On July 20, a panel discussion titled “Russia Under President Vladimir Putin” took place at the Commission on Security and Cooperation in Europe (the Helsinki Commission). A group of experts, including Anders Aslund, Daniel Fried, Marius Laurinavicius, Paul Massaro, Brian Whitmore, and Ilya Zaslavskiy, spoke about the gravest issues facing the Russian state, such as corruption, oligarchy, organized crime, and the threats the Putin regime poses to the West today.

 

Left to right: Daniel Fried, Marius Laurinavicius, Anders Aslund, Paul Massaro, Ilya Zaslavskiy, and Brian Whitmore. Photo: C-Span.

 

Participants:

Anders Aslund, Senior Fellow, Atlantic Council

Daniel Fried, Former Assistant Secretary, Department of State, European and Eurasian Affairs

Marius Laurinavicius, Senior Research Fellow, Baltic-American Freedom Foundation

Paul Massaro, Policy Adviser, Commission on Security and Cooperation in Europe

Brian Whitmore, Senior Correspondent, Radio Free Europe/Radio Liberty

Ilya Zaslavskiy, Consultant, Free Russia Foundation, Energy and Political Risks

 

Discussion:

Brian Whitmore:

  • The Russian elite have a license to monetize their positions, so long as they remain politically useful or loyal to the Putin regime.
  • Corruption proceedings only occur when someone crosses the line politically.
  • The question in these cases is not whether corruption has occurred, but rather whom these individuals have angered within the Kremlin.
  • Organized crime is often used by the Russian state as a weapon of statecraft.
    • This method is used to muddle the state’s fingerprints (e.g. smuggling weapons to the Donbas via non-state operatives).
  • Corruption is the new communism, in that it is spreading as a tool of pro-Russian influence in the West.
    • Shell company real estate holdings in London and New York are prime examples of this phenomenon.

Anders Aslund:

  • Organized crime and oligarchy have effectively been endorsed by the Russian state.
  • Four groups/entities allow this trend to continue unabated:
    • Russia’s FSB and judiciary system.
    • State companies (e.g. Gazprom).
    • Putin’s inner circle.
    • The West.
  • The West is not free from blame in Russia’s struggle with corruption – many stolen assets are funneled to the West, where property rights are more rigorously enforced.
  • Oftentimes these assets are handled by law firms because their communications are protected by attorney-client privilege.

Daniel Fried:

  • The Western system of liberalism and democracy is now under attack from both Russia and within Washington itself.
  • Sanctions will not solve the problem of corruption, but they are an important part of the puzzle.
  • When Russia fails at external aggression, it has historically turned to internal reform as an alternative. This is cause for optimism.

 

Q & A: 

  1. Do the recent anti-corruption protests in Russia signify cracks in Putin’s kleptocracy?

Ilya Zaslavskiy:

  • That is a question that is up for debate, but it does show that Russia’s youth have become fed up with corruption, along with a corresponding lack of social mobility and opportunity at home.
  • We must also realize that political reform is a long-term game – and change won’t necessarily be seen overnight.

 

  1. What would Russian reforms look like?

Daniel Fried: 

  • More open economy.
  • Improved rule of law.
  • More positive relationship with the West.
  • Different political leadership.

 

  1. How does kleptocracy pose a threat to the West and democracy?

Brian Whitmore:

  • Kleptocracy is not confined to Russia’s borders – it tends to create networks of influence in the West, as well.
  • Shell companies have popped up all around Europe, ultimately leading back to Gazprom and the Kremlin.
    • They have opaque ownership structures, making cash flow (and political influence) hard to trace.
    • Many of these companies are associated with Eurosceptic, pro-Kremlin propaganda, which ultimately hurts the Western cause in the information war.
  • For these reasons, Putin’s kleptocracy should be seen as a top security threat to the West.

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