Monday, April 15, 2013

End of the moral State

This is a follow-up to my previous post on End Game Against Freedom.

From the film documentary by Andrei Nekrasov who recounted the murder of Alexander Litvinenko in Poisoned by Polonium, Litvinenko in his own words:

Who is Putin?

We are told, "Wait till he's President, then you'll know."

Imagine someone becoming prime minister in Britain with people asking, "Is he a thief, or isn't he?"  The real issue here is human morality. 

And then:

In the Soviet Union, there were two ideologies: communist and criminal.  In 1991, the communist ideology died.  The criminal remained.

What did Alexander Litvinenko do to get assassinated like he did?  When an esotaric radioactive isotope is ingested then you are beyond a simple murder and now must have the resources behind you to actually plan such a killing and acquire such material which is not readily available.  That is not the hallmark of the Red Mafia, which would normally just leave you dead someplace, anyplace, perhaps in public to make an example of you.  If the criminals want you dead, you are killed.  If you are made to suffer, that takes personal and private malice above and beyond simple criminal affairs.  When you see material involved that only a Nation with nuclear capacity and the ability to get, purify and deliver a short-lived isotope is involved you are now into State-enacted murder.  That is called: assassination.

If this is the case then the crux of the matter is the knowledge he had, which everyone, even Putin, admits are not State secrets.  Litvinenko had no access to nuclear weapons or facilities and although he did serve in the military in Chechnya, he was not a high ranking officer in the command staff, but a low level tank commander.  So what is it that made him a target to be assassinated?


Litvinenko knew no secrets.

No State secrets, true.  But there are that other sort of secret that involves the State...


Everyone realizes I don't know any secrets.  The only secrets I know are about organized crime and corruption, and they can't legally be considered state secrets.  Even if I wanted to work for British intelligence, I have nothing to tell them.  How can I be a traitor to my country?

Why are they so angry with me?

Because I have spoken about the one thing that is important, holy to them.  One officer said to me, "You can out all our agents, to hell with them.  We'll recruit new ones.  But you did one deadly thing.  You made public our system of earning money.  Do you want us to use the underground?"

That is why they hate me so much.

This system was to choose a series of private businesses and shake them down for money by threats of bringing prosecution against them.  As was explained earlier in the documentary, FSB officers are attached to courts as 'lawyers' and they serve as a conduit to inform judges what to do, either through bribes or threats of prosecution against the judge, or just through simple replacement of the judge.  Once you take a bribe, any bribe, a judge is then compromised to the FSB.  By outing such information to the public, Litvinenko became a threat and was tried for treason.  Although he had released no state secrets, only made public those things that the government officials wish kept private about how they shake down businesses.  The implication is that this goes beyond just the FSB, although that, alone would be bad enough.

There is another reason for why Litvinenko was on the hit list, and that isn't discussed in this film.  He apparently had information on the murder of Vladimir Petukhov  the mayor in Nefteyugansk.  Before his death, Litvinenko had visited Israel and Leonid Nevzlin:

Yeah, I think in a way he held the door open with us.  He visit me three months, I think it was, before he was killed.  And he left some papers about what was really, because of some blames on me, what was really under this blame.  Because he was part of KGB and, for instance, he knew from the people in the KGB of the real case of the mayor of Neftyugansk, Petukhov.  So he left his evidence, names and etcetera, and who killed Petukhov and why he was killed...

That is from Khodorkovsky a documentary by Cyril Tuschi and yet another film I recommend for those interested in liberty, freedom and morality.  A bit later in that interview Nevzlin would tell us that he passed that information on to Israeli police and Scotland Yard.  Here is an unexpected intersection between one of the oligarchs of Russia, the KGB/FSB, Putin, Litvinenko and the stark contrast between two sides of the suppression of liberty by State power.

Mikhail Khodorkovsky, as the documentary examines, is an unusual case in the Russian post-USSR power struggle as he is not part of the functionaries of the State, in main the FSB, nor a part of the criminal class that infested the rule writing of the early Russian Duma.  In those early years there was a place for the type of people that Boris Berezovsky talked about with Nekrasov:

B – What a price humans have to pay for knowledge.  How hard it is to rise above the common wisdom.

N- Is it even more difficult for Russians, would you say?

B -  I know what you mean.  The Russian mentality is that of slaves. That's why the system of forced limitations is so welcome. So why then am I advocating liberalism in Russia?  Am I contradicting myself, advocating freedom for the Russians, going against the nation's character?  So, is Russia ready, which means her people ready to take up the responsibility of freedom? I think they are ready.  Because once the tyrannical dictate was lifted, millions of entrepreneurs appeared, a myriad of independent politicians and journalists appeared.  Russia turned out fully prepared for this crucial, historical step.  We only needed to move forward and consolidate that freedom.  And so my main conflict with the authorities today  is about individual independence.  All those stupidities – media controls, "vertical power" – have one result.  Destruction of freedom in the minds of Russia's citizens.

Of that new entrepreneurial class was a group that would start from the ground-up, and would attempt to actually put real capitalism into play in Russia.  Of those Mikhail Kodorkovsky is the most notable as he started with next to nothing to form a bank in Russia without even knowing how a checking account worked because there had been no banks, no checking accounts, no savings accounts, nothing like that in the USSR.  They had to ask experts in to teach them the basics of banking and they did make mistakes, but also made money as Bank Menatep was far more secure than anything else in Russia at the time, which is not to say that it was secure by Western standards as the scandals that came to it demonstrated.

Bank Menatep would also fund a bid for the Yukos oil concern, which had been a State run oil system in the USSR.  Bids from outside Russia were excluded, and while there are complaints of corruption about that it must also be asked what government would want to hand over such a large concern to foreign owners?  If a reasonable and reliable bidder inside Russia could be found then why not hand it over to them?  It was sold at a fraction of its value at $300 million, which was a huge amount in those days in Russia. 

Do remember that a few years previously there had been, effectively, $0 in Russia, and Putin's swindling of St. Petersburg via non-use of sold goods abroad was placed in its lower range at $92 million.  Yukos also had $3 billion in debt, so anyone who was purchasing it was getting a massive amount of debt and the responsibility to pay it off.  This was also in a period in which Saddam Hussein was effectively bottoming out the oil market by selling Iraqi oil far under market prices so as to depress the oil market.  Given that background and realizing that transparency was necessary for running the firm, one would have expected failure of Yukos.  Instead it succeeded, wildly, because it was a transparent, open organization that allowed public scrutiny of its affairs and transactions.

From Irina Yasina journalist who worked with Khodorkovsky to help establish his education works and who was the director of Open Russia:

At some point, Yukos was also a non-transparent company.  Minority shareholders were treated badly and no quarterly reports were submitted, like in the West.  That's what it was like in the beginning. After a series of scandals, Khodorkovsky understood:  If you make a company transparent, you attract investment.  He learned from his mistakes and knew this would also make money.  So it was actually a business project. 

And that made him rich, at one point the richest man under 40 on the planet and headed to become the richest man on the planet, period. 

If oligarchs are to be deplored, and oligarchies which they are a part of, then what about an oligarch who is setting up a template for breaking up the oligarchical system?  Khodorkovsky and the people that came to Yukos were embodying a spirit that did not see them spend on lavish estates, fast cars and the high life, but something far different.  They did live in good homes, yes, but Khodorkovsky also started funding scholarships and schools.  It is forgotten that in the early days of US capitalism there were more than Vanderbilts and Rockefellers, but also Carnegie, Ford and Westinghouse.  Even Rockefeller would start building foundations, charities and just give money away.

Cyril Tuschi:

On the advice of an American PR firm, Khodorkovsky establishes in 2000 Open Russia an organization to support education in Russia.  Khodorkovsky invests $100 million in universities, boarding schools, and training programs for journalists.

In Russia, which did not have such a foundation of moral philanthropy as we know it in the West, to find it suddenly appearing in the post-Soviet era in Russia is nothing short of astounding.  Khodorkovsky, even before he was charged with crimes under Putin's regime, had started that transformation by talking of the need for a civil society so that freedom can flourish. 

From Khodorkovsky's mother, Marina Khodorkovsky:

Education! Mischa's central idea was, that democracy doesn't trickle top down.  It has to become a necessity from the bottom up. When people start to broaden their horizons, they start to think and develop other interests.  That was his core idea.

There is a central dynamic in capitalism that is a moral one and it has to do not just with wealth but its uses.  Khodorkovsky writing from prison:

I must thank prison.  In a way I am freer here than when I was leading the company. I'm only responsible for myself, here.  Here I've come to realize that owning assets, especially large assets, does not automatically make a person free at all.  As a co-owner of Yukos, I had to expend huge amounts of energy to protect this wealth.  I had to abstain from anything that might jeopardized my wealth. I also had to impose limits on myself, because speaking openly and frankly could have harmed those assets.  I had to ignore a lot and put up with many things all for the sake of my personal wealth, to preserve it and increase it.  Not only did I control this wealth, it controlled me, as well.

These are not the words nor thoughts of a man in bed with a regime or criminal organization, but a capitalist with morals and ethics speaking about what acquired wealth does to one.  Unlike George Westinghouse, Mikhail Khodorkovsky hasn't learned the morality of ethical use of capital, but he has learned the basics that even Rockefeller had to learn: when you have so much wealth you are its prisoner as well as its owner and you are the one for your own sorry state of circumscribed freedom.  The only answer to this burden is to lessen it: Andrew Carnegie sold his entire company to J. P. Morgan, while Ford ensured of good worker pay so that they could afford to actually buy the products they made, and Westinghouse concentrated on improving the workplace, work hours, working conditions, and lives of his employees so that they could own the homes the lived in that had electricity and running water in them.

Capitalism is based on providing goods that are wanted by individuals at the lowest price possible to make a profit so as to not only sustain but increase production, while lowering costs.  If no one wanted the goods or services provided, a company would go under, and yet we, in the West, now have a corrupted banking system and industrial system where companies are supported by the State and must answer to its tune.  All in the name of 'saving' such companies that rightfully deserve to fail.  If Yukos was barely able to support itself and had huge debt, then what does it say when the company is turned around, opens its books and becomes successful?  In other words it stepped free of regime support, learned what it means to be accountable to shareholders and then did the right thing to increase its transparency to increase its business and attract more capital. 

At heart capitalism and companies are moral and ethical organizations of individuals while government is an organization of power.  When companies and governments work together it is to the detriment of the moral and ethical roots of capitalism and does nothing but make stronger the power of government over its citizens.  Contributing factory space, production time and other commodities at a low price to defend a Nation where a company resides is one thing.  To take orders from government in peace time on what to make, how to make it, how to produce it and then to kick-back money to campaigns and politicians is inherently immoral as it robs shareholders of their say in the company, and unethical as it puts those in charge of the company in the position of betraying shareholders for their own interests in a share of government power and support.  It is, in other words, fraud.

Yukos was a very wealthy company and one of the wealthiest in Russia when Putin came to power.  This from Aleksey Kondaurov, former KGB general:

The relationship between Putin and Khodorkovsky was in order.  They met regularly and discussed various issues. We had good relations with the government.  After all, the operation was really very powerful.  There was no other company like ours.  We were the country's biggest taxpayer.  We paid more taxes than Gazprom, who were bigger than us.  Which is why we had a good relationship with the secret service.

Via paying taxes, Yukos becomes something quite different than the other companies run by oligarchs who had non-transparent companies: a respected business.  Transparency, paying what you owe in taxes, paying off debt, gaining investors, and becoming rich are combined together and they cannot be separated.  Becoming rich is only a sin if it is your sole and only goal, and this was not the case with Mikhail Khodorkovsky who ensured that his business did the right things to demonstrate that it had responsibilities to attend to in the governmental affairs area via good relationships with government but also to support its civil duty to pay taxes like any good corporate citizen.  It was not there asking for special privileges, special monies, special projects or other such things in promises for political support from the company.  And the FSB, Putin's own organization, understood just who it was that was the largest taxpayer in Russia and appreciated that, respected it, save for at the very highest of ranks.

Former Yukos lawyer, Dmitry Goldlobov recounts what happened:

Putin told them: "Okay guys, stay away from politics, okay?!" And everybody agreed.  Everyone nodded and said: "Okay".  Khodorkovsky nodded as well.  He didn't say: "Dear Mr. Putin, I won't stay away from politics! I'll be just in the Duma" or something.  He agreed.  And afterwards he violated that deal.

Why?  That idea behind Open Russia: a better educated civil society with many interests and a bottom up democratic institution.  To have that sort of institution, to get to a democracy, there needs to be a competition in ideas and ideologies.  And Litvinenko already told us what remained after the USSR in the way of ideology: criminal ideology.  If Boris Yeltsin had tried to build something better but was overcome by the corrupt institutions that remained, particularly the FSB but also the infiltration of the criminal class into business and politics, then what did Vladimir Putin represent?

Litvinenko had outlined this, as well:

In our country, the special services are, in fact, a secret political organization that uses sharp methods, secret methods, not against spies and terrorists, but solely to keep a ruling class in power.  In 1999, for example, to seize power, the FSB used secret methods that are only allowed against terrorists and spies.  If the army were to seize power, they'd roll in with tanks and guns and fly in with jets maybe.  But everyone would notice. The FSB, on the other hand, has secret methods, and nobody noticed anything until chekists made up the government and seized every organ of power.  If the KGB was the armed unit of the Communist Party, then the FSB is the armed unit of – of a caste of corrupt Russian officials.

If you are aware that to run an ethical concern, be it business or government, there must be transparency, and the man in charge and, indeed, the whole establishment of government, is not transparent but has a veneer of democracy on top of it, then what do you do?  Ethically you know that any agreement you make with such a government can be over-ruled by those in power at a whim.  In fact the FSB is particularly good at 'compromising' people and bringing false charges to conviction via a compromised judiciary process.  Without criminal, judicial or police help, just why would you stand by a corrupt government?  Even worse, what can you do to change it?  Khodorkovsky realized that any agreement he made with Putin was ephemeral as Putin had already been shown to be underhanded in his business and official dealings before coming to office.  A corrupt government does not gain the loyalty of ethical individuals be they citizens or corporations.

For doing this, Khodorkovsky's bank had a sanatorium, the RUS, seized by the State.  This was a good if not the best hotel in town and its seizure was rumored to be done on Putin's orders for his wife, who liked the place.  No real legal pretext was given: assets were seized without any indications of having done anything wrong.  Khodorkovsky did nothing, at first, as this was an act of raw power by the Kremlin.  Other business leaders approached Khodorkovsky to speak out about corruption in the Kremlin during their annual, televised meeting with Putin on 19 FEB 2003. Leonid Nevzlin was his business partner and summarized it like this:

Khodorkovsky was asked to bring up the topic of corruption at the Kremlin.  I remember he was unsure whether he would or not.  But it had to be done on principle.

And then Alexander Temerko, a former Yukos VP recounts:

Voloshin told Khodorkovsky: "TV will be there!  We'll instruct the stations to broadcast your speech about corruption! And Putin will definitely react in the right way."

That is charming naiveté, at best, as it must be remembered that this is the same Putin who deceived St. Petersburg, ran the KGB/FSB, worked to launder money for drug cartels in Germany and who had now taken offense that some business leader might actually be funding the opposition and responded by seizing assets using the power of the State to do so.  With those things known, and do choose just one or two before the seizure event, why would anyone expect Putin to act 'in the right way'?

From Aleksy Kondaurov, a security advisor:

At the meeting with Putin he said – and I think this sealed Khodorkovsky's fate – "We started the corruption process, so we should end it."

From Igor Yurgens, Economic Advisor to President Medvedev:

I was present at the meeting and I can tell you that, uh, uh, he handled that confrontation [?] in an arrogant manner.  To be objective I can tell you that sitting in front of the acting President accusing the President, practically, of covering up for the corruption in the State controlled oil company.  That was a little bit too much.  He could have chosen a more elegant way or less confrontational way, but what he said was true.

And part of what was said at the meeting:

Khodorkovsky - Experts from our organizations analyzed the extent of corruption in Russia and all arrived at the same figure: it is estimated at $30 billion.

Putin – You've mentioned the merger between Rosneft and Severneft.  I obviously feel that Rosneft's chairman should react to this and offer further explanation.  Although some aspects are immediately obvious: Rosneft is a state-run company which must increase its reserves.  Because these reserves simply aren't sufficient.  Some other oil companies, such as Yukos, have excessive reserves.  Yet how has Yukos achieved this?  That's a question we should discuss today. As well as payment or non-payment of taxes. We did discuss this with you previously, didn't we? Not long ago.  Your company also had difficulty paying taxes.  But respect is due to the management of Yukos – for coming to an agreement with the tax authorities – settling all claims and issues with the state.  But how were these problems created? Perhaps that is why so many people study tax law. Are you following me?  I'm hereby putting the ball back in your court.

So what is Putin's point?  Yukos, by his own admission, has paid up on its taxes and is, indeed, the largest taxpayer in Russia.  It has large reserves of oil, yes, but gained via commercial activity as he puts no other activity forward that can explain that.  Marginal tax rates are not enough to make or break expansion of reserves and if he has complaints about what prior administrations did in awarding Yukos, then why doesn't Putin want those administrations investigated?  Of course he was the head of the FSB under those administrations and if he had anything at the time, he should have spoken up.  Of course there is that matter of SPAG with Putin sitting on its board and being head of the FSB while the company was charged and convicted of money laundering for drug cartels... perhaps he had other worries at the time, eh?

What you see at work, however, is the head of a corrupt State, or soon to be head, dodging responsibility and transparency, while complaining that a transparent company that has done the right thing might be in the wrong.  If you bring up the Yukos reserves then what about Rosneft's inability to perform marginal expansion or just pay for oil on the open market, or purchase the rights from other companies to their reserves?  If there are any problems with Yukos on taxes then what about Rosneft and its main function of actually running its oil affairs competently?  This is how you cover up corruption at the State level: you blame the innocent or cast doubt on their legitimacy.  Any head of State that is pointing out all the wrongs in others, is in the process of casting them as not being upright while not addressing if he or she has the moral and ethical stature to actually accuse others of anything.  The more you hear haranguing, accusations, belittling, and bringing up past affairs that are ALREADY SETTLED, then you are hearing from someone who, themselves, have something to hide.

It is this that is the indicator of a corrupt State.  If Vladimir Putin wanted to have businesses stay out of politics then, really, the State must stay out of interfering with businesses.  The moment a State decides to wield its power to tell companies what to do or actually purchases companies to be run by the State, then the companies involved have a right, duty and obligation to protect the assets they have from their shareholders and have direct input back into the State.  This is the heart of the process of corruption and collusion between a State, any State, and its business community.  It is one thing to uphold laws of transparency of accounting, keeping good books, and being accountable to shareholders and quite another thing to impose the power of the State towards State ends on private concerns.  Russia, of course, has an entire history of just this problem, going back to the Czars and including the entire history of the USSR and now the post-Soviet era.

From this confrontation Khodorkovsky would attempt to get foreign companies, Exxon and Chevron, involved with Yukos not only to allow those companies into the Russian market but give Yukos a foothold in the American market.  He would establish a foreign outpost of Yukos in Houston, TX which would become the basis of such agreements and would also serve as a separate part of Yukos outside of Russian laws.  Of course this wouldn't do as it would make Yukos an independent, international concern.  This resulted in the arrest of Yukos leading official after Khodorkovsky, Platon Lebedev while he was in hospital and then whisked away to an FSB secret jail.  Isn't it wonderful when State run secret police have secret jails?  At that point Khodorkovsky started telling those close to him in the company and his family to get out of Russia because he didn't want any more hostages taken by Putin.

The State sent people to Khodorkovsky trying to extort money from him so that they would leave him alone.  But he had already seen that sort of trap: once you give money like that you are on the hook forever and they can reneg on the agreement at any time and jack up the costs on a whim.  Besides, Yukos was transparent, had regular outside audits and published those openly.  Yukos had no money to give that could not immediately be seen, and Khodorkovsky had already said that he wasn't running away from Russia as a political exile.  Yukos had paid its taxes, settled any arrears and was in good standing as a taxpaying company.  He was, in other words, not giving into the temptation of easy corruption, an easy life.  That isn't his goal any longer, but for that longer vision of an informed Russian civil society, and he knows that he will pay a price to be on that road.

Two days before his arrest giving a speech at Belgorod University, Mikhail Khodorkovsky said:

Elections alone won't build a civil society.  But it's a first step towards creating a normal state, in which it isn't merely pleasant to work, but also to live.  Let us build it together.  Thank you.

And then in a television interview on Belgorod TV the day before his arrest:

Interviewer - You were in America when your Yukos offices were searched. But you still came back to Russia.  Aren't you afraid that men with handcuffs might suddenly turn up?

Khodorkovsky – As long as our country isn't fully a civil society, nobody is safe from the people with the handcuffs.

The trial on tax evasion, itself, was a pre-determined affair run by the FSB and, ultimately, Putin.  Khodorkovky's denial for early release similar and hinged on missing a sewing class in jail, while otherwise being a model prisoner.  As his time in prison was running out Putin had him tried and convicted of other charges, stealing hundreds of millions of barrels of oil which, strangely, no one can find missing or hidden, anywhere.  Yet still he was convicted of doing the impossible.  The message was clear to those that followed Khodorkovsky's path in business or who hadn't thought that the State would reach out to seize any of the oligarchs: they fled Russia.  And who spoke out against this?

The silence from the West is deafening.

There were long standing groups working to free political dissidents in the USSR who dared speak out against the regime.  But Khodorkovsky, for all his insights into what it takes to have a civil society, gets no support.  A business man who has straightened up the ways of his company and himself, who supports a freer and more well informed society, who behaves with demonstrable morals and ethics can't get that.  Yet he did the right thing, by forming an organization with the goal of expanding the civil sphere, personally donating to schools and institutes, donating to a political opposition so that there could BE a political opposition that could get its ideas before the public.  Too bad it comes from a businessman and not some lowly transgendered artiste speaking in coffeehouses, huh?  The latter would get some press, at least.  An ethical businessman who happens to be the richest man under 40 on the planet?

Joschka Fischer, former Foreign Minister of Germany about what happened after the imprisonment of Khodorkovsky with respect to Khodorkovsky and then Yukos a bit later:

We had a vested interest in asking, can't we solve the Khodorkovsky issue –even after his arrest?  Can't we solve this, so that he might be released from prison? But Putin was highly emotional and totally rejected it.


It concerned the property right at Yukos.  In respect of which the international part of Yukos filed a lawsuit with a Texas court.  The question was: How can the property rights of Yukos be transferred? We had a meeting with former German Chancellor Schroder, Putin and myself – and the Russian Foreign Secretary.  And we met on this sailing ship that's permanently moored in Hamburg, "Rickmer Rickmers" or whatever that ship is called.  We sat below deck. Putin was quite cheerful –wel, yes, in a good mood, saying: "Tomorrow, you'll see how it works!".  Exactly that day Yukos was put up for auction and suddenly an investment group from Novosibirsk, or Irkutsk, or wherever, turned up out of the blue, made a bid for Yukos.  And was awarded the rights.  They immediately sold them on to Rosneft and disappeared into thin air.  And with this trick, the address, at which a civil lawsuit in America could have been served, simply vanished.  And Rosneft could say, "I don't know what the problem is.  We acquired it lawfully.  Any issues you have with this investment group that doesn't exist anymore are not our concern".  Therefore the whole issue, at least, regarding the legal aspects, was rigged.

That is what is left in the place of an ethical business situation: one in which a State-owned concern that can't manage itself well is given the assets via a rigged system that is opaque to all concerned in order to escape legal ramifications of seizure of property.  And those in power in the West who are elected officials and should be seeking to have other governments respect human rights?

Again from Joschka Fischer:

The world isn't what you imagine.  There are interests and values.  But the idea that there are human rights and we will enforce them by any means, is of course absurd.  Then you'd create the opposite of human rights.  That's not how the world works.

Tuschi – But you're still quite an idealist when it comes to the world in general.

Fischer – But I am also a realist.

T – No, you are not at all.

Indeed our rights are endowed to us as individuals and governments are creations of man, not Nature.  Human rights cannot be enforced by governments at all.  It is, however, governments that have the responsibility to respect human rights as they are the creation of men.  Fischer is quite right in that government is not the enforcer of rights as that would make it the granter of rights.  With that said it is not absurd for people to seek to have governments respect human rights, especially those of their citizens.

Milan Horacek, Human Rights Delegate in the EU government:

In all my human rights work, this is the first time I've defended a capitalist, but they are also entitled to human rights.  Which is why I said in my plennary speeches that, at the age of sixty, I have now decided to defend rich people.  One can't distinguish between human rights for the young, old, poor or rich. 

From Andre Glucksmann who covered some of this in the Nekrasov film:

Putin's regime is a regime of oligarchs who own Russia in its entirety, who sell their oil themselves making a huge profits while 50% of the population lives below the accepted poverty line.  So it's a regime of profiteers.  But you may call it what you like.  Of the many types of capitalism, this is one of the worst if it's capitalism.  If it's socialism, it's also very ugly.  So it's -

Nekrasov – It isn't socialism.

G – Well it does have many socialist characteristics.  There is the power of the police, the power of the army, the absence of freedom of expression. Virtually totalitarian.  I also think there are rich men who have become strong supporters of public freedom, that's to say, the rights of man, social security and so on, who find themselves in deepest Siberia.  I mean Khodorovsky.  So I think it's necessary to support both the unemployed who demand food and the capitalists like Khodorovsky, who may be called a capitalist, but he is also for freedom.  On the other hand, we must condemn all those who suppress and prohibit freedom of expression.  In my opinion, Russia has gone back to something it had under the tsars.  Always – At some points, the possibility of real reforms, efforts for reform.  But under the tsars, under communism and today, it was and is an autocracy.  What your Putin calls "vertical power".  That's the way things are now. In my opinion, that's dangerous.  Not only for the Chechens who are being massacred without anyone allowed to say how awful it is, and not only for Russia that is being stifled, but also for the West.

What we can get from these two films is that there is a deep sickness in Western culture as a whole as seen by the inaction of governments with regards to Russia.  But this goes further than just Russia or governments. 

Again from Glucksmann:

You know, France, among the elite, has always suffered from the morbid influence of a Russian mirage.  Later it was the Soviet mirage, bit it had been a Russian mirage.  In the beginning, the French salons of the 18th century were full of admiration for Catherine II and, before that, Peter the Great.  Peter the Great was received by the French Academie just like Putin now.  Together with Bernard-Henry Levy and Philippe Sollers, I wrote a petition to say it was shameful. But there is indeed a kind of innocent and inane admiration, that is to say ignorant admiration, for a state that asserts itself as rational and Western in its appearance.

Nekrasov – So what about Chechnya?

G – That's a scandal!  But even Voltaire knew that Peter the Great had killed his son under torture.  But he tried to hide this fact.  There were also some partisans of Russia at the time of the philosophers, like Diderot.  But he went to see Russia, and though he could no longer protest openly – since he was paid by Catherine II – he left some papers in his drawer.  When Catharine read them, she was appalled.  What did he write?  He wrote, "The Russia of Catherine II has rotted before it ripened."  Instead of ripening, it has rotted.  I'd say its not just the leaders.  There is something wide-spread, a wide-spread malady that exists.  When Hermann Broch, the great Austrian writer, was asked in 1945, "So you think all Germans were fascists? Nazis?" He said no.  "So?" He said, "Listen, there are Nazis, and then there are those who let them come to power, who stood by and let it happen." And that includes all Europeans, without exception. There is then a crime of indifference that is even more fundamental because it is the condition that permits the Nazi crime.  The Nazi crime itself was committed by the Nazis and the part of the population of Germany and also of Europe, but only a part.  Yet the crime of indifference that first authorized the Nazis to take power, and later to wield it in the known way, that is a general crime committed by the Europeans, the leaders and also the population. The crime of indifference consists of closing one's eyes when criminal behavior begins.

Do you see governments trying to pick winners and losers for technology?

How about bailing out banks and deciding which financial institutions need to go under and which should remain?

Have you ever seen a government bail out a failing firm for any reason beyond saving some section of it for defense related purposes?

The disease is socialism, and it doesn't matter if you call it International, National, Communism or 'The Third Way', it is a horror whenever it starts because it is utilizing the power of the State to bring society under its control via controlling its businesses either via outright expropriation (Nationalization, which means a bunch of bureaucratic cronies who don't know the business will run it) or via cronies and payoffs (which means a bunch of business people who don't know  how to run a business efficiently but do know how to grease palms is running it).

Cronyism starts via 'subsidies' and the State telling private firms and individuals what they can do through enticement.  Or via rigging the market via 'regulations', which tend to favor larger firms over smaller, since they can grease palms more thickly.  Those that point this out as corruption become the targets for well funded political attacks, which then turns into laws limiting what you can and cannot say about such activities.  Those laws are enforced by some National government police system, which typically is a Secret Service.  Power is thus transferred bit by bit from government to just a single organ of it: the Secret Police.  It may start as a form of Praetorian Guard or some such, but at some point the leader of the Guard becomes the head of State.

It is why the Red Guard was killed off by the Reds after the October Revolution: the State had the Cheka and it was far more efficient at finding threats to the State than the Red Guard was.  It is the reason the early Black Shirts in Italy were hunted down by the State.  And the SA by the SS in Germany.  Even the most fervent ideological supporters of the ruling caste found themselves on the outs when they were no longer necessary to grab State control.  In fact they were a threat to State control as they knew how to get up the rungs into power.

And the population as a whole?

Docile.  Not wanting to think about what the ends were of these means.  Lulled into poverty and then distracted by merely physical means, like hard drugs, sex, music and concentrating on frivolities while the State provided more and more of their lives until the State could decide who lived and who died.  That is the end-game of every Western terrorist group, and the object is to seize the State police power.  Mind you they never think that they can be destroyed by that same power once control over society is concentrated into the hands of the very few.  Men like Berezovsky, Khodorkovsky and Litvinenko are threats to this system as they tried to show the corruption at the heart of the State, did their best to educate themselves and then realized that the entirety of society needed to be educated as well.

Litvinenko was assassinated for speaking the truth.

Berezovsky fled and that gives him limited input into Russian society.

Khodorkovsky... he helped to set up the way the laws worked in post-Soviet Russia, and admits this and that they were as moral as they could be, those who did this, but that their society was unable to see what morality was.  Once awakened to what was wrong, he became transparent, funded education, pushed for a more open society and then funded the opposition movement.  He was no longer going to be playing the game he set up because it is corruptive, and continues past wrongs.  He subjected himself to a corrupt system with typical outcomes, which he knew.  He left Putin with a truly awful decision.

A dead Khodorkovsky is a martyr and can never, ever change how he thinks.

A live Khodorkovsky might be re-corrupted, but you also know that he knows exactly what the system can do to him and the more you make it bad, and the longer he perseveres, the worse you look.  Not manly at all for the manly Putin to have a businessman tortured because he refused to play ball.  But you can't lock him up forever.  And without him the economic system has lost its vibrancy, its ability to rapidly expand... and yet the very qualities that allow it to do that means that the State control is threatened.

As the man who spent time in jail with Khodorkovsky said: he is alive because he is standing in someone's way and they can't just kill him.  Yet, in unjust exile, his point becomes stronger by the day.  Strong enough to pierce the indifference of Russian society?

He is in jail for a reason.

Would you gladly submit to a corrupt system created by your own ignorance and indifference so as to change it?

That is the dilemma of The Prisoner and his answer still stands:

I will not be pushed, filed, indexed, stamped, briefed, de-briefed or numbered.  My life is my own.

It is the only way to be free when the State seeks absolute control over you via society.

Don't think of Khodorkovsky as a man, just as #6.  And still he smiles in court a testament to the power of just one man.

Wednesday, April 03, 2013

End Game Against Freedom

Note this is a cross-post.  I am looking to utilize some of this material for another post, but that is a look at what it takes to retain freedom (or gain it) when governments no longer respect freedom and liberty of the individual.  The post now follows.

What is the End Game of the global elites against freedom and liberty?  We can see its path by addicting populations to 'social' provisions such as 'retirement' and 'health care', which are different things than living a good life or providing good doctors and medicine.  This is the Redistributive State which seeks to undermine freedom by giving people material goods in return for those people relinquishing ever more control of their lives to the State.

This can be done by means of an Elite funding or promulgating a lower societal uprising so as to force society to be under enough pressure to call for a crackdown on those putting them at risk.  It is a mug's game, a violent game of 3 Card Monte in which those seeking to lead a normal life are The Mark.  When you agree to the 'good' that such government provided social programs can do at the cost of taking money from those who have rightfully earned it via their liberty, you agree to limit the liberty of all: of the rich to be rich, of the poor to realize that they are the source of their own problems, and of the middle class to purchase the passivity of the poor with the wealth of the rich and hoping for a few scraps for themselves.  When you wash, rinse and repeat this sort of thing you are in the  process of breaking the will of individuals to have a free society, to stand up for freedom and ridiculing them because they actually support the ability of people to get rich and of the poor to also have that same opportunity.  What is offered is the class system, at first, which turns into a self-fulfilling Caste System with those at the upper levels dictating to the rest of society how it shall act in its own terms.

The modern West is in one or more cycles of this, but it is interesting to look at one society where this has reached an end-game: there are no longer any illusions of providing social goods because they aren't necessary as the will of those to have a civil society have been broken.  In China there is so much autocratic control and police suppression that it is hard to get information out, but in another place there is just enough of a shame culture left and the attempts to have a veneer of civilization remaining that we can get a look at what this looks like.

I've reported on the Red Mafia before a number of times, and this time I'm coming at it not from the 'find all low level sources to piece together a framework' end, but at the other end of what happens when a very few who actually want to do their jobs in government AS jobs in government actually give the high level framework in stark detail.  I found this through Amazon Pime's service in  film documentary by Andrei Nekrasov who recounted the murder of Alexander Litvinenko in Poisoned by Polonium.  I had looked at part of the aftermath of this assassination of Litvinenko, but the lead-up to it and the high levels of corruption and societal abuse it points at is telling.  It is a film I urge everyone to see since, if you want to see where a quasi-western State ends when its elites assume autocratic control, there is no better overview of just how this can come to be.

The events the film reviews are centered on the post-Soviet collapse in the 1990's where the productive capacity of the old Soviet industries came under the sway of two general classes of individuals: old Soviet elites and organized crime.  In some cases there is no differentiating between the two because they have a connecting link in the secret service, the FSB which used to be the KGB, and actually dates back to the Czar's Cheka.  At one point they are actually referred to in their modern FSB incarnation under that term: their name changes but their methodology of violence in service to State remains. 

From Litvinenko we hear about this directly:

In our country, the special services are, in fact, a secret political organization that uses sharp methods, secret methods, not against spies and terrorists, but solely to keep a ruling class in power.  In 1999, for example, to seize power, the FSB used secret methods that are only allowed against terrorists and spies.  If the army were to seize power, they'd roll in with tanks and guns and fly in with jets maybe.  But everyone would notice. The FSB, on the other hand, has secret methods, and nobody noticed anything until chekists made up the government and seized every organ of power.  If the KGB was the armed unit of the Communist Party, then the FSB is the armed unit of – of a caste of corrupt Russian officials.

Normally a 'Police State' is something created by a dictator or tyrant as a means to control the population by deploying the police as parts of the government with the sole aim to keep the people controlled by police power.  In the case of Russia this has been flipped around where it is the Secret Police that now put forward their own minions into politics to give a veneer of choice but, in actuality, by their brutal and repressive methods that they keep secret but are whispered about, there is no choice at all.  Really if something is undertaken to sway the public via terrorist means promulgated by the Secret Police who, exactly, is going to investigate them?  Anyone seeking to do so can be intimidated via the system that is in place of informers, records, laws promulgated to help keep the police in power, and then enforced by a corrupt legal system upon those who try to bring the actual truth forward.

With tin-pot tyrants if you have a revolution to get rid of the tyrant, can you be sure that it wasn't the secret police that actually instigated the revolt to put themselves into power?  And when a society shucks off its old totalitarian State apparatus, what happens if it actually keeps the secret police around?  Unfortunately this last question is answered in Russia.

One of the men a special unit of the FSB was to frame a man or take him out of ciruclation , and that manwas Lt. Colonel Trepashkin who was starting to piece together just what was going on inside Russia.  He recounts his story:

My first conflict in the '90s was with today's FSB director Patrushev.  I rounded up a gang that laundered money, murdered people, consisted of war lords.  At some point, I had finally managed to get them, but then the problems really started.  There was that classic chain of protection that gangsters always have whether in the FSB, the military intelligence, or in the police.  I was told to drop the case.  I said "Why, these are criminals, we have to indict them.  I won't drop it!"

The agent inside the FSB who was told to frame him so that Trepashkin would be stopped and was recorded on tape in case anything happened to any of the men from the special group in the FSB:

Trepashkin knew something, and they were afraid he'd reveal it in court.  That was my first assignment in the new department that I found really suspicious.  We ended up avoiding it and never completed it.  At the concluding session of 1997 – [..] My boss Kamyshnikov came to me and said, "You must kill Berezovsky."

There is one relevant question that can be asked of Russian society, however, before going on to how the FSB got into power: were the Russian people ready for freedom from an autocratic, indeed, authoritarian State?  For that there is an answer from Boris Berezovsky:

Berezovsky -  So we can put forward – So a certain hypothesis can be put forward.  The better the opportunities a political system offers its members, the citizens, the more efficient the system is.  But the citizens must accept, voluntarily, certain limitations on free will.  A transition from a totalitarian system to a liberal one can only take place when enough of its citizens learn to accept certain inner limitations of free will.

Nekrasov – Perhaps the transition from external limitations to inner ones.

B – Exactly!

N -  Inefficient systems force external limitations.


B – What a price humans have to pay for knowledge.  How hard it is to rise above the common wisdom.

N- Is it even more difficult for Russians, would you say?

B -  I know what you mean.  The Russian mentality is that of slaves. That's why the system of forced limitations is so welcome. So why then am I advocating liberalism in Russia?  Am I contradicting myself, advocating freedom for the Russians, going against the nation's character?  So, is Russia ready, which means her people ready to take up the responsibility of freedom? I think they are ready.  Because once the tyrannical dictate was lifted, millions of entrepreneurs appeared, a myriad of independent politicians and journalists appeared.  Russia turned out fully prepared for this crucial, historical step.  We only needed to move forward and consolidate that freedom.  And so my main conflict with the authorities today  is about individual independence.  All those stupidities – media controls, "vertical power" – have one result.  Destruction of freedom in the minds of Russia's citizens.

One can see where Boris Berezovsky is a very dangerous man to the FSB and those that they support.  The betrayal of freedom in Russia post – USSR started at those places that were the worst off condition-wise.  This exploitation would not only put the criminal oligarchs in power, but they would do so with the help of the FSB and the new Duma which had barely gotten time to get itself together.   The film recounts a cover-up of this period in which Vladimir Putin was involved with a company he had going in Germany which was in contact with the Colombian Cartels and served as a money laundering outfit.  Putin was, at that point, head of the FSB while sitting on the board of that company.  This is recounted by Jürgen Roth, a German writer who has been tracking the Red Mafia's work:

Jurgen Roth - When the premesis of the SPAG here in the Frankfurt area were searched around lunchtime – Well, the offices were searched all day.  But around lunchtime, the Chancellor's office was informed.  That same day, the Russian Interior Ministry was tipped off about the search, which is strange.  Even before the search took place, the public prosecutor's office in Frankfurt tried to suppress the case.  What was on their mind was that Putin was central to this whole affair.  The prosecutor investigating the case didn't get any help. 

It all started with a report about money laundering in Liechtenstein.  In this report the BND, the federal intelligence service, there was a note about the SPAG company laundering money for Russian criminal organization called Tambovskaya.  And so the Public Prosecutor Kirkpatrick opened an investigation.  Soon after that, it was confirmed that money laundering was taking place, that the Tambovskaya connection existed and that Putin might be involved. 

When the company was founded, Putin was on the board of directors for half a year in 1993.  After that he was on the advisory board until 2000.  During that time he was in St. Petersburg and also already director of the FSB.  So he was on the advisory board of SPAG while he was the director of the FSB. 

Now I am familiar with the workings of the FSB.  If someone somewhere so much as farted, he got a written report about it.  And it's hardly plausible that Putin was not informed about all this, about what was going on with SPAG's money and that the people behind it were criminals, classic mafiosi.  He was under investigation for accepting large sums of drug money,  which is undisputed.

N- That was ascertained?

R – It was ascertained by the courts in Liechtenstein.  You can also track his longtime intelligence connections to Germany, to Dresden. I've got a list of all the intelligence officers from the GDR era, and Putin is on it.  Even back then, he kept close connections with the entire intelligence community involved in dirty business.

N – The East German?

R – The GDR intelligence service.  Stasi.

N- Corruption and things?

R – Not only corruption.  Corruption – That's a matter of course.  No one even discusses that anymore.  It's more to do with spying and destruction.  How do I destroy a political opponent?

This is not the first instance that Putin was involved with underhanded dealing for personal gain via criminal means.  This starts with a lead that Litvinenko gives:

Shortly after I gave the interview on Radio Liberty, publications appeared that accused me of slandering our president.  Not to mention that Putin was caught stealing metal assignments and funds in the early '90s in St. Petersburg.

To properly understand what Putin was doing in Leningrad it is important to hark back to what else was going on in the Non-Ferrous Metals outfits at the time, and here I wall draw on my prior piece A taste of Oil For Food and its chefs, which goes over the process of 'tolling'.  With the Russian economy crippled by State facilities being unable to make any payroll at all, the workers were down to barter of goods their facilities produced in exchange for other goods from other workers in other facilities.  This was causing problems as stuff like food wasn't made locally and had to be brought into many regions and without a cash  based system to work with, there was no way to barter ovens, say, for eggs, cheese and milk.  Those who stepped in to put money into these facilities were generally of two major classes: rich elites of the former Soviet State, and organized crime.  Some facilities did try entrepreneurial capitalism, yes, but for large metal works, aluminum plants, steel foundries, titanium smelters... heavy industry in other words... you needed cash.  Lots of cash.  And these 'investors' wanted a 'sweet deal' from the new government and they insisted on 'tolling'.

This form of 'tolling' is unlike having to pay a certain charge on a toll-based road, however, as that is a government tax on use of that road by those who travel on it.  Here it is something else entirely: the agreement by the government not to put a tariff on goods that the producers get in exchange for their output.  What this put in place was a system whereby the workers actually got paid a pittance, almost all of what was produced went outside the country, what came back after sales had no tariff on them and were then sold at above market prices locally.  If you run this sort of system then those running the business get to keep their overseas money, put a small amount in goods to come back, garner a huge windfall of increased prices for those goods versus what a competitive market would garner and then pocket those profits, as well.  Because State power is used to enforce who gets market share and is able to exclude exterior competition and their better managed systems, what you get is a near monopoly on certain regions and markets by what is effectively monopolies run by organized crime.  Isn't it great when you get to write the bills to be passed like this?

From this the section of the film in which Leningrad (St. Petersburg) comes into clear focus because the situation was one in which Putin was part of a transactional scheme to exchange raw materials for food, or metals for food in 1991-92.  Any FSB agent who understands this sort of region and its criminal element is set to make out like a bandit which is, exactly, what Putin did and was written up and dismissed from the program by local officials about the external affairs office and has since been made to disappear as a document and is very difficult to find copies of it anywhere, even on the Internet.  The value of the amount embezzled was $11.5 million which meant that the citizens of St. Petersburg would go hungry and food would be rationed there for the first time since WWII.  That amount is a low-end figure as it doesn't go into specific foodstuff costs which were left out from the contracts.  From the report:

There are reasons to suggest that partners did not intend to import foodstuffs to St. Petersburg.


The recommendations to refer the case to the city prosecutor's office and to remove Mr. Putin from his position.

In 2000 another investigation clarified that because of what happened St. Petersburg did not receive foodstuffs in excess of $92 million, but the total cost left unjustified to the committee amounts to $850 million.  All from an organization that was being run by Mr. Putin.

And how did Vladimir Putin get into power?

If you are the head of a secret police organization using illegal means to enforce power, to work with organized crime, and to partake of such crimes as well, and you have the power and means to undercut the judiciary and subvert military officers, then you are left with very little to resist you.  With that said there is one pretext for a State assuming additional powers and that is war.  In this case the war in Chechnya and, most critically, the second phase of it that started with the bombing of a bridge and then an apartment complex in Moscow.

Those bombings had one strange artifact to them: in the case of the bridge bombing there was an FSB agent found dead at the site of it and in the apartment complex bombing an FSB agent was indicted for having supplied the necessary explosives.  Or should it be said that these were Special Agents, for they were.  The denial of the FSB is, ostensibly, 'we couldn't have done it'.  Even though agents of the FSB are implicated.  Indeed this brings into question why a tank column was stopped outside of Grozny for days and then bombed just before the other attacks.  Tank columns do not stop by roadsides for days at a time as that is wasteful in men and resources who can be better used for doing other things, like not needing field maintenance.  If you are trying to put together a meme of advancing terrorist attacks, would there be a better way to do it than just as it was done?  Because terrorists, you see, don't work on 'front lines' and don't need to 'advance' via announcing themselves with periodic attacks along a given axis of movement: they are not military units.

To get more State power over media, over the economy, over people, is there any means better than a war?

If the secret police of a State using illegal means put forward a program to require the current regime to delegitimize itself, would there be any better way than to start what is, essentially, a civil war and then assert 'special powers' in 'rooting out terrorists' by that self-same secret police?  And then, in the midst of awful, bloody fighting, wouldn't it be nice to have political backing, even if from extreme nationalists, for such activity?  Because that also came with the Chechen war and is one of the most startling visual artifacts of the documentary: skinheads chanting for Putin while waving a flag with a black hammer and sickle in a white circle on a red field.  The swastika replaced by the hammer and sickle.  And chants for killing them all, the Chechens and, although none had any involvement in this, the Jews.

With the election of Vladimir Putin also came the election of a high number of FSB agents and officials also 'winning' elections so that every organ of the State was soon in control of the government.  Some may remember the terrorist attack on the theater in Russia where patrons were held captive by 'terrorist' gunmen.  One of those was an FSB agent who was put into a high position by Putin some months after the 'terrorist attack'.

If China points to international socialism becoming a formulation of national socialism, which is to say fascism, then when genocidal war is mixed into that, as is the case in Russia, you get a form of fascism known as Nazism. Of course it will be denied up and down the line, yet the supporters of State power continue to show up with proper symbology be it that twisty, interlocking geometric design of the New Dawn party in Greece, or the swastika replaced hammer and sickle flag in Russia.  This, most virulent form of socialism at the nationalist scale, is a horror for mankind... although not a lesser horror than international socialist kind as both look to kill to get to and remain in power.  Often with tens of millions dead in that quest.

The true horror is the attitude taken by prosecutors and governments outside of Russia when companies started by FSB agents or organized crime in Russia, and it is hard to say which is worse at this point, are then suspected of criminal acts.  Money laundering, drug running, and, of course, murder using exotic means like a highly rare, short lived, radioactive metal like Polonium.  Litvinenko thought he was safe in Great Britain, but safety is only an illusion unless the State will actually do its job to keep you safe from exterior attack... not turn a blind eye towards it or refuse to ask hard questions or even seek to shut down inquests.  Yet, in the West, we see that in Great Britain and Germany, and if that sort of thing is going in those States, one with the longest history of people seeking democratic freedom and the other the one place that should have learned its lessons about the horrors of NOT investigating such things, then what does that say about the rest of Europe and the West as a whole?

In the US we have a man like Eric Holder who, it must be remembered, was involved in some very sorry episodes in the Clinton Administration, proving to be duplicitous in the Elian Gonzales affair, who also put forward a pardon for Marc Rich.  The same Marc Rich who would show up in post-Soviet Russia to bring 'tolling' as a concept with him to teach to the oligarchs.  It is certain Vladimir Putin knew of Marc Rich – as the head of the FSB that would not escape his notice.  And as Marc Rich had investments in operations going across Russia, east to west, it is very likely that Vladimir Putin had more than a nodding acquaintance of Marc Rich's tactics and techniques.  Did Putin actually know Marc Rich, a man then on the lam from the FBI for questioning with an international search warrant out for him prior to his pardon?  Especially as Putin used the methodologies that Rich brought with him to absolute perfection, can that be just chalked up to being a real good study of those techniques?  You don't use them by accident, that's for sure, but with criminal intent as the two commissions investigating the starving of St. Petersburg pointed out.  And as the courts in Liechtenstein also pointed to in the case of SPAG.  Makes you wonder where SPAG got its money, doesn't it? 

Back to Eric Holder, for a moment, how does such a man pushing for a known organized crime participant to get a pardon, which he must have known in his position at the FBI, get a 'pass' by any political establishment?  How does a duplicitous public official with policing powers entrusted to him violate that trust and, yet, get promoted?  How does criminal operations of running guns to Mexican Cartels, and to other non-State operators overseas, against the treaties we have signed with these Nations, actually get a yawn from the media?

What does the End Game Against Freedom look like?

Vladimir Putin had many contacts in the intelligence and police community overseas.

Here's a thought.

President Eric Holder.

But only after some suitable 'national emergency' has taken place in which 'extraordinary powers' need to be used to 'stop' advancing 'attacks' by organizations that don't do advancing 'attacks'.  That is the equivalent in the US.

The End Game Against Freedom is a Police State.

Run by the Secret Police, not a dictator creating one but a dictator put in power by one.

Who watches the Watchmen?