THE BAD TASTE OF SWEET AND SAUER – MAKING MIKHAIL PROKHOROV LOOK INNOCENT VICTIM OF KREMLIN COPS

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By John Helmer, Moscow

Since he first came to Russia as a Dutch journalist with leftwing claims, money, unlike butter, has always melted in Derk Sauer’s mouth (lead image). Until last week there’s been a quite lot of it — more of it for Sauer to keep than for the string of loss-making publications he has run in Moscow.

Sauer has been identified as a target in an investigation by state prosecutors of fraud at the RBC media group in Moscow. Mikhail Prokhorov owns the control stake in the group; Sauer has been his employee to supervise the editorial and financial sides of the business. A police raid on the offices of Onexim, the Prokhorov holding where Sauer is a vice-president, took place on April 14. Charges against RBC were announced by the Ministry of Interior on April 29. The editors of RBC were sacked last Friday, May 13. More criminal charges have been foreshadowed; Onexim, Sauer, and RBC executives deny them categorically.

A source close to Prokhorov says: “Mikhail doesn’t want to tell anybody, but the people close to him believe that the main reason is [President Vladimir] Putin took personal offence when RBC published a number of articles on the younger daughter Ekaterina and her husband’s [Kirill Shamalov] business, when Putin refused to approve or support one of Mikhail’s projects.”
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OLEG DERIPASKA TRIES FORCING RUSSIAN BEER OUT OF LEONID MIKHELSON’S, KIRILL SHAMALOV’S, AND GENNADY TIMCHENKO’S BOTTLE INTO RUSAL ‘S CAN

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By John Helmer, Moscow

Oleg Deripaska has launched an attack on Leonid Mikhelson, GennadyTimchenko and Kirill Shamalov in an oligarch showdown which President Vladimir Putin must decide, because Prime Minister Dmitry Medvedev cannot. Not since 2008, when Deripaska appealed to Putin for support of his attempt to take Norilsk Nickel away from Vladimir Potanin, has there been a multimillion dollar contest like this, inside the Kremlin wall. Deripaska’s move also comes after two years of attempts by the US Government to force regime change in Moscow by attacking Putin, his family and his “cronies”.
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HANDS UP, PANTS DOWN! THE RAIDER RAIDED AS TATNEFT LAUNCHES STEALTH ATTACK ON IGOR KOLOMOISKY AND GENNADY BOGOLYUBOV

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By John Helmer, Moscow

The Russian oil company Tatneft has launched a successful surprise attack in the UK High Court on the personal assets of Igor Kolomoisky (lead, left) and Gennady Bogolyubov (right). It is claiming $334 million in payment for crude oil Tatneft delivered in 2008 to a Ukrainian refinery which Tatneft controlled at the time. The two Ukrainian oligarchs subsequently took over the refinery with almost as much stealth as Tatneft’s retaliation in London.

The details of the case are being kept secret by Tatneft and the London lawyers for all sides. The case became public at a High Court hearing late last week when the court sustained a freeze order against Kolomoisky’s and Bogolyubov’s worldwide assets. This had been imposed on March 22, catching the two men unprepared. Kolomoisky lives in Geneva on a temporary residency permit; Bogolyubov lives in London. The High Court order limits ATM withdrawals for their personal expenses and transfers from their bank accounts to £5,000 per week.
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IN THE TAKEOVER OF UKRAINE GAS PRODUCER JKX , IGOR KOLOMOISKY HAS A NEW FRIEND IN MOSCOW

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By John Helmer, Moscow

The takeover of London-listed JKX Oil and Gas Plc, which was completed last week with a purge of the board and senior management, is an operation for the benefit of Igor Kolomoisky (lead image, right) and Gennady Bogolyubov, the Ukrainian oligarchs, according to sources in Kiev, Moscow, and London. Proxima Capital Group, a Moscow-based investment firm which won a vote of JKX shareholders on January 28 with 19.97% of the shares and took over leadership of the company, is led by Vladimir Tatarchuk (left). Proxima has announced it has a “fresh perspective” towards Kolomoisky and Bogolyubov, but Tatarchuk won’t say what that means. The sources claim he means a deal with Kolomoisky and Bogolyubov.
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PUTIN’S SUPPER FOR THE OLIGARCHS – WHO’S IN THE FAMILY, WHO’S OUT?

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By John Helmer, Moscow

At the very beginning of his presidency, in March 2000, Vladimir Putin said the state – he meant himself – should be “equidistant” from the oligarchs. He also promised “compliance with [market] rules, without offering any advantages or privileges or preferences to anyone”. The president, Putin added, “should stand above this influence and not pile up all the interests only in favor of the big companies and monopolies. We should not allow this.”
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LEONID LEBEDEV LOSES MOST OF HIS $2 BILLION CLAIMS IN NEW YORK COURT

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By John Helmer, Moscow

Leonid Lebedev (lead image), the former Russian senator and energy trader, has lost fraud and deceit claims against Len Blavatnik and Victor Vekselberg in a New York Supreme Court ruling. After considering the case for eight months, state judge Salliann Scarpulla has also rejected Blavatnik’s and Vekselberg’s application to dismiss Lebedev’s entire lawsuit. This leaves one question to be decided next year — Lebedev’s claim of breach of a contract from 2001, which remained unsigned at the time; and which depends, according to Lebedev, on a conversation during a walk in New York’s Central Park.

The US judge has also ruled to allow Blavatnik and Vekselberg to continue their litigation in a London arbitration court, and the opportunity to file elsewhere. In London Blavatnik and Vekselberg say they paid Lebedev the $600 million he asked for and received through Irish and Cypriot front companies he is claiming didn’t pass on the money to him for more than a decade.
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HOW IMF AND WORLD BANK REPAIR THE UKRAINIAN BANKING SYSTEM — KONSTANTIN ZHEVAGO LIQUIDATED; IGOR KOLOMOISKY, GENNADY BOGOLYUBOV, VICTOR PINCHUK, VASILY KHMELNITSKY ENRICHED

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By John Helmer, Moscow

The International Monetary Fund has decided to delay fresh loan payments of $3.4 billion to Ukraine. In the meantime the World Bank has given the Deposit Guarantee Fund in Kiev $500 million to keep the leading Ukrainian banks solvent. The two international agencies have also agreed to the seizure of $174 million in funds held in a Kiev bank by the London-listed iron-ore miner, Ferrexpo. The state raid on Ferrexpo’s corporate account in Finance & Credit Bank, one of the top-10 Ukrainian banks in asset value, is the first cash confiscation from a Ukrainian oligarch for the benefit of the Ukrainian reform programme.

According to sources close to Konstantin Zhevago, control shareholder and chief executive of Ferrexpo, and owner of Finance & Credit Bank, the money is being used to prop up the banks of rival oligarchs, Igor Kolomoisky and Gennady Bogolyubov, owners of Privat Bank; Vasily Khmelnitsky’s Khreschatyk Bank ; and Bank Dnepr Credit belonging to Victor Pinchuk.
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AFTER MERKEL FINISHES DESTROYING GERMANY, CAMERON EUROPE, AND AFTER OBAMA LOSES HIS WAR AGAINST THE KREMLIN, PUTIN WILL BE THE LAST MAN FLYING — THAT’S RUSSIA WITHOUT THE OLIGARCHS

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By John Helmer, Moscow

Since the US started the regime dominoes falling in Kiev in February 2014, the Polish regime has already toppled, and the French one is doomed – President Francois Hollande will be defeated by every one of the candidates now running to succeed him, including Marine Le Pen of the National Front. The British Prime Minister David Cameron can postpone his day of reckoning, but on the margins of Europe, not inside. The German Chancellor Angela Merkel has less time, fewer supporters. When Merkel topples, she will take the European Union (EU) into the shambles with her.

Russia, under constant attack by the US, Germany, France and Britain in the war to overthrow President Vladimir Putin, is now the only European country to show more, not less voter support for the incumbent leadership. It is also the only one with the capability to repel unwanted migration; convert its economy to domestically sustainable growth; and defeat its foreign enemies by force. The war to defend Europe from Russia is destroying Europe, fast.
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THE SELLING OF TRUST — HOW RUSSIA’S LONGEST AND LARGEST BANK FRAUD HAS BEEN COVERED UP AS IT PASSED FROM ONE OWNER TO ANOTHER, STARTING WITH MIKHAIL KHODORKOVSKY AND ENDING WITH RUBEN AGANBEGYAN, ALEXANDER MAMUT, ET AL.

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By John Helmer, Moscow

Investigations into the collapse of National Bank Trust, one of the largest Moscow banks to be rescued by the Central Bank of Russia and the Deposit Insurance Agency, have targeted a Cyprus-based management group as the operational headquarters of a scheme which, according to current calculations, may have diverted more than $3 billion in bank funds over a decade between 2004 and 2014.

If and when the grand total of losses is toted up, this may beat the Bank of Moscow as the largest Russian bank fraud in history. But there may never be a toting-up — not by the Central Bank of Russia (CBR) which has provided Rb129 billion in bailout financing, nor by the Deposit Insurance Agency (DIA), the state organ in charge of supervising the bailout. Otkritie, the top-5 Russian bank selected by the government to take over Trust and keep it running, has yet to agree with the government on the results of the investigations and attempts at recovery of the funds from offshore.

According to a well-informed Russian state banker, Trust Bank had a high-level krysha, and he’s still at work to assure that the state refinancing of the losses, and the takeover by Otkritie, continue without embarrassment to the Central Bank, without risk for the stakeholders, and without cost for the perpetrators and beneficiaries. With shareholders as well-known as Mikhail Khodorkovsky who started by calling the bank Menatep St. Petersburg; then transferred it to Ilya Yurov, who renamed it Trust; and the current shareholders who have taken over — Ruben Aganbegyan, Vadim Belyaev, Alexander Nessis, Vagit Alekperov, and Alexander Mamut — the duration of the protective cover over the bank’s offshore operations also makes a record by Russian standards.
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LEONID LEBEDEV LEFT HIGH AND DRY, AS CASHFLOW SINKS

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By John Helmer, Moscow

It’s midsummer. Time for the oligarchs, even the insolvent ones, to go aboard their yachts, and set sail for the resorts of the Mediterranean. Oleg Deripaska’s Queen K is this week cruising in the eastern Aegean between the Greek islands and the Turkish coast. Andrei Melnichenko’s A is in the Gulf of St. Tropez, while Victor Pinchuk’s Oneness has made its way from Monaco to Sardinia. Suleiman Kerimov’s financial indisposition cost him his Ice, which is in Gibraltar flying someone else’s flag; his relief boat Air is currently at anchor at Cala di Volpe, on the east coast of Sardinia.

Last week Leonid Lebedev’s Synergy was sailing off the Tuscan coast. But Lebedev (lead image, left) himself is washed up – onshore, that is.
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TRYING TO FOLLOW THE BEACH BOYS – MIKHAIL FRIDMAN AND ALEXEI REZNIKOVICH MEET GREGORY SHENKMAN FOR CALIFORNIA DREAMING, OR IS THIS WIPEOUT?

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By John Helmer, Moscow

Mikhail Fridman (lead image, centre) and Alexei Reznikovich (left) have a telephone problem, and it’s got a name, Gregory Shenkman (right).

It’s not that Vimpelcom, the global mobile telephone company they control through LetterOne (L1), Fridman’s offshore holding, isn’t a lucrative business. In market capitalization Vimpelcom is currently worth $8.7 billion; it dropped from $18 billion in 2010 to $3 billion at the start of this year, and is now up almost threefold. Volatility like this indicates the market sentiment that conventional telephone companies have hit the limit of their value. To grow richer, the telephone companies must do new things. And for the technology to do that, Fridman and Reznikovich admit they must find assets which Russia isn’t producing at present.

For Russian nationals, that’s easier said than done right now. For Vimpelcom to grow, LetterOne is thinking of buying the wherewithal in Silicon Valley, California. That may be the heartland of the technology Fridman and Reznikovich want. It’s also the belly of the beast, so far as the Kremlin and Russian security forces believe, because of the Ukraine sanctions campaign; NATO’s military reinforcements along Russia’s frontiers, and the US Government’s effort to force regime change in Moscow. Trading with the American enemy is an increasing concern at Vimpelcom, because the Kremlin insists; and because the US Government is preparing to strike at Vimpelcom for alleged bribery in pursuit of its international business. So what have Fridman and Reznikovich engaged Shenkman for?
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VLADIMIR POTANIN’S NEW AMOUR, OLEG DERIPASKA – WILL THE AFFAIR SURVIVE THE COLLAPSE OF RUSAL’S SHARE PRICE AND THE SECOND-QUARTER RESULTS?

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By John Helmer, Moscow

Vladimir Potanin (right), control shareholder of Norilsk Nickel, loves Oleg Deripaska (left), control shareholder of Russian Aluminium (Rusal).

Potanin made his inamorata official on Monday. He even quoted Vladimir Lenin’s version of withdrawing before ejaculation, announcing that with Deripaska it has been necessary to “disconnect before combining…Time has shown that it was necessary to plunge into some negative, and only then move on to the positive. However, all this is in the past. The situation in comparison with 2012 has changed dramatically. There is not just a good, but a very high level of trust…” They call each other by their first names, and by the intimate you (“по имени и на ты”).

Let noone imagine, therefore, that Potanin’s former wife, Natalia Potanina, who is suing in courts all over the world for half of Potanin’s wealth, including his 30% of Norilsk Nickel shareholding, is Deripaska’s agent in a hostile takeover scheme.
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WALKING ON WATER – OUSTED FROM THE RUSSIAN SENATE, LEONID LEBEDEV RISKS SINKING HIS BILLION-DOLLAR US LAWSUIT, AND MORE BESIDES

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By John Helmer, Moscow

Leonid Lebedev (lead image) has been ousted from the Federation Council, the Russian senate, after serving twelve years as a senator representing the Volga region of Chuvashia. This follows a Council investigation exposing earnings from offshore entities which Lebedev had failed to disclose in his official income and asset reports to the Council. Lebedev claims he has resigned his senate post voluntarily.

By exposing Lebedev’s money trail in Switzerland and Cyprus, the Russian investigation now threatens to unravel Lebedev’s year-long lawsuit in an American court for payments he claims he didn’t receive from Len Blavatnik and Victor Vekselberg, and which he claims are still owed by them. Blavatnik and Vekselberg have asked the New York State Supreme Court to reject Lebedev’s claim because he is asking to be paid a second time for a 15% shareholding in the TNK oil company Lebedev sold to them in 2003, when they incorporated the stake in the TNK-BP combination with British Petroleum. Lebedev is asking the New York court to award him a share of the proceeds of Blavatnik’s and Vekselberg’s sale of their share in TNK-BP to Rosneft in 2013, ten years after Lebedev had sold out. Lebedev’s court papers make several calculations of shareholding value from $200 million to $2 billion.

Blavatnik and Vekselberg accuse Lebedev of hiding the decade-old deal and concealing the $600 million they paid him through a chain of offshore entities registered in Ireland and Switzerland, and ending up in Cyprus. According to Lebedev’s lawyers in the public court file, at a court hearing on April 9 Judge Saliann Scarpulla agreed to decide shortly on dismissing Lebedev’s claim.
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ALEXEI MORDASHOV HAS GOT WOOD! THE OLIGARCH’S FULL FRONTAL TAKEOVER OF RUSSIA’S PLYWOOD BUSINESS

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By John Helmer, Moscow

In the seedier studios of California, when the director cries “We’ve got wood!” he means the male lead has an erection, and it’s his cue to start his business while the cameras roll at a pornographic scene. Russia’s plywood business isn’t as sexy, but it’s faster growing and bigger too. It’s also becoming a oligopoly for Alexei Mordashov, who is already the well-known oligarch of the Russian steel and mining sectors.

Mordashov (lead image) met President Vladimir Putin in January. He claims he got the president’s go-ahead to build a new wood-processing complex at the village of Suda, outside Cherepovets. Public opposition is fierce – so fierce that the Kremlin is concealing what exactly Putin and Mordashov said about the project at their meeting; how much state money will be given to Mordashov for the scheme; and what Putin intends to do next. Not since Putin took sides with the locals in Irkutsk region against Oleg Deripaska’s paper and pulp plant on the edge of Lake Baikal, has there been such a test of Russians, oligarchs, the President – and who has wood.
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VITALY MASHITSKY ON THE KALININGRAD FRONT – HIGH STAKES IN THE AMBER GAME

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By John Helmer, Moscow

The old saw about how to make a small fortune can be adapted in Vitaly Mashitsky’s case, but you must still start with a large fortune — he’ll take care of the rest.

In a surprise to the amber industry of Kaliningrad, where about 95% of the world’s supply of amber is located, Mashitsky was appointed chairman of the board of the Kaliningrad Amber Combine (KYaK) late last month. The appointment was made by the state holding Russian Technologies (Rostec), which took over the combine in 2013, after bankruptcy, maladministration and bad business modelling left the enterprise unable to pay its debts, invest in modern mining, manufacturing or marketing, keep its workers, or attract serious capital. Rostec is run by Sergei Chemezov, a lifelong friend of Mashitsky’s, who has been pitching himself in Kaliningrad as the powerful lobbyist the region needs in Moscow. With his backing, Mashitsky began meeting senior figures in Kaliningrad and in the amber industry in recent days.

This month Mashitsky has also launched a selfie campaign in the Moscow press, publicizing his arrival as the new tsar of amber, and promising to replace black marketeers with billions of roubles in stable investment and employment for Kaliningrad. An amber industry observer in Kaliningrad, who had never heard of Mashitsky before last month, is skeptical. “Exactly what will follow down the track is not clear yet. We are just witnesses to what is happening.”
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THE FOOTNOTE TO THE SMALL PRINT OF THE IMF LOAN – UKRAINE FAILS AGAIN, POLISH OLIGARCH JAN KULCZYK BEGS FOR KIEV BAILOUT

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By John Helmer, Moscow

What if the Ukrainian government resumes the war noone wants to pay for – not the US, the European Union, Poland, Canada, least of all Kiev?

Public statements by Ukrainian and international officials identify two payment deadlines for war, and for peace. The first falls on May 31, Natalie Jaresko, the US minister of Ukrainian Finance, has told the London Times, when $15.3 billion in sovereign bond debt must be written off “through lower interest rates, longer payment terms, and in some cases, a cut in the sum owed.” The second deadline falls a month later, at the end of June, when the International Monetary Fund (IMF) must decide whether the government in Kiev has met the conditions required for payment of $1.5 billion, the second instalment of the Extended Fund Facility (EFF) which commenced just six weeks ago. A default on May 31 will make inevitable a delay in IMF loan disbursement in June. The combination will halt the European Union promise to start a new €1.8 billion in Macro Financial Assistance (MFA).

Russian sources believe that unless Kiev starts a new military offensive in the Donbass within days, when cross-border Russian action can be blamed, creditor governments pressured into paying and bondholders into conceding losses, there won’t be enough cash later on to pay for troops, machines and ammunition.
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OLEG DERIPASKA PUFFS RUSAL SHARE VALUE FOR DEBT NEGOTIATION WITH SBERBANK, VTB – GERMAN GREF UNIMPRESSED, SHARE PRICE COLLAPSES

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By John Helmer, Moscow

Insiders at the Russian aluminium monopoly Rusal say that chief executive and control shareholder Oleg Deripaska has been miscalculating the effect of share price surges Rusal has enjoyed on the Hong Kong Stock Exchange in recent weeks. That’s because the share price gains have been quickly reversed – and because Rusal’s most important lender, state owned Sberbank, is unpersuaded that the value of the company is gaining.

Sources on the Hong Kong exchange acknowledge a case officer has been assigned to monitor share trading of Rusal, and that he has been aware of abnormal trade volumes on several days in February and March, along with seesawing in the price of the share. But the Exchange chief executive, Charles Li, is reluctant to confirm what the exchange has done to uncover what happened and enforce exchange trading rules. The exchange is also afraid of being accused of covering up irregular trading practice and inside information. According to Li’s spokesman, Scott Sapp, “HKEx does not comment on individual companies or its regulatory actions.” Sapp then asked not to be named.
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A GOOD NIGHT’S REST IN CLEVELAND, OHIO – IGOR KOLOMOISKY HAS BEEN SECRETLY INVESTING IN MIDWEST REAL ESTATE, AND IN KENTUCKY, TEXAS, FLORIDA TOO

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By John Helmer, Moscow

When Ukrainian warlords need a well-earned rest from fighting the civil war, there’s always Cleveland, under State Department protection, or Miami for the warm weather.

Igor Kolomoisky has accumulated more than a quarter of a billion dollars in US investments through a chain of front companies which stretch from several American states to Miami, Florida, to Cyprus, and to the Caribbean. He has also managed to keep his name out of the public record of the American transactions. But the money trail in some of his deals, and at least one of his partners, have come under scrutiny by US and state government agencies, and federal courts in several US states.

Kolomoisky himself, according to a Kiev source and a federal US court filing in December 2012, “has traveled to the United States over the past few years and should have no trouble obtaining a visa.” Kolomoisky has been in the US in recent days, reportedly on a restricted visa, in order to discuss his future and the future of his American assets with US Government officials. Public records reveal that the value of these assets has been falling sharply, and that some may be sold in debt default auctions unless Kolomoisky can persuade state and federal government agencies to provide subsidies, concessional utility rates, tax and other credits.

Sources in Cleveland, Ohio, where Kolomoisky has control over several downtown buildings and a hotel, report that his assets there have lost market value since he acquired them. “Out of state investors think they will make a ton of money,” one of the sources said. “they don’t. I don’t think [Kolomoisky] made any money [in Cleveland].”
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IGOR KOLOMOISKY’S SNOW JOB — CYPRUS MONEY-LAUNDERING UNIT RESPONDS TO UKRAINIAN REPORTS, KOLOMOISKY IN US NEGOTIATIONS

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By John Helmer, Moscow

The Cyprus Government’s unit for combating money-laundering will consider an investigation of Igor Kolomoisky if it is requested by the Ukrainian or US Governments, Eva Papakyriacou revealed on Tuesday. Papakyriacou is the head of the unit, whose acronym, following the Greek, is MOKAS.

She declined to say if there has been a request for investigation, either by a foreign government, or by the Cyprus government agencies responsible for Kolomoisky’s Cyprus passport, or the source of funds of his Privatbank group in Cyprus. “All the information possessed by MOKAS is confidential,” Papakyriakou said. “However, it is noted that the source of funds is checked by the Banks and the Supervisory Authority for Banks is the Central Bank.”
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RASH OR RASHER — OLEG DERIPASKA TRIES SELLING CHINESE INVESTORS A SLICE OF KUBAN AGRO

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By John Helmer, Moscow

Oleg Deripaska, control shareholder and chief executive of the Russian state aluminium monopoly Rusal, hasn’t exactly made a positive rate of return for Asian investors. In fact, share-buyers at the Hong Kong Stock Exchange are likely to conclude that he’s made a hash of every venture he’s tried to bring to that particular market.

Starting with Rusal, the first Russian corporate issue on the Hong Kong exchange, the share dropped 8% on its debut in January 2010, and the company has subsequently lost more than half its initial capitalization. Why then should Deripaska risk his reputation and asset value again with a fresh offer to Asian investors, particularly the Chinese? Answer: he has no reputation and little asset value left to lose.
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DANCING KOLOMOISKY FETCHES RECORD PRICE IN LONDON, SEATED KOLOMOISKY DISMISSED BY WASHINGTON

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By John Helmer, Moscow

A porcelain figurine (lead image, left) produced by the Popov Manufactory of Moscow sold in London on Wednesday for £2,700. The auction by MacDougalls revealed unusually strong demand from Russian collectors. They paid record prices for some figurines, including Tsar Nicholas I (right), from the Sipyagin Manufactory, who fetched £29,700. The pre-sale estimates for the dancing Kolomoisky and the tsar had been in the range of £2,000 to £3,000. Bidding interest in the tsar pushed him to a value almost ten times the estimate. According to Catherine MacDougall, co-director of the leading Russian art auction house, “it is the first mid-season sale outside the biannual Russian art week [in June]. We were very impressed by the result.”
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KOLOMOISKY, DISMISSED AS GOVERNOR OF DNIEPROPETROVSK, ISSUES NEW THREAT FOR THIS PRESS QUESTION — HAS HE LOST HIS SWISS RESIDENCE PERMIT?

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By John Helmer, Moscow

Igor Kolomoisky, the single largest beneficiary of international lending to Ukraine and until Tuesday night the most powerful figure in the country, has lost his residence permit for Switzerland, according to a reliable source in Geneva. Coming after the news of Kolomoisky’s armed and vocal clash in Kiev with Ukrainian President Petro Poroshenko and US Ambassador Geoffrey Pyatt, the Swiss action adds to Kolomoisky’s isolation.
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FALSHAK – BONHAMS LOSES ITS VALUE WHEN RUSSIAN ART AND OTHER ASSETS IT TRADES LOSE THEIRS

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By John Helmer, Moscow

Works of art are only reliable investment assets if the trade in them is tested and transparent enough to prove they aren’t stolen goods, forgeries, or what is known in Russian as falshak (фальшак), a term originally applied to counterfeit coins.

Naturally, as the art trade generates higher and higher prices for individual works, the lure of expensive objects becomes irresistible for those with cash on the run. That is, if it can be laundered, er exchanged, through international auction houses like Christie’s, Sotheby’s, and Bonhams – institutions less regulated, and apparently more reputable than banks. Just as these house names claim to be setting records for auction prices for their goods, the margin of profit to be gained from fraud and forgery attracts almost as many well-heeled crooks for sellers as for buyers.

The relatively short time in which Russian art has been traded in international markets has meant that the swiftly earned riches of the Russian oligarchs have been bidding up auction house prices for objects with dim histories, uneducated demand, and short or non-existent records of ownership. For a London auction house like Bonhams, the record-setting value of Russian art it has been able to find for sale has turned into an opportunity for exchanging the auction house itself for cash. If the privately-owned Bonhams, whose turnover is a tenth of the two bigger houses, were to trade at the price to earnings ratio (P/E) of Sotheby’s, it might fetch over £530 million. But prices like that don’t fetch if there is slightest suspicion of falshak.
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UMBRELLA STRATEGY KEEPS RUSAL AFLOAT, FAILS TO BREACH HK$6 THRESHOLD — OLEG DERIPASKA GAINS FROM UKRAINE WAR, SANCTIONS, AND RUSSIAN ECONOMIC CRISIS

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By John Helmer, Moscow

Oleg Deripaska (left), chief executive of the Russian state aluminium monopoly Rusal, makes a practice of thriving when everyone else is suffering. That’s because the Russian government and the state banks cast a more protective cover over heavy debtors when times are bad than when times are better.

Rusal owes $9 billion, a sum that has been greater than its stock market capitalization for much of the past year. But since January 1 Rusal’s share price has been doing so well, the company has issued notices to the Hong Kong Stock Exchange claiming it is innocent of any hanky panky. If Deripaska isn’t protesting too much, what then is driving Rusal’s apparent recovery so far this year?
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VICTOR PINCHUK FACES RUIN – DNIEPROPETROVSK WORKERS IN MASSIVE LAYOFFS, AS PINCHUK GIVES $40,000 AWAY MONTHLY IN WASHINGTON; US AND EU REFUSE LIFEBUOY

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By John Helmer, Moscow

Victor Pinchuk, the Ukrainian oligarch who took sides for the European Union (EU) against Russia, is running out of money, company officials admitted last week in a confidential briefing.

Pinchuk has been forced to provide his company with $20 million in emergency cash to stave off insolvency, but bondholders and banks owed more than $1 billion have not been paid. Although company officials admit that Interpipe, their pipemaking business in Dniepropetrovsk, has not been attacked directly by the fighting in Donbass, they say they are now cut off from supplies of scrap steel for smelters, electricity, and coal from Lugansk and Donetsk. As a result, Pinchuk is now planning to lay off at least 3,000 workers – one-fifth of his Dniepropetrovsk workforce. A brewing worker rebellion and bankruptcy action by unpaid bondholders are part of what one Interipe executive calls Pinchuk’s “fundamental risk”.

The timing of the disclosures could not be worse for Pinchuk, or for Dniepropetrovsk — until now the bastion of Igor Kolomoisky, Pinchuk’s commercial rival and governor of the region. Pinchuk was the target in the US last week as US newspapers opened investigations into the flow of money Pinchuk has directed to the Clinton Foundation, and to lobbying for commercial and political favours from Hillary Clinton and State Department officials directing the Kiev administration.

According to Interpipe sources, neither the EU nor the US is buying enough Pinchuk pipes to offset the shutout in the Russian market, and the collapse of demand in Azerbaijan and Kazakhstan. The drop in the global oil price has triggered sharp cutbacks in oilfield spending and pipe demand in the US and the Middle East. The American shale oil boom has proved no good for Pinchuk too, because shale oil drilling requires premium pipes which Interpipe doesn’t manufacture.
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THE HUNT FOR BURISMA – WHEN THE PACK OF HOUNDS IS MISSING ITS MASTER, THE FOX ESCAPES

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By John Helmer, Moscow

Burisma, an influential Ukrainian oil and gas company with disputed ownership involving Nikolai Zlochevsky and Igor Kolomoisky, is under criminal investigation in the UK. But you wouldn’t know it from a release issued by the company on January 22. According to Burisma, “Britain closed criminal proceedings against the assets of Nikolay Zlochevskyi [sic]. The case was closed after the Court analyzed the period from 2002 to December 2014 for alleged illegality of the source of funds of companies the ultimate beneficiary of which was Nikolay Zlochevskyi [sic] and ‘found no grounds for further consideration of the case’, said the Central Criminal Court of England and Wales decision.”

A statement issued yesterday by the Serious Fraud Office (SFO) in London, which initiated the criminal proceedings against Zlochevsky in April of 2014, said its investigation of Zlochevsky and Burisma is “ongoing”. The SFO regrets, it added, that unexplained changes of position by the state prosecutor in Kiev led to last month’s court judgement. “We are disappointed,” said the SFO spokesman, “we were not provided with the evidence by authorities in the Ukraine necessary to keep this restraint order in place. Our criminal investigation continues.”

No trace of Burisma’s “no grounds” quotation from the court judgement can be found.
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THE ILLEGALITY OF SANCTIONS – UK HIGH COURT SENDS ROSNEFT CLAIM TO EUROPEAN COURT

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By John Helmer, Moscow

The UK High Court has rejected a lawsuit by Rosneft challenging the legality of sanctions against its oilfield operations and international financing.

The court has ruled that for testing the legality of the sanctions British law and British courts are subordinate to the European Union, and that Rosneft must try its case in the European Court of Justice (CJEU) in Luxembourg. The ruling, which was issued on Monday, contradicts the judgement of the Supreme Court, the UK’s highest court, which decided last March that sanctions against the Iranian bank, Bank Mellat, had violated British law. The new judgement makes no reference to this or any other case decided recently in London on the illegality of UK Government sanctions.

The ruling by Lord Justice Sir Jack Beatson (lead image) and Justice Sir Nicholas Green also flies in the face of the British Government’s promise to preserve the primacy of the British courts over the EU judiciary, and keep London’s market dominance for global litigation. Acknowledging that the issue will be tested in the parliamentary election due in three months’ time, embattled Prime Minister David Cameron has claimed: “We want to make the Supreme Court supreme”. Cameron has promised to introduce a new Act of Parliament to establish the superior status in law of UK courts over the European Court.” That hasn’t happened.
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US JUDGE PROTECTS PUTIN DIAMOND MINE — LUKOIL ESCAPES US COURT TEST OF 17-YEAR MINE FRAUD

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By John Helmer, Moscow

A federal US judge has dismissed a 17-year long attempt by Archangel Diamond Corporation (ADC) to recover damages for the alleged theft of its stake in a multibillion-dollar Russian diamond mine by two Russian oligarchs, Alisher Usmanov and Vagit Alekperov (lead image, left), and Alekperov’s company, LUKoil. The legal action protects LUKoil, which has been under US Government sanctions since September 12, from liabilities — if the ADC lawsuit were to succeed — of almost $5 billion.
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ST. HELENA ON EAST 75TH STREET — ABRAMOVICH MAKES A MOVE TO NEW YORK CITY

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By John Helmer, Moscow

Roman Abramovich has bought two houses, and is negotiating for at least one more, on East 75th Street in New York for about $70 million. The New York papers are reporting that Abramovich is planning to live there with his family because his wife prefers it for her work. Abramovich’s spokesman insisted yesterday that Abramovich’s “main residence is Moscow”.

So why is the well-known crony of President Vladimir Putin buying American assets which may be sequestered, the transactions reversed, his funds frozen or lost, by US Treasury sanctions and by the US Government’s campaign to oust Putin from office? Has Abramovich been offered a guarantee of asset protection from the Obama Administration if he is buying for the one individual the US Government wants to put in exile there – Putin himself?
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SHORTING BRITISH, AMERICAN AND BALTIC INTELLIGENCE – GOING LONG ON VLADIMIR PUTIN



By John Helmer, Moscow
  @bears_with

Philip Short, a journalist from the BBC, has published a new book which claims to be a biography of Vladimir Putin. It isn’t.

What it is instead is a biography of one hundred and twenty-three westerners — what they claim to know about Russia’s leader  and what for commercial motive, reason of state, or vanity they have told Short in interviews he conducted for his book. They include spies he names without their cover – John Scarlett, Richard Dearlove, Richard Bridge,  Kate Horner, Martin Nicholson, and Pablo Miller from the Secret Intelligence Service (MI6); Hans-Georg Wieck and August Hanning of the Bundesnachrichtendienst (BND); Jean-Francois Clair, Raymond Nart,  and Yves Bonnet  of the Direction de la Surveillance du Territoire (DST); Seppo Tiitinen of the Finnish Security Intelligence Service (SUPO); Mark Kelton, Michael Morell, Peter Clement, Michael Sulick, Michael Morgan, Paul Kolbe, and William Green of the Central Intelligence Agency (CIA); Juri Pihl, head of the Estonian Internal Security Service, and Eerik-Niiles Kross, chief of Estonian intelligence; and several dozen other ambassadors, consuls, advisers, headquarters staff, journalists, and think-tankers.

Not one of the spies was operational in Moscow for the past twenty-one years of Putin’s terms in office.

There is a flash of originality in this book. Not a single source on which Catherine Belton’s book  on Putin relies has been interviewed by Short; in his references to Belton’s claims Short reports they “appear to be untrue”. He reaches the same conclusion about two other books about Putin, Karen Dawisha’s   and Masha Gessen’s.    “Neither book pretends to be a balanced account”, Short says.  Dawisha’s book “is marred by numerous errors of fact”. “All three”, Short warns, “set out the case for the prosecution, and like all prosecutors, the authors select their evidence accordingly.” 

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HOW THE WAR IS BEING WON ON THE BEER FRONT



By John Helmer, Moscow
  @bears_with

There is a right way and a wrong way to understand how the war against the West is being fought on the Russian home front.

The wrong way is to read the Anglo-American media, their stay-behind correspondents in Moscow, and their aggregators in Washington, DC.  

The right way is to take a Russian beer. I mean, take the Russian beer business as an illustration of how the fightback is being fought – and how effectively.

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FIGHTING WORDS – WHAT THE POLES SAY WHEN THEY DARE DO NOTHING

By John Helmer, Moscow
  @bears_with

The Poles have always had a serious problem with their neighbours.  

They have the Germans on their western flank, the Russians on their eastern flank, and inside their borders there used to be the Jews, but now there are the Ukrainians. In September 1939 there were about 3.3 million Polish Jews.    Since February 24 of this year, the Ukrainians in Poland have come to the same number.   

The war which the Polish government and military have been fighting against Russia is proving to be almost worthless politically to Law and Justice (PiS), the ruling party in Warsaw; and also to the Civic Platform (PO) and its allies, the principal opposition coalition (KO).  The PiS was 15 percentage points ahead of the KO in the voter polls a year ago, 35% to 20%; the margin between them now is 11 points, 38% to 27%.  The gains for each are close to the margin for statistical error.

Economically, the war is costing much more in public outlays for the refugees than the value of US and NATO arms flows and related war income. By the time Warsaw pays for its new US weapons, it will owe more than when the war started; and there is still no relief from the European Union funding freeze and penalties.   

What’s to be done, the Poles ask themselves – and who’s to blame when they realise the answer is something between not much and nothing.

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MUTINY IN THE CANADIAN GENERAL STAFF – HOW POLITICAL AMBITION & UKRAINE-RUSSIA WAR AIMS ARE BEING COVERED UP IN OTTAWA



By John Helmer, Moscow
  @bears_with

When it comes to bulldogs fighting under a rug Winston Churchill thought they were Russians. Little did he know about Canadians in Ottawa.

The chief dogs in this fight are Trevor Cadieu and Chrystia Freeland (lead image, right).  Cadieu is a lieutenant general who specialises in planning armoured operations against the Russian army in Europe; Freeland is the deputy prime minister, scion of Galicia in western Ukraine,  and candidate prime minister to replace Justin Trudeau, if she can.

As the Canadian politician most directly connected to the Ukraine by family and property, and the most active advocate of war against Russia, Freeland has promoted Canadian military strategy and plans to wage that war on Ukrainian territory and across the Ukrainian borders for many years.   

In Ottawa also, Cadieu has been director of war plans since mid-2019.  No public record is known of his visits to the Ukraine in the following two years. His appointment as chief of Canada’s defence staff was announced in August 2021, then withdrawn in September following the start of an official investigation of sexual assault charges dating from his military cadet days. When the  investigation ended in an official indictment, Cadieu resigned. By April he was in the Ukraine again, working directly on coordinating the new supplies of tanks, armoured vehicles, howitzers,  and other artillery from NATO member states to the Ukraine.

Speaking through an Ottawa defence reporter named David Pugliese, Cadieu declared his innocence of the criminal charges and promised to return from the Ukraine to answer them. He then disappeared as the Russian forces intensified their targeting of Ukrainian and NATO general staff as they prepared operations to save Odessa in the southeast, and Lvov in the west.   

On Friday Pugliese reported Cadieu had surrendered to Canadian police and been released to appear in a local court in August. In the meantime Pugliese has reported an active online debate between supporters and critics of the sexual misconduct charges; these include a comment in support of Cadieu from retired Brigadier-General James Cox claiming the charges against him amount to “sedition to undermine national leadership;”  by that he meant mutiny by the politicians against the generals.

As deputy prime minister with supervision over most government ministers and war plans for the Ukraine, Freeland has claimed to have known nothing of the sexual misconduct which was identified a year ago against General Jonathan Vance, chief of the defence staff between 2015 and 2021. At the time Freeland declared: “No woman serving Canada should be sexually harassed while doing that, and I’m happy right now today to apologize to any woman who was sexually harassed while serving her country;”   by that she meant to condemn no one by name of anything.

Freeland is missing from the list of high officials contacted by former judge Louise Arbour  for her investigation of sexual violence in the Canadian military which began in May 2021 and concluded with the release of her 420-page report last month.    Arbour is known in Europe as the NATO prosecutor of Yugoslav and Serbian President Slobodan Milosevic.

Arbour concluded her report on the Canadian Armed Forces (CAF): “Members of Indigenous and black communities, and other visible minorities and equity-seeking groups, have been largely absent, clearly not welcome. For years, women were simply shut out. When finally allowed to serve, women were made to feel they did not belong. They were denied opportunities to compete fairly and to thrive. They were harassed, humiliated, abused and assaulted, and, appallingly, many continue to be targeted today… One of the dangers of the model under which the CAF continues to operate is the high likelihood that some of its members are more at risk of harm, on a day to day basis, from their comrades than from the enemy.” By enemy, Arbour  meant what Cadieu and Freeland mean.  

There has been no disclosure, no indictment, no apology for the Canadian military role in the Ukraine, training and arming Ukrainians committed to reviving Nazi doctrine from World War II.  Nor for the war crimes now alleged by eastern Ukrainians  to have been committed by western Ukrainians during the civil war which began in 2014. According to Arbour, “the very success of CAF operations, which I am not in a position to assess, reinforces its view that it is unique, and that CAF can do everything without the assistance of outsiders, as it always has.” By not to assess, Arbour meant not to doubt nor criticize.  

A Canadian with NATO warfighting experience comments: “The contradiction here is that the officer corps, heavily committed to the anti-Russia track that cuts across Canadian party lines, is heavily politicized and infected by the neo-Confederate faction in the US. They don’t appreciate what they see as [Prime Minister Justin] Trudeau’s ‘communism’. They believe the charges against Cadieu are an expression of it.”

“The truth, that no one, including Pugliese and other reporters will admit, is that the Canadian military, not to mention large swathes of law enforcement, is not reliable in terms of defending the Canadian state if the ruling faction pursues policies contrary to the officers’ wishes.”

There is no mutiny, at least not against the war against Russia, responds a veteran Canadian politician. “I have seen no indication that senior officers in the Canadian military oppose Canada’s hyper-aggressive approach to the Ukraine war. My impression from day one has been that Canada’s military is as belligerent toward Russia as any in NATO.”

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LITHUANIA’S STEP TOO FAR — BLOCKADE OF KALININGRAD DRAWS NO SUPPORT FROM US, UK, EU, NATO, AS RUSSIA PREPARES “PRACTICAL STEPS”, “NO DIPLOMACY”



By John Helmer, Moscow
  @bears_with

The action the Lithuanian government implemented over the weekend to stop Russian trains carrying sanctioned cargos into Kaliningrad is regarded in Moscow as a long anticipated move, prompted among Lithuanian officials by the British government. The initial Lithuanian embargo action has been followed by a second one this week extending the blockade to trucks and road transport.   Neither action has been publicly announced by the Lithuanian government.

The first news came from Anton Alikhanov, the governor of the Russian oblast of Kaliningrad, following a  notice sent to him by Lithuanian officials. That notice has not been published.

Lithuanian president Gitanas Nauseda (lead image) has said nothing.  

Lithuanian Prime Minister  Ingrida Simonyte announced through the British Broadcasting Corporation that the blockade was not a blockade because only some cargoes were halted, and because “Lithuania is complying with the sanctions imposed by the European Union on Russia for its aggression and war against Ukraine ” . She also told the British state radio “it was important not to overreact”.  

She tweeted: “Any talk of a blockade of Kaliningrad is a lie. Lithuania is complying with the sanctions imposed by the EU on Russia for its aggression and war against Ukraine.  The sanctions were agreed by all the EU member states on March 15…. Passenger transit is also taking place, under a special agreement by the EU, RU, & LT. Steel and ferrous metal products account for only around 1% of the total rail freight to Kaliningrad via LT.”  

In the three days which have followed the Lithuanian action, the US and British Governments, the European Union (EU),  and the North Atlantic Treaty Organization (NATO) have not supported the Lithuanian blockade.

The Russian Security Council met on Wednesday morning, but issued no statement on Lithuania.  The Secretary of the Council, Nikolai Patrushev, who was in Kaliningrad on Tuesday, had announced there that the “consequences will have a serious negative impact on the population of Lithuania.”

Yesterday, at the same time as President Vladimir Putin was chairing the Security Council meeting, the Russian Foreign Ministry announced it is delaying “concrete measures” in reaction:  “The measures will not be diplomatic, but practical, they are now being worked out in an interdepartmental format, We are not talking about this not because we are hiding something, but because the process of their coordination and elaboration is underway. I would like to emphasize once again (the third time for today’s briefing): we have told the European Union and Lithuania about the need to change the steps they have taken. Perhaps something from that side will be changed, and, accordingly, our reaction will be different.”

Here is a compilation of the official documents.

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GERMAN NEUTRALITY WAS MORE IMPORTANT THAN NATO EXPANSION – A NEW HISTORY BOOK EXPLAINS WHY GORBACHEV GAVE IT AWAY FOR NOTHING

By John Helmer, Moscow
  @bears_with

In the rest of the world it is known as the cultural cringe. In Russia the wish to be loved by Americans is known as liberal reform.

In the very first paragraph of a new book called “Collapse: the Fall of the Soviet Union”, the author, Vladislav Zubok – the name in Russian means a small tooth — reveals that on the morning of August 19, 1991, when the first coup was attempted against Mikhail Gorbachev, then President of the Soviet Union, Zubok was flying to the US by arrangement with Strobe Talbott,   Moscow correspondent for Time and soon to be the Clinton Administration’s principal Russia expert. At the time Zubok describes himself as a “Moscow-based academic intellectual”. By this, he means he was no simple worker with a Moscow university degree. In Soviet class terms, he insists the reader recognise him to be an “intellectual”. That then was upper class, and Zubok wants the reader to know the difference between the Russian upper and lower classes —  immediately, on the nineteenth line of his very first page.

Zubok also wants the reader to know he had been hired with money from “the prestigious Amherst College in Massachusetts”. What exactly was prestigious about Amherst, or Massachusetts for that matter — and to whom? And why does Zubok think that in a history of Russian politics between 1983 and 1991, such a remote place, with such an adjectival tag, was worth the mention?

The answer, like the other revelations of the first paragraph, reveals what this book turns out to be. It’s an exercise in American-style reconstruction of what a small group of Russians for hire were keen to give their masters, about the circumstances of the years leading up to Boris Yeltsin’s replacement of Mikhail Gorbachev, and Russia of the Soviet Union. But this isn’t Russian history. It’s the history of Russians with cultural cringe – the desire to be loved by Americans, and to tell them what they wanted, paid for, insisted on hearing then, and demand  now.  

The payoff, reported on the dust jacket of the book, comes from Talbott, Zubok’s original employer. He is quoted as saying: “This is a deeply researched indictment of Mikhail Gorbachev’s timidity and mercurial policies which backfired.” “Instead,” Talbott adds, “Russia at the turn of the 21st century was ripe for the rise of Putin.” Zubok was ripe for what Talbott meant. “In 2008,” according to Zubok’s history, Putin “used military force against Georgia, and in 2014 he annexed Crimea and waged an undeclared war on Ukraine in Donbass.”  The blame for that, Zubok means, was Gorbachev’s mistakes. Without them, “had the Kremlin ruler made different choices… the Soviet Union could have gradually made its way into the world economy by a process of trial and error, with a nomenklatura-style state capitalism, and certainly with its institutions of power preserved.”

As for the Russian cultural cringe, Zubok is sure it was one of Gorbachev’s biggest mistakes.  During his well-known trips abroad in the 1980s, Gorbachev took with him, Zubok records, “a “huge entourage…of journalists, social scientists, writers, theatre directors, filmmakers and other cultural figures. Most of them shared [Gorbachev’s] fascination, admiration, and envy for things Western.”

Zubok has written a book to prove he doesn’t suffer this cringe. The work proves the opposite. This is the problem with cringers. They are too bent out of shape to recognize the shape they are in.

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HER BRITANNIC MAJESTY’S GOVERNMENT BANS RUSSIANS FROM BUYING JUST ABOUT EVERYTHING*

By John Helmer, Moscow
  @bears_with

On March 15 the British Government announced it is imposing a ban on exports to Russia of “high-end luxury goods”.

According to the official press release, “the measures will cause maximum harm to Putin’s war machine while minimising the impact on UK businesses as G7 leaders unite to unleash a fresh wave of economic sanctions on Moscow. The export ban will come into force shortly and will make sure oligarchs and other members of the elite, who have grown rich under President Putin’s reign and support his illegal invasion, are deprived of access to luxury goods.”

Exactly what counts as “luxury goods” was loosely defined in the government’s statement as “luxury vehicles, high-end fashion and works of art” and “antiques”.

But the regulation issued to enforce the policy is much more comprehensive.  Section 11 of this regulation identifies “pearls, precious and semi-precious stones, articles of pearls, jewellery, gold or silversmith articles”. Section 21 covers “Works of art, collectors’ pieces and antiques”; that’s  the kybosh for oligarch luxury —  the Russia warfighters in London say they believe — to “cause maximum harm to Putin’s war machine”.

The official regulation defines this to cover goods higher in price than £250 (before VAT). They have been listed to include horses, caviar, wrist watches, xylophones, vacuum cleaners, ski boots, saddles, perfumes, and pottery. Russian women buying lingerie, Russian men buying pyjamas, Russian children buying rollerskates, and Russian housekeepers buying toasters have all been hit with “maximum harm”. Russian spies have been banned from buying British-made false beards and wigs.

Compression stockings for varicose veins will be stripped off Russian legs at the airport, and confiscated under the new rule.  Bathing suits, however, if worn instead of underwear, are exempted from the ban.

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ANSCHLUSS, AGAIN — ANTICIPATING POLAND’S STRATEGY IN RUSSIA’S INTELLIGENCE ASSESSMENT

By John Helmer, Moscow
  @bears_with

On June 13, for the first time since the Russian military operation began in the Ukraine, a detailed Russian intelligence assessment has been published in Moscow of Polish strategy for the future of Ukraine. This follows several weeks of brief statements by Russian security and intelligence officials claiming the government in Warsaw is aiming at an anschluss or  union  with the “eastern borderlands” known in Poland as Kresy Wschodnie, and in the Ukraine as Halychyna; that’s to say, Galicia.  

These Russian claims have been dismissed as propaganda by the Poles.  Polish strategy, according to Warsaw sources, is to preserve the Zelensky regime in Kiev and the unified Ukrainian military command — and not to acknowledge the possibility of their defeat by the Russian army east of the Dnieper River.

In this week’s discussion between Vlad Shlepchenko, a military analyst for Tsargrad in Moscow, and Vladimir Kozin, a leading academic attached to the Russian intelligence think tank, the Russian Institute for Strategic Studies, they consider the scope of the strategic problem which they think the Poles, and behind them the US and NATO, will continue to pose, after the objectives of Phase-1 and Phase-2 of the Russian military operation in the Ukraine have been completed.  

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THE POLISH ADDITIVE IN THE UKRAINE WAR — TAKE OUT WASHINGTON PORK & BRUSSELS SPICE, WHAT’S THE DIFFERENCE BETWEEN CRACOW AND LVOV SAUSAGE?



By John Helmer, Moscow
  @bears_with

The Cossacks are known for many things, but not for being Roman Catholics like the Galicians of western Ukraine around Lvov, or like the Poles around Cracow.

Originally, the Cossacks swore off eating horsemeat, veal, hare, and pork. Pork is the principal meat of Lvivska (lead image, right) and Krakowska (left), the traditional sausages of Lvov and Cracow. They differ from one another in the spicing – Lvov with onion, marjoram, coriander and bay leaves; Cracow with nutmeg and sugar. In ingredients, the original Cossack sausages were closer to the Jewish ones.

In the war which is now extending from Europe to the world, taste in sausage shouldn’t be confused with race hatred. On May 22, when Andrzej Duda, the President of Poland, declaimed in front of President Vladimir Zelensky at the Verkhovna Rada in Kiev, that “you are – as your national anthem has it – of Cossack stock! You are magnificent!” Duda was making a racial observation with a profound mistake – and not only about sausages.  

The Cossacks of the Ukraine came from the lands between the Dnieper and the Don Rivers – that’s between 700 and 1,400 kilometres from Galicia and a journey of nine to twenty hours by motor, days by horse.  The Cossacks were Slavs and they were Orthodox Christians. By their ethnic origin, language, culture, and religion, they had little in common with the people who lived to the west of the Dnieper; that’s between Kiev, Lvov and the Polish border today. The Cossacks didn’t start eating pork sausage until after they gave up the nomadic life, got off their horses, and settled to farming.

When Duda told the Kiev deputies “I trust the goodness, the friendships made between millions of Poles and Ukrainians will mean we will be good neighbours forever now. This is a great historic opportunity and the great historic break–through”, he was getting closer to the truth of the history. But that is the history of  several hundred years of wars and race hatred between the Galicians and the Poles, and between the Galicians and Poles together against the Russian Slavs. It’s also a story Duda, his political party, and the Polish opposition backed by Mark Brzezinski, the US Ambassador in Warsaw,  recognize as a cause of war inside Poland, as well as outside.

The “historic break-through” which Duda declared in Kiev is only 81 years old, from the time of Duda’s grandfather.*  That was in 1941, when the German Wehrmacht incorporated Galicia into the General Government of southern Poland (Generalne Gubernatorstwo in Polish). Four years later, as the Germans retreated westwards to Berlin, it became the covert strategy of the US Army and then the policy of successive US governments for the extension eastwards of the North Atlantic Treaty (NATO) alliance; since 1945 that policy has also included regime change in Moscow, and the breakup, first of the Soviet Union, and then of the Russian Federation. That was also the announced strategy of Ambassador Brzezinski’s father, Zbigniew Brzezinski, the National Security Advisor of the Carter Administration between 1977 and 1981.   

Duda’s speech of May 22 was a Polish call to the Galicians to put aside the race hatred between themselves, and revive the race hatred which the two Catholic peoples, plus the Germans, have shown towards the Russians – also the Jews from whom the Zelensky family comes.

“How can I speak now,” Duda began his address, “when I am almost overcome with emotion”. Duda’s emotion was also calculated for the Polish audience who will vote in the next national election in just twelve months’ time.

Duda’s call to race war against the Russians was also an attempt to secure Poland against its more recent enemy Germany, and neutralize the US government’s attempt to topple the government in Warsaw. For Duda to manage this combination and hold on to power requires the appearance of a much closer Polish alliance with the Kiev regime than the Ukrainian military commanders and the Galician nationalists are contemplating at the moment, as they are forced into retreat westwards, like the Wehrmacht.  Their taste in sausage isn’t Duda’s, or Brzezinski’s, President Zelensky’s or the Cossacks for that matter.

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THE US WAR IN EUROPE ISN’T HOT ENOUGH – DROPPING THE CLIMATE BOMB ON RUSSIA

By John Helmer, Moscow
  @bears_with

There ought to be a law, or at least a sanction –  tenure cancelled, travel visa blocked – for American experts on Russia who claim to know from their reading of other American experts on Russia why Russia does things, and what will happen next.

Thane Gustafson, a Georgetown University professor publishing at the Harvard University Press, claimed very recently “it’s not too hard to reconstruct at this point what was likely going through Putin’s mind as he gave the order to attack…Putin was not nuts, not deranged, not isolated, etcetera. It was all a reasonable bet—by his strange lights—except that every one of the premises turned out to be wrong.”  Gustafson is certain he knows this; how he doesn’t say.  

But then Gustafson concedes: “All the cards are up in the air, and who knows how they will come down…I don’t know how this ends.”

There’s modest uncertainty for you — except that Gustafson is kidding. He wants you to know, he also says, that Russia is now a fascist state, and there’s really only one thing left he doesn’t know: because it’s such an effective fascist state, “the fact is that because of the regime’s control of information, we have very little idea of how Russians actually feel about the war, and how they will react to Putin’s apparent defeat.”

Gustafson didn’t notice he was squatting on the horns of a dilemma. If Russian regime control of information is so total(itarian), Gustafson’s information must come from the other side – American, Canadian, British, NATO headquarters in Brussels. The technical terms which professors usually apply to information emanating from one side of a two-sided war are misinformation, disinformation, propaganda, active measures, fake news, lies.  Between these things and the information Gustafson says he’s sure of, he has trolled himself.

So, to repeat the question, what if Russians actually support the war and blame the US for starting it?  What if they are as certain of this as Gustafson is certain Putin started it?

And what if the war ends in the US and NATO alliance retreat to Lvov; after which the Polish government will notify NATO HQ it is reviving its treaty claim to the Galician territory of the Ukraine; the chancellery in Berlin will then inform Brussels it requires the return of the ancient Danzig Corridor and Breslau, Polish territories  currently called Gdansk, Wroclaw,  and the  Ziemie Odzyskane;  and the Hungarian government will follow suit with the announcement of the recovery of historical Kárpátalja (Transcarpathia), the Zarkarpatska oblast of the Ukraine?

These were the spoils of the World War II settlement between the US and the Soviet Union in 1945-46. The territorial reversion claims aren’t new. What is new is that the US and the NATO alliance, plus the Galician regime still ruling between Kiev and Lvov, also in Ottawa, have aimed to change the terms of the post-war settlement by continuing the war eastward on to the territory of Russia itself, all the way to regime change in Moscow.

That is what Russia says it is fighting now to defend itself against. As Russian officials have been hinting in recent days, the foreign and defence ministries and the intelligence services are currently discussing in the Kremlin Security Council whether Russia’s long-term security on its western front may be best served by terms of a Ukrainian settlement in which the German, Polish, and Hungarian territorial claims are recognised.   

So, if these are indeed the cards that are up in the air, as the professor in Washington, DC, acknowledges, he isn’t the only one who doesn’t know how they will come down.

In the meantime he  and the Harvard printers want their new book to be a weapon in this war, targeted directly at President Vladimir Putin in the Kremlin. But what if the weapon misfires and they lose this war? Will Gustafson admit his ignorance or his mistake or his deception? Should he resign his professorship? Should Harvard pulp the new book? Or is the state in which Gustafson lives and lectures such an effective fascist state, losing the war against Russia to Germany, Poland and Hungary, minus the Ukraine, plus Russia, won’t matter to US officials any more than losing Afghanistan, Iraq, Libya, and Syria?

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