PARTITIONING UKRAINE — WHO GAINS FROM FIGHTING RUSSIA TO THE LAST UKRAINIAN?

moses_pinchuk

By John Helmer, Moscow

When the last war with Germany was ending, the British intelligence services rounded up as many of their German counterparts as they could find, and interrogated them. They were taken by surprise, as a series of reports by Hugh Trevor-Roper, then a signals intelligence analyst, uncovered as early as 1944.* For the British, the surprise was that neither German military intelligence (Abwehr) nor the SS intelligence organization (Sicherheitsdienst) had the doctrine or the resources for strategic deception: that’s the capacity to mask from your opponent what your plans are, and thereby fool your target into positioning himself for defeat. By the standards of British deceit, as British historians and thriller writers have proclaimed ever since, the Germans were naïve – exposing a colossal Achilles heel to be exploited just because it was always possible to persuade them to put their Achilles foot into a trap.

Predictability and naivety aren’t recommended for war-fighting — nor just for Germans, and not just then. The British intelligence services’ reports on the Russian capacity for deception remain top secret. But what the British believed was once their own superiority in deception tactics, they have now dispensed with, or lost. So when it comes to waging the Anglo-American war against Russia, there’s been no disguise for the Achilles Heels on display in the war for Chechnya or in the Georgian War of August 2008 – both of them lost by the Anglo-American side.
(more…)

SMOKE AND MIRRORS AT RUSAL AS OLEG DERIPASKA GIVES UP LONDON CLAIM

smoke_rusal

By John Helmer, Moscow

Oleg Deripaska has never agreed to settle before judgement in international litigations against him, or against his management of United Company Rusal, unless Deripaska was certain his opponents held a winning hand. When Rusal announced last week that it has settled a London arbitration with Rusal shareholders, Victor Vekselberg and Len Blavatnik, what had happened was a big loss which Rusal’s public shareholders failed to anticipate – with the case still to run against Deripaska personally. That’s the mirror part.

The smoke part has been the failure of market reporting in Moscow and elsewhere to notice the significance of Vekselberg’s and Blavatnik’s victory, and the compensation Deripaska has undertaken, along with Glencore. It was Glencore’s contract for trading Rusal’s aluminium, which was the cause of action that Rusal has now settled.
(more…)

VICTOR PINCHUK’S INTERPIPE DEFAULTS AGAIN — IT’S A WRAP!

yacht

By John Helmer, Moscow

Interpipe, the heavily indebted Ukrainian pipemaker owned by Victor Pinchuk (left foreground), has defaulted on its pledge to list its Eurobonds on the Luxembourg Stock Exchange by December 27, a notice from Deutsche Bank, the bond trustee, has revealed. This is Pinchuk’s second default in two months. On November 1, Interpipe announced it was unable to pay its international banks $106 million due on at least half a billion dollars in loans.

According to the latest disclosure, Deutsche Bank now has the authority to call for repayment of the face value of the Interpipe bonds plus interest. Interpipe’s last financial report indicates that as of December 31, 2012, the sum owing would be more than $198 million. A repayment call would also trigger repayment demands from Interpipe’s international banks and the Italian export agency SACE. The banks, led by ING of the Netherlands, Commerzbank of Germany, and Royal Bank of Scotland (RBS), are owed more than $543 million; SACE, $156 million.
(more…)

IF RUSAL MOVES ONSHORE, AS PRESIDENT PUTIN ORDERED THIS MONTH, IS OLEG DERIPASKA WASHED UP?

so_long_jersey

By John Helmer, Moscow

For as long the Russian tax man can remember, Oleg Deripaska has managed to keep his tax bill far below his Russian peers in the metals business. As national champions go, Deripaska is it for tax minimization. In good years or bad years, whether the London Metal Exchange price for aluminium is high or low, Deripaska’s tax has always gone through the floor. In 2003, a federal Tax Ministry report discovered that Rusal was paying income tax at just 2% of revenues. The percentage rose to 4% in 2006, but it has been diving ever since. In 2007, it was 3.1%; in 2008, 0.4%; 2009, 2.1%; 2010, 1.9%; 2011, 3%. Last year his tax rate was 0.2%. This year, according to Rusal’s interim report for the first nine months, tax is running at 0.97%.

How Deripaska has been able to pull off a trick no other major Russian company has managed has been no secret all these years. Three words do the trick – tolling, transfer pricing, offshorization. On December 12, President Vladimir Putin said enough is enough. His offer – either Deripaska brings Rusal onshore and pays Russian tax on his revenue, or else he loses the state banking credits which have kept Rusal from bankruptcy since November 2008. Either way, Deripaska looks washed up.
(more…)

ELENA TIMCHENKO AND KSENIA FRANK SHOW FRIENDSHIP FOR RUSSIA, AND SOMETHING ELSE

popes_nephew

By John Helmer, Moscow

Never let it be said that in Russia deeds done out of the goodness of the heart go unnoticed by the state. Nup. Not even when philanthropies are paid for with cash accumulated in violation of the state’s policy of deoffshorization. Nup, nup. There is even a special award minted by the Kremlin and intended to recognize the good which offshorizers do in friendship for Russia. Called the Order of Friendship, the ribbons are blue and black, colours which appear on no flag of any country in the world, and symbolize thereby the freedom of the blue sky and the black hole in which we are all obliged to dwell beneath.
(more…)

OLEG DERIPASKA TRIES SUPER SPY MISSION TO RESCUE IRAN HOSTAGE, PAYS BRIBES FOR FBI, TRADES FOR CIA, BUT IF YOU BELIEVE IT, WINS NO QUANTUM OF SOLACE

deripaska_007

By John Helmer, Moscow

Lights! Camera! Action!
Oleg Deripaska, chief executive of the Russian state aluminium monopoly Rusal (title image), calls his security men to a meeting in a soundproof room he’s decorated with a collection of west African masks on the walls. Clicketty-click the subtitle rolls on to the screen, MOSCOW 2009. “Whaddya know about Levinson?” he barks softly. “Who we know in Tehran? Whad’ll it cost us to spring him? Don’t come back if you’ve got nothing.” Deripaska’s threat fades to inaudibility. That’s the cue for the agents, veterans of the old KGB and GRU, to slip wordlessly away, their faces locked in hatchet grins.

Cut to the bar at the Hilton—clicketty-click: TYSONS CORNER, VIRGINIA, 2009 — suspended glass, flashy steel, gold lighting, cocktail chatter. A woman arrives out of breath, complaining to the man and the woman who are already seated, staring into their short bourbons instead of looking up. “Sorry”, she sputters. “Dolley Madison was backed all the way up.” “What’s this about the Russian?” the man whines. “Awright already”, she says. “We need one to catch one. Deripaska says he can buy Levinson out of Iran. Do we task him?”
(more…)

THE PUT-UP PAINT JOB — ANDREI MELNICHENKO SUES FOR ANOTHER COAT ON HIS BOAT

bird_dulux

By John Helmer, Moscow

Andrei Melnichenko has extra reason to be concerned about the sunlight — and we aren’t talking financial transparency. The owner of Eurochem, a large Russian producer of fertilizers, says he has evidence that sunlight on his surfaces reveals rash, blotches, separations, lines, starring and sagging. He says he’s paid to see his face reflected on the surfaces, but because the job has been botched, he can’t. The damage he is estimating at $100 million.

That’s not Melnichenko’s person we are talking about, but the surfaces of his boat, a motor yacht named A, after his wife Alexandra, and owned by the two of them through a succession of offshore companies, starting with Niedes Ltd. of British Virgin Islands, A Yacht Charter Co. of Isle of Man, and currently Bermuda Yachts Ltd of Bermuda.
(more…)

INTERPIPE IS IN THE LION’S MOUTH — THAT’S THE RUSSIAN BANKS

interpipe_lion

By John Helmer, Moscow

Interpipe, the heavily indebted Ukrainian pipemaker owned by Victor Pinchuk (centre), owes at least $120 million to Russian banks, led by state-owned Sberbank controlled by former Minister of Economic Development, German Gref (wall picture, left). But the Russian bankers are not represented in any of the loan restructuring negotiations which are currently under way, following Interpipe’s default on $106 million in debts owed to its international lenders on November 1.

The Russian debt and the Russian influence over Interpipe’s financial survival have been disclosed by Interpipe executives at a briefing for Interpipe’s Eurobond holders on December 9. The Russian loan agreements carry standard protective clauses allowing a call for full repayment when Pinchuk and his holding are in default to other lenders, suppliers, or creditors. If the Russians decide to do this, Interpipe’s executives acknowledge they cannot pay. They have less than $90 million in free cash at present, and admit they cannot borrow extra money.
(more…)

WHAT IS THE REAL GOAL IN THIS GAME? OLEG DERIPASKA ACCUSED OF FRAUD IN KALUGA, ACCUSES GOVERNOR ANATOLY ARTAMONOV OF MORAL DAMAGE

kaluga_deripaska

By John Helmer, Moscow

Russian justice being what is, it is exceptional when the chief executive of a company owned by Oleg Deripaska (right) is arrested and carried off to prison on charges of fraud.

As the days lengthen through which Deripaska’s man must spend behind bars – 16 as of today — interrogated by the Investigative Committee of the General Prosecutor, the likelihood grows that it is Deripaska himself who is the real target. Sources familiar with the matter claim this is the preliminary for an event being planned once the Winter Olympic Games conclude in Sochi on February 23. Not the ski jump, though: the sources claim this time it’s Deripaska for the high jump.
(more…)

DANIELI IN THE LION’S DEN — VICTOR PINCHUK CHEWS OVER $1.3 BILLION DEBT

pinchuk_lions

By John Helmer, Moscow

Victor Pinchuk, the owner of Interpipe, the Ukrainian steelmaker which defaulted on its debts on November 1, has called his first-ever public business meeting. The date is December 9, and the meeting will be telephonic. Deutsche Bank, which is acting as trustee for Interpipe’s $200 million Eurobond issue, is promising to answer questions about the company’s financial collapse, and provide a copy of the debt repayment agreement Pinchuk has with his banks.

Those attending the meeting will not be able to read Interpipe’s presentation until the start of the conference call. They will then have just 60 minutes to read, ask their questions, and listen to the answers. According to Deutsche Bank, the conference call will “last no more than one hour.”
(more…)

INTERPIPE STARTS DEBT REFINANCING TALKS, BLAMES RUSSIA FOR DEFAULT, AS VICTOR PINCHUK BEGS PRESIDENT VICTOR YANUKOVICH FOR RUSSIAN REWARD

interpipe_car

By John Helmer, Moscow

Interpipe, the Ukrainian pipemaker owned by Victor Pinchuk (left), son-in-law of ex-President Leonid Kuchma (centre, right), has released its first official acknowledgement that it is in default on $106 million of debt owed to its banks. In a statement yesterday on the company website, Interpipe said negotiations are under way with the banks, and that they had been informed in advance of the company’s failure to meet the repayment amount due on November 1. “The creditor banks”, according to Interpipe, “have formed a steering committee of creditors. The parties will have to agree to change the schedule of payments on the main body of the loans, as well as some other changes in the loan agreement conditions. The company plans to continue to pay interest on all borrowings in full. The operating activities of Interpipe run in the normal mode.”

Interpipe’s debts currently exceed $1.3 billion; it has less than $50 million in cash. The banks, which negotiated with Interpipe for an earlier debt restructuring agreement in 2011, include Citi, Barclays, Intesa, ING, and Credit Agricole. The banks are not commenting publicly except for Intesa in Milan; it said this week it is aware of the default and is evaluating the situation with the other lenders.
(more…)

GHOSTS OUT OF GRAVES, TRICK OR TREAT — OLEG DERIPASKA’S DECEMBER 6 ANNIVERSARY

december_6

By John Helmer, Moscow

According to United Company Rusal, the Russian state aluminium monopoly, it is one of the most transparent multinational corporations in the world – that’s to say, in the emerging markets of the world, and across sixteen countries. A report of Berlin-based Transparency International (TI), issued on October 16, has ranked Rusal sixth on several measures, with a perfect 100% score on what TI calls “organizational transparency”. The other perfect scorers were Emirates Airlines (UAE), Johnson Electric (Hong Kong), Petronas (Brazil), and Shanghai Electric Group.

As for what organizational transparency means to TI and how it scored Rusal and the others, TI says it asked these eight questions as part of a larger questionnaire:
(more…)

VICTOR PINCHUK TRIPS HIMSELF UP — INTERPIPE FAILS PAYMENT DEADLINE, FACES DEFAULT AND LIQUIDATION

pinchuk_faces

By John Helmer, Moscow

Interpipe, the leading Ukrainian pipemaker, failed to meet last Friday’s deadline for repayment to its international bankers of $106 million, sources in Kiev have confirmed. Interpipe, owned by Victor Pinchuk (image above) and his wife Elena, daughter of former Ukrainian President Leonid Kuchma, is the largest steelmaker in the former Soviet Union to face bankruptcy and liquidation in recent years. According to sources close to Interpipe, who ask not to be identified, Interpipe’s debts now exceed $1.3 billion; its free cash on hand is less than $50 million.

The group says it continues to produce pipes at its new electric arc furnace plant at Dniepropetrovsk, despite market shut-out measures adopted by Russia, the CIS Customs Union, and the US, which have introduced, or plan shortly to impose penalty duties on pipe imports of 19.4% and 30.8%, respectively. These measures, compounding the generally depressed market demand for pipes, have led Fitch Ratings to slash Interpipe’s earnings estimate for this year by more than $100 million to $260 million, possibly less.
(more…)

FAT WHITE TRUFFLES, SLIM WHITE THIGHS — THE RUSSIAN OLIGARCHS’ HIDDEN ASSETS

7_sins

By John Helmer, Moscow

Oligarchy versus democracy is a very old game, and so are the seven deadly sins. Why exactly men like Vladimir Potanin, Mikhail Prokhorov, Alisher Usmanov, Andrei Melnichenko et al. should calculate that advertising their standard of living should help them keep it is difficult to say. Maybe their pockets are under better control than their appetites. Maybe they believe that advertising profligacy will boost the accounting of their net worth and stave off margin calls.

That’s the point the ancient Athenians grasped with conviction. It’s the point of many of Plato’s and Socrates’s dialogues; of the comedies of Aristophanes; and of the records of the Athens law courts which have come down to us. To those Greeks, if a man displayed an excess of money, or what he did with it – by eating, drinking, betting, having sex, bejewelling his body, house, slaves, children, wives — he was by that very fact to be suspected of a crime against the democracy. The Athenian judgement was both retrospective and prospective: spending money intemperately was evidence that it had been too easily (dishonestly) earned. It was also evidence that state policy (investment, tax, war) would be corruptly influenced to serve such oligarchs’ material and personal interests, to the loss of everyone else.
(more…)

THE HISTORY OF UKRAINIAN BLACK BUSINESS, UKRAINIAN SEX TOO, REVEALED THIS WEEK IN THE UK HIGH COURT

black_business

By John Helmer, Moscow

Victor Pinchuk (right top) is the Ukrainian oligarch who last month hosted Bill Clinton, Hillary Clinton, Tony Blair, Dominique Strauss-Kahn and other political wannabes or has-beens, to promote himself as the champion of Ukrainian independence. This week he stands in the UK High Court charged by two other Ukrainian oligarchs with bribery, corruption, theft of state assets, election-rigging, racketeering, extortion, embezzlement, fraud, conspiracy, and perjury, compounded by nepotism and sex with the only child of ex-President Leonid Kuchma (left). Holy Moly!

Russia is the frying pan from which the Ukraine is now trying to escape, Pinchuk and his celebrity guests agreed last month. But the fire into which Pinchuk is now committing his country is so flaming hot, it’s a wonder men with impulse-control problems like Clinton and Strauss-Kahn would wish publicly to endorse it, let alone a presidential candidate like Hillary Clinton trying to raise money for her race to succeed Barack Obama. For campaign reasons the two Clintons have been dissociating themselves from Kuchma’s record for years. But they have been taking Pinchuk’s money, and he is insisting it’s payback time.
(more…)

RUSSIA’S SNAKE PIT — UP THE MONEY LADDER, DOWN THE POWER SNAKE

snake_pit

By John Helmer, Moscow

If the common Russian opinion of who runs the country matches the evidence of who really runs Russia, that’s a reliable test of a democratic culture.

There’s a catch. If just one man and a handful of his trusties run the country, and noone else, not even the very rich or very honest, can improve on their reputation for trust, capability, or popularity, then this must be a democracy without competition. Compared to democracies like the United Kingdom, United States, Italy, or France, where those who run the country are untrusted, incapable, and unpopular, and where the power elite buys election results, respectability, lordships, freedom from taxation, and immunity from prosecution, Russia must be a model of something unusual in politics.
(more…)

OLEG DERIPASKA’S EARS ARE BURNING — CORRUPTION ALLEGATIONS BY SAMUEL MEBIAME IN MIAMI TAPES

deripaska_ear

By John Helmer, Moscow

This week it’s hot and humid in Conakry, capital of the west African Republic of Guinea. It will hit 30 degrees in the day; the humidity will be 100%. Until Saturday, when the much-postponed, much-rigged parliamentary elections will be held, there will be occasional thunderstorms, sunny spells, and an inch of rain per day.

But there’s not enough water to douse the allegations that the President of Guinea, Alpha Conde, took payoffs through go-betweens to rig the presidential elections of June and November 2010; put up Guinea’s mining concessions for a fresh round of corrupt awards; and let Rusal off the hook of a billion-dollar compensation order by the Guinean Government and local courts.
(more…)

MAKING POTASH SAFE FOR DEMOCRACY — AFTER SULEIMAN KERIMOV’S EXIT, WHO’S NEXT?

manure

By John Helmer, Moscow

How many angels can dance on the point of a pin was a trick question for medieval scholars: that’s because, theologically speaking, angels have no substance. So the correct answer is that an infinity of them can sit on the point. Alternatively, since Thomas Aquinas (d. March 7, 1274) claimed two angels cannot occupy the same space, the answer is only one angel.

Fill a modern room on the bank of Lake Valdai last week with a couple of hundred academicians and reporters, most of them from states bent on regime change in Russia, and the headline question they want to debate is: will President Vladimir Putin (standing figure centre) run for re-election in 2018?
(more…)

NO WINGS TO FLY — QIWI CALLS TIME, OR IS IT A CUCKOO?

qiwi_nasdaq

By John Helmer, Moscow

If QIWI, the Russian electronic payments operator, is such a good thing, why did the market cut the stock price the minute QIWI announced this week that it’s planning to sell off more of the control shareholders’ shares?

QIWI was co-founded by Alisher Usmanov’s internet portal company, Mail.ru, and Usmanov continues to be one of QIWI’s biggest clients and sources of cashflow. In May, QIWI launched an initial public offering (IPO) of 12.5 million shares on the US Nasdaq exchange. Usmanov was the biggest seller at the time. Through Mail.ru, he started with 21.4% of the issued share capital, and ended up with 19.4% of the voting shares. He was followed by Andrei Romanenko, QIWI’s board chairman and one of the co-founders, who started with 12.7%, and ended with 8.6%. For the May 3, 2013, prospectus, read this.
(more…)

WARNING FROM VLADIMIR PUTIN TO OLEG DERIPASKA — BE NICER TO PEOPLE

deripaska_putin

By John Helmer, Moscow

The last time President Vladimir Putin publicly criticized Oleg Deripaska, chief executive of United Company Rusal and Russia’s most indebted man, it was at Pikalevo, Leningrad region, in June of 2009. Putin tossed his pen at Deripaska, told him to sign a back-pay agreement, and demanded his pen back. Referring to the failure to pay wages to the town’s alumina and cement factory workers, Putin told Deripaska: “Why has your factory been so neglected? They’ve turned it into a rubbish dump. Why was everyone running around like cockroaches before my arrival? Why was no one capable of taking decisions?..you’ve made thousands of residents of Pikalevo hostages of your ambition, your nonprofessionalism and maybe your greed. Thousands of people. It’s totally unacceptable.”

The pen-tossing and televised chastisement of Deripaska were followed by substantial new state bank and budget funds to cover Deripaska’s payouts at Pikalevo. In September, after everyone had taken their summer holidays, Deripaska claimed Putin hadn’t meant what he seemed on camera to be doing. “The problem”, said Deripaska, “was that the reality of the meeting event and the picture, which was transmitted by the television channels, did not coincide. This was a simple case of editing. Actually, everything went in another way. What happened at the meeting was very productive; the decisions taken to revive manufacture have been implemented.”
(more…)

FITCH DOWNGRADES INTERPIPE TO DEFAULT — VICTOR PINCHUK TO ASK ITALIANS FOR RESCUE FROM RUSSIAN AND AMERICAN MOVES

ukr_eu_interpipe

By John Helmer, Moscow

The international ratings agency Fitch has downgraded its assessment of the Ukrainian pipemaking group Interpipe, owned by Victor Pinchuk, warning that Russian action since July to impose penalty duties on Ukrainian pipe imports is causing a serious loss of sales and a grave shortage of cash for Interpipe. If that continues, a release from Fitch says, the company “is unlikely to be able to meet its scheduled debt repayments.” The Fitch report was issued in London on Monday. It comes just three months after the agency had reported that the outlook for Interpipe as stable, confirming at the time Interpipe’s B- rating.

In the latest action Fitch says it is downgrading Interpipe to CCC. Sources close to recent talks between Fitch and Interpipe describe the triple-C rating as indicating, according to the Fitch methodology, the high probability of default.
(more…)

RUSAL’S CHICHIKOV STRATEGY — OLEG DERIPASKA CLAIMS TO BE REDUCING ALUMINIUM PRODUCTION, ADDING JOBS; BUT THE DEAD SOULS HAVE VOTED FOR HIS OLD ENEMY ANATOLY BYKOV IN KRASNOYARSK

chichikov_deripaska

By John Helmer, Moscow

In Gogol’s well-known story Dead Souls, Chichikov (left), the central character and villain of the piece, makes a lucrative business of buying the names of dead serfs from local census rolls in order to cut the tax liabilities of landowners, accumulate fake collateral against which he intends to borrow, and then retire in wealth. In the more up to date case of the state-funded aluminium monopoly, United Company Rusal, the business is to keep filling the names on the employment rolls while disposing of their jobs and eliminating the unsellable surplus of their production.

The idea of Oleg Deripaska (right), Rusal’s chief executive and trustee for the state owners of the company, is that if the souls protest their loss of work and income, they won’t be convincing to the Kremlin so long as Rusal claims to be paying them for work no longer done. Rusal’s published rationale for what is happening is that until international demand for aluminium raises the price of the metal in trade, it must cut supply to the market. That’s problematic because of the large accumulation of unsold aluminium in uncounted warehouse inventories. That story can be read here.
(more…)

IGOR SECHIN TO SULEIMAN KERIMOV — YOU’RE NOT A FERRARI, I’M NOT A PALM TREE

ferrari_tree

By John Helmer, Moscow

To the disability of being unable to speak his mind in public Suleiman Kerimov has the added handicap of being unable to accept how short his arms are, particularly when handling money from state banks. In overreaching himself Kerimov has provided a case study of how President Vladimir Putin expects the Russian oligarchy to conduct its business when state interests are at stake; and also of the continuing importance of former deputy prime minister Igor Sechin, now chief executive of the Rosneft oil company.

In July Kerimov got too big for his boots when he believed he had Kremlin support for upsetting the potash cartel known as the Belarusian Potash Company (BPC), directly threatening President Alexander Lukashenko of Belarus. The BPC, headquartered in Minsk since 2005, was a Russian creation — successor to a line of trading organizations for the concealment of potash sale profits with names like Ferchimex (Belgium), Bermont (Switzerland), Fertexim (Cyprus), and Uralkali Trading (Switzerland). All of them were the creation of the fertilizer, I mean fertile, mind of Dmitry Rybolovlev, whom Sechin drove out of the potash business in 2010, replacing him with Kerimov. Sechin failed to oust Rybolovlev’s trader, Oleg Petrov, who stayed on to teach Kerimov the tricks of the trade.
(more…)

IN THE OLIGARCH’S BACKYARD — MR & MRS ANDREI MELNICHENKO SUE FOR 100 CENTIMETRES

melnichenkos

By John Helmer, Moscow

Nothing so reveals the character of the men on the commanding heights of the Russian economy than a lawsuit in an international court initiated by their wives against one of their tradesmen.

In the case which recently came to light, Aleksandra Melnichenko (nee Nikolic), wife of the fertilizer oligarch Andrei Melnichenko, sued a New York art dealer for more than €5 million, including triple punitive damages, for putting the wrong thing in her garden. This beats the record for a backyard claim previously set in a Washington, DC, court by Elena Pinchuk – daughter of the ex-President of Ukraine, Leonid Kuchma, and current wife of Victor Pinchuk.

The New York case turned on Mrs Melnichenko’s claim that she had ordered her sculpture to be 220 centimetres in height, but she got only 120 centimetres. The missing 100 centimetres, she claimed, was not only an aesthetic violation and a lapse of taste, but also a breach of contract, and worse, a case of fraud. Hence the triple damages.
(more…)

PRICES FOR DAMIEN HIRST AND JEFF KOONS TAKE BATH, AS VICTOR PINCHUK’S STEEL EMPIRE FALLS ON TOP OF THE ART MARKET

bathtub

By John Helmer, Moscow

After months of delay, Victor Pinchuk’s Interpipe group revealed in its financial report for last year — issued at the start of August but given a release date of May 23 – how much financial trouble the Ukrainian pipe and steelmaker is now facing. The impact of this on the international art market is about to be felt in art auctions scheduled for later this month and in October in London and New York. That’s because Pinchuk’s record-priced acquisitions of two artists, Englishman Damien Hirst and American Jeff Koons, have created an overhang of their works in the market place. According to speculation by London and New York art dealing sources, these works may be forced into sale at a heftier discount than Hirst and Koons have already been taking.

Art market reports show that sales by Hirst have dropped from $45.8m in 2008 to $18.3m in 2012 – and that doesn’t count the volume of works failing to sell at all. Since then, according to the New York Times, Hirst works are fetching 60% less than was originally paid for them. To reduce the supply, Hirst’s production company Science Ltd. has issued a catalogue itemizing one line of purportedly authentic works and inviting owners to apply to Hirst for an authenticity check.
(more…)

ANDREI MELNICHENKO GOES TO THE PRECIPICE, RISKING EUROCHEM FOR THE BENEFIT OF THE STATE OF LOUISIANA, AND HIMSELF

melnichenko_putin

By John Helmer, Moscow

It’s been three years almost to the day since Vladimir Putin (left), then Russian Prime Minister, visited the Gremyachinskoye potash mine in southwestern Volgograd region.

The mine, the newest in construction in Russia, with one of the country’s largest potash reserves, and one of the most costly ever to be built, is owned by Eurochem. This nitrogen, phosphorus and potash fertilizer company is already, the company’s website proclaims, number-1 in Russia, number-3 in Europe, and number-10 in the world. According to its owner, Eurochem aims to be number-5 in the world once Gremyachinskoye starts operating. Eurochem is 92.2% owned by Andrei Melnichenko (right), who is also chairman of the company board. But Melnichenko was nowhere to be seen when Putin visited his property. Instead, Putin was hosted by Eurochem’s chief executive Dmitry Strezhnev. He is Melnichenko’s placeman. Strezhnev owns 7.8% of the Eurochem shares through an offshore equity and trade proceeds scheme which Melnichenko controls in Cyprus, the British Virgin Islands, and Switzerland.
(more…)

RUSAL ANNOUNCES LOYALTY PROGRAMME – DERIPASKA TAKES CASH, DONATES RUSAL SHARES TO SUBORDINATES

rusal_bonus

By John Helmer, Moscow

What is a bonus worth if it’s a promissory note for a value that is sinking towards zero in the short term, and cannot be converted to cash or dividends for years? How much loyalty would a zero-value note be expected to attract?

On July 4, Rusal disclosed to the Hong Kong Stock Exchange that it has devised a plan to give shares to company employees for the purpose, the company release claims, “of increasing the employees’ commitment to achievement of the Group’s strategic goals in implementing of the production system.” The plan is for Rusal to buy 0.05% of the 15.2 billion Rusal shares outstanding; that’s 76 million. As Rusal’s share price slips below the HK$3 level, and its market capitalization falls below US$6 billion, it would cost the company US$29 million in cash to fill the employee stock fund to its maximum authorized number. But Rusal says Oleg Deripaska, the chief executive, is going to start the fund off himself at something less than the maximum “The Company currently intends to finance the Plan by applying the internal funding which is available after the CEO voluntarily declined his bonus for the year 2012.” According to Rusal’s financial report for 2012 (page 42), Deripaska’s salary, allowances, benefits in kind, and “discretionary bonuses” came to US$5.536 million. The financial report doesn’t indicate precisely how much of this was in the form of cash, how much in airplane flights to non-business destinations, and how much in bonus cash. The report does claim that Deripaska received 417,266 bonus shares worth at vesting (November 21, 2012) just $274,000.
(more…)

GULNARA KARIMOVA’S GAME PLAYS IN FRANCE

karimova_monopoly

By John Helmer, Moscow

Swiss and French financial police have searched offices or homes in France as part of what the spokesman for the Swiss Attorney-General calls “our Uzbek case”. According to Jeannette Balmer, “perquisitions [searches] have been made in France on our request.” She declines to say when the searches were conducted, the addresses of the premises searched, or the names of the Uzbek targets. A report by Ola Westerberg of the Swedish news agency Tidningarnas Telegrambyra first revealed the French operation on July 2.

According to Westerberg, searches by the Brigade de Recherche et d’Investigation Financière were conducted simultaneously at different French addresses on June 18. The targets, according to Westerberg, were all connected to Takilant, a Gibraltar front company allegedly used to take bribes from TeliaSonera, the Swedish telecommunications group, in return for operating concessions and mobile telephone licences in Uzbekistan. Behind Takilant is alleged to be Gulnara Karimova, the front-running candidate to succeed the current President of Uzbekistan, Islam Karimov, her father. For the runup to the June 18 operation in France, read the archive here.
(more…)

KOROS, RUSAL TRACKER FUND, STRUCK OFF THE UK COMPANY REGISTER

indian_deripaska

By John Helmer, Moscow

Koros Trading Limited Liability Partnership (LLP), a false front company created in London to receive regular monthly payments of millions of dollars from Rusal, the Russian aluminium monopoly, has been struck off the UK Companies Register for failing to report its annual revenues and income.

Details of Koros transactions have revealed more than $25 million in payments for which sources claim there is no trading, supply or services agreement. The sources believe the money was illegally paid; they suspect the Swiss bank account receiving the funds was a conduit to a beneficiary unwilling to disclose his identity.
(more…)

THE SNOWDEN DISCLOSURES — HOW THE GCHQ INTERCEPT SYSTEM EXPOSED A RUSSIAN TELEPHONE CALL

snowden

By John Helmer, Moscow

It has been known for a long time that the British Government Communications Headquarters (GCHQ) has been intercepting millions of Russian telephone calls, SMS texts and internet traffic, along with the communications of other target nationals, including Americans and the British themselves. Older eavesdropping operations, such as ECHELON, have been documented by European Parliament investigations. More recent operations, such as PRISM and TEMPORA, have been confirmed by the former National Security Agency (NSA) contract agent, Edward Snowden, whose disclosures substantiate the methodology of surveillance, the range of data produced, targeting, sorting, and purported value.

ECHELON snooped on satellite traffic; PRISM on internet data from server companies; and TEMPORA, a telephone surveillance operation, tapped international fibre-optic cables. The signal collection stations are in all sorts of places, including the US, Puerto Rico, Cyprus, Japan, Germany, Canada, UK, and Australia. The Snowden material is up to two years old; the operations he has documented date from about 2007.
(more…)

RUSAL AGM DEFENDS SHARE LOSS DIRECTORS, AS RUSAL SLIPS BELOW ZERO WORTH – PLAN FOR DEBT BUYOUT AND CONVERSION OF RUSAL DEBT TO EQUITY CHALLENGES KREMLIN TO DROP THE RTI SHAREHOLDER TRUST

By John Helmer, Moscow

Rusal’s share price collapsed through the four-dollar threshold today, as the release of results at Friday’s Annual General Meeting (AGM) of Rusal shareholders revealed that the company is planning to use its shrinking cash reserves to try to prop up its share price.

In a dramatic warning issued in Moscow at the same time, Otkritie Capital warned current shareholders to sell. Rusal, according to Otkritie, is now “too illiquid and expensive to short given the lack of real catalysts, but we would avoid the stock on valuation grounds.” A Citi source has reiterated the US bank’s forecast of HK$1.80 as Rusal’s target share price, adding that since Citi’s April 18 assessment of Rusal “nothing has changed”.
(more…)

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.” 

(more…)

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.

(more…)

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.

(more…)

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.”

(more…)

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.

(more…)

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.

(more…)

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.

(more…)

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.  

(more…)

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.

(more…)

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?

(more…)
Categories
Archives

Copyright © 2007-2017 Dances With Bears

Copyright © 2007-2017 Dances With Bears

Education Template