that the manner of death is “undetermined”; in other words, they don’t know how he got those injuries.  DC police have said that their investigation is still open but they have provided no additional details.
News reports are as short on facts as the DC Medical Examiner.

An article in the Washington Post newspaper can best be described as a mélange of isolated facts and speculation.  The Washington Post reports that police claim Lesin showed up at the Four Seasons hotel drunk one night in early November and was turned away from the bar.  He is then said to have checked out of the Four Seasons, where he had been staying, and checked into the Dupont Circle Hotel, where he was found dead on November 5th.  Only The Washington Post seems to be aware that Lesin stayed at the Four Seasons.  No other news service has reported this.  If true, though, it undermines speculation that Lesin was staying at the modest Dupont Circle Hotel in order to keep a low profile.

The Washington Post does not explore why Lesin checked out of the Four Seasons hotel or why he chose the Dupont Circle Hotel to check into.  There are any number of higher end hotels closer to the Four Seasons.

The Washington Post doesn’t explore why the Dupont Circle hotel would check in a guest so drunk he was tossed out of the Four Seasons bar, or how Lesin managed to get to Dupont Circle in his condition. 

The Washington Post reports police speculation that Lesin may have been injured in a brawl or was hit by a car, but does not explore how then Lesin’s condition did not attract the attention of the Dupont Circle Hotel front desk when he checked in.  The Dupont Circle Hotel’s discretion must be exemplary.

The brawl theory seems a red herring, though.  The neighborhoods around the Four Seasons and Dupont Circle, where most embassies are located, are upscale and heavily policed.  A serious brawl would have attracted immediate attention.  The streets are also heavily traveled.  Someone getting hit by a car would also attract immediate attention.  According to police, they just don’t know.  The New York Times reports that Lesin arrived at the Dupont Circle Hotel “disheveled” but without apparent injuries, leaving one to wonder if Lesin didn’t acquire his extensive injuries after arriving at the hotel.

The Washington Post goes on to say that a Russian television station reported that Lesin had been with friends before his death.  How his friends disappeared so completely or, if there had been a fight or a car accident, why they were not there to help him with his injuries is not explored.

The Washington Post reports that a certain long-term friend of Lesin’s in Russia, Sergey Vasiliev, believes Lesin died from heavy drinking, which is what Vasiliev says he was told by the Russian Foreign Ministry.  This is the same Foreign Ministry that is complaining that they do not have any information and are demanding to be briefed by US authorities.  The BBC reports that the Russian embassy in Washington told them it only became aware of Lesin’s injuries when the DC medical examiner’s report was released.  The BBC reports that the Russian embassy press secretary criticized the lack of communication by US authorities, “saying Russia had made repeated requests for updates on the investigation but very few facts had been given.” 

A number of news sources report an unspecified long-term illness, inferring that the illness may have had something to do with Lesin’s death.  The BBC quotes the head of Russian media regulator, Rosepechat, as saying that Lesin had had spinal surgery but was in good health.  The inference seems a highly doubtful explanation for Lesin’s death.

The only sensible comment out of Russia seems to be a BBC quote from Lente.ru from a Russian forensic expert that Lesin’s injuries “were consistent with a severe beating, not an accident or the result of convulsions”.

The Washington Post reports that the same Vasiliev claimed that on November 4 a hotel guard at Dupont Circle checked on Lesin because he had failed to come out of his room for a long time.  However, according to The Washington Post, Lesin had only just checked in, so he could hardly have been there for a long time.  Vasiliev claims Lesin was found dead the next morning by the hotel maid, although The Washington Post can’t say because the hotel declined to comment when asked by them.

Vasiliev also claimed that Lesin had had breakdowns and drinking bouts in the past and had sometimes fallen and injured himself.  Who is Sergey Vasiliev?  Take your pick.  There are many on the web, though none are an obvious candidate.  The Washington Post does not provide enough information to identify Sergey Vasiliev.  [NB; subsequent news reports identify Sergey Vasiliev as CEO of VI Group, a Moscow advertising media company.  However, assertions by the improbably well-informed Vasiliev beg corroboration.)
Did the Kremlin kill Lesin?  The Moscow Times reports that Lesin had had a falling out with another Kremlin insider, Yuri Kovalchuk, a major shareholder of Gazprom Media, where Lesin most recently worked.  Reportedly Lesin owed Kovalchuk a large sum of money that he did not intend to pay back.   TheDailyBeast (and TheDailyBeast2) reports that Lesin owed money to “some of the most powerful men in Russian media and finance.”

If the Kremlin is involved though, it is loosing its touch.  This murder will be tough for the Kremlin to pin on rogue Chechens or accidental poisoning by rare radioactive isotope that the victim had lying around the house, as the Kremlin has claimed about other Russians who fell foul of Putin and died in unusual circumstances.  Blunt force trauma lacks finesse and is kind of hard to explain away.  All one can say is that the mortality rate among not only Kremlin critics but also Kremlin supporters is high.

The police are oddly reticent to call Lesin’s beating a crime.  Even if it were an ordinary drunken bar fight, possibly with friends who were supposedly accompanying Lesin, he is dead, and that is still at least manslaughter.  The only reason to tread carefully is if those who beat Lesin were powerful men (really, no pun intended) or connected to the Russian embassy and had diplomatic immunity; without compelling evidence, even to make the accusation could escalate to a major diplomatic confrontation.  That the Russian embassy in DC feigns complete ignorance while some in Russia share detailed information, suggests that the Kremlin wishes to distance itself from Lesin’s death or someone is engaged in obfuscating the truth.  But that is all just speculation on my part.

In an otherwise fantastical article, the Pro Russia News service, helpfully posts images of the original death notice for Lesin issued on November 7, 2015, and the Chief Medical Examiner’s statement on March 10, which contain curious errors.  PRN notes the seemingly hastily prepared nature of the March 10 notice that misspelled the title of the Chief Communications Officer, had no date, and did not provide the names of the Chief Medical Officer or the Chief of Police in whose names it was issued.  The New York Times reports that the “medical examiner’s office did not explain the timing of its announcement, nor why the findings took so long. Officials there had said as recently as Wednesday that it would not imminently release its findings, only to reverse course the next day.”  The rest of the PRN article is complete nonsense.

There are other anomalies.  Lesin was discovered dead around mid-day on November 5.  Within hours Russian news services were reporting his death and that, according to family members, he had died of a heart attack.  That the family may have been informed of his death so quickly seems possible, but why Russian news services?  And on what basis did the family believe Lesin had died from a heart attack?  Is the connection that Lesin’s daughter works for the US bureau of Russia Today (RT), the news service that her father had set up?

Lesin’s family is surprisingly quiet.  His son, Anton Lessine, is a financier and film producer in Los Angeles.  Lesin’s daughter, Yekaterina Lessina (or Ekaterina Lesina) also lives in Los Angeles.  Both live far beyond their incomes in houses that were purchased by their father.  Lesin is said to have provided tens of millions of dollars to fund his son’s business interests and may have been involved in the business himself (Margarita Simonyan, RT editor in Moscow, claims Lesin invited her to come to Hollywood to write screen plays and he would act as her producer, Radio Free Europe).  Business Insider.

One reason to be quiet is that, as direct beneficiaries of their father’s alleged corruption, they may be subject to criminal charges and penalties also, such as confiscation of their properties, threatening the pampered lifestyle of both children.  Despite a lack of evidence from the US Justice Department of an active investigation, TheDailyBeast reports, “it was all but certain that he [Lesin] was being pursued by US law enforcement” and “the FBI had enough evidence to consider opening a case.”  Dicey stuff for recipients of allegedly ill-gotten gains.

VirtualGlobeTrotting.com provides a tidy snapshot of the former civil servant and his children’s privileged lifestyle:

Ekaterina Lesina is the daughter of powerful Russian media mogul Mikhail Lesin, who is one of Vladimir Putin's top advisers and the former Kremlin media chief.

In summer 2014, a scandal arose when an otherwise mundane lawsuit revealed that Lesin had secretly purchased three multi-million dollar mansions in Los Angeles (one for himself, one for his son Anton Lessine, and one for Ekaterina) at a cost of nearly $30 million. He and his family also purchased at least 8 luxury vehicles, at a cost of more than $1 million, including a $250k Bentley and a $300k Ferrari.

It was also revealed that Lisin had invested tens of millions of dollars through anonymous corporations into the production of Hollywood blockbusters, including the Brad Pitt thriller "The Fury".

Following the emergence of these details, Mississippi Senator Roger Wicker called for the Department of Justice to investigate whether Lesin's money was being illegally laundered in the US and/or was generated via government corruption.

The original lawsuit was the result of two former nannies suing Carole Lessine (Ekaterina's sister-in-law) over wrongful termination and abuse.

Ekaterina's house is located in the exclusive gated community of Mulholland Estates and was purchased for $5.6 million. Her brother's mansion in Brentwood and her father's estate in nearby Beverly Park are also featured on this site.

The theory that Lesin was in Washington to cut a deal with the US seems though to be largely based on his staying at the low profile Dupont Circle Hotel.  However, The Washington Post’s claim that he was actually staying first at the very high profile Four Seasons pretty much blows that theory out of the water.  In any case, The Washington Post also reports that Lesin was in town to attend a charity function honoring Pyotr Aven, a Russian billionaire and philanthropist for which he had paid $10,000 for a dinner ticket, not a good way to keep a low profile.

In some sense, the Kremlin turning on its own people, if true, is comforting.  It means less attention on others.  The Kremlin is showing strains, and Putin’s affection for Stalin extends to Stalin’s methods and climate of paranoia.  Those still in the Kremlin’s favor need to be careful.  It is so easy to fall out of Putin’s good will.  Might Vladimir Yakunin, former head of Russian Railways, or Herman Gref, CEO and Chair of Sberbank, Russia’s largest bank, who have spoken out recently about problems in Russia, be next?  Or, Arkady Rotenburg, if that bridge to Crimea doesn’t work out?  In good stead today doesn’t mean waking up in good stead tomorrow—or waking up at all.  It just takes a twitch to fall out of line with Putin, also a Stalin characteristic.

What should concern Americans is the work of the DC police and the medical examiner.  So far, they appear either evasive or ineffectual.  Lack of progress leaves the impression that Russian oligarchs are treated as “hands-off,” which everywhere else has emboldened their criminal behavior.  A body is a body.  It was either homicide or manslaughter.  What it is not is just those madcap Russians having fun on holiday.

A rogue Russia reaching out to murder its citizens in the United States and other countries, as well as conducting subversive acts including military aggression is a threat to everyone.  It has been months since Mikhail Lesin’s death but the DC police have only now released a brief, inconclusive description of what they know.  The case echoes the British government’s treatment of the Litvinenko murder, which was investigated only after Litvinenko’s wife get a court order for a public inquiry.

Not only are the DC police less than impressive in pursuing and making public the essential facts of Lesin’s death, US law enforcement appears derelict in pursuing obvious instances of money laundering by Russian citizens and their families, including Lesin, who establish themselves in legitimate enterprises in the US to “launder” criminal gains, which only facilitates the dangerous conduct of a rogue state with an unstable leadership that is capable of far greater harm.

Dirk Mattheisen is a writer and blogger on political economy.  He is also an independent consultant on institutional governance of international economic and financial institutions.

How Well Off Is The Average Russian, Anyway?

In response to a recent article on prospects for the Russian economy (Russia: All Scenarios Are Bad in Interiabiznes, a Polish news service), a commenter who can be inferred to be a young Russian professional inveighed against the argument that the Russian people were doing poorly simply because Russia’s GDP compared badly to other countries’.

The commenter had a point of sorts about the limits of international comparisons in explaining domestic economic conditions, and his comment explains in part why the Russian people have not reacted more strongly to their declining economic welfare. He wrote,

“Every time [*@$%#] starts listing gdp per capita in russia in dollars or euro or whatever equivalent i roll my eyes. Wana hear a fun fact? Electricity, standard price here, 2 rubbles for a killowat in rush hours. Now go to british gas or whatever have you, and check how much you pay. And it’s like this in everything. Footlong subway – 220 rubbles with double cheese chicken and bacon. I recall it being in the area of 6-7 pounds in london. Any consumer good you can imagine or resource is a LOT cheaper in Russia…Another example 400 euros a month will get you a medium sized (50sqm+) rented flat in city center. In smaller cities even less than 300 maybe. Find me a city in eu that’s relevant and has rents like that. I recall paying this a week in london for a tiny [ *@$%#] flat.

Based on his examples, nominal prices in Russia appear very reasonable and low in comparison with elsewhere, suggesting that local goods and services in Russia are more affordable than in Europe. That 50sqm+ apartment that rents for €400 in Moscow, might cost £1,000 or more in London (although you could come pretty close to €400 in Berlin). That foot-long Subway sandwich that cost 220 rubles in Russia, or about US$4.40, would cost $7.95 in Washington DC. Throw in stunningly low utility prices, and the average Russian might seem to live quite well.

Even though the import of consumer goods has fallen substantially, low prices in Russia seem to reflect an attractive domestic market for non-tradable goods and services—economist-speak for things that aren’t imported or exported–including housing, domestically produced food, and things like health and educational services—things that are sometimes otherwise known as basic needs. But that isn’t the whole story.

Although prices in the commenter’s examples are roughly half in Russia what they are in Europe, the GDP per capita comparison that he doesn’t like is still a problem. Russia’s GDP per capita is about €9,650, while GDP per capita in Germany is about €36,000 (Estonia is about €16,000 and Hungary is about €11,200) (IMF). The average GDP per capita for the Eurozone is €33,000. Even though prices in Russia might be half what they are in Europe, the average Eurozone citizen’s purchasing power is roughly three times higher. That €400 apartment would take half of the average Russian’s monthly salary. After paying rent, a Subway sandwich a day would take 30% of the average Russian’s remaining gross income per month. The price of a sandwich might sound cheap, but it is not in comparison with income. That cheap electricity presents another problem. It is cheap because Russia has the third largest fossil fuel consumption subsidies in the world, amounting to just over US$30 billion per year. These subsidies drain the national budget and divert resources from more productive economic uses, which slows economic growth and suppresses GDP per capita.

There are other problems. Low domestic prices also reflect the low quality of goods and services. The quality of housing, for instance, is far below standards elsewhere in Europe. The proposal by Moscow’s mayor to level thousands of apartments built during Stalin’s reign, many of which are deemed uninhabitable, indicates the decrepit state of Russian housing. That the mayor’s proposal has met with so much opposition reflects a number of factors but includes low public confidence that promised new housing will be of equal value or more attractive than what is being replaced. Food standards are also lower. As much as 60% of Russian-produced food is “poor quality, unsafe, or falsified”. Much of it is of such low quality that it is not exportable—making it an “un-tradable” good. The low—and declining—quality of education and health services is a major concern for Russia, including not only the low quality of the services provided but also low teacher and doctor salaries.

The average Russian has been until now accepting of the level of prices and low quality of basic goods and services because these have been within reach of most of the population and because, while things could be better, things could also be worse. This has contributed to the average Russian’s complacency about economic conditions.

However, Russians today are under severe economic stress and for many even cheap domestic goods and services are becoming unaffordable. The Russian poverty rate reached almost 15% or nearly 22 million people last year, up from 14 million in 2014, the highest number in a decade.

Growing protests indicate widespread dissatisfaction with material welfare, and anecdotal evidence suggests Russians are under severe economic stress. As an example, the broad-based truckers’ strike in its third year has grown because the new road toll system makes it impossible for independent truckers to make a living, forcing them out of business or into the shadow economy. As one analyst describes it, Povertyin Russia,

“…despite the overall economic upturn, Russia’s people are still in dire straits. One-quarter of Russian companies cut salaries in 2016, at times even skipping payments to their employees. The average monthly wage in Russia dropped 8% last year (after falling 9.5% in 2015) to under $450 — less than the mean monthly pay in China, Poland or Romania — while the poverty rate jumped to nearly 15%. And the country’s regional governments are not faring much better, much to the Kremlin’s consternation.”

Although the commenter argues that the quality of life is better in Russia because the price of basic needs such as food and housing is lower, price alone is a misleading and inadequate indicator of economic welfare. Income matters, too, as does freedom from want, opportunity to better oneself and to provide for one’s family, and the chance to enjoy life’s pleasures. In Russia, these are threatened by poor economic policies. There may be Russians who can afford what the commenter describes, but there are too many who cannot. The commenter’s notion that the average Russian is just as well off materially—or better off–as his or her counterpart in Europe is nonsense. Most Russians have to think twice before spending 220 rubles on a foot-long Subway sandwich.

About the Source

DIRK MATTHEISEN

Dirk Mattheisen is a writer and blogger on political economy with a focus on European affairs and independent consultant on institutional governance of international economic and financial institutions.

Kyiv Noir Continues With Another Russian Assassination Attempt

Kyiv Noir continues with another high profile Russian assassination attempt in Kyiv.  

New York Times - Masquerading As Reporter, Assassin Hunted Putin Foes in Ukraine.

The story of the couple in the New York Times article is worthy of a movie.


As I wrote previously,

Kyiv Noir: When Will The Headlines End?

much of the headline violence in Ukraine starts with Russia’s subversion of Ukraine’s democratic reforms, including anti-corruption reforms--as well as with Russia's war in eastern Ukraine.  Violence and subversion are carried out against Ukraine by Russia because Putin views Ukraine as a threat.  Ukraine's democratic reforms are a threat to Putin because next door to Russia a fellow post-Soviet country is becoming a successful democratic alternative to Putin's oppressive rule. The headlines about violence don't tell the story of Ukraine's progress toward an open and democratic society.

What bothers Putin is that Ukraine’s reform process is succeeding.

Russian Provocations Test Georgia

In a recent article, “Russia Increasingly Treats Georgia As Its Prospective Satellite,” Vasili Rukhadze, political analyst at the Jamestown Foundation, writes that Georgia has recently experienced a “heightened level of Russian intimidation.” He details recent incidents, including an attempt by the Night Wolves, a nationalist Russian motorcycle club, to enter Georgia to celebrate May 9 Victory Day over Nazi Germany and a visit to Georgia by Yuri Luzhkov, former mayor of Moscow and open supporter of Georgia’s Russian-dominated, secessionist enclaves of Abkhazia and South Ossetia. Mr. Rukhadze though does not go as far as to draw the logical conclusion from these incidents.

Vladimir Putin riding with e Night Wolves during his election campaign

The Night Wolves are closely associated with Putin. They were early participants in the occupation of Crimea and fighting in eastern Ukraine, where they carried the standard for Russian nationalism. The purpose of Mr. Luzhkov’s visit is not clear but was described as a personal visit. However, similar informal visits of this kind by Russian officials and prominent individuals also accompanied the occupation of Crimea and eastern Ukraine. If Mr. Rukhadze is feeling nervous, he has every reason to be. Provocations in Georgia have a familiar ring. Lack of a resolute response by the government of Georgia will likely open the door to further provocations.

As a former constituent state of the Soviet Union, Georgia is strategically important.

Russia’s 2018 presidential election is rapidly approaching, and Putin needs something to excite flagging support among the Russian people whose enthusiasm for the seizure of Crimea and Russian-led satellite statelets in eastern Ukraine is waning due to the economic and social costs. Ukraine is now clearly a major headache and opportunities to generate heightened patriotic fervour through tensions in the Baltics could be costly due to a re-invigorated NATO. Even tiny

Even tiny Montenegro in Central Europe was not so easily destabilised last year when Russian and Serbian citizens believed to be directed by Moscow failed to carry off an attempted coup.

Putin may believe, as he searches for a casus belli that Georgia is the perfect opportunity. International condemnation of Russia’s invasion of Georgia in 2008 was a slap on the wrist, and Putin may believe that he can pull it off again since he has very little to lose.

And the prize is worth the taking. As a former constituent state of the Soviet Union, Georgia is strategically important. Control of Georgia would extend Russian authority south over more of the Black Sea coast. It borders on Turkey and, together with a pro-Moscow leaning Armenia, is the most direct transport corridor with Iran—countries Russia has prioritised for improved relations. Georgia also sits astride major east-west oil and gas transport routes. It even offers greater control of the Caucasus region by allowing Moscow to effectively encircle the Muslim oblasts in the North Caucasus.

Russia already controls two puppet states on occupied Georgian territory

Recent provocations in the Russian-controlled Abakhazia and South Ossetia enclaves themselves suggest a tightening of Moscow’s screws on Georgia, including the recent announcement of the creation of joint Abakhazia-Russian military units and the planned merger of law enforcement bodies, as well as rumors that Russia may seek to absorb the enclaves as it did with Crimea.

Recent Russian provocations in Georgia are tangible reminders that Moscow has not given up its interest in the region. Provocations there and elsewhere suggest that Russia remains active and capable of surprising acts of covert and overt aggression.

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Sputnik 

✔@SputnikInt

Top US think tank says @NATO must swallow up #Georgia, #Macedonia, #Bosnia & #Ukraine https://sptnkne.ws/ez3E 

08:00 – 20 May 2017

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Twitter post by Russia’s Sputnik. Russian misinformation often accuses others of conduct Russia itself engages in.

If Russian provocations in Georgia continue or escalate over the next few months, if Russian media escalates its criticisms and attacks on Georgia’s government or its interests—such as this from Sputnik—and, if Russia’s designs on the two enclaves advances toward absorbing them into the Russian Federation, then it is prudent to ask how far Putin might go, which will depend on his assessment of how vulnerable Georgia is, how the West might respond, and on how desperate Putin is to achieve an overwhelming electoral victory next year.

So far, Putin has not found his opportunity. It may be too early yet. The 2018 election is still months off. In the meantime, Georgia needs to be alert and counter Russian misinformation when it occurs. The recent agreement between Georgia and the US on intelligence sharing is a useful step to counter Russian misinformation, which is the first step in any escalation by Russia. Also, useful is the draft US 2017 federal budget that proposes “not less than $100m” to counter Russian influence and aggression in Europe, Eurasia and Central Asia, including Georgia, through support for rule of law, media, cyber, and other programs as well as support for internet freedom in the Russian Federation.

In order not to allow Russia to benefit from aggression, Georgia needs sustained diplomatic, financial and civil society support.  Mr. Rukhadze has it right.  Without Georgia’s steadfastness, and without international support, Georgia risks becoming a Russian satellite.

Euromaidan Press

Russia's Coming Time of Troubles

Euromaidan Press

As Russia approaches its 2018 presidential election, dissent in Russia has taken an ominous turn.  A wide-spread truckers’ strike against road tolls pits the working class against the oligarchs.  An unexpectedly large “youth protest” against corruption in March pits the young against the last post-WWII generation of the Soviet Union as well as their parents who suffered through the 1991 breakup of the Soviet Union.   And, a housing protest in Moscow pits ordinary Russians against their local government.  What happens to Moscow’s plans for a smooth election if dissent metastasizes into opposition?

The threat appears very real because Russia today is threatened by the same economic stagnation, succession turmoil and external pressures as was the Soviet Union in 1991.  The circumstances are similar to other pivotal moments, as well, in Russia’s history, such as its “Time of Troubles” in the late 16^th century when economic trouble, a succession crisis following the death of Ivan the Terrible and conflict with Poland resulted in years of political turmoil.  The legacy of such moments in Russian history has been dramatic upheaval and regime change.

Although Russia appears to be emerging from two years of economic recession, prospects for economic growth are dim because of under-investment and falling consumption.  Economic wealth is increasingly concentrated in the hands of the few.  Russia has the most unequal distribution of wealth of any major economy in the world.  The wealthiest 10% of the population owns 87% of Russia's wealth.  Moreover, economic activity is increasingly concentrated in a handful of cities, especially in St. Petersburg and Moscow, as the Soviet Union’s single industry towns and rural communities die out, leaving entire regions economically and socially devastated.  To balance the Russian budget Putin has reduced spending on welfare, including pensions, health care and education, and on government salaries, further immiserating the Russian people.  At the same time the Russian government is increasing Russia’s international reserves rather than using that income to soften the impact of economic stagnation or to stimulate growth.  High international reserves insulate the Russian financial system from financial crisis, but building those reserves comes at the expense of the real economy where jobs, production and economic growth come from.

Meanwhile, military spending is draining resources from the economy.  Russia’s military strength on show in Syria and in eastern Ukraine does not signify growing power but a hollowing out the rest of society.  In an otherwise fairly positive assessment of Russia’s military capabilities, the Carnegie Endowment makes the point that,

“Excessive spending on the military may indeed be unsustainable in the long term.³⁴ After all, this was a major contributor to state collapse in Russia at least twice during the twentieth century (in 1991, 1917, and, more debatably, 1905) and routinely served as the catalyst for major social upheaval in previous centuries.”

Its military adventures are costly.  Russia has not successfully concluded a single conflict, including Transnistria, South Ossetia, Abkhazia and eastern Ukraine.  As these frozen or festering conflicts proliferate and perpetuate themselves, the financial and reputational cost to Russia rises, even while the welfare of the subject peoples declines dramatically.  Russian client states are deep wells of expense that weaken Russia in Moscow’s misplaced anticipation that nominal control of slivers of territory will legitimate future claims to historical areas of political control.

Russia’s leaders concede that sanctions due to the seizure of Crimea and invasion of eastern Ukraine are likely to last a long time, hindering economic recovery, because there is no path that they are prepared to contemplate that would change the circumstances on the ground.  Russia’s international isolation suggests that Russia may not receive significant support from outside as it did in 1991 if things go from bad to worse, ensuring an even steeper descent, even if no world leader wants to contemplate a Russia plunged into internal chaos.  Meanwhile Russia’s leaders await the miracle of a failure of Western resolve or Western collapse to alleviate their own suffering.

Domestically, the firmament of the Russian state is being shaken, not just from popular protests by truckers and students and apartment dwellers but also from militant nationalism and elevated levels of societal violence both non-state (mafia) and state (suppression of civil society that punishes dissent and non-conformism under the guise of patriotism}.  Violent crime is rising in Russia because of economic hardship but also because of lawlessness in its vassal territories that is filtering back into Russia.  As one commentator puts it, 

“Russian mercenaries who have fought in the Donbas…have gotten a taste for easy money, easy blood, and easy opportunities for satisfying themselves,” in short, all “the criminal joys.” And they don’t forget these when they return home, yet another way that Putin’s war in Ukraine is harming Russia.”

As Russia anticipates the election of Putin to a fourth term as president in 2018, it faces a new time of troubles.  The problems of economic decline, weak political processes, and international tensions are familiar and the fault lines are increasingly clear.  If the collapse of the Soviet Union was unimaginable in 1991, what of the collapse of the Russian Federation today without a change in trajectory?

Under the threat of continued economic decline, social discontent will rise.  The truckers’ strike, which began simmering in 2015 when a new road toll was announced, has spread to 80 of 85 Russian regions.  The apartment renters’ protest in Moscow coalesced on May 14 in a protest by an estimated 20,000 participants.  Under pressure to preserve its privileges, the Russian elite will likely divide on the question of who will succeed Putin, just as it did in 1991.  Under economic pressure, also, central control of the oblasts will become weaker and perhaps fracture, with Moscow losing political coherence south and east of the Don and Volga Rivers—the internal steppe borderlands between Slavic and multi-ethnic groupings in Russia’s empire.  The Caucasus, where Moscow has tenuous control, will fracture, with Chechnya seeking independence if not its own Muslim zone of dominance, since it has as much to fear from extremism as does Moscow.  Differences will emerge elsewhere possibly splitting off additional regions from Moscow’s control, such as in the southwest where Moscow had difficultly containing the “Cossack” nationalists who swarmed eastern Ukraine in 2014-15.  Crimea, Rostov and Krasnodar are farther from Moscow than, say, Kyiv, if local economic and social issues overwhelm centralized control by Moscow as it runs out of money to dampen civil conflict.  Even in the north, regions such as Karelia may drift away from Russia’s orbit and strengthen old relationships with the Nordic countries.  This is what Moscow’s elite fears.

Rather than address directly the problems of economic decline, political paralysis and international isolation, Moscow is promising economic welfare without economic reform, invoking democratic principles without meaningful political participation, and battling fascism where none exists.  These are driving Russia down the road to collapse.

Russia’s turmoil during the time of troubles in the 16^th century was followed by its greatest political and cultural achievements.  To replicate that accomplishment today Russia will have to shed its imperial impulse and complete its transformation begun in 1991 to an open political culture and an engaged civil society in order to emerge as a viable, modern nation-state.  If social unrest continues to grow, the 2018 presidential election may bring that question to a head.