Michael Ruppert

[HERO]

Michael Ruppert: Beta Rational (EIE or LSI), or ESI?


from Crossing the Rubicon: The Decline of the American Empire at the End of the Age of Oil by Michael Ruppert; page 93 (“Laying the Foundation: Destroy Russia, Prepare the Battlefield”):

Anne Williamson succinctly summed up what had been done to the people of Russia. She pointed out, “The Soviet Union was economically self-sufficient except for bananas, coffee, and coconuts.” By the dawning of the new century, except for small parts of Moscow, Saint Petersburg, and other cities where the oligarchs spent their money, it was as badly ruined as it had been at the worst part of World War II. It was a basket case that was self-sufficient in nothing except for its own oil that, incidentally, had already passed the peak of production.

In Moscow in March 2001, attending an international economic conference, I developed a liking for the Russian people, their hospitality, their endurance, and their sense of humor. I was saddened to hear Russian writers and business people in Moscow tell me that the population of Russia had shrunk from an estimated high of around 160 million people in 1991 to 145 million people in a decade; that the life expectancy of a male had dropped in 2000 to around 48 years; that the population was expected to drop to 130 million by 2030; and that, in the nearby Republic of Moldova, pieces of human cadavers were being sold in stores as meat. It was nothing, the Russian people joked. They recounted stories about the German siege of Leningrad, when people starved by the thousands every day. When times were at their very grimmest the people ate what they called “chicken.” Nobody asked further than that, and I was jokingly told to avoid ordering chicken in any Russian restaurant outside the capital.

Moscow was a different story for an American male with a few hundred-dollar bills. I was amazed at the childless Americans I saw there adopting beautiful Russian children from families who could not feed them—another form of wealth transfer. I was stunned by the world-class opulence along Tverskaya, the street running out of Red Square; the casinos, the four-star hotels. An American was instantly recognizable on any street at any time. There was never any need to call a taxi. All one had to do was to step out from the curb and ever so slightly extend one’s hand. In an instant two, three, and sometimes four private vehicles—in various states of repair—would pull to the curb. The owners would drive you anywhere, for any length of time, forgetting any other obligation they had, if you were willing to part with some rubles—or especially some US dollars.

Girls as young as 14 were available for sex on the same terms. Many American men went there for just that reason. One American businessman of Russian descent told me, “Prostitution is legal here, and the age of consent is 16. If a policeman catches you with a 14-year-old, all you have to say is that she looked 16.”

Indeed, in Russia in 2001, the year of the World Trade Center attacks, if you were an American with hundred-dollar bills, you were God. And that is just the way the Empire wanted it.


- pages 87-92 (Eliminating the competition):

Two very important things happened immediately after the collapse of the Soviet Union in December 1991. The United States undertook a massive effort to help the FSU (Former Soviet Union), and in particular Russia, make a “successful transition” to capitalism, and the major oil companies stepped up their ongoing, oft-frustrated post-perestroika efforts to explore and establish joint ventures in the newly independent and oil-rich Central Asian republics of Kazakhstan, Turkmenistan, and Uzbekistan. Oil companies frequently had a number of CIA covert operatives on their payrolls posing as geologists and oil experts.

As it turns out, both efforts were intended to remove large amounts of wealth from the region. Both may have had the equally important objective of preparing the way for the unopposed massive US military deployments in Central Asia that began in October of 2001 after the World Trade Center attacks.

Though the seeds had been planted by the outgoing first Bush administration, the US assistance program to facilitate Russia’s transition to capitalism took off under the new Clinton administration in 1993. A task force headed by Vice President Al Gore, Treasury Secretary Lawrence Summers, Deputy Secretary of State Strobe Talbot and involving exclusive US Treasury contracts with Goldman Sachs, the Harvard Institute for International Development, the IMF, and the World Bank worked in partnership with the government of Boris Yeltsin to remake the Russian economy. What happened was that Russia, in the words of Yeltsin himself, became a “mafiocracy” and was looted of more than $500 billion in assets; its economy was ruined, its currency destroyed, its population rendered desperate, and its ability to support a world-class military establishment smashed.

Journalist Anna Williamson was for many years a leading expert on Russian and Soviet affairs, writing for, among others, the Wall Street Journal, the New York Times, Mother Jones, and SPY. She lived in Russia, spoke the language, and saw first-hand what was done to Russia in the 1990s. In 1999 she completed a book on the subject, Contagion: The Betrayal of Liberty, Russia, and the United States in the 1990s, which despite a signed publishing contract has never been published, like so many other completed manuscripts that might have been vital to the world's understanding. According to Williamson, one publisher simply refused to read her first draft (October 1997), in which she explained the causes and mechanisms of the impending collapse of the Russian market that occurred in August of 1998.

But Williamson did present her knowledge of what had happened in Russia to Congress in 1999, and that record is available. She pulled no punches in describing the rape of a country and of a people who had already been victimized by seven decades of Soviet communism:


And there is no mistake as to who the victims are, i.e., Western, principally US, taxpayers and Russian citizens whose national legacy was stolen only to be squandered and/or invested in Western real estate and equities markets.

Western assistance, IMF lending, and the targeted division of national assets are what provided Boris Yeltsin the initial wherewithal to purchase his constituency of ex-Komsomol [Communist Youth League] bank chiefs, who were given the freedom and the mechanisms to plunder their own economy in tandem with a resurgent and more economically competent criminal class. The new elite learned everything about confiscation of wealth, but nothing about its creation. [“Testimony before the Committee on Banking and Financial Services of the U.S. House of Representatives”, presented September 21, 1999.]


Brzezinski had made it a priority to identify the motivating factors that drove the political elites in a country that needed to be managed. What Williamson described is the creation and installation of a whole new set of elites, the oligarchs, whose motives -- personal enrichment at any cost -- were already known. The Empire loved the oligarchs because they were simple and could be easily controlled with money.

Williamson described two crucial mistakes made by the US fiscal experts who had exclusive contracts to manage the transition. First, they ignored the concept of private property (there had been none under Communism or under the Tsarist regimes). This gave the people no inherent rights to enormous physical equities such as real estate, manufacturing plants, oil refineries, mineral rights. Their only claim to ownership lay in the notion of post-Soviet assets as an abstract communal holding established by the Soviet Constitution inconvenient. In the privatization program Harvard University and World Bank operatives devised and US taxpayers unknowingly financed, those constitutionally guaranteed communal ownership rights were transferred to the state, and only then parceled out to elected individuals in rigged auctions. Second, the good guys from the West turned loose monopoly markets, which caused prices to skyrocket. What little money individual Russians possessed was transferred quickly into the hands of the corrupt oligarchs -- the "mafiya" with whom Boris Yeltsin had made his pact.

Once all the assets had been transferred to the oligarchs, who were becoming fabulously wealthy, it was a simple matter for them to liquidate those assets by selling them to the US and other Western countries, and then laundering their money through US financial institutions such as the Bank of New York. The money laundering and transfer of wealth made more than the Russian oligarchs rich. Billions of dollars accrued to Bank of New York executives and stockholders in 1999. And during the years of the Clinton administration, as Al Gore worked in exclusive partnership with Russian Deputy Prime Minister Victor Chernomyrdin, the Harvard Endowment's value rose from 3 to 19-plus billion dollars. [See Catherine Austin Fitts, “The Money Lords of Harvard: How the Money Works at the World’s Richest University,” http://www.scoop.co.nz/stories/HL0207/S00146.htm ]

Compounding the pillage, a number of investment schemes sponsored by the Export-Import Bank of the United States, the Overseas Private Investment Corporation (OPIC), and a number of congressionally mandated "enterprise funds" were designed for individuals, Russian corporations, and banks. In essence, these initiatives wound up being huge money laundries. The domestic bond market's highly unjustified returns, paid with IMF loans, attracted many eager investors, and soon developed into a classic pyramid scheme. As quickly as the IMF, the World Bank, and other financial entities lent the money to Russia to realize mind-boggling returns for favored players, the money was taken right back out of Russia. Those huge sums, initially provided by taxpayers, returned to Wall Street, US banks and Harvard.

Russia was literally a free lunch for American institutions and non-profits. Williamson observed:

Even the Ford Foundations's Moscow office sponsored its own internal Russian bond shop for which the unthinking Russian managers once asked this reporter to drum up US investors.

It's interesting to note that the Ford Foundation is actively involved in the funding of "progressive" American media outlets, including Pacifica Radio, FAIR, Progressive Magazine, and is indirectly involved in several other well-known progressive media outlets and pundits. At the same time, the Ford Foundation has been linked to the secret society Skull and Bones (through the late McGeorge Bundy), the Trilateral Commission, the Council on Foreign Relations, and the CIA. Both George W. Bush and John Kerry are members of that secret society.


Remarkably, all that heavy Western investment in the Russian bond market was executed largely in defiance of Russian Federation legislation that limited foreign participation in that market. The Clinton administration and Harvard operatives looked the other way as major Clinton campaign donors employed corrupt Russian officials and financial notables to purchase bonds beyond the legal limits on foreign participation set by the Russian government. Williamson noted in her testimony, "The bread and butter of all equity markets are bonds. Wall Street wanted a debt market. You [USAID] build it and we'll come, they said."


Williamson's unpublished manuscript details how those firms that got in on the ground floor, such as Goldman Sachs, were able to work from the inside through alliances with personnel from Harvard's Russia Project. Bonds represent debt. As with any debt, if it can't be paid, then the collateral used to secure it is forfeited. In this case, throughout the 1990s, what was forfeited was Russia's ability to function as a nation, to feed its people, and especially to support its military.

In the end, literally starved for cash, Russia sold much of its military equipment onto the black market. Some of it wound up in the hands of terrorist organizations from Bosnia to Chechnya and Russia's southern frontiers. Again, when the time came for the US Empire to militarily occupy Central Asia and surround the oil fields of the Middle East, Russia had grave economic and military problems to deal with.


In describing how one particular looting scheme operated, Williamson testified:


“The CIA has determined that through Nordex, FPI [the International Foundation for Privatization and Private Investment] seized the export earnings from Russia's natural resource companies -- oil, gas, platinum, gold, diamonds -- and from industrial firms exporting items such as steel and aluminum, and then stashed the hefty profits in Western bank accounts. And only now, eight years almost to the day later, do US taxpayers learn that the 'eager, young reformers' to whom their resources were sent for the purpose of building a new Russia were in league from day one with the exhausted Soviet nomenklatura in a scheme to loot Russia's wealth and park it in the West...

Directors stashed profits abroad, withheld employees' wages, and after cash famine set in, used those wages, confiscated profits and state subsidies to 'buy' the workers' shares from them. The really good stuff—oil companies, metals plants, telecoms—was distributed to essentially seven individuals, 'the oligarchs,' on insider auctions whose results were agreed beforehand. Once effective control was established, directors -- uncertain themselves of the durability of their claim to the newly acquired property -- chose to asset strip with impunity instead of developing their new holdings.”


Is all of this starting to sound a bit like Enron? Like WorldCom? Tyco? Halliburton? Like any of about 20 major US companies I could name? It is perhaps not by coincidence that we see some familiar names cropping up in the orchestration of this campaign to loot Russia that continued across two different presidential administrations. The US secretary of state who began the dialogues on privatization as well as the dismantling of Russia's nuclear weapons was James A. Baker. The James Baker Institute was the co-sponsor of the CFR report on energy in 2001, and James Baker was, in the words of one oil industry lawyer, "all over" the deals to get the major oil companies into Central Asia. The first official US envoy sent to aid Russia in its transitions was our current Deputy Secretary of State, Richard Armitage.

Eventually, of course, the Russian economy collapsed so badly that it was necessary to secure an IMF bailout. That's the kiss of death for any country. Americans paid for that. Then in 1998 the Russian ruble inevitably collapsed because the debt couldn't be paid, and the people started starving in earnest. Consider these passages from a congressional investigation, the aforementioned Cox Report:


The culmination of the Clinton administration's fatally flawed macro-economic policy for Russia occurred in August 1998, when Russia's default on its debts and devaluation of the ruble led to the nation's total economic collapse. By all measurements, the disaster was worse than America's crash of 1929.

The disaster that began on August 17, 1998, spread immediately throughout Russia. Millions of ordinary men and women who had deposited their money in Russian banks lost everything. ATM and debit cards ceased to work. Dozens of banks became insolvent and disappeared. Angry depositors besieged Russian banks, only to learn they had been wiped out.

Millions of senior citizens, whose meager pension income had been suspended for months, were cut off completely. When the dust finally settled in March 1999, the ruble -- and with it, every Russian's life savings -- had lost fully 75 percent of its value.

The devastation of Russia's economy was worse than what America experienced during the Great Depression. By 1932, the US gross national product had been cut by almost one-third. But within just six months of the 1998 crash, Russia's economy, measured in dollars, had fallen by more than two-thirds. From $422 billion in 1997 [the year when ‘The Grand Chessboard’ was published], Russia's gross domestic product fell to only $132 billion by the end of 1998.

At the end of 1929, following America's disastrous stock market crash, unemployment in the United States reached 1.5 million, representing 1.2 percent of the total population. The 1998 collapse of the Russian economy was far worse: 11.3 million Russians were jobless at the end of 1998 -- 7.7 percent of the nation's total population.

In the crash of 1929, stock prices fell 17 percent by year end -- and 90 percent by the depth of the Great Depression four years later. By contrast, the Russian stock market lost 90 percent of its value in 1998 alone.

"Most fundamentally," said Sergei Markow, an analyst at the Institute of Political Studies, "it is a crisis of the real economy -- Russia doesn't work."


How much capital was looted out of Russia? Five hundred billion dollars, according to Congress. And that $500 billion was not stockholder equity, a paper loss from some mutual fund. It was cash.

This congressional investigative report into what had happened in Russia came from the House Policy Committee under chairman Chris Cox (R-CA), a fierce Clinton opponent and supporter of the failed impeachment effort. It told some hard truths, but accomplished very little. Cox made the mistake of believing that what he had revealed -- e.g., that the Clinton administration and Al Gore had openly gotten involved with criminals, and likely engaged in criminal behavior themselves -- was something that would hurt his political opponents. Of course, it did not. What Cox failed to understand was that he was exposing an effort that was above partisan politics -- an effort that was therefore protected. On the other hand, James Leach, Chairman of the House Committee on Banking and Financial Services, understood this reality perfectly. Once "instructed," Leach immediately buried the findings from his own committee's 1999 hearings into Russian money laundering.

[khcs]

Michael C. Ruppert - INFP - Yesenin

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