TRUMP, LOOSE NUKES, THE RUSSIAN MAFIA, SEYMOUR HERSH, AND THE MYSTERY OF THE MISSING LINK

9 09 2018

Recently, I went looking for something authoritative about Russia during “the lawless years” that followed the fall of the USSR. After doing some internet searching, I found that Seymour Hersh, whose reputation is reasonably impeccable, had written a story, entitled “The Wild East,” on that subject in 1994. Yes, I know there are those who attack him, but if you’re reporting on things that annoy those in power, or who aspire to power, you will be attacked. Hersh has won plenty of recognition for his work, and this particular piece was published in The Atlantic, which does not put its support behind dicey reporting.

The page was so discouraging to look at that I almost gave up without reading it. It was in that old-style 90’s internet format–wall-to-wall words, no margins, no pictures, no skipped lines between paragraphs. At the top of the page were an underlined 1 and a 2, indicating that it was the second page of an article, since the 2 was black and the one was blue. Might as well start at the beginning, I said to myself, and jumped to page one.

The US embassy in Moscow

Hersh began his story with an account of the unsolved murder of a staff member of the American Embassy in Moscow:

On November 13, 1993, Michael Dasaro was brutally murdered in his apartment in a fashionable neighborhood in central Moscow, a ten-minute walk from the American embassy. Dasaro was on the verge of being a classic American success story. He grew up poor and streetwise in a public-housing project near Boston and managed to escape, with the aid of a scholarship, to Harvard University, where he became immersed in Russian studies. It seemed inevitable, after his graduation in 1981, that he would find his way to the Soviet Union and put his love of Russian culture and his fluency in the language to work. By the late 1980s he was a valued and much respected contract employee in the economics section of the U.S. embassy in Moscow. Last fall he was hired——at high pay——by one of the many American accounting companies now administering State Department contracts and Agency for International Development (AID) privatization programs throughout Russia and the former Soviet republics.

psst….wanna buy a nuke?

Then Hersh broadened his focus to the way “law and order” had deteriorated in the former Soviet Union, to the point where the country’s stockpiles of nuclear weapons and fissile materials might be sold by desperate military personnel (who were not getting paid, or getting paid so little that it amounted to not getting paid). Here’s a part of Hersh’s transition from the specific to the general:

Two Presidents, George Bush and Bill Clinton, have supported Boris Yeltsin, the President of Russia, although the Yeltsin government has been unable to deal with crime. American policymakers have no illusions about the lack of order in Russia, but how to address it poses a classic dilemma: is the cure——more police and state control over day-to-day life and society——worse than the disease?

Furthermore, some Clinton Administration experts question how extensively the United States can intervene legitimately in Russian affairs. As these experts may know, the Bush Administration chose to play a major and until now secret role in helping Yeltsin to emerge as a hero in his first major crisis—The August, 1991, coup attempt against Mikhail Gorbachev. Bush’s clandestine support for Yeltsin may later have helped blind him and his senior aides to the dangers posed by organized crime in Russia—–dangers that leave citizens at risk of being robbed or murdered, and nuclear warheads and enriched materials at risk of being sold to outsiders in Russia’s flourishing black market.

A little further on in the article, Hersh writes

Dasaro was also a good friend to the many young Americans just out of college who were hired to replace Soviet employees  (my italics) after a spy scare in the mid-1980s. Like them, he was deeply troubled by the extent to which organized crime had made inroads into all aspects of Russian life——including USAID’s multimillion-dollar effort to change state-run enterprises into private businesses, known as the privatization program. “Michael was an expert on crime and privatization,” recalls Kim Gamel, who in the early 1990s was a fledgling reporter for the English-language Moscow Tribune and is now a graduate student in journalism at Northwestern University. (my note: she now writes for the US military newspaper Stars and Stripes, and is based in Korea.) “He had contacts and he knew that the criminal element had taken over privatization.” Dasaro was constantly telling her about various black-market schemes, Gamel says, but not in detail: “I don’t think he thought I could handle it journalistically, and he was probably right.”

It’s quite interesting to note the themes that are arising here, in the light of recent accusations of “Russian meddling in US elections.” We have USAID overseeing the privatization of the Russian economy, with “many young Americans hired” by the Russian government to oversee the process. In 1994,everybody, Hersh included, seems to take this incredibly deep level of American interference in the Russian government for granted. How does it look now, especially in light of its catastrophic results?

After reporting on the way the murder investigation was handled, or rather mishandled, by the embassy and the Moscow police, Hersh interviews one former embassy employee, who says

“it occurred to me, of course, that the American government doesn’t want the public to know what’s going on. At some point there was a lid put on everything. None of my State Department friends can talk about it.”

The police first claimed that Dasaro wasn’t murdered, but had suffered a heart attack. Then they tried to pin his murder to his alleged participation in the gay community in Moscow, and also to frame it as a robbery, since Dasaro was alleged to be about to buy a car, which involved having a relatively large amount of cash on hand. The possibility Hersh barely points to, however, is this: that Dasaro was murdered because he knew so much about the extent of organized crime’s involvement in the privatization process, and was perceived as someone who might expose it to a wider public. To me, murdering somebody in the course of robbing them of the amount of money involved in buying a car seems like, um, overkill. On the other hand, robbery is an excellent pretext for murder, especially if you’re working with the police. Hersh makes it quite clear that Moscow’s police were all too willing to take their orders from organized crime.

Next, Hersh cites a largely unpublicized study by the US Department of Energy’s Office of Threat Assessment, which noted that, in the early 90’s, much of the Russian economy was controlled by organized crime, often with close ties to government officials. Organized crime controlled forty percent of all businesses, sixty percent of all state-owned companies, half the commercial banks, and eighty percent of the small businesses in Moscow and St. Petersburg. Thousands of military officers and dozens of top-level generals were also more likely to listen to the mafia than to their government.

This lead to concerns that these criminal elements might be seeking to steal nuclear materials from the government–not to have their own nuclear weapons, but to sell them overseas. Hersh spends quite a bit of time going into the details of this, the levels of concern about it expressed by various US government officials, and the failure of attempts to create stricter controls over these weapons. Page one ends with this paragraph:

Paul A. Goble, who resigned from the State Department in 1991 as the special adviser on Soviet nationality issues, explained to me that the notion of limited options is heightened by the American “assumption that in any given territory the strongest force is the government.” He said, “It’s reassuring for our leaders to think other leaders have more power than they actually do.” In Russia, he added, “we’re watching the death of a state.” Goble, now a senior associate at the Carnegie Endowment for International Peace, was willing to say what no one in the Clinton Administration wants said: “I’m convinced that if I had twenty-five million dollars, I could buy a warhead and the launch codes.”

That’s quite a statement. Curious to see where Hersh was going with this, I went to click on the link to page two of the article, the page I had found first. There was no such link. I knew how to get back to page two, but I was surprised at this apparent technical glitch by one of America’s premier magazines. Oh well, it’s a twenty-four-year-old article, right? To the casual reader, this is apparently the end of the story. A bit of a cliffhanger, but maybe that’s how Hersh intended it, eh? Just for the heck of it, I went to Hersh’s author page at The Atlantic site, and found–a link to page one, but no link to page two. Page one, which was much better formatted than page two, had whetted my appetite. I plunged on into page two’s densely packed prose.

The first few paragraphs finish the McGuffin introduced at the end of page one: somebody from Greenpeace actually negotiated the sale of a nuclear-armed Russian missile from a Russian base in East Germany, not for twenty-five million dollars, but for a measly quarter million. The deal fell through when all Russian troops were removed from Germany after the abortive coup in Russia in 1991. That didn’t end the threat, though. US intelligence services were aware of the Russian Mafia’s interest in nuclear materials, as well as the possibility that they might leave the country in the hands of disgruntled, underpaid nuclear scientists. (Apparently, that’s how North Korea got the raw materials for its weapons program.) Hersh writes

At one Russian nuclear site enriched uranium was stored in a Quonset hut that was “protected by a padlock or a cipher lock,. No sensors. No electronics. Just two sets of barbed wire.” The uranium was being protected by Russian militiamen armed with hunting knives. Nuclear scientists at Arzamas-16, the nuclear-weapons laboratory, have been in a state of near rebellion over the lack of such basic amenities as housing, health care, and regular paychecks, the source said. At one point last summer the scientists—equivalent in competence and knowledge to the American bomb builders at Los Alamos, New Mexico—staged a public demonstration in order to get paid.

music: Tom Lehrer, “Who’s Next?”

There’s lots more amazing details about the shabby state of the Russian nuclear arsenal in the early 90’s, but then the story makes another pivot:

Questions about the extent of organized crime in Russia are being raised these days in public, but not by senior officials of the Clinton Administration. “I think in many areas of the former Soviet Union—not in Russia yet—the state is so weak that organized crime is capable of control,” says Paul Goble, who served as a CIA analyst before joining the State Department. “We’re going to see the rebirth of a Russian state that will be highly authoritarian, and will use organized crime as an excuse.”

A number of Clinton Administration experts on Russia, after being assured that they would not be quoted by name, told me that they agree with Goble. These officials say that organized crime and inflation in Russia have moved that nation to the edge of becoming, as one puts it, another Weimar Republic—the short-lived democratic German government whose attempts at political and economic liberalism after the First World War collapsed when the public preferred the totalitarian National Socialists. Russia’s strong central government and its internal police force, the KGB, have simply disappeared, and no other state institution has replaced them.

“We’re going to see the rebirth of a Russian state that will be highly authoritarian, and will use organized crime as an excuse.” That is a great deal of what sparked Putin’s rise to power and continued popularity. There are other factors, which I’ll address in my conclusion.

At this point, Hersh largely leaves the nuclear theme behind, and plunges deep into the organized crime aspect of the story, first reminding us that large-scale privatization of state-owned enterprises was part of the program of “shock therapy” administered to Russia under the guidance of first the Bush and then the Clinton administrations.

As an aside, the application of the phrase “shock therapy” to economics first occurred in the mid-eighties. Naomi Klein popularized it with her  book on the catastrophic effects of “economic shock therapy,” “The Shock Doctrine,” in 2007. Anyway, here’s some of what Hersh tells us :

“The Wild West, Alaska frontier, and Chicago in the twenties” is the way a senior State Department official involved in day-to-day Soviet economic strategy describes Russia today. “Anyone who says there isn’t a crisis of governance would be crazy.” A former national-security official, who worked in the Reagan and Bush Administrations, says, “The chaos scares me. Here we have a 1930s situation in Chicago, except that Al Capone has access to nuclear weapons.”

These officials, however, refuse to make such statements on the record. They and other government bureaucrats have come to believe that talking openly about the impact of organized crime will damage their careers.

That view is especially widespread inside the Agency for International Development, which has been under heavy attack from congressional budget and appropriations committees for its alleged mismanagement of more than $1.4 billion appropriated for the years 1992 to 1994 to promote capitalism and the conversion of state-owned businesses and factories into privately held property in Russia and the former republics.

At one briefing last July a CIA official provided a scathing report on the Russian mafia’s infiltration of the privatization program. “Privatization is the centerpiece of AID funding, and it was the first time I heard the CIA admitting there was a problem,” a government official who attended the briefing told me last fall, although, as he knew, Russian newspapers had been full of detailed accounts of wrongdoing.

The briefing focused in part on the voucher program that had been created in Russia and the former republics to ensure that all citizens would be given an opportunity to share in the new private economic system. Millions of privatization vouchers—with a redeemable cash value—were printed and distributed. State-owned property would be publicly auctioned, and the citizens, using their vouchers, would be able to bid. The vouchers could also be used to buy stock in what had been state property.

The CIA official bore a grim message. Millions more vouchers were turning up than had been printed. And millions of vouchers were not being canceled after their use, as regulations called for, but were being reused to buy more property. The mafia, which was behind the counterfeiting of vouchers and their fraudulent reuse, was directly threatening citizens in an effort to keep them from bidding at privatization auctions. Organized-crime groups would appear at the auctions with suitcases full of vouchers and buy up the property at very low prices. The briefing ended with expressions of bureaucratic concern for the future of the privatization program.

An employee at an involved government agency recently told me that his very rough guess last year was that 30 to 50 percent of AID money for privatization is spent in a way that ultimately benefits criminal interests. But when he raised his concern with officials at decision-making levels, he told me, “the reaction was ‘There’s always corruption in AID programs, and we don’t want to get into it.'” The employee recounted one meeting at which “everyone jumped on me for being ‘irrelevant’ in raising organized crime.” He would have left his government job, he said, but could not afford to do so.

So, “thirty to fifty percent” of USAID money–half to three quarters of a billion dollars– was going to organized crime, which used American-provided money to buy up large chunks of the Russian economy at bargain-basement prices, and these formerly state-run enterprises began funneling even more money into the pockets of organized crime .

Let me repeat that:”thirty to fifty percent” of USAID money–half to three quarters of a billion dollars– was going to organized crime, which used American-provided money to buy up large chunks of the Russian economy at bargain-basement prices, and these formerly state-run enterprises began funneling even more money into the pockets of organized crime .

The CIA publicly wrung its hands over this, but…privately? US “intelligence services” have historically worked hand-in-glove with organized crime–to eliminate radical elements in the US labor movement, to smuggle opium and heroin out of “The Golden Triangle,” in multiple attempts to assassinate Fidel Castro, the cocaine-Contra connection, and US attempts to control Afghanistan, the source of much of the world’s heroin. It is easy to suspect that in Russia, too, the CIA and the M.A.F.I.A. were working together, with the CIA seeing this as a way to make sure Russia went down and stayed down. It will take a more skilled sleuth than I to ferret out that story, or whether there is such a story. Even if this US-fuelled boom in Russian organized crime was “collateral damage,” it has huge implications, which I’ll explore later.

The Russian people were not happy about the way the US was running Russia, or with our man in Moscow, Russian President Boris Yeltsin. The value of the ruble dropped precipitously: hyperinflation peaked out at 2333% in 1992. The unemployment rate soared. Life expectancy dropped, largely due to a huge increase in alcoholism. And crime had become a way of life, all due to America’s strong influence on Yeltsin. Thanks, America! Hersh continues:

The quandary over how best to proceed with strengthening nuclear security in Russia is further complicated by strong anti-American feelings now sweeping Russia, triggered not only by Yeltsin’s bloody showdown last fall with his opposition in the Parliament but also by the widespread belief that the Soviet leader can do little wrong in Washington’s eyes.

The many critics of the Clinton Administration’s policy toward Russia—who cut across the ideological spectrum—have focused on its seemingly unstinting support for Boris Yeltsin and the initial reluctance of Washington to establish ties with any other potential leaders in Russia.

Blair Ruble, a scholar who is the director of the Kennan Institute for Advanced Russian Studies, in Washington, D.C., accuses the Administration of “not dealing with reality” in its reaction to the disastrous December elections, in which Yeltsin and his supporters won about 25 percent of the popular vote.

Hersh couldn’t foresee it, but the US response to Yeltsin’s unpopularity, and the rise of more authoritarian, “law and order” parties in Russia’s fledgling democracy, was not to rein in the privatization that was fueling the lawlessness, but to double down on Yeltsin, providing him with millions in funding and several US political advisers for his next election campaign. The gambit worked, sort of. More on that later.

How deeply was the US involved in Russia? Hersh tells us:

…Senator McConnell, Professor Cohen, and the others touched on a sensitive policy question that, as they perhaps did not know, is being debated today inside the Administration: How far, if at all, can the United States intervene in the internal affairs of Russia—if only to help protect the Russian nuclear arsenal?

Questions about whether and how deeply to intervene in Russian affairs are not new. In early spring of 1991, well before the August coup attempt, the Bush Administration learned of the plotting against Mikhail Gorbachev and turned to Yeltsin as a possible alternative leader. Over the next few months U.S. intelligence agencies were assigned to help Yeltsin, then the President of Russia, improve his personal and communications security. When the coup finally took place, President Bush ordered that essential communications intelligence be provided to Yeltsin—over the bitter protests of the National Security Agency, which is responsible for such top-secret intercepts. This help enabled Yeltsin to emerge from the crisis a triumphant hero. The transfer of intelligence was conducted under stringent secrecy and the House and Senate intelligence committees were not formally notified—as is required by law.

Gorbachev’s perestroika, and the sudden rise in criminal activity, opened up the Soviet Union to the CIA and the NSA, and eliminated the need to send U.S. agents on what had for decades been very risky assignments. “The CIA asked, ‘How can we get sources?'” one former senior intelligence official told me recently. “The answer is by paying them. What an incredible position to be in. You can pay men in authority, and you know by technical means who’s in control, and by technical means you can monitor what they’re doing. Why? Because they are immoral. It’s no surprise. We’ve described Russians as criminal all during the Cold War, and since they are no longer Communists, are they suddenly now the moral equivalent of Republicans?” The former official added with a laugh, “As much as Republicans are moral.”

Having what the intelligence community calls a “special relationship” with a senior Russian official was no longer a novelty by the spring of 1991….

“How do we get sources?…By paying them…….having a special relationship with a senior Russian official was no longer a novelty”…..A Russian Robert Mueller would not need to spend two years looking for evidence. US interference in Russia is right out there in plain view. Hey, by 1996 it would be on the cover of Time Magazine. and not because anybody was ashamed of it.

Robert Mueller wishes he had it this easy!

In 1991, the US enabled Yeltsin’s rise to power by using the NSA’s spying abilities to keep him informed of the progress, or rather the lack of progress, of a coup attempt against Gorbachev by anti-perestroika elements in the government.

Hersh concludes his story with this off-the-record quote from “one of the (Clinton) administration’s leading experts on Soviet nuclear issues,” who says


… “there is little to be optimistic about in Russia…Hopefully, we will not repeat the 1930s in Germany.”
“You have a contracting empire. The bulk of people are doing worse under freedom than ever before. People forget how primitive Russia is—it’s Third World. Russians are dreaming about indoor plumbing, having a little car, not living with their parents.

“They can now travel. But they have no money.

“They can now vote. But for whom?

“They can now say what they want. But so what?

“They’re not better off.”

So that, friends, is what the government of Hilary Clinton’s husband did for–or should I say to?–the Russians.

There are three loose ends to wrap up in this story. One is pretty simple–the way this US interference in Russia led to Putin’s rise from being the right-hand man of America’s stooge in Moscow to being a very independent, somewhat authoritarian populist who is widely perceived as having successfully cleaned up the crime spawned by American interference in the country…and who is also the bane of the US establishment. He’s there because of US interference in Russian politics.

The second is “the missing link” part of my title. I haven’t contacted “The Atlantic” to ask them why they haven’t linked the two pages, fearful that the now more-mainstream magazine will completely consign page two of this classic piece of investigative reporting, with its embarrassing revelations of the depth and disastrous results of American meddling in Russia, to “the memory hole.”

If an American President had done this, s/he’d be overwhelmingly popular, too.

The third loose end is my titular reference to Donald Trump, who has, so far, gone completely unmentioned in this story. He was not on Hersh’s radar as the journalist swept Russia  for the elements of this John LeCarre-worthy tale. No, Donald Trump was not in Russia. He was in New York, building apartment buildings and getting rich by catering to a clientele that included the same Russian Mafia figures who were being enriched by US policies in Russia. In fact, it could be argued that it was the flood of USAID-provided Russian mob money that saved Trump from bankruptcy and enabled his rise (if you want to call it that) to the Presidency. Trump has never been indicted for any of this, although the circumstances are suspicious even to those of us who are Russiagate skeptics. Has he remained unscathed because he has, by chance or design, managed to avoid any genuinely illegal activity? Was it just “the luck of the draw”–“so many white collar criminals, so little time”? Or has he not been prosecuted because he was helping the CIA help the criminals who were plundering Russia on our behalf?

That was my first thought, but, on further reflection, I think unlikely that he was working with the NSA/CIA. Trump was just one of many real estate developers who profited, and continue to profit, from the need of wealthy foreigners, be they from Russia, China, or elsewhere, to shelter their wealth from the prying eyes of their own governments. Yes, a great many of these wealthy foreigners have gotten rich illicitly, but some also simply fear that they will be persecuted should the political wind shift in their home country. Money invested in American real estate is difficult for those governments to find, let alone confiscate.

There are whole upscale neighborhoods in New York, San Francisco, Seattle, across the border in Vancouver, and elsewhere that are sitting mostly empty because the owners of the homes and apartments live overseas.  Donald Trump has served only a small percentage of this market. He just happens to be in the spotlight. Dozens, if not hundreds, of Americans have laundered foreign money just as he did, and perhaps still does. In a way, it’s a victimless crime, perpetrated by people well situated to defend themselves, and for the most part prosecutors seem disinclined to investigate. No sense offending the donor class, eh? The statute of limitations on whatever happened in the nineties expired during the Obama administration.

So, seen from the perspective of the present, Hersh’s 1994 article reveals that not only did US imposition of neoliberal economic “reforms” on Russia produce Putin, as is somewhat widely understood among those not hypnotized by the Russiagate spin machine. The billions the US spent in Russia also fueled exponential growth in organized crime in Russia, and those criminals’ efforts to get their money safely out of Russia fueled the rise of Donald Trump. In other words, it was the policies of the neoliberal US establishment under Bush the First and Bill Clinton in the 90’s that created the two biggest current bugaboos of the neoliberal establishment, Vladimir Putin and Donald Trump. The irony of this seems lost on the Democrats and their friends in the Project for a New American Century and the NSA/CIA.

The overall form of this–neo-liberal policy enriching an elite few while having disastrous consequences for those it was ostensibly helping, is not new. In fact, it’s the common result of neo-liberal “reforms,” from Vietnam to Chile to “the war on drugs” to the Iran-cocaine-Contra tangle to NAFTA/WTO to the first and second Iraq wars, Afghanistan, the “war on terror” whose “terrorists” were largely spawned by our country’s clumsy power grabs in the Middle East, the rape of Greece, the repeal of the Glass-Steagall act that led to the crash of 2008, intensifying efforts at “unconventional” oil extraction, aka “fracking,” and the failure to do anything significant to stop catastrophic climate change…I could spend a post/show or two or three exploring all the details.

And yet, there have been no consequences for the promulgators and pundits who enact and support these policies. They go right on bloviating as if all this has been a resounding success. Hey, it’s made them rich, hasn’t it? These are the people who have made it clear that the Democratic Party will change only when it is pried from their cold, dead hands, the people who insist that there is no alternative, that it’s their way or the highway. I want to make it clear that, although I refer to their “cold, dead hands,” I am not advocating killing anybody. That never works.  They are the people who, in the words of Green Party activist Rosa Clemente, make The Green Party “not the alternative, but the imperative.” If America is not going to crash and burn in a way that makes Russia in the 90’s look like a tea party, we had better make a very radical, rapid course correction.

music: Tracy Chapman “Talkin’ ’bout a Revolution

Eliza Gilkyson “Dreamtime


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