Crimea: meet the family

Here’s something interesting: the pro-Russian paramilitary leader in the Crimea is the son of the pro-Russian paramilitary leader in Transnistria.

As that empire was pushed out of Eastern Europe, Aksyonov’s father, Valery, became the leader of a group called the Russian Community of Northern Moldova, which campaigned for the rights of ethnic Russians in a country ruled by the Moldovan majority. In 1990, the ethnic tensions in that country erupted into war, and the Russian army came to the rescue of paramilitary groups fighting the forces of the Moldovan government. Two years later, the conflict ended with the de facto secession of a breakaway state called Transnistria, a sliver of land that runs along the Dniestr River.

Today, Transnistria is still a frozen conflict zone on the map of Europe – and a state that Aksyonov reveres. Its independence is not recognized by any member of the United Nations, including Russia. It is the only part of Europe that still uses the insignia of the Soviet Union, and its economy imposes Soviet-style subsistence living on the masses while the politically-connected elite benefit from its unique black market. As an unrecognized state unbound by international law, its customs points are a clearinghouse for contraband, including tobacco, guns and counterfeit liquor. But Aksyonov sees it as a place to be emulated. “Transnistria is a bastion of Russian culture inside Moldova,” he says. “They wanted to preserve their identity. And I fully support them, because I know what kind of pressures they faced.”

Who knew frozen conflicts could be a family business? Of course, “family” and “business” are usually very ordinary words that can take on a very different significance.

He remembers Aksyonov in the 1990s as a member of a criminal syndicate called Salem, which was named for the brand of contraband cigarettes they imported and dealt in bulk. (Other accounts claim the group was named for the cafe where they hung out.) “Aksyonov was a capo for them, an enforcer,” says Los. “He had a group of ten guys that would go around collecting money.” Aksyonov’s nickname in the local underworld, says Los, was the Goblin. “Every gangster had a nickname. I was called Horns because of my surname.” (Translated from Russian, the word los means moose or elk.)

In Crimea, it looks like he’s starting with the banks. Of course. Was ist ein Einbruch in eine Bank gegen die Gründung einer Bank? I do think this fits with my idea that this is about post-Soviets vs. pre-Europeans.

Update: He may have just added two gas companies. Nothing succeeds like success.

Ukraine: it’s a thing

This piece of Galrahn’s has a great title: US Soft Power in Ukraine is Missing Hard Power’s Escalation Control. It then wanders off into generic stuff about how Obama is lacking resolve and a succession of supposed military options, all of which would lead to war with Russia.

But if we were to stick with the title, we might learn something. “Soft power” – influence, the EU as a magnet, that stuff – is very hard to “calibrate” precisely because it deals in influence over people rather than physical force. People may not be impressed for years, but then change their minds and hugely over-deliver. The participation that makes it important also makes it very difficult to use as an instrument of policy. Classical theories of innovation diffusion tell us that “reinvention”, the degree to which users make innovations their own, is a critical factor in whether this or that idea reaches enough early adopters to hit the inflection point into mass adoption. As a result, not only does it work far better than anyone expects when it works, it also goes to new and unpredictable places nobody expects.

Fair enough. It is obviously true that US and European soft power played a role in Euromaidan. They called it Euromaidan, after all. But I have been writing so far in the voice of someone who imagines they controlled the situation, explaining why they failed to control it. Saying that soft power lacks escalation control is another way of saying that you underestimated the agency of Ukrainians. This theme runs through the whole story.

Vladimir Putin, famously, doesn’t believe it’s a nation and openly treats it as a colonial entity. The US imagines that some National Endowment for Democracy money and advice will solve everything in the way they would like it to be solved. The EU sees it as a fairly cynical bargaining process between Yanukovych and Yulia Tymoshenko and wouldn’t have minded Yanukovych sticking around even after all the shooting. Yanukovych, for his part, clearly didn’t think of Ukraine as a nation; he thought he owned it.

Operationally, this was meant to work like so. The conflict could be presented as a divide between (ex-Polish) western Ukrainians and (ex-Soviet) eastern ones. Experts differ. This would permit people to see it as not a proper nation, a conflict that had to be managed, or alternatively a Soviet survival that needed protecting from the IMF. At street level, this would show up as a pro-Yanuk movement big enough to be a potential political majority. But Yanuk was let down by the failure of the supposed “pro-Russian East” to show up. He was counting on it and he may have reassured Vladislav Surkov, Putin’s very influential PR expert, that it was coming when Surkov came to see him.

The problem was, though, that the “pro-Russian east” had already been a disappointment in 2004, and it was even weaker this time. Research on the ground suggests that the idea of a geographical split is misleading – the political divide is generational, and eastern Ukrainian identity does not signal support for Russia and still less for Yanuk. There is even some evidence that the linguistic picture has changed since 2004, with more people, especially young people, opting to speak Ukrainian and to adopt such an identity. This could be described as the transition from a post-Soviet to a pre-European identity. We might make a little leap of faith and argue that the EU missed this too, and the evidence is that Tymoshenko’s polls are horrible.

If the pro-Russian east didn’t show up, who did? There was a big surprise about Ukraine, and there was a big non-surprise. The surprise was the appeal of the European Union as an ideal – who expected that? – and the non-surprise was the emotional force of nationalism. This brings me to Tuesday’s standoff at Belbek airfield, Sevastopol, where Ukrainian Colonel Yuri Mamchuk led an unarmed march of the 204th Aviation Brigade’s ground crew to assert their right to access the runway and maintain the 40 or so MiG-29 aircraft there. You can watch the confrontation, with subtitles, below:

But I prefer this photo, which reminds me of Ilya Repin, perhaps a painting entitled Colonel Mamchuk Defies the Rascally Cossacks:

The imagery here is very important – the red banner is the colours of the Soviet unit whose traditions the 204th inherited, which had no fewer than six Heroes of the Soviet Union. The Ukrainians have both appropriated the Second World War heritage, and also posed the question as to who looks like the Germans here. It’s also crucial to note that the people Mamchuk led up to the Russian sentries will have been the cooks and clerks and avionics technicians you need to make an air force work, not some sort of commando elite. This is, I think, what nationhood looks like.

And as a piece of strategic nonviolence, it came close to scuppering the whole Russian plan or non-plan in the Crimea. If the Ukrainians got to use the airfield, they could resupply and indeed relieve their garrisons there. If they could fly their planes, they would evidently discredit any Russian claim to control the air. Starving them out would no longer be an option. Having both Russian and Ukrainian forces present would be very much like the Crimea pre-revolution, and therefore something close to the status quo. The degree to which Russian and Ukrainian forces coexisted there until this month is shown by the fact the 204th is a counter-air wing with the dogfighter variant of the MiG-29, and the Russian air wing up the road is a strike force with the Su-24 bomber. The Ukrainians essentially provided the Black Sea Fleet’s air defence. (SO AWKWARD.)

The upshot was a compromise – the Ukrainians didn’t get to reoccupy the airfield, but they did get to station people there. But this is progress towards the status quo. And today, this Daily Mirror piece mentions that the Ukrainian navy’s helicopters are active in Crimea and that the Mirror journalist saw one resupply the garrison he visited. If this is true, the Ukrainians can hold out a long time.

On Tuesday, both Putin’s odd self-contradictory statement and Kerry’s words in Kyiv were united in tone; they both seemed huffy, calling for OSCE monitors to check on the kids-on-lawn situation. Two old men who found they controlled the situation much less than they thought. It is worth pointing out that historically, Crimeans have usually demanded autonomy or even independence, not integration in Russia.

Sources I used beyond the ones linked in the text:

https://twitter.com/TheWarRoom_Tom/status/441248164906303488
https://twitter.com/TheWarRoom_Tom/status/441248640531980288
http://www.telegraph.co.uk/news/worldnews/europe/ukraine/10679161/Ukraines-hero-colonel-insists-he-was-just-doing-his-duty.html
http://www.craigmurray.org.uk/archives/2014/03/putins-victorious-defeat/
http://seansrussiablog.org/2014/03/02/ukrainian-civil-war-wasnt/
http://inmoscowsshadows.wordpress.com/2014/03/02/putins-pyrrhic-crimea-campaign/
http://www.newyorker.com/online/blogs/newsdesk/2014/03/who-will-protect-the-crimean-tatars.html?utm_source=www&utm_medium=tw&utm_campaign=20140306
http://www.theglobeandmail.com/news/world/tide-of-opinion-turns-against-russia-in-ukraines-east/article17293095/#dashboard/follows/
http://eng.kremlin.ru/news/6763
http://zik.ua/en/news/2014/03/05/journalists_recognize_fsb_colonel_posing_as_crimea_selfdefence_commander_467743
http://www.telegraph.co.uk/news/worldnews/europe/ukraine/10670547/Ukraine-crisis-Polite-people-leading-the-silent-invasion-of-the-Crimea.html
http://www.theguardian.com/commentisfree/2014/feb/28/ukraine-this-is-no-second-cold-war
https://russiamil.wordpress.com/2014/03/06/the-role-of-the-black-sea-fleet-in-russian-naval-strategy/
http://www.sueddeutsche.de/politik/krise-in-der-ukraine-die-fuenf-tage-herrschaft-des-volksgouverneurs-gubarew-1.1907550
http://www.edmundconway.com/2014/03/how-britain-became-russias-banker-of-choice-and-what-that-means-for-sanctions/

Those Ukraine speeches really knocked him out

As the expression has been put back in the news, here’s the text of what became known as the Chicken Kiev* speech of President George HW Bush (the elder) in 1991. The title speaks to the changed times: Remarks to the Supreme Soviet of the Republic of the Ukraine in Kiev, Soviet Union. The speech takes as a guiding frame that the USSR will continue in some form and is sceptical about the ongoing process of USSR disintegration, especially economic disintegration. The paragraph that caused Bush 41 trouble back home (a reaction that no doubt had some influence on Bush 43) was this one:

Yet freedom is not the same as independence. Americans will not support those who seek independence in order to replace a far-off tyranny with a local despotism. They will not aid those who promote a suicidal nationalism based upon ethnic hatred. 

For US domestic politics, too deferential to the Soviet status quo. But he did manage to avoid accusations that he was stirring things up and a few months later, Ukraine had voted for independence. Anyway, read the whole thing.

*The appellation is apparently due to William Safire.

Lvov Offensive


Does Herman van Rompuy really need to be telling the people of western Ukraine that if it wasn’t for some pesky border-drawing issue, they would be 3 times better off than they are now? For a Brussels elite that likes to pitch every European Union achievement in terms of the aftermath of World War 2, it’s a remarkably tone-deaf boast.

Was the Ukraine shambles avoidable?

With Saturday bringing news of police in Kiev brutally breaking up what had been a peaceful pro-EU protest, it’s even clearer now than before the botched partnership summit in Vilnius that things could get out of hand on a large scale. Perhaps what stands out the most about Ukraine is the sense of slow-motion crisis: an indigenous “colour revolution” that was diverted, every economic indicator pointing to an old-style IMF program very soon, and months of signals from Russia that its Eurasian Customs Union would be an offer that its neighbours couldn’t refuse.

The day also brings a fairly toughly worded statement of condemnation of the protest break-up from the European Commission, but what hope it has of generating any momentum is not clear with the world into its weekend (and for the USA, Thanksgiving) distractions. But the question for the EU has to be: what did they expect? The noises were there for months when Armenia wavered at the Eastern Partnership. There was a further message in how aggressively Russia played its cards on Syria, but maybe that was given a pass for having headed off US military action.

Even over the last few days though, the mis-steps mounted. It was clear ahead of the Vilnius Summit that President Yanukovich was boxed in by pressure from Russia. So why maintain the pretense that a deal could be done, why go ahead with the summit theatrics, why release the video of him getting a dressing down by Angela Merkel, and then put a bullseye on Moldova as what a country might get if its plays nicely with the EU?

There were other pitfalls embedded in the EU-Ukraine negotiations process. Writing in the New York Times, Oleh Kotsyuba notes the way that social conservatives in Ukraine used the partnership component on tolerance of sexual orientation against it. For others, it became a polarised personality dispute with the focus on Yulia Tymoshenko ($ link).

Of course, we don’t know the dynamics inside the EU capitals and Brussels about who wanted what (was Iran consuming their attention?). But there seems to be several points at which expectations could have managed and temperatures lowered. Perhaps the bigger question is whether the EU has a full understanding of what kind of Russia it is dealing with. It’s going to be a fun Russian G8 Presidency in 2014!

Of fish, flowers, AKs, offshore banking, and now horsemeat

The horsemeat scandal has taken an unexpected, and possibly very significant, turn. So the Cyprus company controlled by Dutch meat merchant Jan Fasen, who was caught last year passing off South American horsemeat, and which is accused of doing the same with horses from Romania and the British Isles, turns out to have a single director, which is itself a company. (Fasen’s firm, if you haven’t heard, is named Draap, or the Dutch word for “horse” spelled backwards.)

This second company, Guardstand, also controls something called Ilex Ventures, which was used by…ahem…the international arms dealer Viktor Bout to buy some aeroplanes. Oh. Guardstand, for its part, is controlled by something called Trident Trust, which is a company-formation agent in Cyprus, which mostly serves Russian customers.

Now, it would probably be wrong to assume that Bout was behind the horsemeat racket or that some huger interest controlled both. It is probably more useful to look at this from a horizontal, functional perspective. Both Bout and the horsemeat guy made use of Cyprus’s role as a Russian-speaking offshore financial services centre with access to the eurozone.

There’s quite a lot more information at Reporting Project, which speaks to this point. The corporate structure is more complicated than the Guardian piece suggests. Draap’s sole shareholder is Hermes Guardian Ltd. in the British Virgin Islands, its sole director is Guardstand, and the company secretary is Trident Trust. Hermes Guardian is a shareholder in numerous other Cypriot companies, and one of its directors is the head of the Cypriot Fiduciary Association. And both Guardstand and Trident were also used during a half billion dollar acquisition of a steel mill in Donetsk.

All this originated because of the existence of a tax treaty between the Soviet Union and Cyprus. Russians and Russian money have been very obvious in Cyprus in the euro era.

It is often suggested that this treaty, like the similar one with Iceland, was intended by the Soviet side to help finance their intelligence agents in the West. If true, it’s possible that Bout would have been aware of it, having worked for the GRU (Soviet/Russian Military Intelligence) in Africa in the 1980s. As he used the Sharjah Airport free-trade zone as the trading and aviation centre of his business, he may have used Cyprus as the financial centre. These are the places where the rubber meets the road of globalisation, and they tend to build up a layer of secrets over time.

This immediately reminds me that his alleged financial manager, Richard Chichakli, has recently surrendered to Australian police after eight years on the run. He’s been extradited to the United States, where Bout is serving his sentence, still protesting to Russia Today that he only ever dealt in fish and flowers.

Now, for the other significant bit. Cyprus has a lot of the same economic problems as, say, Greece. Notably, its banks are in trouble and the sovereign may have to bail them out and the sovereign itself will end up bust, so on and so forth, we all know the story by now. One of the reasons the Cypriot sovereign is on the hook for quite so much money is that Cyprus has surprisingly big banks. Of course, they’re linked up to the rest of Europe via TARGET 2, so if the big depositors spook*, it’s an instant run on the bank.

Big depositors, you say? And who might they be? I think it is fair to say that nobody is particularly keen to bail out Viktor Bout or Horsemeat Guy. As a result, it’s politically very possible that the whole idea of a bail-in might get tested. And whether it does, and the exact terms, are increasingly linked to things like “how far into the maze the journalists get” and “whether Richard Chichakli starts singing in jail”.

And we may be going to see what happens when an offshore financial centre goes bust.

*surely the right word here…

Finalité Revisited

Shortly after the big round of EU enlargement in 2004, I took a look at future prospects for enlargement. At the time, I called prospective members, “largely a collection of the poor, ill-governed and recently-at-war.” Most of them are much less recently at war, many of them are better governed, and almost all of them are less poor, yet for all but a few prospects for EU accession seem to me more distant than in 2004.

What has happened?
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Press freedom in Ukraine: bad, worse

Just three months ago I wrote this about Ukraine’s new President:

Yanukovych’s young administration is interesting for two things: what he’s done, and what he hasn’t… [S]o far, he hasn’t cracked down on Ukraine’s lively press and media. Nor has he moved aggressively to purge the judiciary and the civil service, bring corruption indictments against political rivals, or change the laws to make himself and his supporters immune to investigation or prosecution… Watch this space, I guess.

At that point Yanukovych’s administration was just a few weeks old. Unfortunately, a lot has happened since then:

Most television networks in Ukraine are now owned by oligarchs friendly to Yanukovych. The most-watched Inter channel belongs to State Security Service chief Valeriy Khoroshkovskyy. The nation’s top spy also serves on the High Council of Justice, which appoints judges…

Khoroshkovskyy has maneuvered to expand his media empire through court actions against his competitors, the independent outlets Channel 5 and TVi. In June they were stripped of their broadcast frequencies. A journalists’ group, Stop Censorship, demonstrated outside a recent court session that confirmed the decision… their action was not covered on central television stations.

Khoroshkovskyy also sits on the Board of Directors of Ukraine’s Central Bank; he’s been an ally and backer of Yanukovych for years.

Meanwhile, the crusading editor of a local newspaper has disappeared and is presumed dead:

The one fact everyone agrees on is that Klymentyev vanished. His family reported him missing the next day and Kharkiv police opened a murder inquiry. His friends are convinced he is dead, though so far there is no body. On 17 August a boy discovered his mobile phone and keys in a small rubber boat floating in a rural reservoir…

Klymentyev’s friends and colleagues say they have no confidence in the official investigation into his disappearance. The journalist was a savage critic of local prosecutors who have now been given the task of finding his killers.

Meanwhile, in the background, the laws on press freedom are being amended:

A law protecting personal information, signed by President Yanukovych on 26 June and due to take effect in January 2011, will significantly complicate the work of journalists and expose them to the possibility of criminal prosecution. Under this law, journalists will have to ask a person’s permission before publishing virtually any information about them aside from their name and surname… Draft law No. 6603, which has been submitted to the Verkhovna Rada (parliament) following approval by the cabinet on 30 June, would require news agencies to register with the state every year. Disseminating news without being registered (or re-registered) would be punishable… The bill has been criticised by [free speech organisations] as an attempt to bring Internet media under political control by treating them as news agencies.

Reporters Without Borders came out with a report in July, but the media situation has continued to deteriorate rapidly since then.

In retrospect, this is exactly what one would have expected. Yanukovych was always an authoritarian — it was part of his appeal — and many of the people around him are worse. Still, it’s pretty depressing. Relatively high levels of press and media freedom was one of the few clear accomplishments of the Orange Revolution. It’s clear now that those freedoms are going to be rolled back; the only questions are how fast, how far, and how permanently.