PUTIN’S REBELLION AND THE PROTEST VOTE

The idea of fiscal justice – that taxes should be paid in proportion to the taxpayer’s means -can produce bloody rebellions and even revolutions. But not in Russia.

What then-President Boris Yeltsin did in the 1990s was an old trick he might have cribbed from the histories of the old regimes of France if he had had the resourcefulness to read them. In his case, desperation took the place of literacy.

Until the French Revolution of 1789 halted the practice, French kings pursued buying the loyalty of those powerful enough to threaten their rule by handing out gifts of state assets. Productive agricultural land was the most important of these, but import concessions and commodity monopolies were also awarded. In addition, the kings sold titles of nobility. In return, they exempted the titleholders from paying most of the taxes of the realm. That’s what an aristocracy is made of – the right to exemption from tax, traded for a royal bribe, and the promise not to take up arms against the monarch. In this respect, all aristocrats are nothing if not petty bourgeois, and the foundation of their fortunes, while not necessarily a crime, is certainly a tax break.

Compared to the tsars, Yeltsin democratized tax exemption among Russians. He also favored a small elite, which has managed to concentrate most of the cash value of the exemptions into their own hands while selling off their debts. They are known as the “oligarchs.”

It is easy to understand that, the more insecure kings are, the more tax exemptions they dispense, at the same time as their expenditure requirements – for armies to protect themselves from rebellion – grow apace. The tax base shrinks, as fewer and fewer people are obliged to shoulder the costs of the unbalanced, crooked state. Yeltsin’s one original contribution to this long, sordid history was his invention of the 100 percent tax on low incomes: The practice, implemented by a succession of finance ministers, of withholding salary payments to state employees on the pretence of bureaucratic delays. By extension of the same practice to all those owed money by the state, the tax was adopted by private employers toward their employees.

Throughout the worst of this tax, there was only one revolt -that of the Supreme Soviet in 1993. By physically liquidating the parliament and killing more than a hundred of its defenders, Yeltsin taught a generation of potential tax rebels that it was safer to steal from the system than to fight it.

In the history of tax rebellions, poor people generally stay aloof. They die in swarms, but usually from disease, not from protest. Those who are prepared to fight for fiscal justice -attacking either the king or his noblemen – usually come from the small propertied classes; well-off farmers, tradesmen, artisans or small-business owners. They aren’t so poor that they don’t pay any taxes. Nor are they wealthy enough to buy their way into the exemptions of the aristocracy. So, they are the meat in the fiscal sandwich. When kings fear for their lives, these are the people who pay for his peace of mind. But their potential for disloyalty is always on his mind. The development of European bureaucracy, with all its record-keeping, inspectors and sanctions, is the evolution of squeezing the meat in the sandwich to the limit.

The current conflict between President Vladimir Putin and the oligarchs is unique, because, for the first time in Russian history, it is the king who is trying to dismantle the tax exemptions. He is doing this without any show of support from the small-business groups who stand to benefit most. They are too afraid of Putin’s weakness and the oligarchs’ vindictiveness to take his side, at feast for now. Those who ought to be their natural representatives, the deputies of the Duma Tax Committee, are hirelings of the oligarchs. Yevgeny Primakov at the Chamber of Commerce and Arkady Volsky at the Union of Industrialists and Entrepreneurs ought to speak for them, but they don’t dare to raise their voices either.

What Yukos CEO Mikhail Khodorkovsky is trying to do by selling a 40 percent stake of his oil company to ExxonMobil is nothing less than cashing out the capital gains on all the Yeltsin dispensations from which he benefited before next March. The timing is short and the method desperate, because Khodorkovsky and his fellow oligarchs are certain that Putin will introduce the necessary taxes to redistribute the wealth in the realm once he is reelected. “Stealing” is the word that, in the worldwide history of tax rebellion, all rebels use more often than any other to attack this practice. Khodorkovsky is no more than a thief trying to bank his loot in the United States. He may count himself less fortunate than Mikhail Fridman and Victor Vekselberg, whose sale of Tyumen Oil Co. to British Petroleum early in the year caught Putin unawares, uncertain of what to do ahead of the oil-price crisis the Iraq war could have triggered. Roman Abramovich has been just as fortunate in getting his cash out without paying tax, although the assets have remained in Russian hands. Thieves they are, in Putin’s view and in the opinion of most Russian voters.

This too makes for a unique alliance in the history of tax rebellions – the king in league with the passive poor. It is just as well that Putin has effective command of the Army and the security services, because his enemies are currently so numerous, his allies so impotent and the stakes so big that he might otherwise become a target for violence. Yeltsin destroyed the inhibition to use violent methods in 1993. The methods the oligarchs have used also lack this compunction.

Some of the oligarchs don’t have the stomach for confrontation with the Kremlin, but believe that Putin will be satisfied with a pantomime of concessions. Their paid propagandists at Vedomosti and the Moscow Times charge that all Putin is holding out for is a slice of the tax-exempt proceeds for himself. Vladimir Potanin, who controls both newspapers, has publicly proposed a program of raising employee salaries – although, at the same time, he is trying to make sure that the employees of his Norilsk Nickel mining company and the voters of the city of Norilsk will not elect as mayor the union leader who has been agitating for just such an increase since January. Vekselberg recently gave in to the first major strike of a group of employees at his Siberian Ural Aluminum-while simultaneously trying to prevent a single newspaper from reporting the wage gains the strikers have made, in case their example becomes infectious.

That’s another of the risks the oligarchs are running, as the conflict with Yukos drags on toward Election Day on Dec. 7. The chance is growing that Russia’s poor may cotton on to what Putin is trying to do and find their own spontaneous ways of taking the offensive against the oligarchs. A protest vote of this magnitude won’t show up in the preliminary polls. But, if it happens, it will signal that Russia’s young aristocracy is on its last legs.

THE DURANTY PHENOMENON, THE KHODORKOVSKY ARREST

MOSCOW – There’s nothing more ungainly than newspapers, when their sanctimoniousness is aroused, and they try walking with their feet in their mouths. Call this the Duranty phenomenon.

Walter Duranty was the New York Times journalist who won a Pulitzer prize, journalism’s highest award in the US, for his reporting on Russia in 1931. Duranty died in 1957, and his editors at the Times, plus his Pulitzer board judges, have all joined him in the grave, so they are easy targets for critics. They believe that Duranty’s Pulitzer should be rescinded on the ground that he failed at the time to exercise the same judgment the critics have rendered in retrospect. More than one attempt has been made to oblige the Pulitzer board to yank the prize; another one is under way at the moment. Ukrainian-Americans are reported to be the most vocal Duranty, because they allege in demanding punishment for he failed to report on the lethal 1932-33 famine they blame on Moscow and Stalin.

“A lack of balance and uncritical acceptance”, claims a history professor engaged by the Times to review Duranty’s work, “was a disservice to the American readers of The New York Times and the liberal values they subscribe to,” The professor says publicly Duranty’s prize is a disgrace, and for the honor of the newspaper, it should be surrendered.

A letter to the Pulitzer board by the Times publisher, Arthur Sulzberger Jr., let the cat out of the bag. He conceded that “Duranty’s slovenly work should have been recognized for what it was by his editors and by his Pulitzer judges seven decades ago.” But at the same time, Sulzberger told the board, there are two good reasons for not rescinding the prize now, seventy years later. Rewriting history like this is a Stalinist practice, he argued. And more important, once you start, where do you stop? “The board would be setting a precedent for revisiting its judgments over many decades,” Sulzberger wrote.

Whoa! That really would test the limits of journalism’s elasticity, stretched as it always is between what the history professor calls the liberal values Americans subscribe to, and what reporters identify as the objective truth.

In Russia, the Moscow Times was an English-language newspaper that was created in 1992 from financial sources that remain a mysterious, and then twice rescued from financial collapse by Russian oligarchs. The first was Mikhail Khodorkovsky, the Menatep Bank and Yukos shareholder, who was jailed in Moscow on serious criminal charges over the weekend. The second, and more recent rescuer was Vladimir Potanin, the controlling shareholder of Norilsk Nickel, Russia’s largest mining company. Potanin’s control of the newspaper is far larger than Khodorkovsky’s was, and includes not only a sizeable shareholding, but also a lien on the newspaper company’s accumulated debts.

In the Russian revolution that started in 1991, and continued over the past weekend, the Moscow Times has always been on the side of those into whose hands the country’s wealth has been taken. Power to the people! has meant electricity for Oleg Deripaska and Anatoly Chubais. Bread to the hungry! is the slogan of Vladimir Potanin’s agro-industrial holding. Land to the peasants! has meant oilfields for Khodorkovsky and Mikhail Fridman. The Times has also backed a series of US government policies meant to dismantle the Russian military-industrial base to prevent it from ever again posing the superpower threat the Soviet Union had represented. Washington wanted a Saudi Arabia without rockets. The Times thought that was just dandy.

But now that the jailing of the Yukos shareholders coincides with a parliamentary and a presidential election, Russians can vote for the first time on the fundamental direction they think the slogans of the revolution should take. And despite the fact that men like Khodorkovsky and Potanin can bend the media, the political parties, the cabinet of ministers, and the parliament to their will, the combination of president and popular sentiment makes for a fresh shift of property that is on course to win both elections as democratically as Russia under Yeltsin ever managed. With a crucial difference: Putin isn’t making the election choice the phony one of himself versus the red tide, as Yeltsin tried three times, and still required a 10% fraud to win. Putin is silent, and the choice is thunderingly obvious.

According to the Times editorial, however, Putin’s silence is “unbecoming”. Not for the first time, the Times quotes Chubais -the real US ambassador to Moscow – in demanding that Putin justify Khodorkovsky’s arrest or release him. According to the Times, Chubais also threatened force, if Putin doesn’t reply. “There will be a conflict of such an extent that it will bring in the entire society, and it could turn out to be uncontrollable,” Chubais threatened. Those are fighting words for a man who no longer controls an army the way he did during Yeltsin’s time in office -and whose test run for president (in the poll of 2008) is currently drawing him voter approval of around 3.5%.

For the first time since 1991, the Russian president has called into question the policy of the oligarchs in turning over the economy’s resource assets to foreign enterprises, and taking the multi-billion dollar concession fees for themselves. No civilized country in the oil world – not even Saudi Arabia – allows foreign corporations to control the rate of their oil production and the risk of reserve depletion. If Russia must depend on oil for the short term, then Khodorkovsky was warned – in July – that neither he, nor Yukos, will decide this question of national strategy. And yet, he has continued to negotiate a sale to ChevronTexaco and ExxonMobil. As I have reported many times since July, it was the asset sale, not Khodorkovsky’s political manipulations, that crossed the Kremlin, and led to his current fate. The slow shift in the public positions of the economic policy ministers like German Gref and Victor Khristenko – toward decelerating oil output growth, increasing investment in reserve replacement, di versifying away from oil -demonstrated how difficult it was for the president to pull his own government behind his resource policy, instead of the oligarchs. Nonetheless, Putin has put up the greatest show of resistance to bad policy in the modern history of Russia. His reward has been a Moody’s rerating of sovereign debt, and the massive support of the silent Russian majority, which will get its big chance on December 7, Election Day.

But discrediting the English language as a platform of wealthy reaction, the Moscow Times reports the president is silent. That’s because the newspaper’s proprietor, like everyone else in Russia right now, can hear the message all too audibly. Power to the people! Bread for the hungry! Land for the peasants! If the Times is doing today what Duranty is accused of doing so long ago, then it will only be a matter of weeks, not decades, before we can judge for ourselves where the truth in the Russian revolution is really heading.

LAST HURRAH, OR BRONX CHEER, FOR CHUBAIS

Anatoly Chubais is the biggest factotum in Russia, and an oligarch of sorts, in part because he controls United Energy Systems (UES), the electricity utility on which the profit margins of several other oligarchs depends; and also because he was the government official who rigged the privatization schemes that created the oligarchs’ private wealth.

Because he is not the direct owner of UES, and governs it by an appointment of the majority shareholder, the federal government, he could in theory be dismissed with a stroke of President Vladimir Putin’s pen. His power is thus usually measured by the fact that he has surived so long. On the other hand, that power is usually qualified by the often reported public opinion that he is one of the most hated men in Russia.

Chubais’s survival in the Kremlin’s good-books is attributed by his friends to his resourcefulness as a manager. But when President Vladimir Putin began to focus this past summer on what should be done with Russia’s natural resource reserves, policymaking for the future of the country’s electricity – the generating plants, the transmission lines, the mechanism for regulating the market price of power – has begun unravelling many of Chubais’s schemes. His attempt to transfer unfinished power plants to oligarchs like aluminium producer, Oleg Deripaska, in return for little cash, and unsecured promises of capital expenditure, was aborted. Chubais’s bigger attempt to attract the oligarchs into buying up UES shares to use later in swaps for privatized regional generating companies has also been stymied, although not before the UES share price jumped more than 250% in the past year.

In a normal stock market, the share value of an electricity utility like UES is usually based on the depreciated replacement value of the generating assets it operates. But in the rigged Russian market, Chubais triggered a speculative run on the shares by proposing to allow buyers of UES now to swap them into controlling stakes of regional energy companies later, when UES is dismantled, and the regional sources of electricity will be offered for sale. Power-hungry aluminium and steel makers jumped at the opportunity to lock in control of their subsidized electricity costs for years to come. So did arbitrageurs looking for an opportunity to buy electricity assets on the cheap for profitable resale.

Then Putin began to intervene, in part to hold down electricity prices before the December parliamentary election; and in part to prevent another privatization ripoff. As the UES board struggled to secure Kremlin approval, the unbundling of UES into regional energos was postponed. The scheme for privatizing the energos was also reviewed, and under pressure, the state-controlled board of UES conceded that an open cash auction for energo shares might be preferable to Chubais’s share swap scheme. One of the steelmakers complained that it was unfair to change the rules in the middle of the game. That the game had been rigged from the start was the retort from Chubais’s critics.

At that point, Chubais announced he would be a candidate for election to the State Duma on December 7.

Normally in Russian politics, a man like Chubais would hesitate before running for a parliamentary seat, unless he were convinced that he would shortly need it for the immunity it provides to criminal prosecution. While the other oligarchs have tried to cash out, and place their cash beyond reach of the second Putin administration, Chubais hasn’t the same leverage. If he has hidden a fortune under a mountain of gold somewhere abroad, it’s peanuts to compare with the fortunes of those Chubais created for others.

The timing of Chubais’s political move suggested that he expected that he would be dismantled before UES, possibly after Putin’s reelection next March.

To announce, therefore, that he is not only running, but leading the small party called the Union of Right Forces is one thing; to follow almost immediately with the declaration that if elected, he won’t take his seat, is to forego the immunity, but call into doubt his real motive. Chubais’s candidacy is the first ever offered to Russian voters to pass judgement on his methods of privatization. It is also a vote on whether voters want electricity prices to be fixed by the oligarchs, or by the state. The outcome of both seems so obvious, it has to be wondered why Chubais would invite his fellow Russians to heap on top of the opprobrium his record has already earned, the nemesis that such a display of vanity should provoke. More than once Chubais has admitted getting away with the deceiving the International Monetary Fund; the last time, he said, was on the eve of the August 1998 financial crash. Even for voters with short-term memories, it isn’t likely Chubais will get away with persuading them to support him for his unrepentant insincerity and cynicism.

In the retiring Duma, the Union of Right Forces (SPS is the Russian acronym) holds 7% of the seats after winning 9% of the 1999 vote. Most polling organizations currently estimate that, compared to the eiection four years ago, voter sentiment has been cut in half, and that the party is struggling to make the 5% threshold for proportional representation of its party list. Chubais is ranked third on the SPS list, behind Irina Khakamada and Boris Nemtsov. If the latter duo were worried that their party organization was headed for oblivion, Chubais may have persuaded them that his candidacy was a necessary, if desperate measure.

Through its spokesman, Elena Dikun, the SPS isn’t so sure. Dikun says she doesn’t know what Chubais will be doing to campaign for the party in the next four weeks. To questions of what benefit the party thinks Chubais brings to its campaign, Dikun added that the only official comment the party will make about Chubais is that he holds the number-three slot on the ticket.

If SPS won’t say that Chubais will add votes to the ticket, Chubais isn’t so reticent. On a personal website, www.chubais.ru, he has posted the results of a poll among voters which asked whether voters would be more or less likely to vote for, or against, SPS if Chubais is on the ticket. According to the sample of 1,132, 54% responded that they would vote for SPS, whatever names led the party list. Almost 20% replied that they wouldn’t vote for SPS under any circumstances. That left 299 voters in the sample. According to Chubais, 4% said that they had been thinking of voting for SPS, but now that Chubais was running, they would not. Twenty-two percent said that Chubais’s candidacy had convinced them to vote for SPS. At best, then, the net benefit of Chubais’s candidacy to SPS may be a positive 18%.

For the Chubais boosters, this is evidence enough that negative sentiment for him in the Russian electorate is irrelevant. His campaign is needed, they say, to garner bonus votes that may tip SPS over the 5% electoral barrier. But none of the nationally recognized election pollsters believe this to be true. According to VTsIOM, SPS was polling 5.3% in August, before Chubais took his position on the party list; afterwards, it dropped to 3.6% in September. Analysts at the polling agency claim Chubais has changed almost nothing, and that SPS’s vote range remains bounded between 4% and 5%. ROMIR, another of the national pollsters, concurs. He puts the SPS vote between 5% and 6%, but is emphatic; “SPS has a very stable group of electors, and Chubais will not scare them off. But I’m not sure he will be able to add new voters.” The Public Opinion Foundation (FOM) has run voter intention surveys with Chubais’s name on the SPS list, and without.

The results show a vote range of 3% to 4%, without the addition of Chubais’s name making a difference. The Centre for Political Technologies confirms a similar finding. The SPS vote is currently running below 5%, and Chubais hasn’t lifted that, at least not yet.

There is one clue in the national polls to explain why some voters might vote for SPS because of Chubais. Most profiles of SPS voters indicate that they are predominantly female, young, and residents of Moscow or St.Petersburg. Many of them are so young, in fact, they don’t know what Chubais was doing in the mid-1990s. His record is irrelevant to these voters. They associate him with the wealth that is conspicuous where they live, and essential for their lifestyle. Call them courtesans with candles – they don’t care about high-priced electricity.

If SPS breasts the tape on election day with voters like these, then Chubais will have won a sideshow. The question of whether there is any place for him in Putin’s policy for the future of Russia’s natural resources will be decided elsewhere.

END OF THE ROAD FOR DERIPASKA?

Oleg Deripaska, chief executive of Russian Aluminum (RusAI), Russia’s largest aluminum producer, and head of Basic Element, which holds his investments in other sectors of the Russian economy, has been feeling maligned for a long time now. A two-year-old lawsuit by smelting rival Mikhail Zhivilo in New York accusing Deripaska and his associates of using illegal tactics in the acquisition of his assets has been dismissed for lack of jurisdiction. But, in all likelihood, the case will either be returned to the courts on appeal or refiled. The trouble Deripaska has had with the U.S. authorities preceded the court case and appears to be persisting, despite the efforts of well-known American lawyers he has engaged to clear him. In Zurich, Deripaska has lost an appeal of an arbitration panel’s award of $90 million to Krasnoyarsk archrival Anatoly Bykov. He faces more of the same in other European jurisdictions. In Frankfurt am Main, lawyers defending Germany’s leading financial newspaper, Frankfurter Allgemeine Zeitung, from a defamation suit filed by Deripaska have turned up more than he can have bargained for.

In Russia, Deripaska can also complain that he’s been maligned. In Moscow, he is the target of a recent petition to the Kremlin by paper and pulp producers who accuse him of using a variety of hostile-takeover tactics. His acquisition of the Ingosstrakh insurance company is under investigation by the General Prosecutor’s Office. Although he married into the Yeltsin circle, he hasn’t been able to put his Kremlin connections to much use in recent months. The four keys to his profit margin in the aluminum trade – electricity, alumina, freight rates and tolling privileges – have come under serious pressure. His attempts to secure shareholding control or regional political influence over the price of energy to his smelters have been less than effective. His control of the Nikolayev alumina refinery, the supplier of roughly one-third of his smelter’s raw-material requirement, is under threat from the government in Kiev and an ambitious Ukrainian metals magnate. Rail tariffs have recently been raised by 5 percent or more, and the possibility of special discounting has shrunk. Deripaska was able to lobby Finance Minister Alexei Kudrin to drop his attempt to halt the tax concessions conferred by tolling contracts – but he lost a similar bid in Ukraine.

Through RusAl, Deripaska has made big promises – to build a new smelter in Murmansk, a new bauxite mine in Guinea, a new partnership with the Chinese Aluminum Co., a new metals complex in Australia, a new smelter in western Ukraine – but there is little yet to show for any of them.

In its section describing investment plans for the next five years, RusAI’s Web site lists four priority projects that are quite different and a good deal less costly. A Ukrainian court recently appointed an expert to take inventory of what exactly has been done at the site of the promised Pervomaiskoye smelter in order to enable it to rule on whether Deripaska has broken the terms of the agreement with the Ukrainian government that allowed him to take over the Nikolayev asset.

To the question of why his fellow oligarchs are looking to cash out at least some of their assets, but not Deripaska, the short answer may be that he has looked for a multitude of exits, only to find that the way is blocked. He can’t list RusAI shares on the London or New York Stock Exchange, because the company’s assets have yet to be consolidated into a single shareholding company. Although Deripaska recently denied that he had made a deal with Roman Abramovich to buy the latter’s half-share of RusAI, sources inside Millhouse, Abramovich’s holding company, claim that Deripaska has been making a bid but lacks the cash to pay the $3 billion sale price outright and cannot come to terms with other shareholders at Millhouse who don’t share the desire to cash out of Russia. They may be biding their time for a counter-bid aimed at Deripaska’s half-share of RusAI. Then, on Oct. 3, Deripaska turned around and declared he had bought a 25 percent stake in RusAI from Abramovich. No price or payment terms were disclose.Deripaska has never revealed the price of any of his transactions, or how they have been paid for.

Borrowing to fund asset takeovers, leverage existing assets, or even pay for production upgrades and expansions, isn’t easy for Deripaska. Although he considers that a current debt portfolio totaling $1.5 billion – including last week’s $100 million loan from Credit Suisse First Boston – is a gilt-edged indicator of his international creditworthiness, he still trails behind his fellow oligarchs in being able to obtain unsecured credits. For every dollar RusAI borrows, international banks want their hands on a metal ingot.

It was therefore noteworthy when Deripaska, on a recent visit to the southeastern Siberian city of Irkutsk, announced that he wants to add to his stakes in the region’s Bratsk smelter, a new smelter site at Taishet and the regional electrical utility, Irkutskenergo. Deripaska said that he aims to bid for Sukhoi Log, the largest unmined gold deposit in Russia.

Now, goldmining would be a first for Deripaska, and Sukhoi Log nothing if not expensive. A few days before his remark, Deripaska had lost out in the bidding for a 45 percent state shareholding in Lenzoloto, the Irkutsk regional goldminer, which has been taken over by Vladimir Potanin’s Norilsk Nickel group at a price of more than $152 million. Potanin would like the market to think that, with control of Lenzoloto, he now has the inside running for the state award of the Sukhoi Log mining license, which will go up for tender after the presidential election next March.

Deripaska’s announcement suggests that he thinks that Potanin may be politically vulnerable and open to a Kremlin challenge to knock him out of the race. Other declared bidders for Sukhoi Log include Polymetal of St. Petersburg, led by Alexander Nesis, and Khazret Sovmen, former owner of Polyus, Russia’s largest operating goldmine, which was acquired a year ago by Potanin. One thing all of them have already learned is that the tender will not be issued by Natural Resources Minister Vitaly Artyukhov until he learns whom the Kremlin wants to win. And that decision won’t be made until after the election season is behind us.

So, Deripaska’s open bid for Sukhoi Log turns out to be a wager that, among the oligarchs and Yeltsin leftovers, he has a better chance of surviving than Potanin. It’s little wonder that Deripaska thinks he’s been maligned to date.

IRAQ WAR DOES NOT PAY DIVIDENDS TO RUSSIANS

Russian oil producers, pipelines and ports are certain to be badly hit if the United States forces a regime change in Iraq and, consequently, world oil prices fall sharply. And that’s only scratching the surface of the threat to the Russian economy from an American war on Iraq, and all that would follow.

Understanding this should be an antidote to a spate of recent reports in the Anglo-American press. These claim that, behind the curtain of the United Nations Security Council, the Russian government is negotiating a secret deal with the United States to trade Moscow’s concession for war to start, in exchange for Washington’s guarantee to secure Russian oil company concessions in Iraq, or to pay a matching indemnity. No matter how the value of Russia’s interests in Iraq may be summed up, and never mind how unreliable and unpredictable the Bush administration’s undertakings are understood to be, the cost of oil prices’ collapse to the Russian economy is certain to be greater than any promised indemnity. (more…)

PUTIN IS NOT THE LAST OF THE MOHICANS

If you believe what you are told about Russia in virtually all the world media at this moment, President Vladimir Putin is an isolated savage fighting a last-ditch battle against the forces of advancing civilization, out¬numbered, out¬gunned and doomed. If Putin — and a handful of his advisors — represent the last of the Mohicans, then who exactly are the advancing redcoats, and are they the civilizing force we’ve been told they are?

So far, Mikhail Khodorkovsky, the chief shareholder and CEO of oil company Yukos, has positioned himself in the domestic and foreign media as the force of civilization that Russia badly needs. Much of Prime Minister Mikhail Kasyanov’s cabinet has allied itself with him. It’s peculiar then that,unlike the redcoats of the original Fennimore Cooper story of the American Indians versus the British and French invaders, this Russian claims that it is in his country’s interest that he should sell effective control of one of Russia’s largest oil assets to an Americar oil company.

It is stranger even that ExxonMobil should believe Khodorkovsky when he told them to visit Kasyanov to ask if he would approve such a deal, the value of which is roughly estimated to be about $25 billion. Khodorkovsky also claims that he received Putin’s approval for a sale to an American oil company. That Putin has changed his mind since then is obvious. But why would ExxonMobil go to Kasyanov if it already understood that Putin was the man in charge?

The answer is that Khodorkovsky and his mostly American advisors believe they can lay siege to the Kremlin and force Putin to surrender if they can demonstrate — mostly via the press, but also through fireside chats with the likes of Henry Kissinger, whom Putin met in New York — that there is no support for Putin’s opposition to Yukos. Khodorkovsky is figuring that the Americans, the media and the Russian politicians he has on retainer are enough to topple Putin. Although the Kremlin walls are thick ones, that’s the firepower the Yukos redcoats are betting on.

And so, last week Khodorkovsky stoked speculation on the Russian stock market and fed the ever-obliging Financial Times the line tha the ExxonMobil deal was only a whisker away. Khodorkovsky’s minions misread Putin’s remarks to the New York Times in an interview published on Oct. 6 and tried to cast last week’s police raids on Yukos as a sign that Putin was close to surrender. Khodorkovsky has been buying press coverage for so long, he’s forgotten that everyone in Russia — except himself — believes everything they read to be false.

What Putin said was clear: “we have a category of people who have become billionaires overnight, as we say. The state appointed them as billionaires.” The corollary was that the state would decide what is to happen to them next, not the media, which — Putin added — have been “subjugated — in the same way that the oligarchs behaved with natural resources.” Asked specifically what he intended to do about Khodorkovsky’s proposed sale to ExxonMobil, Putin drew the distinction between foreign investment in new oil projects and foreign shareholding control of Russian oil assets. If he was the last of the Mohicans, this was no forked tongue — he was speaking confidently and categorically. He was reminding Khodorkovsky that he, like Mikhail Fridman and German Khan of Tyumen Oil Co. and Abramovich of Sibneft, have failed to invest in long-term oil prospecting or new oilfield production outside the areas that were developed by the Soviet state. That task has been left for international companies to undertake, while the Russian oligarchs awarded themselves huge dividends and leveraged their companies with mounting debt. The state has so far refrained from taxing that dividend outflow as most other European and American governments do — through capital-gains or dividend-remittance taxes. Putin knows that he doesn’t have a single minister in the cabinet, and certainly not a prime minister, or even a presidential chief of staff, who would countenance such proposals and who can be trusted not to betray the president’s orders. At least, not for the time being.

And so, all Putin has been able to do is to pursue his policy with the only means available to him. If it takes a prosecutor and a policeman to inform Yukos, ExxonMobil and the world that, in Russia, as everywhere else in the civilized world, it will be the government that must decide on what terms Russian natural-resource assets can be swapped, pledged or sold, then that’s who must deliver the message.

“We favor foreign capital involvement in Russia’s economy,” Putin told his U.S. interviewer. “ExxonMobil is operating in the Far East, in Sakhalin, it is involved in investing a lot of money there, and we will support their further activities there. As regards purchasing part of the Yukos company, again this is a corporate matter, but once again we are talking about a possible major deal here, and I think it would be the right thing to do to have preliminary consultations with the Russian government on this matter.”

Only a fool would imagine that when Putin spoke of the government, he meant Kasyanov.

And so, when Putin chose to speak next on the same subject — at the Yekaterinburg summit meeting with German Chancellor Gerhard Schroeder on Oct. 9 — Putin was addressing all the fools. According to a wire-service report, “the president stressed that the gas pipeline system of the Russian Federation was ‘the offspring of the Soviet Union,’ and only Russia could ‘maintain it in working condition, even regarding its parts outside the country.”We will not divide Gazprom,’ Putin said. He added that the European Commission should have no illusions on this account. ‘In the gas sphere, they will have to deal with the state,’ the president stressed.”

What Putin said about the gas sphere applies no less forcibly to the oil and the mining spheres, to Yukos, Norilsk Nickel, Russian Aluminum and Siberian Ural Aluminum; to Khodorkovsky, Fridman, Vladimir Potanin, Oleg Deripaska and Victor Vekselberg.

This is not surrender talk from the last of the Mohicans.

However, it is a disgrace and shame to Western media like the Financial Times and of virtually all the Russian media, the Russian parliament and Kasyanov’s cabinet that Putin has been made to appear to be waging this fight for a national-resource and investment policy, virtually unsupported and apparently alone. If the truth were to be known, Putin has been getting the support and technical advice he needs from those who are not so vain or corrupt that they want to disclose their names. Khodorkovsky has bought the silence of the Communist Party and of others in the parliamentary election race who might have debated the resource-policy issues as they deserve to be. But the Kremlin knows that there is a broad and deep popular resentment against the oligarchs that will favor the policy Putin has been maintaining in recent weeks. He knows the economics of this resource policy have been tested and proven from Japan and South Korea to France, the United Kingdom, even California. Whatever lineup popular Russian resentment produces in the new State Duma will not affect the fact that, after the presidential election next spring, Putin will be the government, and Khodorkovsky will have lost.

Thus, there is no point now in Putin or his trusted circle of advisors responding directly to Khodorkovsky’s publicity campaign. Whoever will be stronger after the election, he won’t be. And when that is clear, the Duma deputies for whom Yukos has paid will turn tail.

CALL OFF THE ELECTION HOAX

MOSCOW – In a well-known Russian anecdote, a police investigator is questioning the son-in-law of an elderly lady who has been found dead. “Why did she die?” the policeman asks. “Because she ate poisoned mushrooms,” the son-in-law replies. “So why is her body covered with bruises?” the policeman asks. “Because she was stupid, and didn’t want to eat,” the son-in-law says.

Russian politics are more than a little like the old lady.

It is now one month into the parliamentary election season, with just eight weeks to go before polling day. Each day, the electorate is being pummeled by multimillion-dollar propaganda campaigns, which include the manipulation of voter polls designed to generate the impression of fake groundswells of opinion. Almost every nuance has been professionally anticipated, diagnosed and neutralized with as much election technology as money can buy.

If you look at the headlines of Russian newspapers, or ask ordinary voters, you’re bound to conclude that one of the dominating issues at this stage of the campaign is whether the oligarchs — the handful of men who acquired Russia’s major energy and mineral assets on the cheap and are now trying to sell them off to foreign buyers — should be allowed to get away with the cash for the second time in five years. I say the second time, because the ruble crash and bank default of August 1998 allowed oligarchs like Mikhail Khodorkovsky (remember Menatep Bank?) and Vladimir Potanin (Uneximbank?) to rid themselves of bad billion-dollar wagers their banks had made and expand the difference between their onshore costs and offshore profits — all at the expense of most Russian savings. Ordinary Russians haven’t forgotten that.

If, next, you ask the leaders of the major political parties running for seats in parliament two questions about this subject, you might think their answers would address what is on the minds of the voters. In order to understand what Russian politicians, especially those who say they are campaigning in opposition to the government, think the voters should hear, I have spent a month asking one question about the oligarchs and one about what is to be done about them. What should be on the tip of every Russian politician’s tongue right now, if not the answers to these two questions?

1. Do you or does your party approve of the sale of a strategic shareholding of Yukos to a foreign oil company?

2. Do you or does your party support taxing the oligarchs’ wealth, such as a capital-gains tax, a tax on foreign remittances of profit or a superprofit tax?

Fatherland and the Liberal Democratic Party of Russia (LDPR) are usually classified as pro-Kremlin in the way their members have voted in the Duma now coming to an end. Fatherland contested the last Duma election in opposition to its current ally, the United Russia group; in this campaign, they are indistinguishable. Together, they claim a 40 percent share of the current Duma’s seats. The best the pollsters are projecting for them in December is 37 percent. The LDPR currently has a 3 percent share of the Duma’s seats, but the polls are suggesting a harvest of protest votes to propel them to 14 percent.

When they campaign for votes, Fatherland – whose name in Russian, Otechestvo, suggests the fatherland, motherland, patriotism and nationalism — and Vladimir Zhirinovsky, the only public figure recognized by LDPR voters, act as if national policy ought to rule out the massive transfer of Russian wealth abroad. You would guess that both parties should find it easy to answer yes to both questions, even if they might be a trifle uncomfortable with the details.

At Fatherland, the party spokesman found the questions so surprising that he asked for them to be submitted by e-mail. That was done many days ago. There has been no reply. At the LDPR, the spokesman for the party and for Zhirinovsky refused to answer either question. That’s because, he said, “we are not ready to provide a new economic program, and we don’t comment on any suggestions in the economic-policy area.”

In the ideological center of the Russian political lineup, there is Yabloko, the oppositionist party led by Grigory Yavlinsky. He commands a 4 percent share of the retiring Duma; his projected share in the new one, if the polls are right, would be only 3 percent. Yavlinsky was once a professional economist. A month ago, his spokesman, Maxim Zubilin, said that it was a little early to answer the questions because “our election program is not quite ready.” Regarding taxes, he said, Yabloko is “a consistent advocate of cutting them, all taxes, starting with value-added tax. The reason for this is that the decrease of taxation will help move capital out of the shadows.” But what if capital moves out of the shadows — and out of Russia, too? To Zubilin, this sounded like “a way of sharing with the people” and was definitely not Yabloko’s idea. On the other hand, Zubilin acknowledged that there may be a problem of capital leaving Russia and that “we think it should be prevented through economic, not administrative, measures.” So what about taxing capital gains and foreign-profit remittances? Zubilin wouldn’t answer.

And what about the number-one question on everybody’s mind — the Yukos question?

Zubilin seemed crestfallen. “Regarding the possibility of the sale of a strategic share in Yukos to foreigners,” he said, “I think the party doesn’t have an official position.” Zubilin then added that “Yukos is a private company, and the sale of its shares to foreign investors is its own affair. Yukos is one of the most transparent companies in Russia. The wish of U.S. investors to invest money into this company is a good proof of that.” Since Zubilin’s reliance on U.S. investors to decide Russian economic policy seemed an odd pitch for Russian votes, I decided to try Yabloko again — after the foreign press had put the Yukos sale to ExxonMobil or ChevronTexaco on the front pages, and after President Vladimir Putin had been to the United States to chat about the matter with President George W. Bush — and Henry Kissinger over dinner at the latter’s New York apartment. This time, Yabloko’s spokesman was more cautious. He requested that the questions be sent by email. Two weeks have passed, and there has been no reply.

Yabloko thought that Sergei Glazyev, the former economist who is heading the Motherland party, might be in favor of taxing the oligarchs’ wealth and even of preventing Khodorkovsky from selling his shareholding. In 1996, Glazyev, then head of economic security on the Kremlin’s Security Council, came out against the methods by which the oligarchs had acquired their assets through phony privatization and against the uses to which they put their capital. But that was then. What about a month ago, when Khodorkovsky was reported to be selling 20 percent of Yukos for about $11 billion to ChevronTexaco?

I must have picked the wrong day, because Glazyev’s spokesman said that he wouldn’t answer until Sept. 22, when he planned to release his economic program. I called back last week, long after the program had had time to mature and after Khodorkovsky was now telling his friends at the Financial Times that he was selling a 40 percent stake of Yukos to ExxonMobil for $25 billion. Anna Gorbatova is Glazyev’s spokeswoman, and, from what she says, she feels sorry for him. On the one hand, she says, Glazyev is too busy to answer questions. On the other hand, he is traveling and too tired to answer his mobile phone. If he had the chance to review the questions by e-mail, Gorbatova said, the poor man might be able to give an answer in two weeks.

Glazyev is a frail fellow with a thin-reed voice that could easily fail under the pressure of campaigning. It’s perhaps just as well that he has the burly Dmitry Rogozin, with plenty of stamina, as the number-two candidate on the Motherland ballot. Rogozin has always presented himself as an ardent nationalist — with military overtones, when he managed the first of Gen. Alexander Lebed’s political campaigns. Since then, Rogozin has matured into the chairmanship of the Duma Committee for International Relations, where dealing with foreign policy is his daily bread and butter.

Surely, if anyone in the election campaign had a view on the Yukos question, it would be Rogozin. He sent his spokeswoman Olga Sagoreva to the telephone. But she was almost as sorry for Rogozin as Gorbatova was for Glazyev. “Rogozin,” she apologized, “is firstly a politician, and not very good with economic questions.” If a candidate for public office is no good at something, it’s a relief to hear it first from his closest associates. But there is no point beating around the bush — Rogozin doesn’t have an opinion to pass on to voters about taxing the oligarchs in general or dealing with Yukos in particular. His spokeswoman thought that it might be useful if I asked Glazyev, because she thought he might not be as bad at economics as Rogozin. She also invited an e-mail. There has been no reply.

Glazyev has positioned himself as the young left-leaning voter’s alternative to the Communist Party of the Russian Federation (KPRF). He insists that he is neither on the take from the Kremlin nor from the anti-Communist corporations to split the Communist vote and diminish its voting power in the new Duma. But what to make of the KPRF itself? It’s noteworthy that, on the 18 candidate Communist federal list that voters will see on their ballot papers, there is one, Sergei Muravlenko, who is a former chairman of the board of directors of Yukos, and another, Alexei Kandaurov, currently head of an analysis department in one of Yukos’ corporate divisions. They are on the KPRF ballot, according to party officials, because they are “old party comrades,” not because they are from Yukos. So what does the old party think of Khodorkovsky’s attempt to transfer his capital to an American corporation?

Ivan Melnikov is the party’s campaign voice, and he doesn’t like to lose it. On the one hand, he wants to address the questions, so he has asked for them to be sent by e-mail. On the other hand, he doesn’t want to answer them. Indeed, Melnikov has evaded answering these two questions for more than a month. As an associate of Melnikov’s at KPRF headquarters explains, he will continue to refuse to answer the questions, but avoid looking like he is doing so.

The KPRF is reputed to be the strongest opposition party in Russia, maybe the strongest party of them all. Current polls give it a projected 37 percent share of the new Duma. That is not only up on last month’s poll projections, but also double the party’s current Duma strength. Allowing for the exaggeration such polls are meant to convey — to galvanize a wave of anti-Communist energy from the electorate — it does appear that there may be a tidal wave of opposition sentiment coming in December, If so, it’s hardiy good news for the government and the Kremlin. That is, if you believe the way the sides and choices of the political campaign have been portrayed by the government’s propagandists. But what if there is no opposition, because, on the burning issues of the day, there is no one in the campaign who will give voters the answers to two of the most obvious questions of all?

Ever since Khodorkovsky began to feel the heat for his attempts to cash out and secure U.S. backing for himself, his capital and his ambitions, he has told his supporters that the real reason for his confrontation with the Kremlin is politics, not economics. According to Khodorkovsky and his supporters, he has been spending too much of his company’s time trying to influence the outcome of the Duma elections and buying votes and candidates, threatening the Kremlin’s strategy for a majority parliament of its own. In short, Khodorkovsky has claimed that his sale of Yukos is being blocked because he is threatening to create a political opposition all of his own. To this end, he has been reported to have bankrolled Yabloko, the KPRF and, possibly, other candidates as well.

If this is true, the money appears to have bought nothing but silence so far. But the tongue-tied candidates do tell one thing: If they don’t dare campaign on the issue of the Yukos sale, then the only choice in Russian politics doesn’t include them. So, let’s call off the Duma election — it’s nothing more than the poisoned mushroom in the well-known anecdote. Let’s go straight to the only real choice that Russians have to vote on — Putin VS. Khodorkovsky. The Russia Journal

IF IT SMELLS ALLURING, IT’S RUSSIAN – IN WARTIME L’ORÉAL (FRANCE) AND ESTÉE LAUDER (US) MAKE A BAD SMELL



By John Helmer, Moscow
  @bears_with

The war plan of the US and the European allies is destroying the Russian market for traditional French perfumes, the profits of the French and American conglomerates which own the best-known brands, the bonuses of their managers, and the dividends of their shareholders. The odour  of these losses is too strong for artificial fresheners.

Givaudan, the Swiss-based world leader in production and supply of fragrances, oils and other beauty product ingredients, has long regarded the Russian market as potentially its largest in Europe; it is one of the fastest growing contributors to Givaudan’s profit worldwide. In the recovery from the pandemic of Givaudan’s Fragrance and Beauty division – it accounts for almost half the company’s total sales — the group reported “excellent double-digit growth in 2021, demonstrating strong consumer demand for these product categories.”    Until this year, Givaudan reveals in its latest financial report, the growth rate for Russian demand was double-digit – much faster than the  6.3% sales growth in Europe overall; faster growth than in Germany, Belgium and Spain.    

Between February 2014, when the coup in Kiev started the US war against Russia, and last December, when the Russian non-aggression treaties with the US and NATO were rejected,   Givaudan’s share price jumped three and a half times – from 1,380 Swiss francs to 4,792 francs; from a company with a market capitalisation of 12.7 billion francs ($12.7 billion) to a value of 44.2 billion francs ($44.2 billion). Since the fighting began in eastern Ukraine this year until now, Givaudan has lost 24% of that value – that’s $10 billion.  

The largest of Givaudan’s shareholders is Bill Gates. With his 14%, plus the 10% controlled by Black Rock of New York and MFS of Boston, the US has effective control over the company.

Now, according to the US war sanctions, trade with Russia and the required payment systems have been closed down, alongside the bans on the importation of the leading European perfumes. So in place of the French perfumers, instead of Givaudan, the Russian industry is reorganizing for its future growth with its own perfume brands manufactured from raw materials produced in Crimea and other regions, or supplied by India and China. Givaudan, L’Oréal (Lancome, Yves Saint Laurent), Kering (Balenciaga, Gucci), LVMH (Dior, Guerlain, Givenchy), Chanel, Estée Lauder, Clarins – they have all cut off their noses to spite the Russian face.

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THE WAR AGAINST FOOD – WHO IS TO BLAME



By Nikolai Storozhenko, introduced and translated by John Helmer, Moscow
  @bears_with

This week President Joseph Biden stopped at an Illinois farm to say he’s going to help the  Ukraine ship 20 million tonnes of wheat and corn out of storage into export, thereby relieving  grain shortages in the international markets and lowering bread prices around the world.  Biden was trying to play a hand in which his cards have already been clipped. By Biden.  

The first Washington-Kiev war plan for eastern Ukraine has already lost about 40% of the Ukrainian wheat fields, 50% of the barley, and all of the grain export ports. Their second war plan to hold the western region defence lines with mobile armour, tanks, and artillery  now risks the loss of the corn and rapeseed crop as well as the export route for trucks to Romania and Moldova. What will be saved in western Ukraine will be unable to grow enough to feed its own people. They will be forced to import US wheat, as well as US guns and the money to pay for both.

Biden told his audience that on the Delaware farms he used to represent in the US Senate “there are more chickens than there are Americans.”  Blaming the Russians is the other card Biden has left.  

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EXILE



By John Helmer, Moscow
  @bears_with

The problem with living in exile is the meaning of the word. If you’re in exile, you mean you are forever looking backwards, in geography as well as in time. You’re not only out of place; you’re out of time — yesterday’s man.

Ovid, the Roman poet who was sent into exile from Rome by Caesar Augustus, for offences neither Augustus nor Ovid revealed, never stopped looking back to Rome. His exile, as Ovid described it, was “a barbarous coast, inured to rapine/stalked ever by bloodshed, murder, war.” In such a place or state, he said, “writing a poem you can read to no one is like dancing in the dark.”

The word itself, exsilium in Roman law, was the sentence of loss of citizenship as an alternative to loss of life, capital punishment. It meant being compelled to live outside Rome at a location decided by the emperor. The penalty took several degrees of isolation and severity. In Ovid’s case, he was ordered by Augustus to be shipped to the northeastern limit of the Roman empire,  the Black Sea town called Tomis; it is now Constanta, Romania. Ovid’s last books, Tristia (“Sorrows”) and Epistulae ex Ponto (“Black Sea Letters”), were written from this exile, which began when he was 50 years old, in 8 AD, and ended when he died in Tomis nine years year later, in 17 AD.  

In my case I’ve been driven into exile more than once. The current one is lasting the longest. This is the one from Moscow, which began with my expulsion by the Foreign Ministry on September 28, 2010.  The official sentence is Article 27(1) of the law No. 114-FZ — “necessary for the purposes of defence capability or security of the state, or public order, or protection of health of the population.” The reason, a foreign ministry official told an immigration service official when they didn’t know they were being overheard, was: “Helmer writes bad things about Russia.”

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IN THE FOG OF WAR THERE’S THE GUTERRES CERTAINTY AND THE CADIEU CERTAINTY – GORILLA RADIO SEES THROUGH THE COVER-UP



By John Helmer, Moscow
  @bears_with

Antonio Guterres is the Secretary-General of the United Nations (UN), who attempted last month  to arrange the escape from Russian capture of Ukrainian soldiers and NATO commanders,  knowing they had committed war crimes. He was asked to explain; he refuses.   

Trevor Cadieu is a Canadian lieutenant-general who was appointed the chief of staff and head of the Canadian Armed Forces last August; was stopped in September; retired from the Army this past April, and went to the Ukraine, where he is in hiding. From whom he is hiding – Canadians or Russians – where he is hiding, and what he will say to explain are questions Cadieu isn’t answering, yet.

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DID UN SECRETARY-GENERAL GUTERRES COMMIT A WAR CRIME AT AZOVSTAL?

By John Helmer, Moscow
  @bears_with

Antonio Guterres, the United Nations Secretary-General, is refusing this week to answer questions on the role he played in the recent attempt by US, British, Canadian and other foreign combatants to escape the bunkers under the Azovstal plant, using the human shield of civilians trying to evacuate.

In Guterres’s meeting with President Vladimir Putin at the Kremlin on April 26 (lead image), Putin warned Guterres he had been “misled” in his efforts. “The simplest thing”, Putin told Guterres in the recorded part of their meeting, “for military personnel or members of the nationalist battalions is to release the civilians. It is a crime to keep civilians, if there are any there, as human shields.”  

This war crime has been recognized since 1977 by the UN in Protocol 1 of the Geneva Convention.  In US law for US soldiers and state officials, planning to employ or actually using human shields is a war crime to be prosecuted under 10 US Code Section 950t.  

Instead, Guterres ignored the Kremlin warning and the war crime law, and authorized UN officials, together with Red Cross officials,  to conceal what Guterres himself knew of the foreign military group trying to escape. Overnight from New York, Guterres has refused to say what he knew of the military escape operation, and what he had done to distinguish, or conceal the differences between the civilians and combatants in the evacuation plan over the weekend of April 30-May 1.May.

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THE LAST DITCH IS POLAND – RUSSIA’S PHASE-3 PLAN FOR WESTERN UKRAINE



By Vlad Shlepchenko, introduced & translated by John Helmer, Moscow
  @bears_with

The more western politicians announce pledges of fresh weapons for the Ukraine, the more Russian military analysts explain what options their official sources are considering to destroy the arms before they reach the eastern front, and to neutralize Poland’s role as the NATO  hub for resupply and reinforcement of the last-ditch holdout of western Ukraine.

“I would like to note,” Defense Minister Sergei Shoigu, repeated yesterday, “that any transport of the North Atlantic Alliance that arrived on the territory of the country with weapons or material means for the needs of the Ukrainian armed forces is considered by us as a legitimate target for destruction”.  He means the Ukraine border is the red line.

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THE MATLIN PLOT, THE BROWDER PLOT AND THE NEW YORK TIMES PLOT



By Lucy Komisar,  New York*
  @bears_with

Here’s a story the New York Times has just missed.

US politicians and media pundits are promoting the targeting of “enablers” of Russian oligarchs who stash their money in offshore accounts. A Times article of March 11   highlighted Michael Matlin, CEO of Concord Management as such an “enabler.” But the newspaper missed serious corruption Matlin was involved in. Maybe that’s because Matlin cheated Russia, and also because the Matlin story exposes the William Browder/Sergei Magnitsky hoax aimed at Russia.

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YELLOW COAL, THE FUEL MADE OUT OF RACE HATRED — MAY DAY MESSAGE FROM SIGIZMUND KRZHIZHANOVSKY, 1939



By John Helmer, Moscow
  @bears_with

In 1939 a little known writer in Moscow named Sigizmund Khrzhizhanovsky published his idea that the Americans, then the Germans would convert human hatred into a new source of energy powering everything which had been dependent until then on coal, gas, and oil.

Called yellow coal, this invention originated with Professor Leker at Harvard University. It was applied, first to running municipal trams, then to army weapons, and finally to cheap electrification of everything from domestic homes and office buildings to factory production lines. In Russian leker means a quack doctor.

The Harvard professor’s idea was to concentrate the neuro-muscular energy people produce when they hate each other.  Generated as bile (yellow), accumulated and concentrated into kinetic spite in machines called myeloabsorberators, Krzhizhanovsky called this globalization process the bilification of society.

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IS CAESARISM THE PROBLEM, THE SOLUTION, A FANCY DRESS COSTUME, OR A PROPAGANDA CARTOON?



By John Helmer, Moscow
  @bears_with

In imperial history there is nothing new in cases of dementia in rulers attracting homicidal psychopaths to replace them.  It’s as natural as honey attracts bees.

When US President Woodrow Wilson was incapacitated by a stroke on October 19, 1919, he was partially paralysed and blinded, and was no longer able to feed himself, sign his name, or speak normally; he was not demented.

While his wife and the Navy officer  who was his personal physician concealed his condition, there is no evidence that either Edith Wilson or Admiral Cary Grayson were themselves clinical cases of disability, delusion,  or derangement. They were simply liars driven by the ambition to hold on to the power of the president’s office and deceive everyone who got in their way.  

The White House is always full of people like that. The 25th Amendment to the US Constitution is meant to put a damper on their homicidal tendencies.

What is unusual, probably exceptional in the current case of President Joseph Biden, not to mention the history of the United States,  is the extent of the president’s personal incapacitation; combined with the clinical evidence of psychopathology in his Secretary of State Antony Blinken;  and the delusional condition of the rivals to replace Biden, including Donald Trump and Hillary Clinton.

Like Rome during the first century AD, Washington is now in the ailing emperor-homicidal legionary phase.  But give it another century or two, and the madness, bloodshed, and lies of the characters of the moment won’t matter quite as much as their images on display in the museums of their successors craving legitimacy, or of successor powers celebrating their superiority.  

Exactly this has happened to the original Caesars, as a new book by Mary Beard, a Cambridge University professor of classics, explains. The biggest point of her book, she says, is “dynastic succession” – not only of the original Romans but of those modern rulers who acquired the Roman portraits in marble and later copies in paint, and the copies of those copies, with the idea of communicating “the idea of the direct transfer of power from ancient Romans to Franks and on to later German rulers.”

In the case she narrates of the most famous English owner of a series of the “Twelve Caesars”, King Charles I — instigator of the civil war of 1642-51 and the loser of both the war and his head – the display of his Caesars was intended to demonstrate the king’s self-serving “missing link” between his one-man rule and the ancient Romans who murdered their way to rule, and then apotheosized into immortal gods in what they hoped would be a natural death on a comfortable bed.

With the American and Russian successions due to take place in Washington and Moscow in two years’ time, Beard’s “Twelve Caesars, Images of Power from the Ancient World to the Modern”,  is just the ticket from now to then.

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RUSSIAN REPORTING ON THE SECRETS OF THE COMMAND BUNKER UNDERNEATH AZOVSTAL



By Margarita Menshikova, translated by John Helmer, Moscow
  @bears_with

On the day before Good Friday (Orthodox), Russian Defence Minister Sergei Shoigu reported at the Kremlin to President Vladimir Putin that at Mariupol,  inside the Azovstal steel works, about two thousand troops remain underground, including foreigners. Putin issued the following order: “There is no need to penetrate these catacombs and crawl under these industrial facilities. Seal off the industrial zone completely.”  

Four days earlier on April 17, the Defence Ministry spokesman Major-General Igor Konashenkov told the press that “up to four hundred foreign mercenaries were trapped [at Azovstal]… Most of them are citizens of European countries, as well as Canada. We have already reported earlier that radio conversations between militants in Mariupol are conducted in six foreign languages”  

Today, an unusually detailed report by the Moscow internet broadcaster Tsargrad was published to signal the strategic significance and political value of the NATO officers in their command bunker under Azovstal.

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