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Declassified U.S. Documents Show Russian Oligarchs Supported NATO Expansion

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This article originally appeared at Business New Europe


Fifteen years after the then unknown Vladimir Putin took over the Russian presidency, analysts still puzzle over how he arrived in the position. Newly declassified documents from President Bill Clinton’s administration, released to bne IntelliNews, show how Putin’s candidacy was a compromise after a fierce battle for power in Russia between pro-US oligarchs and pro-state conservatives. At stake was not just power in Russia, but the crucial question of Russia’s relationship with the West.

Russia’s ‘oligarchy’ took power during Yeltsin’s re-election in 1996, when they used his reliance on funding from Russia’s leading seven bankers to acquire the cream of the country’s resource-producing assets.

According to the documents from the Clinton administration, which were released under a mandatory declassification review, one of the chief ideologists of Russia’s freshly minted oligarch system was Russian-Israeli banker and media magnate, Vladimir Gusinsky, owner of Most Bank and TV channel NTV.

Gusinsky came to a November 1996 lunch meeting with US embassy officials with an important message: the oligarchs were here to stay – but they should not be feared by the US. Oligarchy was a fitting governance system for Russia, and would put the country on a pro-US course.

“Russia, Gusinsky explained, was not a democratic or a European country; it is an Asiatic country,” he said, according to embassy records, with Gusinsky’s name redacted but implicit. “The country was run by an oligarchy, of which businessmen like him were an integral part, and would be for some time,” Gusinsky told the US diplomats.

“Our friends in the West” had been right to criticise the oligarchs in the past, he said, but now they had taken on “responsibilities for Russia’s national interests”.

Gusinsky “did not deny that many Russian businessmen, including himself, had engaged in dubious activities, especially as they were setting up their operations and accumulating capital”, he told the diplomats. “Nevertheless, a number of big businessmen had now emerged – for example, Berezovsky’s seven bankers [Boris Berezovsky himself, Vladimir Gusinsky, Mikhail Fridman, Vladimir Vinogradov, Aleksandr Smolensky, Mikhail Khodorkovsky, Vladimir Potanin] – who were so big and influential that they no longer had to engage in such activities and no longer did,” the document reads. Gusinsky claimed that allegations of oligarchs’ links to organised crime were spread by Russia’s security services, with the aim of stemming capital flight.

Rule of seven bankers 

Of all the 1990s oligarchs, none was more powerful than Berezovsky, who coined the phrase “the rule of seven bankers”. Berezovsky attained high political office, allowing him to directly shape Russian domestic and foreign security policy – at the same time as being a citizen of Israel.

Berezovsky acknowledged that his power was based on his control over TV channel ORT. “90% of all TV influence is concentrated in the top three channels: ORT, RTR and NTV,” Berezovsky told US diplomats in 2000, according to the declassified documents. Of these, his own ORT was by the far the most powerful, he said.

With ORT as his power base, Berezovsky set himself apart from all other oligarchs in terms of his political ambitions. He sought and gained influence not only on key domestic political questions, including the country’s territorial integrity, but also directly on Russia’s foreign policy.

At the height of his power, Berezovsky was deputy head of Russia’s powerful security council, but, as the documents make clear, security council head Ivan Rybkin was merely his pawn.

In this capacity, Berezovsky actively sought US backing in 1996 for what he promised would be a “radically pro-Western policy”, according to an account to US diplomats in 1996 provided by then Georgian president and former Soviet foreign minister Eduard Shevardnadze.

Shevardnadze was backed in Georgia by Berezovsky’s close business partner and friend Bardi Patarkatsishvil, and appears to have acted as wingman for Berezovsky to approach the US in 1996.

In a meeting with a US ambassador-at-large in Tbilisi in November 1996, Shevardnadze told US diplomats that Berezovsky was an “extraordinary person”, who “wanted a radically different foreign policy, putting Russia squarely with the West”. “He merited US support,” Shevardnadze advised, but “support would have to be done in the right dosages”. In time, “he would develop into a necessary and useful man,” Shevardnadze said.

In particular, Shevardnadze said, Berezovsky was entirely free of any interest in expanding Russian influence across the post-Soviet space, for instance viewing embryonic plans for a post-Soviet customs union as “nonsense”.

Berezovsky’s plans for a pro-Western revolution in Russian foreign policy had to find a way of countering then foreign minister Evgenny Primakov. Primakov was a former head of the KGB and strongly sceptical regarding the West’s intentions towards Russia. According to Shevardnadze, Berezovsky intended to undermine Primakov’s position in that he “wanted to create something like a secretary of state within the Russian security council”. The powers of the security council were not defined in the constitution, and critics feared it could be used to create a parallel government outside any parliamentary control. At the same time, Berezovksy sought to sideline Primakov.  “Berezovsky felt Russian policy should radically change, and he understood this would be impossible without changes in personnel,” Shevardnadze said.

US diplomats were well aware of the negative reports in both Western and Russian media alleging that Berezovsky, the so-called “godfather of the Kremlin”, was involved in corrupt schemes such as siphoning funds from state-owned national carrier Aeroflot, as well as benefiting from crony privatisations. There is no sign in the documents they ever committed themselves to support him, as Shevardnadze wished. “Deputy security council chairman Berezovsky is a dangerous figure,” Pavel Gusev, newspaper publisher and editor of leading Russian paper Moskovsky Konsomolets, told US diplomats. “He is a pure mafioso, and his appointment is proof that major criminal groups have reached the highest levels of government.”

The only question of wrongdoing discussed in the declassified documents is Berezovsky’s admission that he held Israeli citizenship along with Russian, which was illegal and especially questionable for the deputy head of the security council. “I did it in 1993 and had totally forgotten about it,” he told US diplomats somewhat implausibly.  He also claimed to have recently revoked his Israeli citizenship. “Judging by a phone conversation he had in pol/int chief’s presence, he was seeking to have the revocation antedated to precede his appointment to the security council,” the dispatch commented drily.

‘Do it quickly’

The oligarchs came to power at the same time as Nato launched its controversial eastwards push. US diplomats record encountering deep-seated antagonism to the move in Moscow. “Utterances about the undesirability of Nato expansion and the need for ‘special agreements’ were heard ad nauseum around town,” American diplomats wrote in 1997.

With the US looking to overcome Russian suspicions, the oligarchs offered one obvious channel, given their monopoly on Russian TV and their search for international legitimacy. The oligarchs thus lost not time in showing themselves the strongest backers in Russia of Nato’s expansion. Berezovsky even backed an apparent offer to Russia to join the military alliance. “It was a mistake for Russia not to capitalise immediately on Nato’s invitation to Russia to become a member, ” Berezovsky told US diplomats later at a meeting in February 1999. Berezovsky said at the meeting that there was considerable support for US in Russia among the intelligentsia, both “as the carrier of democratic ideals as well as a powerful country with global plans”.

Igor Malashenko, right-hand man of Gusinsky and president of Gusinsky’s flagship NTV channel, was even more gung-ho over Nato expansion than the US diplomats themselves. While US diplomats were prepared to work with Russia to overcome misgivings over the policy, Malashenko simply advised US diplomats at a meeting in 1997 to just “do it quietly”.

Malashenko compared Russia’s position relative to the West in the 1990s to Germany or Japan’s position after their World War II capitulations, but said that the country’s leadership failed to recognise this. “Russia lost the Cold War, but you will never hear any of our leaders say this,” Malashenko said, as quoted by the US diplomats.

“Malashenko’s injunction to the US to just get on with Nato enlargement ‘but do it quietly’ is a useful warning of the need for a deft hand in the present politically charged atmosphere,” was the US takeaway from the encounter.

From Primakov to Putin

Open oligarch support for Nato expansion may have deepened suspicion of the Western alliance among conservative figures in Russia’s foreign policy and security elites, who feared that the oligarchs were ready to sell out their country to the West.

The diplomatic dispatches show how competing foreign policy positions – pro-US vs Russia-centric – were quickly enmeshed with the domestic struggle over power and money at the end of the Yeltsin era. Berezovsky’s struggle for political supremacy with Primakov, whom he called his “ideological enemy”, ran parallel to Primakov pushing back against Berezovsky’s business practices in 1999.

Primakov had become prime minister in September 1999 following Russia’s default in August 1998. By early 1999 he was a strong favourite for the presidency, with elections due in March 2000, and Yeltsin barred from standing for a third time. Under Primakov, government agencies had carried out checks of Berezovsky’s business empire. Primakov at the same time opposed the West over military action against Slobodan Milosevic’s Serbia.

Berezovsky directly tried to enlist US support to oust Primakov from the post of prime minister in May 1999, and thus to scupper Primakov’s presidential ambitions, the documents reveal.

At a crucial meeting with US diplomats in February 1999, following the first government checks of his business, Berezovsky warned that, “Primakov actually is as red as a tomato'” and that, “Primakov would not serve as prime minister beyond May”. Berezovsky said he was moving “indirectly” to oust Primakov and sought assurances from the US that they would support what he called a “soft landing” for Primakov in favour of a new government.

Berezovsky then switched to English to ask for US support for a new government. “Such a government would understand and have a ‘clearer’ approach on who and how the economy should be led. In this case, he asked, would the US be ready to help stabilise the situation in Russia? Would the US be able to move the country forward?” the documents relayed.

US diplomats were cautious about getting caught up in domestic feuding, despite the foreign policy advantages it promised them. “Berezovsky’s thinly-veiled query about US support in such a circumstance and his well-developed penchant for scheming should be interpreted as a warning to be extra cautious about reacting to rumors or events in the coming months too quickly,” they wrote.

In the event, Yeltsin fired Primakov on May 12, sending shockwaves through Russian politics. Yelstin appointed Sergei Stepashin to succeed Primakov, only to replace him six weeks later with the politically unknown Vladimir Putin.

One year after Berezovsky had conspired to oust Primakov, Vladimir Putin was president and Berezovsky on his way out.

Death of an oligarch

Why did Berezovsky miscalculate Putin so badly? The main reason cited in the US diplomatic dispatches is exactly Berezovsky’s longstanding feud with, and fear of, Primakov. “Putin is better than Primakov,” Berezovsky told US diplomats bluntly in 2000. In contrast to Primakov, Putin had said he would not revise the controversial privatisations of the 1990s, through which oligarchs acquired ownership of key assets in the resource industries.

Berezovsky appears not to have anticipated that Putin would clip the oligarchs’ political wings, perhaps because for him and his fellow oligarchs political and economic power and were one and the same. Putin’s ideological mix of capitalism and conservative authoritarianism was new in Russia, which was used to a binary opposition of pro-Soviet statist forces and supporters of pro-Western laissez-fair policies.

Berezovsky was slow to catch on. “Putin is going down the path of Peron or Pinochet – not seeking an authoritarian state per se, but pursuing the goal of a democratic state via an authoritarian path,” Berezovsky told US diplomats in late 2000.

Not only was Putin against the oligarchs, but he was also suspicious of their pro-US policy preferences. “Putin fears neither the US nor Nato, but thinks the US holds positions that run counter to Russian interests,” Berezovsky warned the US.

Contrary to reports that Berezovsky had selected Putin as presidential candidate, Putin and Berezovsky seem to have had little contact with each other before Putin became president, which may have been another reason for Berezovsky’s misjudging him. Berezovsky himself told US diplomats that he backed new foreign minister Ivan Ivanov to succeed Primakov as prime minister in 1999, although Putin eventually got the nod, after an interlude of six weeks.

Oligarch banker Pyotr Aven confirmed to US diplomats that there was no special tie between Putin and Berezovsky, even “noting that he himself had introduced the two”, US diplomats wrote. “Putin knows no-one,” Aven told the diplomats, while at the same time acknowledging that the oligarchs have “no instrument of influence over him”.

Soon Berezovsky realised that his efforts to keep Primakov out of office had backfired, and that his power was in decline. “We understand that from an early stage in the Putin administration, Berezovsky lost his privileged access to the Kremlin, and was required to apply for permission each time he wished to visit there,” US diplomats wrote in 2000.

Berezovsky put on a typical show of bravado, boasting of his willingness to resist the Kremlin. “They can put me in jail but it won’t help,” he boasted to diplomats. In the end he left the country to avoid jail on fraud charges relating to Aeroflot and the car dealership LogoVAZ that he controlled, and settled in the UK, from where he continued attempts to organise opposition to Putin.

Only once did American diplomats see a different, anxious Berezovsky, which may have presaged his suicide from depression in 2013, after a devastating London courtroom defeat to former partner Roman Abramovich in 2012. After Primakov’s government had ordered the first checks on Berezovsky’s businesses in 1999, spelling the beginning of the end of his business empire, Berezovsky’s “obvious signs of worry [were] reflected on the face and in the voice of the reputed oligarch”, who “spoke in hushed tones”, the US ambassador wrote of his troubled guest.

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Census 2022 – what difference does it make?

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Next Sunday, April 3rd, is Census night. Millions of people in homes countrywide will fill in page after page of questions, some of which are deeply personal and many of which might be unfamiliar.

But what it is it all about?

At a basic level, Census 2022 will be used to inform planning of public policy and services in the years ahead, according to the Central Statistics Office.

The questions will cover a range of environmental, employment and lifestyle issues, including the use of renewable energy sources in homes.

The questions will help inform policy development in the areas of energy and climate action, and the prevalence of internet access, to understand the availability of and need for internet connections and range of devices used to access the internet.

Questions also focus on changes in work patterns and will include the trend of working from home and childcare issues, while questions are also asked about the times individuals usually leave work, education or childcare, to help identify and plan for transport pattern needs locally and nationally.

Other topics covered include volunteering and the type of organisations volunteers choose to support, tobacco usage and the prevalence of smoke alarms in the home.

And of course there is a time capsule – the chance to write something which will be sealed for the next 100 years.

In this episode of In The News, the head of census administration Eileen Murphy and statistician Kevin Cunningham about what it all means for us.

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Oscars 2022: Will Smith makes Oscar history after slapping Chris Rock over joke about wife Jada Pinkett Smith | Culture

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Will Smith took the Oscar for Best Actor at last night’s 94th Academy Awards, but he also became the protagonist of the ceremony for other reasons. The night was following the script, until Smith slapped comedian Chris Rock on the stage after the latter made a joke about the shaved head of the former’s wife, Jada Pinkett Smith. Rock had quipped that he was “looking forward to GI Jane 2,” in reference to her look. Pinkett Smith has revealed publicly that she has alopecia. It looked as if the moment had been planned, until Smith went back to his seat and shouted: “Get my wife’s name out of your fucking mouth.”

The moment, which immediately became Oscar history but for all the wrong reasons, left the attendees with frozen smiles, and asking themselves whether it was possible that a veteran such as Smith could have lost his cool in front of tens of millions of people. After taking the prize for Best Actor, the superstar actor made a tearful apology, saying that he hoped the Academy “will invite me back.” Later on, actor Anthony Hopkins called for “peace and love,” but it was already too late. The incident overshadowed the success of CODA, which took the Oscar for Best Picture. Just like the time when Warren Beatty mistakenly named La La Land as the big winner of the night, no one will speak about anything else from last night’s awards.

At first sight, Smith’s actions looked as if they were scripted. When he first heard Rock’s joke, he laughed. But his wife was seen on camera rolling her eyes, and it was then that the actor got up onto the stage and hit Rock. When he returned to his seat he raised his voice twice to shout “Get my wife’s name out of your fucking mouth,” sending a wave of unease and shock through the attending audience. The fact that he used the f-word, which is prohibited on US television, set alarm bells ringing that this was real and not a planned moment. In fact, the curse word was censored by the broadcaster, ABC, in the United States.

During a break, Smith’s PR manager approached him to speak. In the press room, which the actor skipped after collecting his prize, instructions were given to the journalists not to ask questions about the incident, Luis Pablo Beauregard reports. The next presenter, Sean “Diddy” Combs, tried to calm the situation. “Will and Chris, we’re going to solve this – but right now we’re moving on with love,” the rapper said.

When Smith took to the stage to collect his Best Actor award for his role as Richard Williams – the father of tennis stars Venus and Serena – in King Richard, he referred to the character as “a fierce defender of his family.” He continued: “I’m being called on in my life to love people and to protect people and to be a river to my people. I know to do what we do you’ve got to be able to take abuse, and have people talk crazy about you and have people disrespecting you and you’ve got to smile and pretend it’s OK.”

He explained that fellow actor Denzel Washington, who also spoke to Smith during a break, had told him: “At your highest moment, be careful, that’s when the devil comes for you.”

“I want to be a vessel for love,” Smith continued. “I want to be an ambassador of that kind of love and care and concern. I want to apologize to the Academy and all my fellow nominees. […] I look like the crazy father just like they said about Richard Williams, but love will make you do crazy things,” he said. He then joked about his mother, who had not wanted to come to the ceremony because she had a date with her crochet group.

The Los Angeles Police Department released a statement last night saying that Chris Rock would not be filing any charges for assault against Smith. “LAPD investigative entities are aware of an incident between two individuals during the Academy Awards program,” the statement read. “The incident involved one individual slapping another. The individual involved has declined to file a police report. If the involved party desires a police report at a later date, LAPD will be available to complete an investigative report.”

On December 28, Pinkett Smith spoke on social media about her problems with alopecia. She stated that she would be keeping her head shaved and would be dealing with the condition with humor. “Me and this alopecia are going to be friends… Period!” she wrote on Instagram.



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House-price inflation set to stay double digit for much of 2022

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House-price inflation is expected to remain at double-digit levels for much of 2022 as the mismatch between what is for sale and what buyers want continues.

Two new reports on the housing market paint a picture of a sector under strain due to a lack of supply and increased demand driven by Covid-related factors such as remote working.

The two quarterly reports, one each from rival property websites myhome.ie and daft.ie, suggest asking prices accelerated again in the first quarter of 2022 as the stock of homes available for sale slumped to a new record low.

Myhome, which is owned by The Irish Times, said annual asking-price inflation was now running at 12.3 per cent.

Price

This put the median or typical asking price for a home nationally at €295,000, and at €385,000 in Dublin.

MyHome said the number of available properties for sale on its website fell to a record low of 11,200 in March, down from a pre-pandemic level of 19,000. The squeeze on supply, it said, was most acute outside Dublin, with the number of properties listed for sale down almost 50 per cent compared with pre-pandemic levels.

It said impaired supply and robust demand meant double-digit inflation is likely until at least mid-2022.

“Housing market conditions have continued to tighten,” said author of the myhome report, Davy chief economist Conall Mac Coille.

“The broad picture of the market in early 2022 remains similar to last year: impaired supply coupled with robust demand due to Ireland’s strong labour market,” he said.

Soure: MyHome.ie

“One chink of light is that new instructions to sell of 7,500 in the first 11 weeks of 2022 are well up from 4,800 in 2021, albeit still below the 9,250 in 2019. The flow of new properties therefore remains impaired,” said Mr Mac Coille.

“Whatever new supply is emerging is being met by more than ample demand. Hence, transaction volumes in January and February were up 13 per cent on the year but pushed the market into ever tighter territory,” he said.

He said Davy was now predicting property-price inflation to average 7 per cent this year, up from a previous forecast of 4.5 per cent, buoyed strong employment growth.

Homes

Daft, meanwhile, said house asking prices indicated the average listed price nationwide in the first quarter of 2022 was €299,093, up 8.4 per cent on the same period in 2021 and and just 19 per cent below the Celtic Tiger peak, while noting increases remain smaller in urban areas, compared to rural.

Just 10,000 homes were listed for sale on its website as of March 1st, an all-time low. In Dublin, Cork and Galway cities, prices in the first quarter of 2022 were roughly 4 per cent higher on average than a year previously, while in Limerick and Waterford cities the increases were 7.6 per cent and 9.3 per cent respectively.

The report’s author, Trinity College Dublin economist Ronan Lyons, said: “Inflation in housing prices remains stubbornly high – with Covid-19 disturbing an equilibrium of sorts that had emerged, with prices largely stable in 2019 but increasing since.

“As has been the case consistently over the last decade, increasing prices – initially in Dublin and then elsewhere – reflect a combination of strong demand and very weak supply.”


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