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Latest US sanctions on Russia: incitement to a coup and a new form of protectionism

The latest sanctions seem concerned as much with protecting the US’s economic positions as punishing Russia

Alexander Mercouris

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The latest round of sanctions the US Treasury has imposed on Russia are a strange affair.

Earlier rounds of sanctions have been linked to specific acts of real or alleged Russian misbehaviour e.g. the death of Sergey Magnitsky, the Crimean crisis, the war in the Donbass, the shooting down of MH17, and the alleged Russian meddling in the 2016 US Presidential election.

This latest round of sanctions is different in that it is not directly linked to any Russian action – real or alleged – at all.  Nor are the people sanctioned – for example the Russian businessman Oleg Deripaska – directly accused of anything.

In place of any specific accusation against Russia or any of the individuals concerned, here is how a statement from US Treasury Secretary Steven Mnuchin justifies the latest sanctions

The Russian government operates for the disproportionate benefit of oligarchs and government elites.  The Russian government engages in a range of malign activity around the globe, including continuing to occupy Crimea and instigate violence in eastern Ukraine, supplying the Assad regime with material and weaponry as they bomb their own civilians, attempting to subvert Western democracies, and malicious cyber activities.  Russian oligarchs and elites who profit from this corrupt system will no longer be insulated from the consequences of their government’s destabilizing activities.

(bold italics added)

In other words Russia is a bad corrupt country which does lots of bad things around the world of which the US disapproves.  Anyone in Russia who is rich (“an oligarch”) and is therefore “profiting from this corrupt system” is in some way responsible and risks being sanctioned irrespective of anything they do unless this changes.

The implication is that if they do not want to be sanctioned the “oligarchs” must overthrow Russia’s government.

The latest sanctions are therefore an incitement to a coup.  All other steps the US has taken having failed, Russia’s businessmen (“oligarchs”) are now being told that unless they engineer the overthrow of Russia’s government they will be sanctioned.

The first thing to say about this policy is that it is decades out of date.

There was a time in the 1990s when a small group of stratospherically wealthy and corrupt individuals really did control Russia’s government.

By way of example, most of the people who met in the Kremlin during the 1998 financial crisis to decide whether or not to devalue the rouble were not members of the government or even officials, and the meeting during which the decision was finally taken to devalue the rouble was chaired not by a government minister but by the former Acting Prime Minister of Russia Yegor Gaidar, who at the time was neither a member of the government nor an official, but who was merely an adviser of Russia’s President, Boris Yeltsin, who was at the time away reviewing the fleet.

The decision was in fact made by the same small group of wealthy and corrupt individuals who at that time really did control Russia’s government, meeting informally under Gaidar’s chairmanship, and not through the official structures.

It is not a misconception to call these individuals “oligarchs”.  In the 1990s that is exactly what they were.  The most politically powerful amongst them – Boris Berezovsky – was not even properly speaking a businessman.

That is not the situation in Russia today.  A person like Oleg Deripaska – the aluminium magnate whose name appears on the latest sanctions list – may be a person of great influence and power.  However he does not control Russia’s government, and has no means to do so.

I should say that I first came across the suggestion that the “oligarchs” could be mobilised to overthrow President Putin or force him to reverse his policies by imposing sanctions upon them in early 2014 at the start of the Ukrainian crisis.

As I recall reports appeared in the media that the German intelligence agency the BND was advising Chancellor Merkel that if the EU imposed sanctions on Russia the “oligarchs” would either force President Putin to change course or would overthrow him in order to save their fortunes.

Many rounds of sanctions later one might suppose that that theory had been tested to destruction.  However Steven Mnuchin’s statement suggests that faith in it dies hard.

The latest round of sanctions the US has imposed on Russian businessmen and their companies will not weaken President Putin’s position or that of the Russian government, and will not affect Russia’s economy.

As China’s semi-official English language newspaper Global Times has recently pointed out, Russia – unlike countries like Iran – has a big largely self-sufficient continental sized economy possessing immense scientific, technological and natural resources, making it therefore largely immune to sanctions.

As for the wealthy Russian individuals who the latest sanctions are targeting, the reason so many of them keep money abroad is not because they control Russia’s government, but because they do not control it, and do not wholly trust it.

The result is that they have been squirrelling away much of their money abroad, beyond their government’s reach.

Now what they are discovering is that their money is at far greater risk of being seized by the US government than by their own – something the Russian government has been telling them for years – so that it is in fact safer kept at home than it is squirrelled away abroad.

In other words the latest sanctions and Steven Mnuchin’s statement could not have played more completely into the Russian government’s hands.

With Russian businessmen being told that the money they have squirrelled abroad may be seized irrespective of what they do unless they overthrow the Russian government – something which Russian businessmen know is beyond their power and is therefore impossible – they have no realistic option if they want to keep their money safe than to bring it home.

It seems that even before Mnuchin’s statement and the latest round of sanctions that is what some of them were doing.

A few weeks ago – before the Skripal crisis – a group of Russian businessmen in London wrote to President Putin asking for permission to return home with their money because of the threats they were facing; whilst the Russian government’s latest eurobond sale, which was specifically addressed to Russian businessmen, was heavily oversubscribed as they rushed to buy bonds issued by their own government.

The latest sanctions and Mnuchin’s statement will only accelerate the process.

A policy which only strengthens Putin’s position – forcing Russian businessmen to repatriate their money to Russia and increasing their dependence on the Russian government – looks completely counterproductive, and on the face of it that is what the US’s sanctions policy is.

However there may be more than one agenda at work.

The Russians are complaining that one of the purposes of the sanctions is to block Russian arms exports, a field in which Russia has recently been encroaching on US markets, such as Turkey and Saudi Arabia, and even farther afield, to countries like Indonesia.

There is of course a political dimension to this in that arms sales tend to bring closer political ties, and the US may be especially leery of US allies like Turkey and Saudi Arabia buying arms from Russia because of the danger that this might increase Russian influence there.

However attempts to block the arms sales of a major competitor on the international arms market does have something of a look of protectionism about it, which is not altogether surprising given the recent protectionist steps being taken by the Trump administration – especially with respect to China – and the importance of arms sales not just for the US economy but for individual US companies.

With China and Russia now increasingly cooperating in aircraft development, including their planned wide body airliner, with both China and Russia producing advanced and competitive narrow body airliners (the Comac C919 and the Irkut MC-21), and with Russia advancing with its development of the new Perm family of civil aircraft engines, which are capable of powering all these aircraft, it is also understandable that the US might wish to sanction Russian arms makers given the strong linkage between arms manufacturing and the civil aircraft industry.

Just as the latest US tariffs on China seem intended – at least in part – to obstruct development of China’s artificial intelligence industry, so the latest sanctions on Russian arms makers may be intended to obstruct development of the Chinese and Russian aviation industries – and especially of Russia’s civil aircraft engine industry – given the threat these industries pose to the position of the US in the international aviation market where the US has long enjoyed market dominance, and which accounts for a significant part of its exports.

If Russia’s and China’s nascent aviation industries are one of the ultimate targets of the latest sanctions, then that might also explain the sanctioning of Oleg Deripaska, the chief executive of RUSAL – Russia’s giant aluminium conglomerate – aluminium being of course a key material used in aircraft building.

It should be said however that there may be multiple other reasons why Deripaska – one of the most powerful and toughest of all Russian businessmen – has been targeted for sanctions.

If sanctions really are evolving into a tool to protect US positions in key industries such as artificial intelligence, arms manufacturing and civil aviation, then that I suspect will surprise no-one.

All I would say about that however is that in that case the US has missed the bus.  The sort of protectionist measures the US is imposing on China, and the sort of sanctions the US is imposing on Russia, would have devastated both the Chinese and Russian economies two decades ago.

By now – as Russia’s resilience in face of sanctions shows – both the Chinese and the Russian economies have achieved a level of sophistication and size that makes them essentially impervious to these sort of actions.

By way of example, though China’s exports peaked at over 37% of its GDP in 2006, by 2016 that had fallen to under 20%.  Today the major driver of China’s economy is internal demand, just as the main driver of Russia’s economy after 2020 will be investment.  Neither can be affected by the protectionist actions or sanctions the US is taking.

This is all the more so as China and Russia – and especially China – press ahead with constructing their own alternative international financial architecture (eg. the so-called “petro-yuan“) to underpin their economies, and the trading systems which they are constructing

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Photos of swastika on Ukrainian mall stairway creates a stir [Video]

Ukrainian nationalist press in damage-control mode to explain away the Nazi sign, but they forgot the name of the street the mall is on.

Seraphim Hanisch

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One of the aspects of news about Ukraine that does not make it past the gatekeepers of the American and Western news media is how a significant contingent of Ukrainian nationalists have espoused a sense of reverence for Nazis. The idea that this could even happen anywhere in the world in an open manner makes the claim seem too absurd to be taken seriously. Gone are the days when the Nazi swastika adorned streets and buildings in Europe. Right?

Well, maybe, wrong.

This was seen in Kyiv’s Gorodok (or Horodok, if you insist) Gallery, a shopping center in that city, located on Bandera Avenue.

The pro-nationalist news service UNIAN wasted no time going to press with their explanation of this incident, which admittedly may be accurate:

Children and teenagers who participated in the All-Ukrainian break dance festival held in the Kyiv-based Gorodok Gallery shopping mall were shocked to see a swastika image projected onto an LED staircase.

The mall administration apologized to visitors, explaining saying that their computer system had apparently been hacked.

“The administration and staff have no relation to whatever was projected onto the LED-staircase, and in no way does it support such [an] act. Now we are actively searching for those involved in the attack,” it said in a statement.

According to Gorodok Gallery’s administrative office, it was not the first time a cyber breach took place.

As reported earlier, Ukraine is believed to be a testing ground for cyberattacks, many of which are launched from Russia. Hackers have earlier targeted critical energy infrastructure, state institutions, banks, and large businesses.

This time, it appears, hackers aimed to feed the Kremlin’s narrative of “Nazis in power in Ukraine” and create a relevant hype-driving viral story for Russian media to spread it worldwide.

The Gorodok Gallery also apologized on its Facebook page and said that this was a result of hacking.

But what about the street that the mall is on? From the self-same Facebook page, this is what we see:


To translate, for those who do not read Ukrainian or Russian, the address says the following:

23 Steven Bandera Prospekt, Kyiv, Ukraine 04073

This street was formerly called “Moscow Avenue.” Big change, as we shall see.

Steven Bandera got his birthday designated as a national holiday in Ukraine last December. He is known in Ukraine’s history for one thing. According to the Jerusalem Post:

The street where the shopping mall is located is named for Stepan Bandera, a Ukrainian nationalist who briefly collaborated with Nazi Germany in its fight against Russia.

His troops are believed to have killed thousands of Jews.

Several Israeli papers picked this bit of news up, and of course, the reasons are understandable. However, for the West, it appears possible that this news event will largely go unnoticed, even by that great nation that is often called “Israel’s proxy”, the United States.

This is probably because for certain people in the US, there is a sense of desperation to mask the nature of events that are happening in Ukraine.

The usual fare of mainstream news for the West probably consists of things like “Putin’s military seizes innocent Ukrainian sailors in Kerch incident” or, “Ukraine’s Orthodox Church declared fully independent by Patriarch of Constantinople” (not that too many Americans know what a Constantinople even is, anyway), but the overriding narrative for the American people about this country is “Ukraine are the good guys, and Russia are the bad guys,” and this will not be pushed aside, even to accommodate the logical grievance of Israel to this incident.

If this article gets to Western papers at all, it will be the UNIAN line they adhere to, that evil pro-Russia hackers caused this stairway to have a swastika to provoke the idea that Ukraine somehow supports Naziism.

But UNIAN neglected to mention that the street name was recently changed to Stephan Bandera (in 2016), and no one appears to have hacked this. Nor does UNIAN talk about the Azov fighters that openly espoused much of the Nazi ideology. For nationalist Ukrainians, this is all for the greater good of getting rid of all things Russia.

A further sad fact about this is the near impossibility of getting assuredly honest and neutral information about this and other similar happenings. Both Ukrainian nationalists and Russian media agencies have dogs in the race, so to speak. They are both personally connected to these events. However, the Russian media cannot be discounted here, because they do offer a witness and perspective, probably the closest to any objective look at what is going on in Ukraine. We include a video of a “torchlight march” that took place in 2017 that featured such hypernationalist activity, which is not reported in the West.

More such reports are available, but this one seemed the best one to summarize the character of what is going on in the country.

While we do not know the motive and identities of whoever programmed the swastika, it cannot really be stated that this was just a random publicity stunt in a country that has no relationship with Nazi veneration.

The street the mall is on bears witness to that.

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It’s Back to the Iran-Contra Days Under Trump

Abrams and his cronies will not stop with Venezuela.

Strategic Culture Foundation

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Authored by Wayne Madsen, via The Strategic Culture Foundation:


Showing that he is adopting the neoconservative playbook every day he remains in office, Donald Trump handed the neocons a major win when he appointed Iran-contra scandal felon Elliott Abrams as his special envoy on Venezuela. Abrams pleaded guilty in 1991 to two counts of withholding information on the secret sale of US weapons for cash to help illegally supply weapons to the Nicaraguan right-wing contras, who were battling against the government of President Daniel Ortega. Abrams would have headed to a federal prison, but President George H. W. Bush, an unindicted co-conspirator in the scandal, issued pardons to Abrams and his five fellow conspirators – former Secretary of Defense Caspar Weinberger, former National Security Adviser Robert McFarlane, and former Central Intelligence Agency officials Alan Fiers, Duane “Dewey” Clarridge, and Clair George – on Christmas Eve 1991, during the final weeks of Bush’s lame duck administration.

Abrams escaped being charged with more serious crimes by Independent Counsel Lawrence Walsh because he cut a last-minute deal with federal prosecutors. Trump, who has made no secret of his disdain for cooperating federal witnesses, would have normally called Abrams a “rat,” a gangster term meaning informant. The man who helped engineer the pardons for Abrams and his five convicted friends was none other than Bush’s Attorney General, William Barr, who has just been sworn in as Trump’s Attorney General. Trump, who is always decrying the presence of the “deep state” that thwarts his very move, has become the chief guardian of that entity.

During a recent hearing of the US House of Representatives Foreign Affairs Committee, newly-minted congresswoman Ilhan Omar, Democrat of Minnesota, reminded her colleagues and the world about the sordid background of Abrams.

Omar zeroed in on Abrams’s criminal history:

“Mr. Abrams, in 1991 you pleaded guilty to two counts of withholding information from Congress regarding the Iran-Contra affair, for which you were later pardoned by President George H.W. Bush. I fail to understand why members of this committee or the American people should find any testimony you give today to be truthful.”

Abrams, as is the nature of neocons, refused to respond to Omar and cited her comments as “personal attacks.”

Abrams’s and his fellow criminals’ use of mercenaries and “death squads” to conduct secret wars in Nicaragua, Honduras, El Salvador, and Guatemala during the Ronald Reagan administration in the 1980s has made a re-entrance under Trump. Abrams was brought on board by neocons like National Security Adviser John Bolton, Vice President Mike Pence, and Secretary of State Mike Pompeo to oversee a US military build-up in Colombia, said to be 5000 US troops, to support Venezuelan paramilitary and military efforts to topple President Nicolas Maduro. Abrams and Bolton are also believed to have retained the services of another unindicted conspirator in the Iran-contra affair, Michael Ledeen, a colleague of the disgraced and convicted former Trump National Security Adviser, retired Lieutenant General Michael Flynn. Ledeen and Flynn co-authored a book titled, “The Field of Fight: How We Can Win the Global War Against Radical Islam and its Allies.” The book contains nothing more than the standard neocon tripe one might expect from the likes of Ledeen.

An official investigation of the Iran-contra scandal by the late Republican Senator John Tower of Texas concluded that Abrams’s and Ledeen’s friend, Iranian-Jewish middleman Manucher Ghorbanifar, a long-time Mossad asset and well-known prevaricator, was extremely instrumental in establishing the back-channel arms deals with Iran. Ghorbanifar has long been on the CIA “burn list” as an untrustworthy charlatan, along with others in the Middle East of similar sketchy credentials, including the Iraq’s Ahmad Chalabi, Syria’s Farid “Frank” Ghadry, and Lebanon’s Samir “Sami” Geagea. These individuals, however, were warmly embraced by neocons like Abrams and his associates.

Abrams, whose links with Israeli intelligence has always been a point of consternation with US counter-intelligence officials, is part of an old cabal of right-wing anti-Soviet Democrats who coalesced around Senator Henry Jackson in the 1970s. Along with Abrams, this group of war hawks included Richard Perle, Frank Gaffney, William Kristol, Douglas Feith, Lewis “Scooter” Libby, Abram Shulsky, and Paul Wolfowitz. Later, this group would have its fingerprints on major US foreign policy debacles, ranging from Nicaragua and Grenada to Lebanon, Iraq, and Libya. Later, in December 2000, these neocons managed to convince president-elect George W. Bush of the need to “democratize” the Middle East. That policy would later bring not democracy but disaster to the Arab Middle East and North Africa.

Abrams and his cronies will not stop with Venezuela. They have old scores to settle with Nicaraguan President Ortega. The initiation of “regime change” operations in Nicaragua, supported by the CIA and the US Southern Command (SOUTHCOM) in Miami, have been ongoing for more than a year.

The Trump administration has already achieved a regime change victory of sorts in El Salvador. Nayib Bukele, the former mayor of San Salvador, who was expelled from the formerly-ruling left-wing Farabundo Marti National Liberation (FMLN) party and joined the right-wing GANA party, was recently elected president of El Salvador. Bukele has quickly re-aligned his country’s policies with those of the Trump administration. Bukele has referred to President Maduro of Venezuela as a “dictator.” He has also criticized the former FMLN government’s recognition of China and severance of diplomatic ties with Taiwan. It will be interesting to see how a sycophant like Bukele will politically survive as Trump continues to call hapless asylum-seeking migrants from his country, who seek residency in the United States, “rapists, gang monsters, murderers, and drug smugglers.”

Another country heading for a US-installed “banana republic” dictator is Haiti. President Jovenal Moise has seen rioting in the streets of Port-au-Prince as the US State Department removed all “non-essential” personnel from the country. Moise, whose country has received $2 billion in oil relief from Venezuela, to help offset rising fuel prices, has continued to support the Maduro government. However, at the US-run and neo-colonial artifice, the Organization of American States (OAS), Moise’s envoys have been under tremendous pressure to cut ties with Venezuela and recognize the US puppet Juan Guaido as Venezuelan president. Moise’s refusal to do so resulted in armed gangs hitting the streets of Port-au-Prince demanding Moise’s resignation. It is the same neocon “regime change” playbook being used in Venezuela and Nicaragua.

There will be similar attempts to replace pro-Maduro governments in his remaining allies in the region. These include Suriname, Antigua and Barbuda, Dominica, and Saint Vincent and the Grenadines.

Abrams was also brought in as an adviser on Middle East policy in the George W. Bush administration. The carnage of Iraq is a stark testament to his record. In 2005, it was reported that two key Bush White House officials – Deputy Chief of Staff Karl Rove and Deputy National Security Adviser Elliot Abrams – gave a “wink and a nod” for the assassinations by Israeli-paid operatives of three key Lebanese political figures seeking a rapprochement with Syria and Lebanese Hezbollah – Member of Parliament Elie Hobeika, former Lebanese Communist Party chief George Hawi, and former Prime Minister Rafik Hariri.

In 2008, a United Nations panel headed by former Canadian prosecutor Daniel Bellemare later concluded Hariri was assassinated by a “criminal network” and not by either Syrian and Lebanese intelligence or Lebanese Hezbollah as proffered by Abrams and his friends in Washington.

Representative Omar was spot on in questioning why Abrams, whose name is as disgraced as his two fellow conspirators – Oliver North and John Poindexter – whose criminal convictions were overturned on appeal, is working for the Trump administration on Venezuela. The answer is that the neocons, who can sense, like raptors, Trump’s political weakness, have filled the vacuum left by top-level vacancies in the administration.

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Putin: If mid-range missiles deployed in Europe, Russia will station arms to strike decision centers

Putin: If US deploys mid-range missiles in Europe, Russia will be forced to respond.

RT

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Via RT…


If the US deploys intermediate-range missiles in Europe, Moscow will respond by stationing weapons aimed not only against missiles themselves, but also at command and control centers, from which a launch order would come.

The warning came from President Vladimir Putin, who announced Russia’s planned actions after the US withdraws from the INF Treaty – a Cold War-era agreement between Washington and Moscow which banned both sides form having ground-based cruise and ballistic missiles and developing relevant technology.

The US is set to unilaterally withdraw from the treaty in six months, which opens the possibility of once again deploying these missiles in Europe. Russia would see that as a major threat and respond with its own deployments, Putin said.

Intermediate-range missiles were banned and removed from Europe because they would leave a very short window of opportunity for the other side to decide whether to fire in retaliation after detecting a launch – mere minutes. This poses the threat of an accidental nuclear exchange triggered by a false launch warning, with the officer in charge having no time to double check.

“Russia will be forced to create and deploy weapon systems, which can be used not only against the territories from which this direct threat would be projected, but also against those territories where decision centers are located, from which an order to use those weapons against us may come.” The Russian president, who was delivering a keynote address to the Russian parliament on Wednesday, did not elaborate on whether any counter-deployment would only target US command-and-control sites in Europe or would also include targets on American soil.

He did say the Russian weapon system in terms of flight times and other specifications would “correspond” to those targeting Russia.

“We know how to do it and we will implement those plans without a delay once the relevant threats against us materialize,”he said.

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