Panama Papers Are Putin Blackmail of US Officials
Clifford Gaddy has never recovered from his 20-year infatuation with Anatoly Chubais and Alexei Kudrin. Neither has Gaddy’s boss at Brookings Institution in Washington, Strobe Talbott, the regime changer-in-chief at the State Department in the 1990s, when Boris Yeltsin was his man in the Kremlin, and the rest of the country too weak to resist.
If only they ruled Russia today, President Chubais, Prime Minister Kudrin or vice versa, instead of President Vladimir Putin, there could never ever be the Kremlin plot Gaddy and Brookings charged last week for blackmailing United States officials and their allies with something like the Panama Papers. A regime-changing plot like that isn’t as preposterous as it sounds — not because Putin thought of it, as Gaddy now claims, but because Gaddy and Talbott used it a good many times themselves in Moscow, and in Belgrade too, until Putin put a stop to them. For lossmaking Brookings, however, putting a stop to Putin’s plotting is a desperate advertisement for badly needed funds.
“Are the Russians actually behind the Panama Papers?” is the title of Gaddy’s indictment. It isn’t an opinion-page piece placed in a newspaper. There’s no institutional disclaimer either. It is an official publication of the Brookings think-tank where Gaddy is chief expert on Russia, and Talbott is chief executive.
Also, the question isn’t a genuine one, because Gaddy’s answer is yes. “My thinking”, he says, ignoring the subjunctives, conditionals, and the cyrillization of control (контроль) –“is this could have been a Russian intelligence operation, which orchestrated a high-profile leak and established total credibility by ‘implicating’ (not really implicating) Russia and keeping the source hidden. Some documents would be used for anti-corruption campaigns in a few countries—topple some minor regimes, destroy a few careers and fortunes. By then blackmailing the real targets in the United States and elsewhere (individuals not in the current leak), the Russian puppet masters get ‘kontrol’ and influence.”
Gaddy provides no evidence. Instead, he proposes the ancient Roman courtroom trick of casting blame in the direction of motive when the evidence of commission of acts is absent. “The cui bono [“to whose good”] principle connects profits with motives, asking who stands to gain from a certain action. If it’s the Russians who win, isn’t it possible that they are somehow behind at least part of this story?” — that’s another of Gaddy’s trick questions, to which he has the ready answer.
“So let’s say that the ‘who’ is the Russians, and the ‘why’ is to deflect attention and show that ‘everybody does it.’ But how? Given Russia’s vaunted hacking capabilities, a special cyber unit in the Kremlin may have been able to obtain the documents. (Monssack [sic] Fonseca is maintaining that the leak was not an inside job.) But it is most likely that such an operation would be run out of an agency called the Russian Financial Monitoring Service (RFM). RFM is Putin’s personal financial intelligence unit—he created it and it answers only to him. It is completely legitimate and is widely recognized as the most powerful such agency in the world, with a monopoly on information about money laundering, offshore centers, and related issues involving Russia or Russian nationals.”
RosFinMonitoring’s chief, Yury Chikhanchin, who has an economics doctorate like Gaddy and 16 years in the security services, first took charge of the agency in 2008. Four years later, in June 2012, Putin met him publicly,twice, to hand him the cover story, according to Gaddy, for what RFM really does that’s different from its US counterpart, the US Treasury’s Financial Crimes Enforcement Network (FinCEN), headed by Jennifer Shasky Calvery (right).
According to Putin, “we must prepare a national plan to combat money laundering, tax evasion, and offshore tax evaders, while understanding which company is the ultimate beneficiary of this. This is what other countries, or at least many of them, do.”
According to Brookings, Putin told Chikhanchin to break into Panamanian offshore company registration files to find the names of influential US government officials and businessmen in order to blackmail them into taking Kremlin orders.
Putin also told Chikhanchin to keep his work secret. “I note that over these years, despite the complexity and confidential nature of your work, the Service has never had any leak of information that could be damaging for our country’s business and economy. I hope that you will continue to work just as intensely, thoroughly and carefully.”
In July 2013 the RFM was exposed in public as Putin’s personal spy agency. That was in a publication financed by the Russian state media budget. The author of the disclosure was… Gaddy.
One of the secrets Gaddy kept then, and now, is that between 2000 and 2002 Chikhanchinwas head of the Currency Control Department at the Finance Ministry. The minister to whom he reported was… Kudrin.
But the Putin-Chikhanchin secret is now out, leaked by Gaddy: “the purpose of the Panama Papers operation… is a message directed at the Americans and other Western political leaders who could be mentioned but are not. The message is: ‘We have information on your financial misdeeds, too. You know we do. We can keep them secret if you work with us.’ In other words, the individuals mentioned in the documents are not the targets. The ones who are not mentioned are the targets.”
When Cicero called out “cui bono”, the Romans in court didn’t know what a boomerang was. Without evidence, the Putin plot according to Gaddy is just that. He invites the question – what motive, benefit, or profit can he, Talbott, and Brookings have for attacking the Panama Papers as a Putin blackmail scheme? This isn’t a trick question.
According to Gaddy’s resume, in the mid-1990s he was “an advisor to the Russian finance ministry and regional governments on issues of fiscal federalism for the U.S. Government’s Tax Reform Oversight Project for Russia.” Talbott was Under-Secretary of State. The recent release of the transcripts of telephone-calls and meetings at the time between President Bill Clinton and British Prime Minister Tony Blair reveals that Talbott’s mandate was to keep Yeltsin in power if possible – and if impossible, build up as his replacement Yegor Gaidar at best, Victor Chernomyrdin at worst. Getting rid of Prime Minister Yevgeny Primakov was one of Talbott’s regime changes; at the same time as he was plotting the overthrow of Slobodan Milosevic in Serbia. For details, read this.
How are their interests now, and Brookings’ interests, affected by the Panama Papers? For cui bono, read cash. Brookings doesn’t fully reveal the identity and value of its funding sources. But this how it describes them: “Generous individuals, foundations, leading corporations, and U.S. and foreign government agencies that share our commitment to quality, independence, and impact in public policy research and analysis support Brookings with financial contributions and intellectual engagement. Donors invest in Brookings with both project-specific gifts and unrestricted funds that help us react nimbly to breaking events and confront urgent challenges, from the domestic and global economies to foreign affairs to the health of America’s cities and metropolitan areas.”
For quality, independence, and impact this is what Talbott and Gaddy define asBrookings’current mission on Russia: “Confronting an aggressive Russia, U.S. policymakers must understand President Putin’s motivations and worldview in order to devise an effective strategy to counter Moscow’s revanchist agenda. Whether considering Putin’s efforts to re-establish a sphere of influence in Eastern Europe or his turn to nationalism to burnish his domestic popularity, Senior Fellows Fiona Hill and Clifford Gaddy offer U.S. policymakers comprehensive insights into the Russian leader. In 2015, Gaddy and Hill, director of the Center on the United States and Europe, released an expanded edition of Mr. Putin: Operative in the Kremlin, adding five new chapters that provide greater context on Putin’s ambitions for Russia.” Russia and China are defined by the think-tank as the principal “direct challengers to the liberal, international order.”
Fiona Hill the alternate expert on Russia after Gaddy, was a UK national; a Harvard PhD, then an academic, and between 2006 and 2009 “the national intelligence officer for Russia and Eurasia at The National Intelligence Council.”
The second alternate expert on Russia on the Brookings payroll, titled “senior fellow in the Project on International Order and Strategy in the Foreign Policy program”, is Robert Kagan. He is the husband of Victoria Nuland, who is in charge of regime-change operations for Russia and Ukraine at the State Department at the moment. For details, click to read.
For the money in the pay packets of Talbott, Gaddy, Hill and Kagan, open page 39 of the 2015 annual report for the current list of Brookings paymasters. The foreign governments giving this cash include the US military allies, Australia (foreign ministry, defence ministry), Canada, UK, Japan, South Korea, Qatar, Turkey, United Arab Emirates (UAE), and Norway. To match these countries and governments to the list of names revealed in the Panama Papers, open this. Of the governments appearing on both the Brookings and Panama lists, either directly or through proxies, the most obvious are Qatar, Ukraine, UK, and UAE.
But their wars may be hurting Brookings’ bottom-line. The think-tank reports its revenue in 2015 fell from the year before by 11% to $95.6 million, while its operating costs jumped 5% to $104.2 million. Brookings’ investment income also suffered, dropping from a positive $38.9 million in 2014 to a negative $22 million in 2015. This means the think-tank is in the red operationally, and needs to raise more donor cash urgently.
The need for fresh money is particularly urgent for foreign policy, because Talbott, Gaddy, Hill, Pifer, and Kagan aren’t cheap: they consume one-third of the think-tank budget each year. Foreign enemies, not domestic American issues, are what brings home the bacon for Brookings.
Brookings’ committee for offshore money-raising is headed by Antoine van Agtmael, an American of Dutch origin. His business is emerging market investment funds; they appear to be based in the UK, and use Ireland for offshore registration; Russia has not been one of his investment targets. The Brookings board is heavy on Americans (3), Spaniards (3), Mexicans (2), Canadians (2), and Israelis (2).
The Panama Papers list of names counts five Israeli oligarchs — Lev Leviev, Idnan Ofer, Teddy Sagi, Dan Gertler, and Beny Steinmetz. There are several Spaniards, including the Spanish duchess, Pilar de Borbon, sister of former King Juan Carlos.
There are no Russian donors to Brookings — only anti-Russian donors. The flushest of them is the Ukrainian oligarch, Victor Pinchuk. He has been providing $200,000 annually to the institution, and he takes a seat on its International Advisory Council. He funds the pro-Kiev, anti-Moscow Ukrainian coverage by former US Ambassador to Ukraine, Steven Pifer, a salaried Brookings Fellow. For more details, including Brookings’ and Pifer’s refusal to discuss the Pinchuk money, read this. The latest report from Brookings on where its money came from in 2015 identifies Pinchuk as continuing to give in the range of $100,000-$249,000.
Talbott (right) was Pinchuk’s guest at the Yalta European Strategy (YES) meeting in Kiev on September 12, 2015. On the left, Ukrainian foreign minister Pavlo Klimkin; centre, James Appathurai, the Canadian spokesman for NATO. Pifer of Brookings has been a regular guest of Pinchuk’s at the annual YES convention for years.
Following the Brookings money trail identifies a cui bono motive for Brookings to protect its benefactors, local and foreign, by attacking the Panama Papers in case the money landing in the Brookings till has been laundered from benefactor crimes. The Russian charges that Pinchuk stole more than $200 million from his Rossiya Insurance Company in Moscow suggest something of the sort, though there have been no trials, no convictions. For details of that case, read this.
For the Talbott-Gaddy theory of Putin-Chikhanchik blackmail to turn into publishable evidence requires a naïve believer, a stooge — indeed, several of them, including the most rabidly anti-Russian media in the English-speaking world: the London Guardian, the Rupert Murdoch press, the Daily Beast (director, Chelsea Clinton), and the Nikkei-owned Financial Times (Nikkei gave more than $50,000 to Brookings last year). According to Gaddy’s version , the International Consortium of Investigative Journalists (ICIJ) of Washington, which has supervised the authentication and dissemination of the Panama Papers, is “the self-described elite of investigative journalists—but what have they discovered about the source of all these documents?”
Nichevo, says Gaddy. “Perhaps, since the ICIJ is funded by Americans, they’re not going to bite the hand that feeds them… Perhaps, then, someone purged those references before the documents were handed over to the German newspaper. The ‘someone’ would… be the Russians—and the absence of incriminating information about Americans is an important hint of what I think to be the real purpose of this leak.”
Brookings almost follows the money trail into the ICIJ, but stops short. Had it gone further, it would have discovered among the financiers of ICIJ and its Washington parent, theCenter for Public Integrity (CPI), there are George Soros’s Open Society Foundations; many of the same American foundations to be found on the Brookings benefactor list; plus proprietors of the media which are publishing the Panama Papers. This cui bono trail runs around the world in a circle. For example, Soros pays money to the ICIJ to receive the Panama Papers, and pays the Mail& Guardian of South Africa to report them.
The US Agency for International Development (USAID) also pays into the circle by financing “fact checking”, “investigative journalism”, and “responsible media” projects in countries where the Panama Papers stories have been amplified, such as the Balkans,Ukraine, Mexico, and the Philippines.
On April 9, the State Department spokesman acknowledged that one of the funnels for the Panama Papers, the Organized Crime and Corruption Reporting Project (OCCRP), is financed by USAID. “They”, claimed spokesman Mark Toner (below) “ this organization conducts investigative journalism, primarily, I think, in Europe.”
“Obviously, these are the kind of organizations that USAID has and continues to fund, but not specifically for – to go after any particular government, but – or any particular individual, but simply to conduct what – and what we’re supporting here is the conduct of independent investigative journalism that we believe can shine a light on corruption, because, as the Secretary on down have said, corruption continues to have a corrosive effect on good governance around the world. So it’s part of our – a core tenet of our foreign policy that we support organizations that go after corruption.”
Cui bono? asked reporters at the briefing. “We have no editorial control over what over their reporting,” Toner answered. “They’re allowed [by the US Government] to and permitted to cover whatever they want.”
The Brookings attack on the Panama Papers as a Russian plot appeared on April 7, two days before the State Department made these admissions.
The OCCRP reports the US Government and Soros money in the funding section of itswebsite; it omits them both in its history of the organization. As for how accountable the ICIJ is to investigation of its own funds, it isn’t. This is what happened when the ICIJ’s director, Gerard Ryle, was asked questions about a Russian investigation he had just published with the Guardian in November 2012 – before Ryle cut the telephone line.