Russia Analytical Report, May 29-June 4, 2018

This Week’s Highlights:

  • The only winners of the fraying transatlantic partnership between the U.S. and Europe are the leaders of China and Russia—even worse is that Trump doesn’t seem to be bothered, or even aware, of the emerging strategic re-alignments taking place under his watch, writes Erik Brattberg, director of the Europe program and fellow at the Carnegie Endowment for International Peace.
  • Former U.S. ambassador to the Soviet Union Jack Matlock writes that “Russiagate” promoters are diverting attention from real threats, and that the focus should instead be on encouraging Trump and Putin to restore cooperation in issues of nuclear safety, non-proliferation, control of nuclear materials and nuclear arms reduction—areas of vital interest to both the United States and Russia.
  • Mueller will not indict Donald Trump, but he will issue a comprehensive and detailed report, claims Nelson W. Cunningham, president and co-founder of an international trade consultancy. He predicts that the issuing of Mueller’s report, the fight over its release and the fallout from a firing of Deputy Attorney General Rod Rosenstein will play out before November.
  • The outrage over journalist Arkady Babchenko’s murder unified virtually everyone. But the enthusiasm for this clever special operation was almost exclusively confined to Ukraine, writes Alexander Baunov, editor in chief of Carnegie.ru.
  • In 2011, when the FSB sent a request to Russia’s most popular social network, Vkontakte, to take down pages used by protestors, it did so by fax, writes journalist Andrei Soldatov. When Putin began downsizing the role of the FSB, he also ceased using the agency as a recruitment base for important government positions, Soldatov writes. The new model is familiar from the late Soviet Union, when the Politburo called the shots and kept the intelligence services on a short leash—and a crucial part of this new model is to keep everybody off balance, including law enforcement and secret services.

I. U.S. and Russian priorities for the bilateral agenda

Nuclear security:

  • No significant commentary.

North Korea’s nuclear and missile programs:

  • No significant commentary.

Iran and its nuclear program:

  • No significant commentary.

New Cold War/Sabre Rattling:

  • No significant commentary.

NATO-Russia relations:

“Don’t Put US Bases in Poland: NATO can and must do a lot more to deter Russia without dividing allies,” Ben Hodges, Politico, 06.04.18: The author, the Pershing chair in strategic studies at the Center for European Policy Analysis, writes: “What makes NATO the most successful military alliance in history is the cohesion of its members. Any policy that risks undermining that should be examined with a highly critical eye. Establishing a permanent U.S. military presence in Poland … is exactly one of those cases. … Some would see this as a violation of the 1997 NATO-Russia Founding Act … Moscow certainly would. … I don’t think it is wise to move ahead with a policy that would feed Russian fears, real or not. The move could also create additional friction with allies who are already at odds with each other … a base in Eastern Europe is unnecessary. … from a practical standpoint, permanently placing an armored brigade combat team in Eastern Europe is simply unfeasible. It would require an expansion of the U.S. Army that does not appear likely to happen. … the Army and therefore U.S. European Command, benefits from the increased readiness that comes from the use of rotational combat teams. … Eastern allies believe that the presence of U.S. forces would significantly increase the deterrent effect, because they believe that Russia would never attack and risk a kinetic confrontation with U.S. forces … There are ways we can achieve this … without straining the cohesion of the alliance. The use of rotational forces should be expanded to include all of the eastern flank nations … What’s really needed in these countries are logisticians, air and missile defenders and military police, as well as intelligence and communications experts. … If Eastern Europe wants to enhance NATO’s deterrent effect, a potentially divisive military presence is not the right way to do it. Far better to protect the cohesion of the Alliance, while ensuring that trained and ready forces are ready to move in if necessary.”

Missile defense:

  • No significant commentary.

Nuclear arms control:

  • No significant commentary.

Counter-terrorism:

  • No significant commentary.

Conflict in Syria:

  • No significant commentary.

Cyber security:

  • No significant commentary.

Elections interference:

“Musings … ‘Russiagate’ Hysteria,” Jack Matlock, JackMatlock.com, 06.02.18The author, a career diplomat and former U.S. ambassador to the Soviet Union, writes: “Did the [New York] Times’ editors perform at least the rudiments of due diligence before they climbed on their high horse of moral outrage in the editorial of the day? … their long editorial excoriated ‘Russia’ (not individual Russians) for ‘interference’ in the election and demanded increased sanctions against Russia ‘to protect American democracy.’ … The New York Times, of course is not the only offender. … Increasingly, both in Congress, and in our … media it has been accepted as a ‘fact’ that ‘Russia’ ‘interfered’ in the 2016 election. … what is the most important fact regarding the 2016 U.S. presidential election? The most important fact, obscured in ‘Russiagate’ hysteria, is that Americans elected Donald Trump president under the terms set forth in a constitution written and approved by Americans. … I did not personally vote for Trump … But I consider the charges that Russian actions ‘interfered’ in the election, or—for that matter—damaged the ‘quality of our democracy’ ludicrous, pathetic and shameful. … I should add ‘dangerous’ … ‘Dangerous’ because, making an enemy of Russia, the other nuclear superpower—yes, there are still two—comes as close to political insanity as anything I can think of. … Instead of facing the facts and coping with the current reality, the ‘Russiagate’ promoters in both the government and the media, are diverting our attention from where the real threats are. … We must desist from our current witch-hunt insanity and encourage Presidents Trump and Putin to restore cooperation in issues of nuclear safety, non-proliferation, control of nuclear materials and nuclear arms reduction. This is in the vital interest of both the United States and Russia.”

“The Special Counsel’s Investigation Is Likely Hurtling Toward a Conclusion. Buckle Up,” Nelson W. Cunningham, Politico, 05.29.18The author, president and co-founder of an international trade consultancy, writes: “Special counsel Robert Mueller may well be in the final stages of wrapping up his principal investigation. … Mueller’s target is September 1. … Here’s what could happen: Mueller will not indict the president, but he will issue a comprehensive and detailed report. … A presidential indictment would take Mueller down a constitutional rabbit hole from which he might not emerge for years. It would also be contrary to long-standing Justice Department policy, and Mueller, a careful institutionalist, is required to follow department policy where he can. … There may well be other indictments, against lesser figures … Mueller might even name Trump an ‘unindicted co-conspirator’ in some of these crimes, just as Watergate special prosecutor Leon Jaworski named Richard Nixon in 1974. … But unlike the Starr Report, Mueller’s [report] may never see the light of day. … Rod Rosenstein will decide to release the report to Congress and the public. … Trump may follow the example of Nixon in October 1973 when he ordered the firing of Archibald Cox in the famous Saturday Night Massacre, which also took down the attorney general and deputy attorney general …  Trump’s efforts to shut down the report could backfire spectacularly. … All of this—the conclusion of Mueller’s investigation, the issuing of his report, the fight over its release and the fallout from a firing of Rosenstein—will play out loudly in public before November.”

Energy exports from CIS:

“Transformed Gas Markets Fuel US-Russian Rivalry, But Europe Plays Key Role Too,” Morena Skalamera, Russia Matters, 05.30.18: The author, an associate with the Geopolitics of Energy Project at Harvard Kennedy School's Belfer Center, writes that “the U.S. has much to gain on the global gas market … Europe’s gas market, meanwhile, has much to gain from additional supply. But Trump’s approach … alienates Western European partners and feeds into a … portrayal of the new U.S. role … as a zero-sum game, in which … U.S. gas supplies serve as an antidote to Russia's ‘gas dominance’ in Europe … even if Russia remains Europe’s dominant gas supplier in the coming years—as is likely—it now has to play by EU rules and vie hard for market share … gas is a prized commodity but not a major weapon in East-West relations … the main change [in Europe’s gas market] has been a shift from rigidity to flexibility … and from domination by a handful of strong players to greater competition. … In 2009-2011 the U.S. … mastered the extraction of … ‘shale gas’ … This development affected gas exporters across the board, including Gazprom … Washington seems intent on pushing countries on the other side of the pond to wean themselves off Russian gas and, sometimes at least, to buy American instead. … it’s almost impossible to imagine U.S. LNG companies selling gas at a loss in exchange for geopolitical influence (whereas Gazprom has). … both Russia and the U.S. often see the EU as having limited agency and existing merely as a battleground where American and Russian gas suppliers square off. … Global competition among LNG gas suppliers is likely to get more intense. … On the European market, both Russian and American companies will have to face increasingly competitive producers like Qatar, which, by some estimates, may beat out both countries in sales to Europe in five to 10 years. … As agonizing as recent challenges in Europe may be for Gazprom, none of them poses any existential threat either to the company itself or to the Russian economy as a whole.”

U.S.-Russian economic ties:

  • No significant commentary.

U.S.-Russian relations in general:

“Standing Up to the Thought Police,” Editorial Board, The Washington Post, 06.04.18The news outlet’s editorial board writes: “Telegram was created by … Pavel Durov, a Russian who left the country after he lost control of an earlier social media platform, VKontakte. Telegram relies on encryption and has 200 million active users worldwide. … Recently, Russia demanded that Telegram turn over keys to user data, and Telegram refused. … Russia's communications regulator, Roskomnadzor, has been trying to shut down Telegram in the country. … the latest roadblock he [Durov] confronted is at Apple … Russia has asked Apple to remove Telegram from its App Store in Russia and to prevent it from sending notifications to Russian users. According to Mr. Durov, since mid-April, Apple has restricted Telegram from updating its app worldwide … We understand that Apple is not going to cave in to the Russian thought police. Apple has not removed Telegram from the App Store nor blocked notifications, and on Friday, Apple pushed out an update of Telegram as Mr. Durov requested. … Mr. [Tim] Cook has quietly stood on principle and refused to give in to Russia's demands. This is an important development in the still-unsettled battle over freedom in the digital world. Telegram is an extremely significant test case.”

II. Russia’s relations with other countries

Russia’s general foreign policy and relations with “far abroad” countries:

“Putin’s Fourth Term: New Faces—Old Politics,” Alexander Lukin, The National Interest, 06.02.18The author, head of the department of international relations at National Research University Higher School of Economics in Moscow, writes: “The main individuals responsible for setting foreign policy have retained their posts—Foreign Minister Sergei Lavrov, Defense Minister Sergey Shoigu, presidential aide for international affairs Yuri Ushakov and others—meaning that little will change. … That policy essentially strives to preserve Russia’s independence and sovereignty while reaching agreement with the West wherever possible. Leaders understand that a complete break with the West could lead to serious problems for the economy and … the regime. … On the other hand, the West, and particularly the U.S., demands that Russia give up all of its negotiating positions in return for the promise of restored relations—terms to which the Putin regime cannot agree. … As a result, Putin must pursue a balanced policy. And despite the harsh U.S. sanctions against Russia, the Trump administration has created very favorable conditions for achieving such a balance. Washington’s withdrawal from the Iran deal, the economic pressure it is applying to Europe and China, and its ill-defined position on Korea make it possible for Russia to deepen its cooperation with China while improving the atmosphere with Europe. Taken together, it enables Moscow to continue its current course without incurring significant losses.”

“Mid-sized Powers Must Unite to Preserve the World Order: France, the UK, Japan and others must join forces as the US and China become erratic,” Gideon Rachman, Financial Times, 05.28.18The author, chief foreign affairs columnist for the Financial Times, writes: “Both America and China are increasingly tempted to break free of the constraints of international agreements and to use their power to achieve their goals, unilaterally. Russia lacks the economic might of a great power. But it has the territorial expanse and the nuclear arsenal, and has made a mighty contribution to an atmosphere of growing international lawlessness. … this creates a dilemma for the world’s middle powers. Germany, France, Japan and Britain … are international players, with global economic and security interests. They need a world with rules. … It is time for an informal alliance of middle-sized powers that are interested in supporting a global rules-based order. … collectively, they have a chance of working together to preserve a world based around rules and rights, rather than power and force.”

China:

“Why Trump’s Tariffs May Push Europe Toward China and Russia,” Erik Brattberg, The National Interest, 06.03.18The author, director of the Europe program and fellow at the Carnegie Endowment for International Peace, writes: “The Trump administration’s National Security Strategy … called for a redoubling of efforts to stave off long-term strategic competitors, especially China and Russia. … Several of President Trump’s own actions, however, directly and indirectly contradicts this stated goal. … Trump is severely undermining the transatlantic relationship and pushing allies further away, thus generating new space for Beijing and Moscow to wield influence. Two recent actions taken by Trump perfectly illustrate this worrisome trend. The first one is the use of an arcane national security provision to impose unilateral trade tariffs on allied steel and aluminum producers. … European countries are now intensifying their outreach to Russia and China in an effort to improve trading relationships and put pressure on Trump. … The other issue is Trump’s decision to pull out of the JCPOA nuclear deal with Iran, which has created the deepest rift across the Atlantic since the Iraq war invasion in early 2003. … The only winners of such a fraying transatlantic partnership are the leaders of China and Russia. But the worst part of it all is that Trump doesn’t seem to be bothered—or even aware—of the emerging strategic re-alignments taking place under his watch.”

Ukraine:

“Back From the Dead: the Bizarre Story of Journalist Arkady Babchenko. By faking a journalist’s death and blaming it on Russia, Ukraine is fighting fire with fire—and setting its own house ablaze,” Mark Galeotti, Foreign Policy, 05.30.18The author, a senior research fellow at the Institute of International Affairs Prague and a visiting fellow with the European Council on Foreign Relations, writes: “On May 29, the news broke that [Arkady Babchenko] another Russian journalist critical of President Vladimir Putin’s regime had been killed, gunned down outside his apartment in Kiev. … On May 30, the journalist stood up, alive and well, at a press conference to admit it had been a sting operation by the Ukrainian security services to catch a Russian-paid killer. A cunning stratagem? A self-defeating gimmick? Welcome to the world of post-truth geopolitics, where it can be both. … What seems to have been a tactical win for Ukraine might prove something of a strategic defeat. … Moscow now gets to play the ‘Babchenko defense’ next time its fingerprints appear to be on some similar black operation. … this was not just a police sting but also used, from the first, to score political points against the Kremlin. … That Babchenko is still alive is great news. That someone who was trying to kill him is reportedly in custody is an excellent outcome. But to give the last word to that British police officer I spoke to, ‘there must have been some other way to have achieved this.’ He paused, sighed. ‘Sometimes people can just be a bit too clever for their own good.’”

“Sorry, Foreign Media: Your Anger At Ukraine Faking a Journalist's Death Is Misguided,” Maxim Eristavi, The Washington Post, 05.31.18The author, a nonresident research fellow with the Atlantic Council and co-founder of Hromadske International, writes: “When I first took to social media to report that that the Russian journalist and dissident had been killed, I received overwhelming support from foreign colleagues and readers. Then, about 20 hours later, I rushed to share the joyous news that he wasn't dead after all. … The response … a storm of criticism tinged with annoyance … made me question the news culture we live in and the narrative filter some of my Western colleagues apply to their coverage of foreign events. … Violence against journalists in Eastern Europe has become routine. … When Babchenko's newsroom colleagues learned, with the rest of the world, that he was alive and safe, the reaction was so wild that the video capturing it became viral. … some foreign journalists and commentators … [have] denounced the Ukrainian government's operation as deplorable, or as an ‘unacceptable manipulation.’ Some even equated it with Kremlin disinformation campaigns. … My dear foreign colleagues, I'm sorry that the Ukrainian authorities haven't lived up to your expectations. … But today I'm just happy that my colleague is alive, and that journalists in our country have finally experienced a measure of justice.”

“Sadly, the Fog of Lies Is Working,” David Ignatius, The Washington Post, 06.01.18The author, a veteran foreign correspondent-turned-columnist, writes: “When a prominent Russian journalist fakes news about his own murder to try to expose the Kremlin's misdeeds, you know something has gone dangerously wrong in what we like to call the free marketplace of ideas. … Russia pioneered the modern use of ‘weaponized information’ to interfere in the 2016 American presidential election and political campaigns in Europe, according to the U.S. intelligence community. But the Kremlin has lots of company in using hacked, leaked, stolen or fabricated information to influence opinion. The American information marketplace is being corrupted by many other foreign nations, including China, Saudi Arabia, Iran, Qatar and the United Arab Emirates. … The scary thing is that this fog of lies is working—for the Russians, the Arab info-warriors and Trump. And it is encouraging a growing use of covert manipulation by other nations (and private parties) to shape opinion.”

 “Truth Without Borders: Why Faking a Journalist’s Death Won’t Help Ukraine,” Alexander Baunov, Carnegie Moscow Center, 06.04.18The author, editor in chief of Carnegie.ru, writes: “The outrage over Babchenko’s murder unified virtually everyone. But the enthusiasm for this clever special operation was less widespread: it was almost exclusively confined to Ukraine.”

Russia's other post-Soviet neighbors:

  • No significant commentary.

II. Russia’s domestic policies

Domestic politics, economy and energy:

“Religion and Violence in Russia: Context, Manifestations and Policy,” Center for Strategic and International Studies Russia and Eurasia Program, June 2018: The editor of this report, senior adviser and director of the Russia and Eurasia Program at CSIS, writes: “Narratives of ‘traditionalism’ are at the center of religious debates in Russia … That which is not ‘traditional’ is foreign, undesirable and often ‘extremist’—often with attendant legal repercussions. … while violent Islamist groups are consistently also prosecuted …, groups that use Orthodox imagery and concepts, even when they do so explicitly with the aim of inciting violence, are often left alone. … the media also plays a role, by echoing dominant narratives and further normalizing them. … Muslim religious leaders define themselves and their approaches as ‘traditional’ while more fundamentalist, and younger, preachers are delegitimized … as foreign-influenced, ‘radical’ and ‘extremist’ … in almost all cases of denunciation of other religious approaches and beliefs, the accusation of ‘foreign’ roots plays an important role … The same phenomena are further illustrated by … government restrictions on, Orthodox church denunciation of and violent action against groups [like Russia’s Jehovah’s Witnesses] termed ‘sects.’ … while anti- Muslim sentiment generally remains at lower levels in Russia than in much of the rest of Europe, it also appears to be increasing. … the rise of social media as a recruiting tool … has coincided with the growth of ISIS in Russia and the participation of Russians and other post-Soviet citizens in the Syrian conflict. … The Orthodox Church and the question of what is traditional present an entirely different picture when it comes to the conflict in Ukraine. … the narrative of ‘traditionalism’ and ‘extremism’ that frames so much of the discussion of religion in Russia has made it more, rather than less, difficult to battle violent manifestations of religious tension and conflict.”

“Analyst Sackings Will Not Stop Questions For Russia’s Gazprom: Many investors are unhappy that gas group does not seem to be maximizing profits,” Neil Buckley, Financial Times, 05.30.18The author, Eastern Europe editor at the Financial Times, writes: “Shareholders have long fretted that Gazprom’s goal does not seem to be maximizing profits … But Mr [Alex] Fak’s report suggests Gazprom’s decisions make perfect sense if you assume it is run, above all, for the benefit of the contractors that build those pipelines. … Three major pipeline projects now being built … will cost $93.4 billion … But it [the report] estimates all three … are ‘not even close’ to being value-creating for Gazprom. They will, however, be profitable, says the report, for Gazprom’s two main contractors: Stroytransgaz, controlled by Gennady Timchenko, and Arkady Rotenberg’s Stroygazmontazh. … [This situation] risks encouraging self-censorship among Russian investment analysts. … The report also highlights once again just how poorly valued Gazprom is.”

Defense and aerospace:

  • No significant commentary.

Security, law-enforcement and justice:

 “How the Kremlin Corralled the FSB,” Andrei Soldatov, Foreign Affairs, 05.31.18The author, an investigative journalist and author, writes: “From Putin's ascent to power in 2000 until quite recently, the FSB enjoyed the status of a ‘new nobility’ … The agency was generously funded, immune from oversight and free to act against the real and perceived enemies of the Kremlin. Putin’s trust in the FSB … proved to be misplaced. The agency failed to predict the massive protests that struck Moscow in 2011, and … was powerless to respond to the demonstrators’ use of social media to mobilize and organize. When the FSB sent a request to Russia’s most popular social network, Vkontakte, to take down pages used by the protestors, it did so by fax. … Putin began, around 2015, to change the scheme. He got rid of old friends … Around this time, Putin also ceased using the FSB as a recruitment base for important positions in the government and economy. … The goal of these changes was not to make the intelligence services less important; it was to reduce their autonomy. The new model is familiar from the late Soviet Union, when the Politburo called the shots and kept the intelligence services on a short leash … A crucial part of this new model is to keep everybody off balance, including law enforcement and secret services. … Russia’s military intelligence agency, the GRU, is reducing its public presence, and the recently formed National Guard has abandoned its ambition to obtain surveillance powers. The key problem for the late-Soviet model was that the information services … eventually ceased supplying critical information to the top for fear of telling their bosses what they didn’t want to hear.”