I
venture that few outside the Russian Federation will even know the
name of Anatoly Chubais, today the CEO of a Russian high-tech company
called Rusnano. Following the high-profile November 15 arrest of
Prime Minister Dmitry Medvedev’s Minister of Economics, Alexei
Ulyukaev, on charges of accepting at least $2 million in bribes in a
state privatization involving Rosneft and Bashneft energy companies,
the spotlight has turned to the company of Anatoly Chubais, Boris
Yeltsin’s 1990s privatization czar, today CEO of state-owned
Rusnano. If charges are formally brought against Chubais–undeniably
one of the most hated of the Yeltsin-era kleptocrat “reformers”
who worked with the CIA during the 1990’s to plunder Russian state
assets worth hundreds of billions for just pennies – it will signal
that Putin feels in a strong enough position to purge the pro-free
market liberal mafia that still holds a lock grip on the development
of the Russian economy.
by
F. William Engdahl for the Saker blog
On 16
November, the day after the dramatic arrest of Ulyukaev, state
prosecutors and police raided the offices of Chubias’ Rusnano.
Notable about the reports of the prosecutors’ questioning Chubais
and other top officers at Rusnano, is the fact that several have fled
Russia in recent months to avoid prosecution. To the present, Chubais
remains, and vehemently claims innocence.
In my view,
there is vastly more at stake here than the innocence or guilt of
Chubais. This move, if combined with the arrest of Ulyukaev, signals
a major cleanup of corrupt elements who, beginning even before 1991,
organized to sell Russia to the CIA and Western speculators like
George Soros.
Some history
that has generally been blacked out in the West about the true role
of Anatoly Chubais and the Yeltsin Presidency are instructive to also
understand the irrational rage of Washington and US banks and
oligarchs directed at Putin and at everything he does to re-establish
Russian sovereignty and stability.
Part
2 - Russia’s Shock Therapy, Harvard and CIA
As part of
the dissolution agreement, Russia took title to all state assets of
the former USSR, now non-existent, as well as assuming all foreign
debts of the USSR. Yeltsin was told to make a 32-year-old friend of
George Soros named Yegor Gaidar his Economics Czar. Gaidar, who
formally was made Finance Minister of the new Russian Federation in
February 1992, made another young economist, Anatoly Chubais, his
privatization head.
Gaidar was
taken to Poland to study the Polish “Shock Therapy” model, the
process that had been introduced by George Soros’ young Harvard
economist protégé, Jeffrey Sachs. Back in Moscow, Yegor Gaidar,
using the Polish example of Sachs, convinced Yeltsin to “let
prices rise to increase supply and to scrap trade barriers so that
foreign commodities could begin to fill store shelves.”
It was a
lie. The Soviet economy was self-sufficient in everything except
perhaps bananas and coffee. The shops were full until Yeltsin
announced in November 1991 the exact date when price controls were to
be lifted, December 31 of that year. Shop-owners hid their goods
waiting for the announced profit bonanza of price decontrol. Shops
were suddenly empty. Within a week of the Yeltsin speech, rationing
was imposed on Muscovites.
Gaidar was
instructed by the US Treasury from the new Clinton Administration
that took office in January 1993. The key person at Treasury for the
ensuing Gaidar-Chubais looting of Yeltsin’s Russia was a former
Harvard economist named Lawrence Summers. Summers used the powerful
influence of the US Treasury Department to get International Monetary
Fund dollars to the cash-hungry Yeltsin government, telling Yeltsin
and Gaidar that Russia must open itself to unrestricted imports if
they wanted to receive IMF and other Western loans.
Gaidar soon
delivered a policy that served the demands of Washington and of the
KGB’s new banking oligarchs around Mikhail Khodorkovsky’s Menatep
Bank and others. Under the Gaidar decrees, Russian manufacturing was
to go bankrupt in the face of unrestricted foreign competition, but
domestic banking, such as Menatep, controlled by the rogue KGB
generals and the CIA-tied Western banks, was to be protected from
competition.
After the
November 1992 US election victory of Bill Clinton, Larry Summers, the
new US Treasury Deputy Secretary responsible for Russia “reforms,”
also a former Harvard economics professor, brought a group of his
former Harvard colleagues including George Soros’s Polish Shock
Therapy adviser, Jeffrey Sachs, and economics professor, Andrei
Shleifer, to Moscow under the auspices of their Harvard Institute for
International Development (HIID). The Sachs-Schleifer-Summers
triangle essentially orchestrated all key aspects in the
implementation of Gaidar-Chubais “shock therapy” in the early
1990’s Yeltsin years.
In 1991,
Summers had been chief economist at the World Bank, where Summers
named his former Harvard student, Schleifer, a Russian-American, as
World Bank “adviser” to the Yeltsin government. Soon after
Summers became Deputy Treasury Secretary in the Clinton
Administration in 1993, Schleifer would join Jeffrey Sachs’ Harvard
Institute for International Development (HIID) as the head of their
Moscow operations.
HIID was
cleverly chosen by Summers as the key advisory agency to work with
Gaidar and Chubais to organize the colossal looting known as Russian
privatization. Summers, from his Washington Treasury office, named
all key actors in the Chubais privatization rape of Russia in the
early 1990’s. They were what could be called a Harvard mafia.
Summers hired David Lipton from Harvard, a former consulting partner
of Jeffrey D. Sachs & Associates, to be his Deputy Assistant
Treasury Secretary for Eastern Europe and the Former Soviet Union.
Sachs was named Director of HIID in 1995. His HIID received USAID
grants for the institute’s “work” in Russia.
The USAID
was known as a CIA front agency, keeping the CIA role of regime
change and such hidden behind the veil of a charitable US Government
agency spending for economic development. It was a key money link for
the directing of every step of the Chubais privatization operations
through the Summers-Sachs Harvard Boys.
Harvard was
a clever choice to be the CIA hands-on operator for the Chubais
privatization. CIA monies via a Harvard University front gave an aura
of impartial academic respectability and of plausible deniability
that the CIA was responsible. Shleifer, a Russian-born émigré, and
protégé of Summers, was already a tenured professor of economics at
Harvard in his early 30s. He became Sachs’ head of HIID’s Russia
project, based in Moscow. Then Summers brought in yet another Harvard
Boy, another former World Bank consultant for Summers named Jonathan
Hay. In 1991, while at Harvard Law School, Hay had also become a
senior legal adviser to the Chubais GKI state privatization agency.
In the following year 1992, Hay was made HIID’s general director in
Moscow. Hay assumed vast powers over contractors, policies and
program specifics. He not only controlled access to the Chubais
circle but was its spokesperson.
Both
Jonathan Hay and Andrei Schleifer were identified later as CIA
agents.
Vladimir
Putin in an April 2013 annual dialogue with Russian citizens, though
he discreetly did not name the names, referenced Hay and Schleifer as
identified CIA agents working with Chubais and Gaidar in the criminal
Russian privatization. Putin said: “We learned today that
officers of the United States’ CIA operated as consultants to
Anatoly Chubais. But it is even funnier that upon returning to the
US, they were prosecuted for violating their country’s laws and
illegally enriching themselves in the course of privatization in the
Russian Federation.”
In 2006 US
District Court in Boston had fined Hay and Schleifer them personally
$2 million and Harvard University $26.5 million for fraud and
embezzlement of government funds for private enrichment. That same
year 2006 Summers–who by then had become Harvard President was
forced to resign on revelation of his role in the Moscow HIID
scandals. Berofr he had managed to get Schleifer an endowed Harvard
Professor chair. Hay later resurfaced as founder of the Ukraine
branch of the Polish “free market” Centre for Social and Economic
Research (CASE) during the CIA coup d’etat in Kiev in 2014.
The criminal
Russian privatization of invaluable state assets that Hay and
Schielfer created together with Anatoly Chubais and Yegor Gaidar
after 1992 was done to the last detail by Chubais in cooperation with
his new American advisers. When the announcement of the proposed
“vouchers-for-shares” privatization received cold response from
Russians, already reeling from the economic shock of price
liberalization, Hay and Schleifer arranged for slick US Public
Relations experts from Burston-Marsteller and the Sawyer Miller Group
to devise an ad campaign to be aired on the TV channels of the
newly-created Russian oligarchs to convince Russians to accept the
program.
Chubais as
head of the state GKI state property agency issued 150 million
“vouchers” to each and every citizen. In turn, they could invest
their voucher in a small share in a Russian privatized state company
or shop, or sell it at an established market price pegged to the US
dollar, of course. As most Russians were then concerned when if ever
the next pension payment would be paid, or where jobs could be found
in the collapsing industrial economy that was a predictable result of
the Sachs-Harvard-Chubais Shock Therapy, millions simply sold their
vouchers for some cash. It was an insane idea if Chubais and Gaidar
cared about the economic future of the Russian Federation. It was
brilliant if they wanted to create billionaire dollar oligarchs,
which is just what they did.
Vouchers
could be bought or sold on every street corner in Russia at the start
in June 1992. They were traded at the new unregulated Moscow
commodity exchanges set up by Harvard’s Jonathan Hay with the USAID
monies channeled via HIID. Unregulated (deliberately a decision of
Gaidar, Chubais and their Harvard CIA advisers) voucher investment
funds sprung up everywhere to gather citizens’ vouchers in the
millions. The ruble was domestically made convertible to the US
dollar on the advice of the Sachs HIID team. In the twenty months the
voucher-for-shares program lasted, the price swung from a high of $20
to a low of $4 a voucher. As they were made freely tradeable, it was
ripe for the billionaire oligarchs around Yeltsin who already had
huge cash hoardes to buy them up, just what they did.
Nearly six
hundred voucher funds obtained 45 million vouchers. The largest,
calling itself First Voucher, collected 4 million vouchers.
At the
stated price for the vouchers, Chubais and his Harvard Boys had
valued the entire Russian economy–which included the world’s
largest nickel company, some of the world’s largest oil and gas
companies including Sibneft and Gazprom, RUSAL, the world’s largest
aluminum company–at a total that was less than the market value of
the US General Electric company. The face value of each voucher was
10,000 rubles which Chubais promoted by lying to the public, stating
one voucher would be sufficient to buy two or even three Volga cars.
Because they
had been allowed by the Bush CIA networks that controlled the
financial side of the Yeltsin mafia to be the first Russians with big
money, the select Yeltsin oligarchs were able to buy up hundreds of
thousands of vouchers and redeem them for entire industries, which
would later be stripped and sold. Although they were supposedly
acting on behalf of the state, the bank auctioneers of oligarch-owned
banks rigged the process. This was how Bank Menatep’s Mikhail
Khodorkovsky got a 78 percent share of ownership in Yukos, worth
about $5 billion, for a mere $310 million. It was how Boris
Berezovsky got Sibneft, another oil giant, worth $3 billion, for
about $100 million.
Using his
connections, Khodorkovsky was able to purchase several factories in
investment tenders, and large blocks of shares in timber, titanium,
pipe, and copper smelting. In total, he gained control of more than
one hundred companies before getting Yukos. In the auctions, based on
the number of total vouchers that were circulated, the entire Russian
industrial system, mines, oil companies, factories, had a total value
of under $12 billion.
Under
pressure from Parliament, Chubais agreed to prohibit voucher sale of
state companies to foreign investors. There were, however, two
notable exceptions Chubais made. In 1995, in the wake of the Yeltsin
Referendum victory financed by Soros, the Harvard Management Company
(HMC), which invests the university’s large endowment, and George
Soros, who brought Harvard’s Sachs to Chubais, were the only
foreign entities allowed to participate. Both HMC and Soros became
major shareholders in Novolipetsk, Russia’s second-largest steel
mill, and Sidanko Oil, with reserves exceeding those of Mobil. HMC
and Soros also invested in Russia’s high-yielding, IMF-subsidized
domestic GKO bond market. And in 1997 he bought 24% of Sviazinvest,
the telecommunications giant, together with Uneximbank’s Vladimir
Potanin, the nominal spokesman of the new Russian oligarchs. At one
point Soros stated he had invested $2.5 billion in such Russian
assets for the dirt-cheap prices Chubais had deliberately set.
Source
and references:
Comments
Post a Comment