The U.S., U.K. and France have continued to debate this week whether to allow Ukraine to use some Western-supplied long-range missiles for long-range strikes at targets inside Russia, such as U.K.-built Storm Shadows and their French-made equivalents, Scalps, that rely on U.S. equipment for navigation, thus, giving Washington the right of veto for their use. The Biden administration is reportedly poised to approve Storm Shadows and Scalps for such use (though not on Sept. 13), but it remains divided on whether to allow use of U.S.-made Army Tactical Missile Systems (ATACMS) for the same purpose. The U.S. State Department is open to Kyiv’s request for use of ATACMS, while the Pentagon and the intelligence agencies are skeptical, according to FT. But even the use of Storm Shadows and Scalps inside Russia would mean NATO countries are at war with Russia, according to Vladimir Putin’s Sept. 12 remarks, which were echoed by his spokesman Dmitry Peskov and his U.N. envoy Vasily Nebenzia. The fear in the White House is that hardliners in the Kremlin could insist this retaliation take the form of attacking transit points for missiles on their way to Ukraine, such as an airbase in Poland in what would lead to invoking of NATO’s Article 5, meaning the alliance would be at war with Russia, according to the BBC.
Asked on Friday about Russia’s threats, John Kirby, the White House spokesman, said that Mr. Putin “has obviously proven capable of escalation over the last now going on three years. So yeah, we take, we take these comments seriously.” “But,” he added, “it is not something that we haven’t heard before.” (NYT, 09.13.24)
Lord Kim Darroch, Britain’s former national security adviser, said western allies should think carefully about Putin’s warnings of a war between Moscow and NATO. “We really don’t want to escalate this,” he told FT.
Matthew Savill of RUSI believes lifting restrictions on use of Western-made long-range missiles by Ukraine would pose a dilemma for Russia as to where to position its precious air defenses. Ultimately however, such use is unlikely to turn the tide, according to Savill. If Savill’s estimate is accurate, then as was the case with prior steps in the ladder of arming Ukraine, the use of Storm Shadows and Scalps would be a morale booster for the Ukrainian leadership and would also generate some benefits on the battlefield, but wouldn’t be a game changer.*1
William Burns of CIA and Richard Moore of MI6 said it would be wrong to take Putin’s threats of nuclear escalation lightly but that the West should not be unnecessarily intimidated, according to FT.
In 1989 I served as an advisor to the first post-communist government of Poland, and helped to devise a strategy of financial stabilization and economic transformation. My recommendations in 1989 called for large-scale Western financial support for Poland’s economy in order to prevent a runaway inflation, enable a convertible Polish currency at a stable exchange rate, and an opening of trade and investment with the countries of the European Community (now the European Union). These recommendations were heeded by the US Government, the G7, and the International Monetary Fund.
Based on my advice, a $1 billion Zloty stabilization fund was established that served as the backing of Poland’s newly convertible currency. Poland was granted a standstill on debt servicing on the Soviet-era debt, and then a partial cancellation of that debt. Poland was granted significant development assistance in the form of grants and loans by the official international community.
Poland’s subsequent economic and social performance speaks for itself. Despite Poland’s economy having experienced a decade of collapse in the 1980s, Poland began a period of rapid economic growth in the early 1990s. The currency remained stable and inflation low. In 1990, Poland’s GDP per capita (measured in purchasing-power terms) was 33% of neighboring Germany. By 2024, it had reached 68% of Germany’s GDP per capita, following decades of rapid economic growth.
On the basis of Poland’s economic success, I was contacted in 1990 by Mr. Grigory Yavlinsky, economic advisor to President Mikhail Gorbachev, to offer similar advice to the Soviet Union, and in particular to help mobilize financial support for the economic stabilization and transformation of the Soviet Union. One outcome of that work was a 1991 project undertaken at the Harvard Kennedy School with Professors Graham Allison, Stanley Fisher, and Robert Blackwill. We jointly proposed a “Grand Bargain” to the US, G7, and Soviet Union, in which we advocated large-scale financial support by the US and G7 countries for Gorbachev’s ongoing economic and political reforms. The report was published as Window of Opportunity: The Grand Bargain for Democracy in the Soviet Union (1 October 1991).
The proposal for large-scale Western support for the Soviet Union was flatly rejected by the Cold Warriors in the White House. Gorbachev came to the G7 Summit in London in July 1991 asking for financial assistance, but left empty-handed. Upon his return to Moscow, he was abducted in the coup attempt of August 1991. At that point, Boris Yeltsin, President of the Russian Federation, assumed effective leadership of the crisis-ridden Soviet Union. By December, under the weight of decisions by Russia and other Soviet republics, the Soviet Union was dissolved with the emergence of 15 newly independent nations.
In September 1991, I was contacted by Yegor Gaidar, economic advisor to Yeltsin, and soon to be acting Prime Minister of newly independent Russian Federation as of December 1991. He requested that I come to Moscow to discuss the economic crisis and ways to stabilize the Russian economy. At that stage, Russia was on the verge of hyperinflation, financial default to the West, the collapse of international trade with the other republics and with the former socialist countries of Eastern Europe, and intense shortages of food in Russian cities resulting from the collapse of food deliveries from the farmlands and the pervasive black marketing of foodstuffs and other essential commodities.
I recommended that Russia reiterate the call for large-scale Western financial assistance, including an immediate standstill on debt servicing, longer-term debt relief, a currency stabilization fund for the ruble (as for the Zloty in Poland), large-scale grants of dollars and European currencies to support urgently needed food and medical imports and other essential commodity flows, and immediate financing by the IMF, World Bank, and other institutions to protect Russia’s social services (healthcare, education, and others).
In November 1991, Gaidar met with the G7 Deputies (the deputy finance ministers of the G7 countries) and requested a standstill on debt servicing. This request was flatly denied. To the contrary, Gaidar was told that unless Russia continued to service every last dollar as it came due, emergency food aid on the high seas heading to Russia would be immediately turned around and sent back to the home ports. I met with an ashen-faced Gaidar immediately after the G7 Deputies meeting.
In December 1991, I met with Yeltsin in the Kremlin to brief him on Russia’s financial crisis and on my continued hope and advocacy for emergency Western assistance, especially as Russia was now emerging as an independent, democratic nation after the end of the Soviet Union. He requested that I serve as an advisor to his economic team, with a focus on attempting to mobilize the needed large-scale financial support. I accepted that challenge and the advisory position on a strictly unpaid basis.
Upon returning from Moscow, I went to Washington to reiterate my call for a debt standstill, a currency stabilization fund, and emergency financial support. In my meeting with Mr. Richard Erb, Deputy Managing Director of the IMF in charge of overall relations with Russia, I learned that the US did not support this kind of financial package. I once again pleaded the economic and financial case, and was determined to change US policy. It had been my experience in other advisory contexts that it might require several months to sway Washington on its policy approach.
Indeed, during 1991-94 I would advocate non-stop but without success for large-scale Western support for Russia’s crisis-ridden economy, and support for the other 14 newly independent states of the former Soviet Union. I made these appeals in countless speeches, meetings, conferences, op-eds, and academic articles. Mine was a lonely voice in the US in calling for such support. I had learned from economic history — most importantly the crucial writings of John Maynard Keynes (especially Economic Consequences of the Peace, 1919) — and from my own advisory experiences in Latin America and Eastern Europe, that external financial support for Russia could well be the make or break of Russia’s urgently needed stabilization effort.
It is worth quoting at length here from my article in the Washington Post in November 1991 to present the gist of my argument at the time:
This is the third time in this century in which the West must address the vanquished. When the German and Hapsburg Empires collapsed after World War I, the result was financial chaos and social dislocation. Keynes predicted in 1919 that this utter collapse in Germany and Austria, combined with a lack of vision from the victors, would conspire to produce a furious backlash towards military dictatorship in Central Europe. Even as brilliant a finance minister as Joseph Schumpeter in Austria could not stanch the torrent towards hyperinflation and hyper-nationalism, and the United States descended into the isolationism of the 1920s under the “leadership” of Warren G. Harding and Sen. Henry Cabot Lodge.
After World War II, the victors were smarter. Harry Truman called for U.S. financial support to Germany and Japan, as well as the rest of Western Europe. The sums involved in the Marshall Plan, equal to a few percent of the recipient countries’ GNPs, was not enough to actually rebuild Europe. It was, though, a political lifeline to the visionary builders of democratic capitalism in postwar Europe.
Now the Cold War and the collapse of communism have left Russia as prostrate, frightened and unstable as was Germany after World War I and World War II. Inside Russia, Western aid would have the galvanizing psychological and political effect that the Marshall Plan had for Western Europe. Russia’s psyche has been tormented by 1,000 years of brutal invasions, stretching from Genghis Khan to Napoleon and Hitler.
Churchill judged that the Marshall Plan was history’s “most unsordid act,” and his view was shared by millions of Europeans for whom the aid was the first glimpse of hope in a collapsed world. In a collapsed Soviet Union, we have a remarkable opportunity to raise the hopes of the Russian people through an act of international understanding. The West can now inspire the Russian people with another unsordid act.
This advice went unheeded, but that did not deter me from continuing my advocacy. In early 1992, I was invited to make the case on the PBS news show The McNeil-Lehrer Report. I was on air with acting Secretary of State Lawrence Eagleburger. After the show, he asked me to ride with him from the PBS studio in Arlington, Virginia back to Washington, D.C. Our conversation was the following. “Jeffrey, please let me explain to you that your request for large-scale aid is not going to happen. Even assuming that I agree with your arguments — and Poland’s finance minister [Leszek Balcerowicz] made the same points to me just last week — it’s not going to happen. Do you want to know why? Do you know what this year is?” “1992,” I answered. “Do you know that this means?” “An election year?” I replied. “Yes, this is an election year. It’s not going to happen.”
Russia’s economic crisis worsened rapidly in 1992. Gaidar lifted price controls at the start of 1992, not as some purported miracle cure but because the Soviet-era official fixed prices were irrelevant under the pressures of the black markets, the repressed inflation (that is, rapid inflation in the black-market prices and therefore the rising the gap with the official prices), the complete breakdown of the Soviet-era planning mechanism, and the massive corruption engendered by the few goods still being exchanged at the official prices far below the black-market prices.
Russia urgently needed a stabilization plan of the kind that Poland had undertaken, but such a plan was out of reach financially (because of the lack of external support) and politically (because the lack of external support also meant the lack of any internal consensus on what to do). The crisis was compounded by the collapse of trade among the newly independent post-Soviet nations and the collapse of trade between the former Soviet Union and its former satellite nations in Central and Eastern Europe, which were now receiving Western aid and were reorienting trade towards Western Europe and away from the former Soviet Union.
During 1992 I continued without any success to try to mobilize the large-scale Western financing that I believed to be ever-more urgent. I pinned my hopes on the newly elected Presidency of Bill Clinton. These hopes too were quickly dashed. Clinton’s key advisor on Russia, Johns Hopkins Professor Michael Mandelbaum, told me privately in November 1992 that the incoming Clinton team had rejected the concept of large-scale assistance for Russia. Mandelbaum soon announced publicly that he would not serve in the new administration. I met with Clinton’s new Russia advisor, Strobe Talbott, but discovered that he was largely unaware of the pressing economic realities. He asked me to send him some materials about hyperinflations, which I duly did.
At the end of 1992, after one year of trying to help Russia, I told Gaidar that I would step aside as my recommendations were not heeded in Washington or the European capitals. Yet around Christmas Day I received a phone call from Russia’s incoming financing minister, Mr. Boris Fyodorov. He asked me to meet him in Washington in the very first days of 1993. We met at the World Bank. Fyodorov, a gentleman and highly intelligent expert who tragically died young a few years later, implored me to remain as an advisor to him during 1993. I agreed to do so, and spent one more year attempting to help Russia implement a stabilization plan. I resigned in December 1993, and publicly announced my departure as advisor in the first days of 1994.
My continued advocacy in Washington once again fell on deaf ears in the first year of the Clinton Administration, and my own forebodings became greater. I repeatedly invoked the warnings of history in my public speaking and writing, as in this piece in the New Republic in January 1994, soon after I had stepped aside from the advisory role.
Above all, Clinton should not console himself with the thought that nothing too serious can happen in Russia. Many Western policymakers have confidently predicted that if the reformers leave now, they will be back in a year, after the Communists once again prove themselves unable to govern. This might happen, but chances are it will not. History has probably given the Clinton administration one chance for bringing Russia back from the brink; and it reveals an alarmingly simple pattern. The moderate Girondists did not follow Robespierre back into power. With rampant inflation, social disarray and falling living standards, revolutionary France opted for Napoleon instead. In revolutionary Russia, Aleksandr Kerensky did not return to power after Lenin’s policies and civil war had led to hyperinflation. The disarray of the early 1920s opened the way for Stalin’s rise to power. Nor was Bruning’sgovernment given another chance in Germany once Hitler came to power in 1933.
It is worth clarifying that my advisory role in Russia was limited to macroeconomic stabilization and international financing. I was not involved in Russia’s privatization program which took shape during 1993-4, nor in the various measures and programs (such as the notorious “shares-for-loans” scheme in 1996) that gave rise to the new Russian oligarchs. On the contrary, I opposed the various kinds of measures that Russia was undertaking, believing them to be rife with unfairness and corruption. I said as much in both the public and in private to Clinton officials, but they were not listening to me on that account either. Colleagues of mine at Harvard were involved in the privatization work, but they assiduously kept me far away from their work. Two were later charged by the US government with insider dealing in activities in Russia which I had absolutely no foreknowledge or involvement of any kind. My only role in that matter was to dismiss them from the Harvard Institute for International Development for violating the internal HIID rules against conflicts of interest in countries that HIID advised.
The failure of the West to provide large-scale and timely financial support to Russia and the other newly independent nations of the former Soviet Union definitely exacerbated the serious economic and financial crisis that faced those countries in the early 1990s. Inflation remained very high for several years. Trade and hence economic recovery were seriously impeded. Corruption flourished under the policies of parceling out valuable state assets to private hands.
All of these dislocations gravely weakened the public trust in the new governments of the region and the West. This collapse in social trust brought to my mind at the time the adage of Keynes in 1919, following the disaster Versailles settlement and the hyperinflations that followed: “There is no subtler, no surer means of over- turning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose.”
During the tumultuous decade of the 1990s, Russia’s social services fell into decline. When this decline was coupled with the greatly increased stresses on society, the result was a sharp rise in Russia’s alcohol-related deaths. Whereas in Poland, the economic reforms were accompanied by a rise in life expectancy and public health, the very opposite occurred in crisis-riven Russia.
Even with all of these economic debacles, and with Russia’s default in 1998, the grave economic crisis and lack of Western support were not the definitive breaking points of US-Russian relations. In 1999, when Vladimir Putin became Prime Minister and in 2000 when he became President, Putin sought friendly and mutually supportive international relations between Russia and the West. Many European leaders, for example, Italy’s Romano Prodi, have spoken extensively about Putin’s goodwill and positive intentions towards strong Russia-EU relations in the first years of his presidency.
It was in military affairs rather than in economics that the Russian – Western relations ended up falling apart in the 2000s. As with finance, the West was militarily dominant in the 1990s, and certainly had the means to promote strong and positive relations with Russia. Yet the US was far more interested in Russia’s subservience to NATO that it was in stable relations with Russia.
At the time of German reunification, both the US and Germany repeatedly promised Gorbachev and then Yeltsin that the West would not take advantage of German reunification and the end of the Warsaw Pact by expanding the NATO military alliance eastward. Both Gorbachev and Yeltsin reiterated the importance of this US-NATO pledge. Yet within just a few years, Clinton completely reneged on the Western commitment, and began the process of NATO enlargement. Leading US diplomats, led by the great statesman-scholar George Kennan, warned at the time that the NATO enlargement would lead to disaster: “The view, bluntly stated, is that expanding NATO would be the most fateful error of American policy in the entire post-cold-war era.” So, it has proved.
Here is not the place to revisit all of the foreign policy disasters that have resulted from US arrogance towards Russia, but it suffices here to mention a brief and partial chronology of key events. In 1999, NATO bombed Belgrade for 78 days with the goal of breaking Serbia apart and giving rise to an independent Kosovo, now home to a major NATO base in the Balkans. In 2002, the US unilaterally withdrew from the Anti-Ballistic Missile Treaty over Russia’s strenuous objections. In 2003, the US and NATO allies repudiated the UN Security Council by going to war in Iraq on false pretenses. In 2004, the US continued with NATO enlargement, this time to the Baltic States and countries in the Black Sea region (Bulgaria and Romania) and the Balkans. In 2008, over Russia’s urgent and strenuous objections, the US pledged to expand NATO to Georgia and Ukraine.
In 2011, the US tasked the CIA to overthrow Syria’s Bashar al-Assad, an ally of Russia. In 2011, NATO bombed Libya in order to overthrow Moammar Qaddafi. In 2014, the US conspired with Ukrainian nationalist forces to overthrow Ukraine’s President Viktor Yanukovych. In 2015, the US began to place Aegis anti-ballistic missiles in Eastern Europe(Romania), a short distance from Russia. In 2016-2020, the US supported Ukraine in undermining the Minsk II agreement, despite its unanimous backing by the UN Security Council. In 2021, the new Biden Administration refused to negotiate with Russia over the question of NATO enlargement to Ukraine. In April 2022, the US called on Ukraine to withdraw from peace negotiations with Russia.
Looking back on the events around 1991-93, and to the events that followed, it is clear that the US was determined to say no to Russia’s aspirations for peaceful and mutually respectful integration of Russia and the West. The end of the Soviet period and the beginning of the Yeltsin Presidency occasioned the rise of the neoconservatives (neocons) to power in the United States. The neocons did not and do not want a mutually respectful relationship with Russia. They sought and until today seek a unipolar world led by a hegemonic US, in which Russia and other nations will be subservient.
In this US-led world order, the neocons envisioned that the US and the US alone will determine the utilization of the dollar-based banking system, the placement of overseas US military bases, the extent of NATO membership, and the deployment of US missile systems, without any veto or say by other countries, certainly including Russia. That arrogant foreign policy has led to several wars and to a widening rupture of relations between the US-led bloc of nations and the rest of the world. As an advisor to Russia during two years, late-1991 to late-93, I experienced first-hand the early days of neoconservatism applied to Russia, though it would take many years of events afterwards to recognize the full extent of the new and dangerous turn in US foreign policy that began in the early 1990s.
In the not too distant past, the New York Times eviscerated a set of establishment think tanks in Washington, D.C. The paper revealed documents and emails showing nonprofit research institutes how defense industry interests routinely and covertly influence the media and policymakers. The target of its reporting focused on a prominent think tank called the Center for Strategic and International Studies (CSIS).
“Think Tank Scholar or Corporate Consultant? It Depends on the Day,” ran one NYT headline. The story showed that a scholar at CSIS doubled as a security industry lobbyist who used the think tank to press his client’s interests. “How Think Tanks Amplify Corporate America’s Influence,” blared another NYT investigation, featuring internal emails unmasking CSIS for pushing military drone-friendly policies while raking in drone industry donations.
The NYT series on think tank corruption began ten years ago. Little has changed in terms of the behavior of defense industry-funded think tanks. Instead, the NYT has gone on to embrace them.
In its ongoing reporting on the Ukraine-Russia war and the debate over whether to fuel the conflict, the NYT routinely goes to CSIS for quotes to justify more weapons and more war. The latest flashpoint is the news that NATO powers are moving to likely approve Ukraine’s use of Army Tactical Missile System missiles, known as ATACMS, to strike deep into Russian territory, potentially targeting oil refineries, factories, and other infrastructure that serve a mix of military and civilian purposes. The move would amount to a major escalation that may provoke a wider war across Europe, strikes on U.S. assets, or even nuclear war.
President Vladimir V. Putin has said that such missile strikes from American-provided ATACMS into Russian territory would “mean that NATO countries — the United States and European countries — are at war with Russia.”
In reporting on the decision, the NYT did not speak to outside experts who raised concerns about a potential nuclear conflict. Instead, they quoted a single outside expert voice, a scholar from CSIS, to push back on any dangers and to argue that such strikes are par for the course:
“The strikes would help degrade Russian military capabilities, and Russia already uses Iranian, Chinese and North Korean weapons and components against targets in Ukraine,” said Seth G. Jones, a senior vice president with the Center for Strategic and International Studies.
Aside from the fact that this quote makes almost no sense – the North Korean weapons to Russia consist largely of short-range artillery rounds – the NYT is engaging in the same type of industry opinion laundering it once decried.
CSIS vice president Seth Jones doubles as an official at Beacon Global Strategies, a consulting firm that lobbies on behalf of the defense industry, with previous clients that include Raytheon.
As the NYT has previously reported, CSIS is funded and routinely directed by the largest defense contractors in the world. Lockheed Martin, the manufacturer behind the ATACMS missile system, is among the think tank’s largest corporate benefactors. As we’ve reported, Lockheed Martin stands to benefit financially from the war, citing $10 billion in opportunities.
21stCenturyWire published an intriguing report over the weekend about how “Austrian Court Case Reveals More Evidence of Biden, Democrat Corruption in Ukraine”. The gist is that Austria ruled against the US’ requested extradition of a prominent Ukrainian businessman in 2015 on the basis that it couldn’t prove his guilt, plus the documents that he shared in his support proved “the blatant political overtones” of the case. Readers can learn more about the details upon reviewing the preceding hyperlinked report.
What’s sufficient for casual observers to know is that a GOP victory in November could lead to the political will required to thoroughly investigate Biden’s meddling in Ukraine during his time as Obama’s Vice President. This sequence of events can’t be taken for granted though since Trump might lose and/or the Republicans might not win Congress. He declined to investigate Hillary during his first term despite his infamous call to “lock her up” so he might not investigate Biden either if he wins again.
After all, the incumbent is now considered to be senile, which is why Kamala was coronated as the Democrats’ replacement candidate. Biden is also at the end of his life cycle, and it’s unlikely that he’d make it through the extended legal process required to bring him to justice even if Trump won and Congress had the political will to launch a criminal investigation into him. Even if other Democrats in the Obama Administration are investigated, they might just conveniently pin the blame entirely on Biden.
For as despondent as some Americans might feel upon realizing this, they shouldn’t forget that they can still make a difference in reshaping their compatriots’ perceptions about his family and party over the long term through the work that they can do on this in the Alt-Media Community (AMC). There are many passionate investigative journalists who could ensure that this becomes Biden and the Democrats’ defining legacy if they dedicate their lives to exposing them.
The US media space is totally different than it was in 2016. Dozens of non-Mainstream Media news channels have since popped up, Twitter transformed into X after being bought by Musk who then proceeded to reform it into an imperfect but nevertheless much better free speech platform than before, and Telegram is all the rage among American dissidents nowadays. These three have combined to create a powerful media ecosystem for maximally disseminating “inconvenient truths”.
Trump might end up disappointing some of his followers yet again if he wins, or the “Republicans-In-Name-Only” (RINO) might once again sabotage his agenda, so it falls on the AMC to ensure that a form of justice is served by investigating the Biden Family and the Democrats’ meddling in Ukraine. It’s an admittedly overwhelming thought to undertake such an endeavor, but it’s not impossible once the election ends regardless of the outcome since political researchers might then have much more time.
Given what’s already been discovered but has yet to be assembled in an easily accessible and readable way, there’s no doubt that Biden and then his son Hunter led the Democrats’ influence operations in post-Maidan Ukraine, but the details need to be more widely known to make a difference. If the AMC put its mind to it and musters up the resources to fund proper investigate journalism into this, after which they then effectively disseminate it, more Americans might become aware of what happened.
Therein lies the long-term goal that could make a meaningful difference after the election regardless of the outcome since it could result in turning more Democrats into Independents, Republicans, or getting them to become politically apathetic after realizing how corrupt Biden, his family, and his party are. After all, they played a leading role in the events that preceded the worst conflict in Europe since World War II and which carries with it the risk of a nuclear apocalypse, so this is all actually a pretty big deal.
It sounds like the west figured out that Telegram was financially vulnerable and that arresting/convicting its founder and CEO would be likely to destroy the company, thereby eliminating a non-western controlled information source. As the Kim Iversen video at the bottom shows, they are seeking to do the same to Twitter/X. This, combined with reports of anti-war/anti-establishment journalists being harassed and arrested by the British government and regular British citizens being arrested for social media posts, these are dark days for freedom of speech in the west. – Natylie
The Bell, 9/3/24
Pavel Durov opposed strict moderation — it could cost him his freedom, and his company
Telegram founder and Russian tech icon Pavel Durov spent just 96 hours in a French jail. Released on house arrest, the case is far from over, and will have repercussions way beyond him and his platform. The saga looks set to go a long way towards shaping the future relationship between Western democratic governments and internet platforms in general.
Pavel Durov’s four-day detention came to an end on Aug. 28, when a Paris judge granted him bail. Durov was officially indicted on a string of charges — all related to Telegram’s “complicity” in crimes plotted, planned and executed over the platform. Although out of jail, Durov is obliged to report to the police twice a week and cannot leave France. The substance of the allegations against him can be summed up in a single phrase: Telegram has consistently failed to cooperate with French police in its attempts to investigate crimes committed with the help or, or explicitly enabled by, the platform.
The Bell spoke with people close to Telegram’s leadership and those working for the platform about how Telegram moderates content and typically doesn’t cooperate with Western law enforcement bodies — and how this set Durov on a collision course with French authorities.
Telegram has just 50 employees — 30 of which are developers, Durov said in an interview with Tucker Carlson this spring. He contrasted his company’s lean approach with rival big-tech companies that, he said, had bloated headquarters and inefficient processes. The company has no HR department or many other divisions that would be mandatory for a large business. It’s reasonable to conclude from this that there has never been a significant number of people working on content moderation for the service. Everything that can possibly be automated is automated, one source told The Bell.
Telegram has three levels of moderation, said Fedor Skuratov, creator of the Combot moderation service. The first is in chats, communities and channel comments. These are moderated by admins, using outsourced solutions. Level two is a complaints system. Any user can report any public post (though not private ones) using a “Report” button in the app. Users can do this to highlight pirated content, threats, pornography or child abuse. External contractors moderate these complaints — but nobody knows who they are or how many are involved. The third level of moderation is an algorithm that is mostly used to filter spam in private messages based on suspicious patterns of behavior associated with bots. Automated moderation can be used in group chats, but it tends to be unpredictable and therefore the feature is rarely activated.
The weakness of this moderation framework is partly explained by an approach purposefully adopted by Telegram’s creators. Moderation options exist on a spectrum. At one extreme is Meta, which blocks or suspends users for even minor infringements. At the other end is Telegram, which argues that censorship benefits nobody and it should staff as hands-off as possible. “Durov believes that the platform should not interfere with what people write to one another in private messages on Telegram,” one of his acquaintances explained. For example, as long as pornography is not published on public channels, leave it alone. “The most important thing for moderation on Telegram is user comfort, so that they don’t receive unwanted messages. There are essentially no restrictions on users being able to find something on Telegram for themselves,” explained Skuratov.
A second reason behind the approach is more of a business factor: Telegram’s aversion to hiring more staff. The company believes this would strip them of their advantages of being a small, flexible business, as well as threaten security. “Hiring human moderators is a one-way street — there will never be enough of them,” Skuratov said. “And there is a high risk of leaks: the more people with access to data, the worse it is for security,” he added. When Telegram was just starting out, this approach worked. But the problem has grown as it became a service with hundreds of millions of users — making it impossible to comply with even its own small set of rules. As a result, specific content began to leak into the public parts of Telegram and due to a lack of people and money, Telegram could not cope.
There’s another important business factor. Almost from day one, Telegram wanted to act not just as a messenger, social network and blog platform, but also as a marketplace. Back in 2015, Telegram introduced the opportunity to create bots that made it easy to set up a simple online store inside the app. But unlike the Apple or Google stores, Telegram had no moderation of these mini-apps, meaning developers could release anything they wanted without any meaningful checks. This lowered the entry threshold, paving the way for a plethora of different businesses to flock to the platform — including those operating in the black, or gray market. For instance, the platform became famous years ago in Russia as a hotbed for the trade of personal data — with people able to buy gigabytes of information, hacked or leaked, for next to nothing.
What next for Telegram?
Telegram’s financial position was already uncertain before Durov’s arrest. From launch, the company struggled to monetize the platform. At first it was financed by Durov’s personal funds from the sale of VKontakte. Then the company tried to launch its own crypto token, which was successful with some of the world’s most well-heeled investment funds — but was ultimately blocked by the US Securities and Exchange Commission. Over the last three years, Telegram has turned to loans, having placed bonds worth more than $2.3 billion.
Durov’s arrest could tip the company into a financial crisis, the Financial Times wrote after analyzing the company’s previously secret financial statements for 2023. Telegram has no money of its own and is massively unprofitable, the FT found. In 2023, the platform had revenues of $342 million, posting an operating loss of $108 million and a post-tax loss of $173 million. The company partially covered those losses by increasing the value of crypto assets on its balance sheet, which were valued at almost $400 million.
The debt on the Telegram’s bond-issuing spree is due to be paid off by March 2026. If the company conducts an IPO before then, the bonds are converted into shares at a discount — a good deal for Telegram. If not, the platform must repay bondholders with interest (at a rate of 7% per year). With Durov facing a lengthy legal saga that could end in years of prison time, it’s unclear whether a stock market launch is still on the table. The FT suggests not: the case against Durov is already causing too much damage to an already unprofitable business.
Investors are nervous. Telegram bonds fell below 90 cents on the dollar after Durov was arrested. And Telegram is in no rush to reassure its backers. According to one bond holder, there has been no contact from the company’s representatives in the past week.
Why the world should care
For the first 10 years of Telegram’s existence, Pavel Durov managed to strike a balance between privacy and public safety. If Telegram had found a more reliable means of monetization, it might well have had the funds to pay more attention to security and moderation, as its bigger competitors do. We will soon find out whether the service will get a second chance. In post-Soviet countries, it’s worth remembering, this is not just about the survival of gray businesses and shady online marketplaces, but of one of the last major platforms for free speech.
