The Federal Reserve Conspiracy by Antony C. Sutton
“Another fine and extremely well researched work by Antony C. Sutton. An expose’ of the people and forces behind the takeover of the US economy by the Federal Reserve system, on behalf of the oligarchs. A must for anyone interested in the inner workings of US politics and economics, and the concealed reasons for current events. This is the first book that details hour by hour the events that led up to passage of the Federal Reserve Act of 1913 – and the many decades of work and secret planning that private bankers had invested to obtain their money monopoly.”
Antony C. Sutton, D.Sc. was born in London, England, in 1925, spent most of his life in the United States and has been a citizen for 40 years.
With an academic background in economics and engineering, Sutton has worked in mining exploration, iron and steel industries before graduate school at UCLA. In the 1960’s he was Professor of economics at California State University, Los Angeles, followed by seven years as a Research Fellow at Stanford University.
- Print Length: 88 pages
- Publisher: Dauphin Publications Inc.
- Publication Date: September 16, 2014
- ASIN: B00NO83CDM
- Fair Use Source: B00NO83CDM
The Federal Reserve Conspiracy by Antony C. Sutton
“‘Fox News anchor Chris Wallace burst viewers’ bubble,” crowed the Daily Beast. The media–Democrat complex was popping its buttons because Fox News’s highly regarded anchor had delivered his audience the purportedly devastating and unimpeachably factual news that the Trump–Russia investigation did not begin with the infamous Steele dossier.1
Wallace was reacting to a clip of Rush Limbaugh’s observation, in a then-recent Fox News interview, that the Obama Justice Department and the FBI “began an investigation based on a phony dossier created and written by associates of Hillary Clinton”—the Steele dossier. No, Wallace countered, “The Trump investigation did not start with the FISA warrant and Carter Page and the dossier.” To the contrary, “It started in June and July of 2016 when George Papadopoulos had spoken to a Russian agent and spoke to an Australian diplomat and said he had heard they had information on—dirt on Hillary Clinton.”
I am a Chris Wallace fan, and was one long before I became a contributor at Fox News. The Fox firmament is fairly described as right-leaning, and its primetime options are laden with opinion programming. The network’s best product, though, is its straight news coverage. Wallace is at the top of the class: a fact-driven journalist who prizes getting it right over getting it Right. Still, his snapshot of the Trump–Russia investigation’s Origin Story—a tale designed to defy accurate rendering—was woefully incomplete.
The Origin Story has been the subject of cacophonous debate, foreign intrigue, spy games, stonewalling, and media scripting. In a sense, in scoffing at the claim that everything flows from the Carter Page FISA warrant, which was substantially based on the Steele dossier, Wallace and others have to be right. No investigation ever starts with a FISA warrant.
A good deal of gumshoe effort is generally needed to get an investigation to the point where a warrant may be sought. The warrant permits what is still called “wiretapping” and “bugging,” the lexicon of a bygone technological time. In Justice Department lingo, such monitoring is known as “elsur,” short for electronic surveillance. Today, it involves eavesdropping not just on people’s phone calls and back-room meetings; there are emails, texts, social media posts, and the like—torrents of communications by wire, cable, satellite, and all manner of complex telecom. Caught in the mix are providers from the legacy phone companies, to newer telecoms, to such social media sites such as Facebook, Twitter, and Instagram. Gone are the days of simple analog technology transmitting waves of sound by hard wire; modern communications technology zooms packets of digital data, disassembled and reassembled across vast global networks. Now, investigators are vexed by apps that scramble the packets in order to defeat eavesdropping, to say nothing of the legal and technological challenges posed by millions of seemingly indiscriminate communications racing through the internet’s “upstream,” which we’ll encounter in Chapter 5.
The pejorative term for intruding on these communications is spying. To get a judicial warrant permitting it, whether in a criminal or a counterintelligence probe, is no layup. Such a warrant is sought at an advanced stage of an investigation because agents must work hard to corroborate the factual claims on which they will ask a judge to base the legally mandated probable cause finding. Further, Congress has prescribed numerous approval hoops, including sign-offs by top officials at the FBI and Justice Department. These agencies and the Foreign Intelligence Surveillance Court, in turn, impose additional vetting procedures. As a practical matter, a proper application may not be made to the court until a considerable amount of investigative grunt work has been done.
Even those, like my friend Rush Limbaugh, who stress the foundational role of the so-called “dossier” and the Carter Page FISA warrant, acknowledge that, although the FBI began receiving Christopher Steele’s reports (eventually compiled into the dossier) in July 2016, no warrant was sought until October, three months later. The problem is not that the FBI did not try to verify Steele’s information; it is that the Bureau was not able to verify it (in addition to having good reasons to know that parts of it were ridiculous, that Steele’s credibility was suspect, and that Steele himself did not claim that his information was accurate—just worrisome and worthy of further investigation). That said, to concede that the Trump–Russia investigation did not begin with the dossier-fueled spying on Page is not an admission that it commenced in the early summer of 2016, due to reports about Papadopoulos. In truth, by then it had been going on for several months—since at least the latter half of 2015, not long after Donald Trump entered the GOP nomination chase and before most anyone had ever heard of George Papadopoulos.
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““Horrifying!” As we’ve seen, candidates can get chirpy at final presidential debates less than three weeks from Election Day, and Hillary Clinton was no exception. What “horror” had her inveighing so? The very thought that her Republican rival would question the legitimacy of the presidential election.37
Donald Trump being Donald Trump, he wouldn’t budge. He would not pledge to accept the election results a priori. Okay, no, Trump didn’t use the phase a priori. But he did speculate that the electoral process could be rigged. Until he saw how it played out, the Republican nominee said, he could not concede that the outcome would be on the up-and-up.
First, he reaffirmed an allegation for which he’d already been roundly condemned: foreigners could swing the election—specifically, “millions” of ineligible voters, an allusion to illegal immigration, the piñata of Trump’s campaign. Second, he complained about the gross one-sidedness of the media’s campaign coverage: scathing when it came to him; between inattentive and fawning when it came to his opponent, whose considerable sins were airbrushed away. Third, he claimed there was deep corruption: Clinton, he maintained, should not have been permitted to run given the evidence of felony misconduct uncovered in her email scandal. Instead of prosecuting her, law-enforcement agencies of the Democratic administration bent over backwards to give her a pass, and congressional Democrats closed ranks around her, conducting themselves in committee hearings more like her defense lawyers than investigators searching for the truth.
A flabbergasted Clinton responded that she was shocked—horrified—to hear Trump “talking down our democracy” this way. This was a top theme in her campaign’s closing days: The election was absolutely legitimate; Trump was traitorously condemnable for refusing to say so.
Of course, Clinton and the Democrats who parroted her would prefer that you forget that now. And given her strained relationship with the truth, they’re right to suspect that you’d never retain anything she said for very long. The media–Democrat caterwauling over Trump’s election-rigging spiel was not rooted in patriotic commitment to the American democratic tradition of accepting election outcomes. They said what they said because they fully expected to win. The polls all said they would. Mrs. Clinton and her backers, President Obama included, would not abide a taint of illegitimacy affixing itself to her inevitable presidency.
Except it wasn’t so inevitable. And when Clinton lost, they changed their tune about election-rigging. Suddenly, the inconceivable, the heresy-even-to-hint-at, was to be taken as gospel: The outcome was illegitimate! Russia hacked the election!
There was, however, a very inconvenient problem for this narrative: everything of significance that is known to the U.S. government about Russian meddling was already known in those pre-election weeks when Clinton and the Democrats were vouching for the integrity of the process and condemning Trump for even hesitating to endorse it.
By now, the story is well known.38 Russia’s cyberespionage operations began in 2014, long before Donald Trump’s entry into the race. By summer 2015, hackers believed to be connected to Russian intelligence agencies had access to DNC computer networks, and the FBI began warning DNC officials of this in the September of that year—albeit with a lack of urgency that now seems stunning. In March 2016 came the hacking of a private email account belonging to John Podesta, Mrs. Clinton’s campaign chairman, who was sufficiently versed in cyber privacy issues to have authored a 2014 report on the subject while serving as a top Obama White House advisor.
U.S. intelligence agencies were intimately aware of the penetrations. Obama’s national intelligence director, James Clapper, publicly acknowledged that hackers appeared to have targeted presidential campaigns. By August 2016, CIA Director John Brennan interpreted streams of foreign intelligence to indicate that Putin had personally ordered the cyber thefts with the intention of at least damaging Clinton, if not flipping the election to Trump. In a phone call, Brennan is said to have admonished Alexander Bortnikov, the head of Russia’s security service (the FSB), to desist. The next month, in a face-to-face confrontation (through interpreters) at an international conference in China, Obama warned Putin that “we knew what he was doing and [he] better stop it or else.” Meanwhile, the administration conducted numerous high-level, close-hold meetings, weighing several options including retaliatory cyber attacks.
Ultimately, Obama decided to do nothing. The president’s political allies and media admirers are now embarrassed about his inaction—“It is the hardest thing about my entire time in government to defend. I feel like we sort of choked,” one anonymous senior administration official told The Washington Post. As ever, though, they remain apologists for their man, portraying a pained POTUS, fearful that any action he took would make matters worse, or be perceived as political, or otherwise undermine confidence in the election.
What, then, is the collusion narrative? And what’s their story now? It is pretty much the same story they rebuked Trump for telling. They peddle a three-part rigged-election claim: (1) foreign interference, not by illegal aliens who may have voted but by Russians who did not affect the voting process; (2) one-sided press coverage—they mean the Russian propaganda press and the WikiLeaks release of DNC and John Podesta emails, which they’d now have you believe had more influence on Americans than did the media-Democrat complex and the grudging State Department release of Hillary Clinton’s own emails; and (3) the corruption that lifted a low-character candidate who should not have been allowed to run but who received extraordinary government assistance—not from the Obama Justice Department but from the Putin regime.
To assess the Democratic narrative as bunk is not to excuse Russian duplicity, which many of us were warning about while Bush was embracing Putin as a strategic partner and while Obama was “resetting” with all due “flexibility.”
By late October, the Russian “cyberespionage” effort to meddle in the election was well known. In the same debate in which Clinton rebuked Trump for refusing to concede the election’s legitimacy, she attacked her rival as “Putin’s puppet” and cited the finding of government agencies that Russia sought to interfere in the election. Clinton was not at all concerned that Putin’s shenanigans would have any actual impact on the election. She invoked them because she thought it was helpful to her campaign—an opportunity to portray Trump as ripe for rolling by the Russian regime.
And how could she have taken any other position? None other than President Obama himself observed that there was nothing unusual about Russian scheming to influence American elections, which he said “dates back to the Soviet Union.”39 Obama deftly avoided mentioning that past scheming had never gotten much media traction because the Soviets had been more favorably disposed towards Democrats. While he blamed the Putin regime for hacking emails during the 2016 campaign, Obama described this as “fairly routine.” He acknowledged, moreover, that it was publicly notorious well in advance of the election—which, of course, is why Clinton had been able to exploit it in a nationally televised debate three weeks prior to November 8.
What happened here is very simple: Russia was unimportant to Democrats, and was indeed avoided by Democrats, until they needed to rationalize a stunning defeat. Prior to the election, Democrats had little interest in mentioning “Russia” or “Putin.” Of course, they sputtered out the words when they had no choice—when, not wanting to address the substance of embarrassing emails, they had to shift attention to the nefarious theft of those emails.
Beyond that, attention to the Kremlin was bad news for Clinton. It invited scrutiny of the Clinton Foundation’s suspicious foreign dealings, Bill Clinton’s lucrative speech racket, Hillary’s biddable State Department, and Russia’s acquisition of major U.S. uranium supplies. It conjured embarrassing memories of the “Russia Reset,” during which the supine Obama administration watched Putin capture territory in Eastern Europe and muscle his way into the Middle East, all while arming and aligning with Iran. It called to mind the intriguing relationship between Podesta (the Clinton-campaign chairman and former Obama White House official) and Putin’s circle—specifically, a $35 million investment by a Putin-created venture capital firm, Rusnano, into a small Massachusetts energy company, Joule Energy, just two months after Podesta joined Joule’s board.40
So, while Donald Trump’s Russia rhetoric ranged from the unseemly (blowing kisses at an anti-American thug) to the delusional (the notion that Russia, Iran’s new friend, could be a reliable ally against jihadism) to the reprehensible (moral equivalence between the murderous Putin regime and American national-defense operations), Clinton’s own Russia baggage rendered her unable to exploit it. It was only afterward, after she lost a contest she thought she had in the bag, that the election turned illegitimate.”
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Next: Chapter 2: What Russia Collusion Investigation … And What Started It?
“Even though the FBI had an informant collecting damning information, and had a prosecutable case against Mikerin by early 2010, the extortion racket against American energy companies was permitted to continue into the summer of 2014. It was only then that, finally, Mikerin and his confederates were arrested. Why then? Months earlier, in March 2014, Russia annexed Crimea. Putin also began massing forces on the Ukrainian border, coordinating and conducting attacks, ultimately taking control of territory. Clearly, the pie-in-the-sky Obama reset was dead. Furthermore, the prosecution of Mikerin’s racketeering scheme had been so delayed that the Justice Department risked losing the ability to charge the 2009 felonies because of the five-year statute of limitations on most federal crimes.
Still, a lid needed to be kept on the case. It would have made for an epic Obama administration scandal, and a body blow to Hillary Clinton’s presidential hopes, if in the midst of Russia’s 2014 aggression, public attention had been drawn to the failure, four years earlier, to prosecute a national-security case in order to protect Russia’s takeover of U.S. nuclear assets … in a transaction that had significant ramifications for Clinton Foundation investors.
And lo and behold: The case disappeared without fanfare, much less a public trial. Think about that: The investigation of Russian racketeering in the American energy sector was the kind of spectacular success over which the FBI and Justice Department typically do a bells-’n’-whistles victory lap: the big self-congratulatory press conference followed by the media-intensive prosecutions—and, of course, more press conferences.
Here … crickets.
The Justice Department and FBI had little to say when Mikerin and his co-conspirators were arrested. They quietly negotiated guilty pleas that were announced just before Labor Day. It was arranged that Mikerin would be sentenced just before Christmas. All under the radar.
How desperate was the Obama Justice Department to plead the case out? Mikerin was arrested on a complaint describing a racketeering scheme that stretched back to 2004 and included extortion, fraud, and money laundering. Yet he was permitted to plead guilty to a single count of money-laundering conspiracy.
Except it was not really money-laundering conspiracy.
Under federal law, that crime carries a penalty of up to twenty years’ imprisonment, not only for conspiracy but for each act of money laundering.33 But Mikerin was not made to plead guilty to this charge. He was permitted to plead guilty to an offense charged under the catch-all federal conspiracy provision, Section 371, which criminalizes agreements to commit any crime against the United States—an offense carrying a penalty of zero to five years’ imprisonment.34
The Justice Department instructs prosecutors that when Congress has given a federal offense its own conspiracy provision with a heightened punishment (as it has for money laundering, racketeering, narcotics trafficking, and other serious crimes), they may not charge a section 371 conspiracy. That statute is for less serious conspiracy cases. To invoke it for money laundering caps the sentence way below Congress’s intent for that behavior. It signals to the court that the prosecutor does not regard the offense as major.
Yet, that is exactly what Rosenstein’s office did, in a plea agreement his prosecutors co-signed with attorneys from the Justice Department’s Fraud Section—then run by Andrew Weissmann, later Mueller’s top deputy in the Trump–Russia investigation.35
As we’ll see at many junctures, it’s a small world.
Mikerin thus faced no RICO charges, no extortion or fraud charges. The plea agreement is careful not to mention any of the extortions in 2009 and 2010, before CFIUS approved Rosatom’s acquisition of U.S. uranium stock. Mikerin just had to plead guilty to a nominal “money laundering” conspiracy charge. Insulated from Congress’s prescribed money-laundering sentence, he got a term of just four years’ imprisonment. The deal was a steal for him. It also spared the Obama administration a full public airing of the facts.36“
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“Meanwhile, congressional opposition to Russia’s potential acquisition of American uranium resources began to stir. As Peter Schweizer noted in Clinton Cash,32 four senior House members steeped in national-security issues—Peter King (R., N.Y.), Ileana Ros-Lehtinen (R., Fla.), Spencer Bachus (R., Ala.), and Howard McKeon (R. Calif.)—voiced grave concerns, pointing out that Rosatom had helped Iran, America’s sworn enemy, build its Bushehr nuclear reactor. The members concluded that “the take-over of essential US nuclear resources by a government-owned Russian agency … would not advance the national security interests of the United States.” Republican senator John Barrasso objected to Kremlin control of uranium assets in his state of Wyoming, warning of Russia’s “disturbing record of supporting nuclear programs in countries that are openly hostile to the United States, specifically Iran and Venezuela.” The House began moving a bill “expressing disfavor of the Congress” regarding Obama’s revival of the nuclear-cooperation agreement Bush had abandoned.
Clearly, in this atmosphere, disclosure of the racketeering enterprise that Rosatom’s American subsidiary was, at that very moment, carrying out would have been the death knell of the asset transfer to Russia. It would also likely have ended the “reset” initiative in which Obama and Clinton were deeply invested—an agenda that contemplated Kremlin-friendly deals on nuclear-arms control and accommodation of the nuclear program of Russia’s ally, Iran. Nothing, however, would be allowed to disturb the reset. It appears that no disclosure of Russia’s racketeering and strong-arming was made to CFIUS or to Congress—not by Secretary Clinton, not by Attorney General Holder, and certainly not by President Obama. In October 2010, CFIUS gave its blessing to Rosatom’s acquisition of Uranium One.”
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Previous: Collusion with Russia: Uranium One
“That, naturally, is where the Clinton Foundation came in. And while Skolkovo is not a pretty story, Uranium One is even worse, involving the surrender to Putin’s regime of fully one-fifth of the United States’ uranium-mining stock, an outrage concealed by the tanking of a criminal investigation into the American subsidiary of Russia’s state-controlled nuclear energy and uranium-mining conglomerate, Rosatom.
Once again, Peter Schweizer’s Clinton Cash has exposed much of this scandal, this time supplemented by excellent reporting from The New York Times.28 Significant background of the story predates the Obama years, involving more of Washington’s history of “collusion with Russia.”
The United States government has been conducting uranium commerce with Russia since the Soviet Union imploded. In 1992, the Bush administration agreed with the nascent Russian federation that U.S. nuclear providers would be permitted to purchase uranium from Russia’s disassembled nuclear warheads (after it had been down-blended from its highly enriched weapons-grade level). Uranium is a key component of nuclear power, from which the United States derives about 20 percent of our total electrical power, generated by approximately ninety-nine commercial reactors operating at sixty-one nuclear power plants in thirty states. Relatively speaking, our country does not have vast uranium resources. We currently produce only about 7 percent of the uranium we need and must import the rest; in 2017, for example, Russia accounted for 18 percent.29
In 2005, under the guise of the Clinton Foundation’s mobilization to address the incidence of HIV/AIDS in Kazakhstan (where the virus was nearly nonexistent), Bill Clinton helped his Canadian billionaire pal Frank Giustra convince the ruling despot, Nursultan Nazarbayev, to grant coveted uranium-mining rights to Giustra’s company, Ur-Asia Energy. Ur-Asia had no background in this highly competitive but potentially lucrative business. Nazarbayev, a former Communist party apparatchik, has ruled Kazakhstan for almost thirty years, and is notorious for human rights abuses and looting the treasury.30
In the months that followed, Giustra gave an astonishing $31.3 million to the Clinton Foundation and pledged $100 million more. With the Kazakh rights secured, Ur-Asia was able to expand its holdings and attract new investors. One was Ian Telfer, who also donated $2.35 million to the Clinton Foundation. Ur-Asia merged with Uranium One, a South African company, in a $3.5 billion deal. Telfer became Uranium One’s chairman. The new company proceeded to buy up major uranium assets in the United States.
Meanwhile, as tends to happen in dictatorships, Nazarbayev turned on the head of Kazakhstan’s uranium agency (Kazatomprom), who was arrested for selling valuable mining rights to such foreign entities as Ur-Asia/Uranium One. This was likely done at the urging of Russia, the neighborhood bully. Rosatom, the Kremlin-controlled nuclear energy and uranium extraction conglomerate, was hoping to grab the Kazakh mines—whether by taking them outright or by taking over Uranium One.
The arrest, which happened a few months after Obama took office, had Uranium One’s Clinton Foundation investors deeply concerned that the Kazakh mining rights would be lost. Uranium One turned to Secretary Clinton’s State Department for help. As State Department cables disclosed by WikiLeaks show, Uranium One officials wanted more than a U.S. government statement to the media; they pressed for written confirmation that their mining licenses were valid. The State Department leapt into action: An energy officer from the U.S. embassy immediately held meetings with the Kazakh regime. A few days later, it was announced that Russia’s Rosatom had purchased 17 percent of Uranium One. Problem solved.
Well, not quite. Rosatom was only fleetingly satisfied. Russia wanted a controlling interest in Uranium One. That would mean a controlling interest not just in the Afghan mines but in the U.S. assets that Uranium One had acquired—amounting to 20 percent of total U.S. uranium stock.
On this point, much of the anti-Clinton (and pro-Trump) coverage in conservative media has misaimed its focus.31 The tendency is to hype the U.S. uranium assets and the fact that uranium can be used to make nuclear bombs. But Russia did not need our uranium for weapons purposes—no more than Newcastle needs our coal. Rather, to generate wealth, Putin’s regime has long sought to develop and exploit its capacity as a commercial energy producer. The Kremlin was no doubt delighted at the opportunity to grab American uranium stocks: as I’ve already noted, we do not produce enough uranium for our domestic electricity needs, so anytime Putin takes from us something we need, it potentially becomes a leverage point for him and thus a problem for us. But in the greater scheme of things, the U.S. assets were a comparatively small objective next to the Kremlin’s real target: the copious Kazakh stocks Uranium One owned.
Still, because Russia’s move on Uranium One implicated significant U.S. uranium assets, federal law required approval by the Committee on Foreign Investment in the United States. CFIUS is a powerful tribunal, composed of the leaders of 14 U.S. government agencies involved in national security and commerce. In 2010, these included not only Secretary of State Hillary Clinton, who had cultivated a reputation as a hawk opposed to such foreign purchases, but Attorney General Eric Holder. This is important because, at the very time the Uranium One transaction was under consideration, the Justice Department and the FBI were conducting an investigation of Rosatom’s ongoing U.S. racketeering, extortion, and money-laundering scheme.
The Russian commercial agent responsible for the sale and transportation of uranium to the United States is a subsidiary of Rosatom known as “Tenex” (formally, JSC Techsnabexport). Tenex (and by extension, Rosatom) has an American arm called “Tenam USA,” based in Bethesda, Maryland. Around the time President Obama came to power, the Russian official in charge of Tenam was Vadim Mikerin. The Obama administration reportedly issued a visa for Mikerin in 2010, but a racketeering investigation led by the FBI determined that he was already operating here in 2009.
As Tenam’s general director, Mikerin was responsible for arranging and managing Rosatom/Tenex’s contracts with American uranium purchasers. This gave him tremendous leverage over the U.S. companies. With the assistance of several confederates, Mikerin used this leverage to extort and defraud the U.S. contractors into paying inflated prices for uranium. The proceeds were then laundered through shell companies and secret bank accounts in Latvia, Cyprus, Switzerland, and the Seychelles Islands—though sometimes transactions were handled in cash, with the skim divided into envelopes stuffed with thousands of dollars. The inflated payments served two purposes: they enriched Kremlin-connected energy officials in the United States and in Russia to the tune of millions of dollars; and they compromised the American companies that paid the bribes, rendering players in U.S. nuclear energy—a sector critical to national security—vulnerable to blackmail by Moscow.
To further the Kremlin’s push for nuclear-energy expansion, Mikerin sought to retain a lobbyist. Naturally, he planned not only to use the lobbyist’s services but to extort kickbacks, just as he did with U.S. energy companies with which he dealt. Aided by an associate connected to Russian organized-crime groups, Mikerin found his lobbyist—a man named William Douglas Campbell. Mikerin’s solicitation in 2009 made Campbell uncomfortable, worried that he’d end up on the wrong side of the law. He contacted the FBI and revealed what he knew. From then on, he became the Bureau’s informant, and the Justice Department ultimately relied on his information to arrest and prosecute Mikerin and his conspirators.
Interestingly, at the time Campbell started cooperating, the FBI was led by director Robert Mueller, the special counsel who investigated whether Trump had colluded with Russia. The case against Russia’s subsidiary, Tenam, was centered in Maryland, where the U.S. attorney was Rod Rosenstein—President Trump’s deputy attorney general through most of Mueller’s Trump–Russia investigation.
Thanks to Campbell’s work, the FBI was able to understand and monitor the racketeering enterprise almost from the start. By mid-May 2010, it could already prove the scheme and three separate extortionate payments Mikerin had squeezed out of the informant.
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Previous: Collusion with Russia: The Obama Reset
“That brings us to the Obama years, the era of the “Russia Reset”—announced with great ceremony by Secretary of State Hillary Clinton, brandishing a red plastic “Reset” push-button that she presented to her counterpart, Foreign Minister Sergey Lavrov. Oops: the button was mislabeled Peregruzka (the Russian word for “overcharge”) rather than Perezagruzka (reset). As investigative journalist Claudia Rosett observes, the Kremlin still keeps the button on display in a museum at the Foreign Ministry, “less a souvenir of U.S.–Russia camaraderie than a symbol of American folly.”20
Even as Putin continued his Georgian occupation Obama kicked off the Reset by shelving Bush’s plans for missile-defense installations in Eastern Europe.21 Further courting the Russian dictator, the president revived the civilian nuclear power agreement in 2010, insisting that the pact advanced U.S. national security. It was just the beginning of the administration’s promotion of Russia’s key industrial sectors, improving our declining but dangerous rival’s military and cyber capabilities and fortifying its capacity to extort the European nations and former Soviet republics that rely on Russia for their power needs.
Why? Because “Trade with Russia Is a Win-Win.” That was the headline of Secretary Clinton’s June 2012 Wall Street Journal op-ed, applauding Russia’s formal entry into the WTO.22 It was crucial, she explained, because Russia was just a great place for Americans to do business, and our commerce could now blossom since the Obama administration had made Moscow “a normal trading partner.” Sure, the Putin regime posed many challenges, but Clinton maintained that “it is in our long-term strategic interest to collaborate with Russia in areas where our interests overlap.”
Collaborate? That sounds almost like collu—well, never mind.
Obama and Clinton somehow decided that one of these collaborative areas should be technology. Under the secretary’s guidance as point person of the Obama administration’s “U.S.–Russia Bilateral Presidential Commission,” the State Department teamed up with Russia’s Foreign Ministry to help erect Moscow’s version of Silicon Valley—Skolkovo. It’s unlikely Putin could believe his good fortune: The project was like an espionage operation in broad daylight, openly enhancing Russia’s military and cyber capabilities.
The Defense Department’s European Command put it this way:
Skolkovo is an ambitious enterprise, aiming to promote technology transfer generally, by inbound direct investment, and occasionally, through selected acquisitions. As such, Skolkovo is arguably an overt alternative to clandestine industrial espionage—with the additional distinction that it can achieve such a transfer on a much larger scale and more efficiently. Implicit in Russia’s development of Skolkovo is a critical question—a question that Russia may be asking itself—why bother spying on foreign companies and government laboratories if they will voluntarily hand over all the expertise Russia seeks?
Recognizing Russia’s “current pursuit of external aggression and internal repression,” which marked what it generously regarded as the Kremlin’s “previous course toward democracy and cooperation with the West,” EUCOM stressed caution against “the risks that Russia could leverage transferred scientific knowledge to modernize and strengthen its military.”23
Ya think? The U.S. Army’s Foreign Military Studies Program at Fort Leavenworth concluded that Skolkovo was a “vehicle for world-wide technology transfer to Russia in the areas of information technology, biomedicine, energy, satellite and space technology, and nuclear technology.” Moscow has made it unabashedly clear, moreover, that “not all of the center’s efforts are civilian in nature”: the project was deeply involved in military activities, including the development of a hypersonic cruise missile engine.24 As investigative journalist John Solomon notes, the FBI ended up warning several American tech companies that entanglement with Skolkovo risked wide-ranging intellectual property theft. The agent in charge of the Bureau’s Boston field office even took the extraordinary step of publishing a business journal op-ed, depicting Skolkovo as “a means for the Russian government to access our nation’s sensitive or classified research development facilities and dual use technologies with military and commercial application.”25
Why would our government do such a thing? At the time this was all going on, Clinton’s State Department issued its annual country-by-country findings on the state of civil liberties. Russia was found to be using technology “to monitor and control the internet.” The State Department elaborated that official corruption was rampant, security services engaged in sweeping surveillance of communications, journalists were under siege, dissidents were arbitrarily detained—and some even tortured and killed.26
What was Secretary Clinton thinking?
As we’ve seen, most of the time, she was thinking about the Clinton Foundation, and money (I’d say not in that order, but it’s pretty much the same order). Putin’s regime dangled billions of dollars to invest in Skolkovo companies. Secretary Clinton immediately went to work attracting both corporate contributors and businesses deemed worthy of Russian investment.
The investigative journalist Peter Schweizer has done yeoman’s work exposing the grimy interplay between the Clinton Foundation and the State Department. By 2012, the last year of Secretary Clinton’s tenure, 60 percent of the “key partners” identified for the Skolkovo venture (seventeen out of twenty-eight) had “made financial commitments to the Clinton Foundation, totaling tens of millions of dollars, or sponsored speeches by Bill Clinton.” Russians tied to Skolkovo also gave to the Clinton Foundation, including Viktor Vekselberg, a billionaire confidant of Putin’s who was chosen to run the Skolkovo Foundation.27
There is symmetry here. Again, no one would sensibly say that Secretary Clinton wanted to make Russia a more capable adversary—and as things turned out, I’d wager that strengthening the regime’s cyber proficiency would be something she’d regret (if she were given to that kind of introspection). But it is like the irresponsible mishandling of top-secret information, and the storing and transmission of any sensitive government information, classified or otherwise, on a non-secure server system: it’s not that Clinton didn’t know what she was doing or that she didn’t apprehend the risks; it is that she had other priorities and threw caution to the wind—pretty much the textbook definition of gross negligence. She wasn’t alone: this was not Secretary Clinton’s administration, but President Obama’s. He calculated that abetting and appeasing Russia was a price worth paying for “help” on the Iran deal and in Syria. And while there is some reason to believe Clinton was marginally harder on Russian aggression than Obama, it is a simple thing to rationalize doing the wrong thing when making waves is hard. So, you convince yourself that building Russia into a modern economy will somehow change the nature of the regime (instead of enriching and fortifying it). Plus, there was money to be made.
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“Let’s put aside the time-honored international sport of meddling in other countries’ elections. Let’s stick with collusion with Russia: a quarter-century long, Bipartisan Beltway melody, right up until on November 8, 2016.
Cro-Magnon blowhards like myself have never warmed up to Moscow. So we’ve complained about the New Thinking, regardless of whether it was incumbent Republicans or Democrats delusionally portraying Russia as a perfectly normal country with which to do business, make lots of money, and even ally ourselves.12
Washington, however, has preferred to stay delusional.
The unsustainability of the Communist system, under the pressure of Reagan’s military build-up and support of anti-Communist movements, made the Evil Empire’s disintegration inevitable. Yet, gifted a historic opportunity to dance on the grave of Soviet tyranny, our government’s bipartisan foreign-policy establishment punted. Rather than call the culprits to account and make an enduring record of the hundreds of millions killed and enslaved, successive administrations embraced and propped up Moscow as a force for global stability. The Soviet Union hadn’t quite finished crumbling when President George H. W. Bush gave his infamous “Chicken Kiev” speech, trying to persuade Ukraine not to break away from Moscow.13 It was a harbinger of things to come: Presidents Bill Clinton, George W. Bush, and Barack Obama all enticed Ukraine to give up its means of self-defense on the false assurance that we would—with Russia’s help!—protect it from aggression—an assurance premised on the pie-in-the-sky theory that there would, of course, be no Russian aggression.14
Given Ukraine’s prominence in the Trump–Russia collusion narrative developed by the Hillary Clinton campaign, it is worth recalling Bill Clinton’s collusion with Russia in the “Trilateral Statement”: a joint declaration between Clinton and Boris Yeltsin, along with Britain, purporting to guarantee Ukraine’s security. Why would Kiev need to keep its nuclear arsenal when its neighbor, Moscow, had reformed? The Iron Curtain was history, history itself was supposedly at its happy democratic ending, and it was now all about paying out the “peace dividend.”15 Throughout his eight-year tenure, Clinton flaunted his warm relationship with Yeltsin, committing to support Moscow with financial assistance, including subsidies to adjust decommissioned military officers and nuclear scientists to the new order. In 1997, the U.S. president prevailed upon our G-7 allies to make it the G-8 by admitting Russia, giving it greater influence over global trend-setting by the world’s leading economies, despite the fact that Russia was not one of them.16
Then there was President George W. Bush peering into Vladimir Putin’s soul and finding a “trustworthy” ally. Secretary of State Condoleezza Rice joined our new “strategic partner” in an agreement to help Russia amass the technology, material, and equipment needed to improve its nuclear research and power production—for “civilian” purposes only, of course. Bush enthusiastically seconded Clinton’s proposal that Russia be admitted to the World Trade Organization, even though its corrupt economic policies and practices undermine the market-based norms the WTO is meant to fortify.17
Meanwhile, up-and-coming Democratic Senator Barack Obama was working bipartisan magic with Senate Republicans, pushing Kiev to think bolder than just giving up its nukes; Ukraine needed to surrender its conventional arsenals, too. But wait, what about protection from possible Russian invasions? Please … that was foreign-policy thinking for a bygone time.18
Naturally, Putin humiliated the Bush administration and Congress’s bipartisan Russia accommodationists by invading Georgia, annexing swaths of its territory in Abkhazia and South Ossetia. The White House quietly withdrew the ballyhooed U.S.–Russia Civilian Nuclear Power Agreement from congressional consideration.” 19
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