Saturday, April 1, 2017

Russia's Legal Corruption

Anne Applebaum explains how Russia corrupts its targets in The Washington Post.

We already know that social media makes it much easier for the Russian state to spread disinformation. Less attention has been paid to the Russian private businessmen who make it much easier for the Russian state to win friends and buy influence than their Soviet counterparts did. Most “independent” Russian oligarchs are nothing of the sort: Their money came originally from the Russian state, through manipulated “privatizations” and money laundering. They depend upon the state in order to keep it, and if asked they will use it to do the state’s bidding. Yet much of what they do on the state’s behalf looks like ordinary business: buying and selling companies, investing in property, hiring consultants.

That context helps explain the career of Paul Manafort, President Trump’s former campaign manager and longtime affiliate. According to the Associated Press, Oleg Deripaska, a Russian billionaire, hired Manafort in 2005, both to help his company and to “influence politics, business dealings and news coverage inside the United States, Europe and former Soviet republics to benefit President Vladimir Putin’s government.” Manafort does not deny working for Deripaska, who hired him legally. But he says he did not work on behalf of the Russian state. Technically, he is right. In practice there is no difference.

In practice, Manafort was working for the Russian state in at least one other capacity as well. From about 2007 to 2012, Trump’s future campaign manager served as an adviser to Viktor Yanukovych, the pro-Russian politician who in 2010 was elected president of Ukraine. Once in power, Yanukovych worked to preserve the corrupt relationships between Russian and Ukrainian oligarchs. He also stole billions of dollars, weakened the Ukrainian state, undermined the constitution and unleashed his security forces on protesters before fleeing in disgrace. Technically, Manafort would be correct to say, again, that his work for Yanukovych was not done on behalf of the Russian state. But in practice, again, there was no difference.

Russian private money has also played a role in Trump’s career. Though Trump has said repeatedly that he has never invested in Russia, Russia has invested in him. Famously, Donald Trump Jr. declared in 2008 that Russian money made up a “pretty disproportionate cross-section of a lot of our assets.” More recently, a Reuters investigation showed that holders of Russian passports invested at least $98 million into seven Trump properties in Florida alone, a number that doesn’t include any investors who hid their names behind anonymous shell companies.

Technically, none of this money had anything to do with the Russian state. But in practice, it likely won goodwill and influence for Russia. Over many years, and long before he became president, Trump repeatedly praised Russia and its president. In 2007, he declared that Putin is “doing a great job.” In 2015, he described the Russian president as a “man so highly respected within his own country and beyond.”

Just like Deripaska’s payments to Manafort, the “disproportionate” Russian investments in Trump’s businesses, which Trump still owns, weren’t bribes. They didn’t involve the KGB, and they probably didn’t include any secret payments either. The question now is whether our political system is capable of grappling with this particular form of modern Russian corruption at all. Congress cannot simply ask the question “was this all legal,” because it probably was. Congress, or an independent investigator, needs to find a way to ask, “was this moral,” because it surely wasn’t, and “does it constitute undue influence,” which it surely does.

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