Bloomberg Business Week, 1/18/23

For many young Russians, the barrage of sanctions that severed their country’s ties with large swaths of the global economy was a good reason to leave. For Viktoriya Shelanova, a 37-year-old social media manager in Moscow, it was an opportunity to start a business selling water sports apparel.

An exodus of foreign brands following Russia’s invasion of Ukraine has resulted in shortages of goods in practically every sector. When Viktoriya’s sister Julia, an avid wakeboarder, struggled to find a neoprene vest, the two set out to find a manufacturer in China, a country that has maintained friendlier relations with the Kremlin.

They identified a factory in Guangdong province that produces sports gear for several big US companies and sent a request for samples via WeChat, the Chinese messaging service. Less than two months later they received a delivery of 20 vests. Once they’ve chosen the ones they like best, they plan to start ordering them in batches of 100 to sell in Moscow, and to the water sports parks that have sprung up in recent years as wakeboarding gained in popularity. “We think there will be huge demand, and there’s no competition at the moment,” Viktoriya says by phone from Moscow.

Many commentators have compared Russia’s current economic isolation with that of the Soviet era. Yet it’s more reminiscent of the 1990s, when the collapse of communism left gaping holes in supply chains, forcing consumers and entrepreneurs to find creative ways to fill them.

Avito, the Russian equivalent of Craigslist, is full of people offering to import foreign-brand apparel from abroad: Search for Gucci and you’ll pull up 173,000 listings. New supply chains have sprung up to bring in iPhones and other Western tech gear via former Soviet countries.

Franchise owners are coping with the exit of multinationals by selling products with similar packaging and logos but slightly different names. Krispy Kreme doughnuts are now called Krunchy Dream, Starbucks is Stars Coffee, and Pizza Hut is now Pizza N (a play on the fact that the Russian N looks like an English H).

One enterprising Russian national, who asked not to be identified, has set up a company in Dubai that has a license to import gold. Russian companies buy bullion and ship it to him, and he sells it to jewelry makers in the United Arab Emirates. After pocketing 40% of the profit, he uses the proceeds to buy car parts, or whatever else is needed, which are then transported to Russia.

It’s all part of what Kremlin officials call the “mobilization economy.” Speaking in March, shortly after an initial round of sanctions took effect, Russian President Vladimir Putin said: “There’s only one way out of the conditions that we currently find ourselves in, and that’s to give maximum freedom to people who are conducting business.”

Regulations that banned so-called parallel imports, a term that applies to branded goods brought in without the trademark owner’s consent, have been dropped. The Ministry of Economic Development’s website advertises low-interest-rate loans for entrepreneurs in certain lines of work as well as moratoriums on inspections.

That isn’t to say sanctions aren’t causing pain. Used Toyotas and BMWs fetch higher prices than they did when they were new. (Good luck tracking down a replacement transmission if your foreign-made car breaks down.) More than a quarter of Aeroflot’s planes have been grounded because they’ve been cannibalized for parts for aircraft that are still flying.

A Bloomberg Economics study that compared Russia with South Africa in the 1960s through the ’90s, when the latter faced sanctions over apartheid, concluded the economy faces “a significant slow-burning drag as barriers to trade and capital flows choke competition and add inefficiency.” The Russian economy contracted 2.7% last year, according to Bloomberg Economics estimates, and is set to shrink an additional 2.5% in 2023.

Russia’s statistical agency stopped publishing detailed trade data after the invasion of Ukraine, but imports are estimated to have fallen by as much as 23.5% last year, from $380 billion in 2021, according to the central bank. Deputy Prime Minister Denis Manturov predicted in September that the value of parallel imports would reach at least $20 billion by the end of 2022.

As many as 1 million Russians fled the country in 2022, to escape economic hardship and the threat of men being called up to the front. For those who remain, daily life is slowly changing as many of the big global brands wind down operations. So far only about 5% of international companies that were in Russia before the war have completely pulled up stakes, according to a database created by Kyiv School of Economics. But more than half have curtailed operations or halted new investment.

Some multinationals, like Apple Inc. and Inditex, the parent of Zara, made a swift exit following the invasion. Others, like Reckitt Benckiser Group Plc, whose portfolio includes products that are household names the world over, including Enfamil baby formula and Durex condoms, along with British American Tobacco Plc, maker of Dunhill and Pall Mall cigarettes, announced plans to exit but haven’t yet followed through.

Danone SA, the biggest dairy producer in Russia, announced it would be exiting the market in October. It’s still unclear whether the new Russian owner of its production plants will have the right to sell Activia yogurt or other Danone brands.

Consumer-product giants Unilever Plc and Mondelez International Inc., both of which have plants in Russia, say they’re only supplying Russian consumers with essential products, though those include Cornetto ice cream and Milka chocolate.

For some categories of goods, Chinese brands have rushed in to fill the vacuum. Xiaomi Corp. was Russia’s bestselling smartphone maker in 2022, dethroning Samsung, and three of the top five brands were Chinese, according to M.Video-Eldorado Group, Russia’s biggest consumer electronics retailer.

The market for designer clothes and accessories is thriving despite sanctions. After the European Union banned exports of luxury items costing more than €300 ($324) each to Russia in March, sales surged at stores in Dubai and Turkey, two countries that have maintained direct flights to Russia, according to Claudia D’Arpizio, a partner at Bain. The consultancy estimates that Russians purchased about €7 billion of personal luxury goods in 2021, both at home and during travels abroad, representing up to 3% of the global luxury market.

While European luxury conglomerates have shut down their stores in Russia, they’ve yet to decide whether to permanently exit the country. In October, Jean-Marc Duplaix, chief financial officer of Kering SA, owner of Gucci and Saint Yves Laurent, said maintaining a presence in Russia helped the group “protect” its trademarks there.

As for the Shelanova sisters, the two aren’t planning to stop at neoprene vests. They’re thinking of expanding into wetsuits and have started investigating which Chinese factories produce for the big US brands. “We’ve already found the one that makes wetsuits for Roxy, but we’re looking for other companies as well,” says Julia. “We’d like to create our own brand.”

By Dmitry Trenin, RT.com, 1/19/23

Dmitry Trenin is a research professor at the Higher School of Economics and a lead research fellow at the Institute of World Economy and International Relations. He is also a member of the Russian International Affairs Council.   

Predicting the course of political events during particularly volatile periods, such as the one we entered a year ago, is a thankless and meaningless endeavor. Yet in such times, there’s both a need and an opportunity to gain a deeper understanding of the main trends shaping the world. This brief overview is an attempt to identify Russia’s main course of development in the international arena and its relations with key players in the year ahead.

Ukraine

The longer the conflict in Ukraine lasts, the more it resembles an uncompromising confrontation between Russia and US-centric Western countries. The escalation of hostilities continues to be the dominant trend. The stakes are extremely high for all sides, but for Moscow even more so than for the United States or Western Europe. For Russia, the conflict is not only a matter of external security and its place in the world, but also a matter of internal stability, including the cohesion of its political regime and the future of Russian statehood. After the partial mobilization last fall, combat operations in Ukraine began to resemble something far broader. What started out as a “special military operation” may well become a “patriotic war.”

All conflicts eventually come to an end as a result of agreements. However, the above circumstances make it nearly impossible to conclude either a peace agreement or even a stable armistice similar to the Korean deal of the 1950s. The problem is that Washington’s maximum concessions are a far cry from Moscow’s minimal goals. The objective of the US is to exclude Russia from among the great world powers, initiate regime change in Moscow, and deprive China of an important strategic partner. Its strategy is to exhaust the Russian Army at the battlefront, shake up society, undermine people’s trust in the authorities, and finally, get the Kremlin to surrender. As for Russia, it has the resources and power to get the better of these schemes and achieve its goals in such a way as to avoid another armed conflict in the future. In 2023, combat operations in Ukraine may not end, but over the next 12 months, we will see whose willpower is stronger and which side will eventually prevail.

The West

The Ukrainian conflict has so far been a proxy war between Russia and NATO. However, the growing number of Western countries joining the conflict and aiming to “strategically defeat” Russia may lead to a direct clash between the Armed Forces of Russia and Western military units. If this happens, the Ukrainian conflict will turn into a Russia-NATO war. Such a situation will inevitably carry a nuclear risk. This is further aggravated by the fact that, acting out of desperation, Kiev authorities may provoke the US-led military bloc to directly enter the conflict.

However, even if a head-on collision is avoided, the West’s overall hostility towards Russia will keep on growing. Economic relations between Russia and Western Europe, which the latter sabotaged last year despite the evident “suicide” of such actions, will continue deteriorating.

Western European countries are continuing to isolate themselves from Russia, seeing it as a direct threat and using this “menace” to boost the internal cohesion of their own bloc. For over half a century, “European security” has been a safe haven for international diplomacy and a mantra for foreign policy. But now, the Western Europeans have dropped the pen and taken up the sword – or, more precisely, artillery systems.

Ukraine is currently the most significant battlefront between Russia and the West, but not the only one. The front of confrontation extends north through Belarus, Kaliningrad, and the Baltic into the Arctic, and south through Moldova, the Black Sea, Transcaucasia, Kazakhstan, and Central Asia. Of particular importance in 2023 are Kazakhstan and Armenia, where the West is actively supporting anti-Russian nationalist powers, and Moldova and Georgia, where it’s attempting to rekindle old conflicts and open a “second front” in addition to the Ukrainian one.

In Russia-US relations, dialogue has long been replaced by a hybrid war. And Ukraine is but one direction, albeit the most noticeable, that this showdown is taking. Washington’s goal is to actively demonstrate its global dominance and it’s willing to take serious and risky steps to this end. Moscow is not the main opponent for Washington, but one that needs to be taken down first. US foreign policy is merciless to rivals, opponents, and allies alike, and Russia can count only on its own power to hold the Americans back.

Ahead of the 2024 presidential elections in the US, political struggles are predictably set to escalate. The Republicans, who recently took control of the House of Representatives, will likely demand greater accountability for the funds allocated to Ukraine. These largesse may also be somewhat reduced. Nevertheless, most Republicans share the views of President Joe Biden’s administration regarding both Ukraine and Russia, so a change in US policy in favor of Moscow remains highly unlikely.

In terms of relations between Japan and Russia, cooperation established by former prime minister Shinzo Abe is being replaced with Cold War-era hostility. In contrast to Western Europe, Japan isn’t willing to break off energy ties with Russia. But the revitalization of the alliance between Japan and the United States, coupled with the strengthening military-political ties between Russia and China and mounting tension on the Korean Peninsula all signal a return to the old confrontation with Russia, China, and North Korea on one side, and the United States, Japan, and South Korea on the other.

The East

In the current circumstances, Belarus remains Russia’s only absolute ally. At the same time, Moscow maintains partner relations with several nations whose importance has grown significantly in recent times. These are primarily the great world powers China and India; regional players Brazil, Iran, Turkey, and South Africa; and the Persian Gulf countries – primarily Saudi Arabia and the United Arab Emirates. These countries, along with dozens of others, have not joined in the Western sanctions against Russia and continue to be Moscow’s partners. However, Asian, African and Latin American countries that exist within Washington’s financial empire, which are increasingly called “the world majority” in Russia, are forced to consider the effect of secondary US sanctions.

This is apparent in the case of China. The proposal of a Russian-Chinese partnership “without borders” demonstrates the willingness of both world powers to develop in-depth cooperation in all fields. Despite Washington’s considerable efforts to use the Ukrainian conflict to sabotage China-Russia relations, economic and military ties between Beijing and Moscow are growing stronger. The promised visit of Chinese leader Xi Jinping to Russia, scheduled for the spring of 2023, is evidence of the ongoing rapprochement.

At the same time, both sides are acting out of their national interests. For Russia, the United States is currently an opponent. But for China, it is only a rival and a potential opponent. This is not enough to form a military alliance between Moscow and Beijing. China naturally values its economic interests in US and European markets, and Beijing may change its mind in favor of a military alliance only if Washington becomes its enemy. For the sake of Russia alone, China is not willing to take this step.

There are also issues around Russia’s relations with India. Just like Beijing, New Delhi is Moscow’s strategic partner. Yet with its ambitious goal of accomplishing a major economic leap in the current decade, India is particularly interested in economic and technological cooperation with the US, the EU, and Japan. Moreover, New Delhi sees Beijing as its main rival and a potential military threat: the smoldering conflict on the border between the two most populated Asian states continues to occasionally flare up. In addition to BRICS and SCO membership, India is a member of the Quad group, which the US views as an anti-Chinese alliance.

In such conditions, Russia will have to decisively strengthen its positions in India in 2023. This includes actively working with local elites, explaining Russia’s foreign policy and countering the attempts to distort it by Western media (used by the Indian press as its main reference), finding and developing new opportunities for economic, technological, and scientific cooperation, and encouraging productive cooperation via international forums and other platforms. In the opposite case, a “go with the flow” attitude in Russian-Indian relations will result in India’s drift away from Moscow.

Last year, Iran became the only country to supply its own weapons systems to Russia. At the same time, Tehran entered the process of joining the Shanghai Cooperation Organization (SCO). The North-South Transport Corridor linking Russia with the Persian Gulf nations, India, and South Asia has acquired particular importance under Western sanctions. Also, last year it finally became clear that the Iranian nuclear deal would not be extended. This means the suspension and possibly even the termination of over half a century of cooperation between Russia and the United States on nuclear nonproliferation.

In 2023, Russia and Iran will continue growing closer. On the Russian side, this will require the development of a more concise and active strategy towards the Middle Eastern state.

Moscow’s relations with Tehran directly influence its relations with the Arab nations and Ankara. The region is notable for having several centers of power. The policy of the Persian Gulf’s Arab countries (especially Saudi Arabia and the United Arab Emirates) is becoming increasingly multi-vector. They are no longer focused solely on the US and are developing ties with Russia and China. In the coming year, this trend will likely continue and strengthen. Having proposed a concept for regional security in the Gulf zone back in 2019, in 2023 Moscow could step up the efforts and facilitate dialogue between Iran and its southern neighbors.

2023 is the centenary of the proclamation of the Turkish republic, and will see presidential elections. For Russia and its foreign policy, the importance of Turkey has grown dramatically in recent years. As a result of the Syrian war, the Second Karabakh War, the Ukrainian conflict, and the collapse of normal relations between Russia and Western Europe, Turkey turned into a transport, logistics, and gas hub between Russia and the Euro-Atlantic world.

The Turkish opposition is determined to put an end to the 20-plus year political reign of Recep Tayyip Erdogan, who intends to run for another (according to him, final) presidential term. We won’t make predictions concerning the upcoming election but will only point out the trend that Turkey is transforming from a regional power into a major independent player with global ambitions. This makes Ankara an indispensable, if challenging partner for Moscow.

Close neighbors

Last but not least are Russia’s relations with its immediate neighbors. This trend came to the fore in 2022 and is set to continue. Over the coming year, achieving a breakthrough and eventually, victory in Ukraine, will be Russia’s main priority. Belarus will remain Russia’s closest ally and partner. Meanwhile, the rise of ethnic nationalism in Kazakhstan and potential discord in relations between Moscow and Astana pose the greatest risk.

Other threats may include a Moldovan attempt to cooperate with Kiev and the West on solving the Transnistria conflict; a potential renewal of hostilities between Armenia and Azerbaijan; another outbreak of the border dispute between Kyrgyzstan and Tajikistan, and internal destabilization issues in neighboring countries.

On the other hand, under the influence of last year’s gigantic geopolitical, strategic, and geo-economic shifts, it has become obvious that we need a fundamentally different level of economic and military-political cooperation within the frameworks of the Eurasian Economic Union (EAEU) and the Collective Security Treaty Organization (CSTO), respectively. It’s worth noting that in both aspects, Russia-Uzbekistan cooperation looks particularly promising. What is clear is that under the conditions of unprecedented geopolitical tension along the entire perimeter of Russia’s new post-Soviet borders, Moscow will need to invest a lot more attention, understanding, and effort to reap results. This will become one of the key challenges for Russian foreign policy in 2023.

This article was first published by Profile.ru.

By Prof. Geoffrey Roberts, H-Net (Humanities and Social Sciences Online), 1/24/23

Geoffrey Roberts is an historian, biographer, and political commentator. A renowned specialist in Russian and Soviet foreign and military policy and an expert on Stalin and the Second World War. He is Emeritus Professor of History at University College Cork and a Member of the Royal Irish Academy.

There is a serious danger that the ‘decolonization’ of Russian history being sought by some within the Russian Studies community will be used as a vehicle for anti-Russian political ends rather than the academic goal of seeking to foster a deeper understanding of the past in all its complexity.

Alexander Hill goes too far when he places David Marples among those western academics “all-but calling for the dismemberment of Russia”. But having read Professor Marples’s piece on ‘The Rationale of Russia’s ‘Special Military Operation’ in Ukraine’ (https://www.e-ir.info/2022/12/22/opinion-the-rationale-of-russias-special-military-operation-in-ukraine/), I can see why Dr Hill would make such a claim.

According to Marples, Russia is an authoritarian terrorist regime, bent on ethnocide and the complete destruction of the Ukrainian state. Putin is conducting a barbaric war in Ukraine with goals that preclude diplomacy or the possibility of peace negotiations to end a conflict that has already claimed the lives hundreds of thousands of people, destroyed Ukraine’s economy, and forced millions of its citizens to become refugees. The only choice, writes Marples, is to fight the war to the bitter end, even if that results in ‘political and social chaos’ in nuclear-armed Russia.

With that mindset, it makes perfect sense to seek Russia’s dismemberment, or, better still, the extirpation of the Russian state, just in case its people decide to elect another Putin.

Marples’s critical fire is directed against western academics seeking to understand the Ukraine conflict from the Russian perspective, scholars like myself, who believe the war is limited and defensive, and that a ceasefire, peace negotiations and some kind of a settlement will be extremely difficult but not impossible to achieve – a settlement that would preserve Ukraine as an independent, sovereign state (albeit at the cost of lost territory), satisfy Russia’s security demands, and, not least, avert calamitous escalation into an all-out NAT0-Russia conflict. Similarly minded scholars also think the war could have been avoided by (a) implementing the Minsk agreements on the reintegration of rebel Donbass into Ukraine as regionally autonomous provinces and (b) significant western concessions to the Russian security proposals of December 2021.

Marples namechecks John Mearsheimer, Marlene Laruelle, and Alexander Hill, and I am glad to add my name to those he identifies as advocates of the view that Russia sees itself as fighting a defensive war provoked by Ukraine and the West. (See G. Roberts, “‘Now or never’: The Immediate Origins of Putin’s Preventative War on Ukraine’” https://jmss.org/article/view/76584/56335)

Marples’s response to our views is a series of dubious assertions that read more like propaganda talking points than scholarly analysis. His article displays little or no awareness that each and every one of his assertions is disputed by other scholars who read the evidence differently.

Take, for example, the vexed question of Putin’s attitude to Ukrainian independence and sovereignty. Marples asserts that Putin “has never recognised Ukrainian independence or the very concept of Ukraine as an independent state”. The problem is that Putin has done just that on numerous occasions.

“We respect the Ukrainian language and traditions. We respect Ukrainians’ desire to see their country free, safe and prosperous”, writes Putin in his now notorious essay ‘On the Historical Unity of Russians and Ukrainians’, “I am confident that true sovereignty of Ukraine is possible only in partnership with Russia [which] has never been and will never be ‘anti-Ukraine’. And what Ukraine will be – it is up to its citizens to decide.” (“On the Historical Unity of Russians and Ukrainians”, 12 July 202.1 http://www.en.kremlin.ru/misc/66182.

Unable to prove his point directly, Marples resorts to arguing around it, highlighting statements showing that Putin wants to limit Ukrainian sovereignty and independence. About that he is right. Putin has repeatedly said that Ukraine’s 1991 borders were an artificial construction of the Bolsheviks and their communist successors. He has been adamant that he won’t allow Ukraine to become an anti-Russia and nor will he stand for political and ethnic discrimination against Russian-identifying Ukrainians. He has also characterised Ukraine as a corrupt state controlled by criminals, oligarchs and ultra-nationalists who have shamelessly exploited the Ukrainian people and turned the country into a western catspaw against Russia, And, of course, he has vowed never to return to Ukraine the occupied and incorporated territories of Donets, Lugansk, Kherson and Zaporizhia.

Clearly, Putin envisages a severely circumscribed version of Ukrainian sovereignty (which he sees as advantageous to Ukraine as well as Russia), but his views are not incompatible with an independent Ukraine exercising a meaningful degree of freedom in foreign and domestic policy. Limited sovereignty is and has been the fate of many states. Ireland would never have been allowed to separate from Britain had its independence threatened British security. Finland, having side with Nazi Gemany during the war and lost a lot of territory to the USSR, had to aligned itself Moscow during the cold war. The United States would not countenance Canada or Mexico doing anything that imperilled its security. In 1962 the US was prepared to obliterate Cuba and start a third world war if Soviet nuclear missiles were not removed from that independent sovereign state. In 2003 the British and American pre-emptively attacked Iraq, supposedly to stop Saddam Hussein from acquiring nuclear weapons. China would go to war to stop Taiwan over-exercising its sovereignty. Limited sovereignty is the norm in the current system of international relations. Not even the greatest of powers exercises unbridled sovereignty: the US was forced to shelve it plans to invade Cuba and remove its rockets from Turkey in order to rid Soviet missiles from its doorstep.

Marples seems to prefer a forever war to win Ukraine’s complete and unrestrained independence. He may well get his wish as far as the war is concerned. But I fear the result will be the further destruction and dismemberment of Ukraine.

The tone of Marple’s furious philippic contrasts markedly with the measured discourse of this thread. De-colonising Russian Studies is a complex topic of discussion in which there are some sharply opposed views, but all the contributors (including Marples himself) have treated each other with respect and scholarly decorum.

I have nothing against scholars taking a political stand on the Russia-Ukraine war – I have done so myself (https://www.irishtimes.com/opinion/2022/07/13/ukraine-must-grasp-peace-from-jaws-of-unwinnable-war/). I understand the depths of emotion stirred by the war. But I feel strongly that our primary mission as academics is to throw light on the subject, not add heat to the already intense polemics.

By Martin A. Lee, Institute for Policy Studies, 5/1/2001

“Honest and idealist … enjoys good food and wine … unprejudiced mind …”

That’s how a 1952 Central Intelligence Agency (CIA) assessment described Nazi ideologue Emil Augsburg, an officer at the infamous Wannsee Institute, the SS think tank involved in planning the Final Solution. Augsburg’s SS unit performed “special duties,” a euphemism for exterminating Jews and other “undesirables” during the Second World War.

Although he was wanted in Poland for war crimes, Augsburg managed to ingratiate himself with the U.S. CIA, which employed him in the late 1940s as an expert on Soviet affairs. Recently released CIA records indicate that Augsburg was among a rogue’s gallery of Nazi war criminals recruited by U.S. intelligence agencies shortly after Germany surrendered to the Allies.

Pried loose by Congress, which passed the Nazi War Crimes Disclosure Act three years ago, a long-hidden trove of once-classified CIA documents confirms one of the worst-kept secrets of the cold war–the CIA’s use of an extensive Nazi spy network to wage a clandestine campaign against the Soviet Union.

The CIA reports show that U.S. officials knew they were subsidizing numerous Third Reich veterans who had committed horrible crimes against humanity, but these atrocities were overlooked as the anti-Communist crusade acquired its own momentum. For Nazis who would otherwise have been charged with war crimes, signing on with American intelligence enabled them to avoid a prison term.

“The real winners of the cold war were Nazi war criminals, many of whom were able to escape justice because the East and West became so rapidly focused after the war on challenging each other,” says Eli Rosenbaum, director of the Justice Department’s Office of Special Investigations and America’s chief Nazi hunter. Rosenbaum serves on a Clinton-appointed Interagency Working Group (IWG) committee of U.S. scholars, public officials, and former intelligence officers who helped prepare the CIA records for declassification.

Many Nazi criminals “received light punishment, no punishment at all, or received compensation because Western spy agencies considered them useful assets in the cold war,” the IWG team stated after releasing 18,000 pages of redacted CIA material. (More installments are pending.)

These are “not just dry historical documents,” insists former congresswoman Elizabeth Holtzman, a member of the panel examining the CIA files. As far as Holtzman is concerned, the CIA papers raise critical questions about American foreign policy and the origins of the cold war.

The decision to recruit Nazi operatives had a negative impact on U.S.-Soviet relations and set the stage for Washington’s tolerance of human rights abuses and other criminal acts in the name of anti-Communism. With that fateful sub-rosa embrace, the die was cast for a litany of antidemocratic CIA interventions around the world.

The Gehlen Org

The key figure on the German side of the CIA-Nazi tryst was General Reinhard Gehlen, who had served as Adolf Hitler’s top anti-Soviet spy. During World War II, Gehlen oversaw all German military-intelligence operations in Eastern Europe and the USSR.

As the war drew to a close, Gehlen surmised that the U.S.-Soviet alliance would soon break down. Realizing that the United States did not have a viable cloak-and-dagger apparatus in Eastern Europe, Gehlen surrendered to the Americans and pitched himself as someone who could make a vital contribution to the forthcoming struggle against the Communists. In addition to sharing his vast espionage archive on the USSR, Gehlen promised that he could resurrect an underground network of battle-hardened, anti-Communist assets who were well placed to wreak havoc throughout the Soviet Union and Eastern Europe.

Although the Yalta Treaty stipulated that the United States must give the Soviets all captured German officers who had been involved in “eastern area activities,” Gehlen was quickly spirited off to Fort Hunt in Virginia. The image he projected during 10 months of negotiations at Fort Hunt was, to use a bit of espionage parlance, a “legend”–one that hinged on Gehlen’s false claim that he was never really a Nazi, but was dedicated, above all, to fighting Communism. Those who bit the bait included future CIA director Allen Dulles, who became Gehlen’s biggest supporter among American policy wonks.

Gehlen returned to West Germany in the summer of 1946 with a mandate to rebuild his espionage organization and resume spying on the East at the behest of American intelligence. The date is significant as it preceded the onset of the cold war, which, according to standard U.S. historical accounts, did not begin until a year later. The early courtship of Gehlen by American intelligence suggests that Washington was in a cold war mode sooner than most people realize. The Gehlen gambit also belies the prevalent Western notion that aggressive Soviet policies were primarily to blame for triggering the cold war.

Based near Munich, Gehlen proceeded to enlist thousands of Gestapo, Wehrmacht, and SS veterans. Even the vilest of the vile–the senior bureaucrats who ran the central administrative apparatus of the Holocaust–were welcome in the “Gehlen Org,” as it was called–including Alois Brunner, Adolf Eichmann’s chief deputy. SS major Emil Augsburg and gestapo captain Klaus Barbie, otherwise known as the “Butcher of Lyon,” were among those who did double duty for Gehlen and U.S. intelligence. “It seems that in the Gehlen headquarters, one SS man paved the way for the next and Himmler’s elite were having happy reunion ceremonies,” the Frankfurter Rundschau reported in the early 1950s.

Bolted lock, stock, and barrel into the CIA, Gehlen’s Nazi-infested spy apparatus functioned as America’s secret eyes and ears in central Europe. The Org would go on to play a major role within NATO, supplying two-thirds of raw intelligence on the Warsaw Pact countries. Under CIA auspices, and later as head of the West German secret service until he retired in 1968, Gehlen exerted considerable influence on U.S. policy toward the Soviet bloc. When U.S. spy chiefs desired an off-the-shelf style of nation tampering, they turned to the readily available Org, which served as a subcontracting syndicate for a series of ill-fated guerrilla air drops behind the Iron Curtain and other harebrained CIA rollback schemes.

Sitting Ducks for Disinformation

It’s long been known that top German scientists were eagerly scooped up by several countries, including the United States, which rushed to claim these high-profile experts as spoils of World War II. Yet all the while the CIA was mum about recruiting Nazi spies. The U.S. government never officially acknowledged its role in launching the Gehlen organization until more than half a century after the fact.

Handling Nazi spies, however, was not the same as employing rocket technicians. One could always tell whether Werner von Braun and his bunch were accomplishing their assignments for NASA and other U.S. agencies. If the rockets didn’t fire properly, then the scientists would be judged accordingly. But how does one determine if a Nazi spy with a dubious past is doing a reliable job?

Third Reich veterans often proved adept at peddling data–much of it false–in return for cash and safety, the IWG panel concluded. Many Nazis played a double game, feeding scuttlebutt to both sides of the East-West conflict and preying upon the mutual suspicions that emerged from the rubble of Hitler’s Germany.

General Gehlen frequently exaggerated the Soviet threat in order to exacerbate tensions between the superpowers. At one point he succeeded in convincing General Lucius Clay, military governor of the U.S. zone of occupation in Germany, that a major Soviet war mobilization had begun in Eastern Europe. This prompted Clay to dash off a frantic, top-secret telegram to Washington in March 1948, warning that war “may come with dramatic suddenness.”

Gehlen’s disinformation strategy was based on a simple premise: the colder the cold war got, the more political space for Hitler’s heirs to maneuver. The Org could only flourish under cold war conditions; as an institution it was therefore committed to perpetuating the Soviet-American conflict.

“The agency loved Gehlen because he fed us what we wanted to hear. We used his stuff constantly, and we fed it to everyone else–the Pentagon, the White House, the newspapers. They loved it, too. But it was hyped-up Russian bogeyman junk, and it did a lot of damage to this country,” a retired CIA official told author Christopher Simpson, who also serves on the IGW review panel and was author of Blowback: America’s Recruitment of Nazis and Its Effects on the Cold War.

Unexpected Consequences

Members of the Gehlen Org were instrumental in helping thousands of fascist fugitives escape via “ratlines” to safe havens abroad–often with a wink and a nod from U.S. intelligence officers. Third Reich expatriates and fascist collaborators subsequently emerged as “security advisors” in several Middle Eastern and Latin American countries, where ultra-right-wing death squads persist as their enduring legacy. Klaus Barbie, for example, assisted a succession of military regimes in Bolivia, where he taught soldiers torture techniques and helped protect the flourishing cocaine trade in the late 1970s and early ’80s.

CIA officials eventually learned that the Nazi old boy network nesting inside the Gehlen Org had an unexpected twist to it. By bankrolling Gehlen, the CIA unknowingly laid itself open to manipulation by a foreign intelligence service that was riddled with Soviet spies. Gehlen’s habit of employing compromised ex-Nazis–and the CIA’s willingness to sanction this practice–enabled the USSR to penetrate West Germany’s secret service by blackmailing numerous agents.

Ironically, some of the men employed by Gehlen would go on to play leading roles in European neofascist organizations that despise the United States. One of the consequences of the CIA’s ghoulish alliance with the Org is evident today in a resurgent fascist movement in Europe that can trace its ideological lineage back to Hitler’s Reich, through Gehlen operatives, who collaborated with U.S. intelligence.

Slow to recognize that their Nazi hired guns would feign an allegiance to the Western alliance as long as they deemed it tactically advantageous, CIA officials invested far too much in Gehlen’s spooky Nazi outfit. “It was a horrendous mistake, morally, politically, and also in very pragmatic intelligence terms,” says American University professor Richard Breitman, chairman of the IWG review panel.

More than just a bungled spy caper, the Gehlen debacle should serve as a cautionary tale at a time when post-cold war triumphalism and arrogant unilateralism are rampant among U.S. officials. If nothing else, it underscores the need for the United States to confront some of its own demons now that unreconstructed cold warriors are again riding top saddle in Washington.

By John Helmer, Blog, 1/25/23

David Ignatius has been a career-long mouthpiece for the US State Department. He has just been called in by the current Secretary of State Antony Blinken to convey an urgent new message to President Vladimir Putin, the Security Council, and the General Staff in Moscow.

For the first time since the special military operation began last year, the war party in Washington is offering terms of concession to Russia’s security objectives explicitly and directly, without the Ukrainians in the way.

The terms Blinken has told Ignatius to print appeared in the January 25 edition of the Washington Post [2]. The paywall can be avoided by reading on. 

The territorial concessions Blinken is tabling include Crimea, the Donbass, and the Zaporozhe, Kherson “land bridge that connects Crimea and Russia”. West of the Dnieper River, north around Kharkov, and south around Odessa and Nikolaev, Blinken has tabled for the first time US acceptance of “a demilitarized status” for the Ukraine. Also, US agreement to restrict the deployment of HIMARS, US and NATO infantry fighting vehicles, and the Abrams and Leopard tanks to a point in western Ukraine from which they can “manoeuvre…as a deterrent against future Russian attacks.”

This is an offer for a tradeoff – partition through a demilitarized zone (DMZ) in the east of the Ukraine in exchange for a halt to the planned Russian offensive destroying the fortifications, rail hubs, troop cantonments, and airfields in the west, between the Polish and Romanian borders, Kiev and Lvov, and an outcome Blinken proposes for both sides to call “a just and durable peace that upholds Ukraine’s territorial integrity”.

Also in the proposed Blinken deal there is the offer of a direct US-Russian agreement on “an eventual postwar military balance”; “no World War III”; and no Ukrainian membership of NATO with “security guarantees similar to NATO’s Article 5.”

Blinken has also told the Washington Post to announce the US will respect “Putin’s tripwire for nuclear escalation”, and accept the Russian “reserve force includ[ing] strategic bombers, certain precision-guided weapons and, of course, tactical and strategic nuclear weapons.”

President Putin has offered a hint of the Russian reply he discussed with the Stavka [3] and the Security Council [4] last week. 

Putin told a meeting with university students on Wednesday, hours after Blinken’s publication.  “I think that people like you,” the president said [5],   “most clearly and most accurately understand the need for what Russia is now doing to support our citizens in these territories, including Lugansk, Donetsk, the Donbass area as a whole, and Kherson and Zaporozhye. The goal, as I have explained many times, is primarily to protect the people and Russia from the threats that they are trying to create for us in our own historical territories that are adjacent to us. We cannot allow this. So, it is extremely important when young people like you defend the interests of their small and large Motherland with arms in their hands and do so consciously.”

Read on, very carefully, understanding that nothing a US official says, least of all through the mouths of Blinken, Ignatius, and the Washington Post is trusted by the Russians; and understanding that what Putin and the Stavka say they mean by Russia’s “adjacent historical territories” and the “small and large Motherland” has been quite clear. 

Follow what Blinken told Ignatius to print, before Putin issued his reply. The propaganda terms have been highlighted in bold to mean the opposite — the public positions from which Blinken is trying to retreat and keep face.

The Biden administration, convinced that Vladimir Putin has failed in his attempt to erase Ukraine, has begun planning for an eventual postwar military balance that will help Kyiv deter any repetition of Russia’s brutal invasion.

Secretary of State Antony Blinken outlined his strategy for the Ukrainian endgame and postwar deterrence during an interview on Monday at the State Department. The conversation offered an unusual exploration of some of the trickiest issues surrounding resolution of a Ukraine conflict that has threatened the global order.

Blinken explicitly commended Germany’s military backing for Ukraine at a time when Berlin is getting hammered by some other NATO allies for not providing Leopard tanks quickly to Kyiv. “Nobody would have predicted the extent of Germany’s military support” when the war began, Blinken said. “This is a sea change we should recognize.”

He also underlined President Biden’s determination to avoid direct military conflict with Russia, even as U.S. weapons help pulverize Putin’s invasion force. “Biden has always been emphatic that one of his requirements in Ukraine is that there be no World War III,” Blinken said.

Russia’s colossal failure to achieve its military goals, Blinken believes, should now spur the United States and its allies to begin thinking about the shape of postwar Ukraine — and how to create a just and durable peace that upholds Ukraine’s territorial integrity and allows it to deter and, if necessary, defend against any future aggression. In other words, Russia should not be able to rest, regroup and reattack.

Blinken’s deterrence framework is somewhat different from last year’s discussions with Kyiv about security guarantees similar to NATO’s Article 5. Rather than such a formal treaty pledge, some U.S. officials increasingly believe the key is to give Ukraine the tools it needs to defend itself. Security will be ensured by potent weapons systems — especially armor and air defense — along with a strong, noncorrupt economy and membership in the European Union.

The Pentagon’s current stress on providing Kyiv with weapons and training for maneuver warfare reflects this long-term goal of deterrence. “The importance of maneuver weapons isn’t just to give Ukraine strength now to regain territory but as a deterrent against future Russian attacks,” explained a State Department official familiar with Blinken’s thinking. “Maneuver is the future.”

The conversation with Blinken offered some hints about the intense discussions that have gone on for months within the administration about how the war in Ukraine can be ended and future peace maintained. The administration’s standard formula is that all decisions must ultimately be made by Ukraine, and Blinken reiterated that line. He also backs Ukraine’s desire for significant battlefield gains this year. But the State Department, Pentagon and National Security Council are also thinking ahead.

Crimea is a particular point of discussion. There is a widespread view in Washington and Kyiv that regaining Crimea by military force may be impossible. Any Ukrainian military advances this year in Zaporizhzhia oblast, the land bridge that connects Crimea and Russia, could threaten Russian control. But an all-out Ukrainian campaign to seize the Crimean Peninsula is unrealistic, many U.S. and Ukrainian officials believe. That’s partly because Putin has indicated that an assault on Crimea would be a tripwire for nuclear escalation.

The administration shares Ukraine’s insistence that Crimea, which was seized by Russia in 2014, must eventually be returned. But in the short run, what’s crucial for Kyiv is that Crimea no longer serve as a base for attacks against Ukraine. One formula that interests me would be a demilitarized status, with questions of final political control deferred. Ukrainian officials told me last year that they had discussed such possibilities with the administration.

As Blinken weighs options in Ukraine, he has been less worried about escalation risks than some observers. That’s partly because he believes Russia is checked by NATO’s overwhelming power. “Putin continues to hold some things in reserve because of his misplaced fear that NATO might attack Russia,” explained the official familiar with Blinken’s thinking. This Russian reserve force includes strategic bombers, certain precision-guided weapons and, of course, tactical and strategic nuclear weapons.

Blinken’s refusal to criticize Germany on the issue of releasing Leopard tanks illustrates what has been more than a year of alliance management to keep the pro-Ukraine coalition from fracturing. Blinken has logged hundreds of hours — on the phone, in video meetings and in trips abroad — to keep this coalition intact.

This cohesiveness will become even more important as the Ukraine war moves toward an endgame. This year, Ukraine and its allies will keep fighting to expel Russian invaders. But as in the final years of World War II, planning has already begun for the postwar order — and construction of a system of military and political alliances that can restore and maintain the peace that Russia shattered.

Highlighted in bold type in Blinken’s text is the phrase, “a strong, noncorrupt economy and membership in the European Union”. This is Blinken’s message to the Kremlin that the US wants to preserve Ukraine’s agricultural economy, its grain export ports, and the trade terms agreed with the European Union before the war. It is also Blinken’s acknowledgement [6] that Vladimir Zelensky’s move early this week to force the resignations and dismissals of senior officials means the US is calling the shots in Kiev and Lvov.

Nothing is revealed in Blinken’s offer “for the Ukrainian endgame and postwar deterrence” of how, and who on the US and Russian sides, to negotiate directly on the particulars. Instead, there is the hint that if the Russians agree to trust the Americans and delay the planned offensive, and if they allow the rail lines to remain open between Poland and Lvov, the Americans will reciprocate by keeping the Abrams and Leopard tank deliveries in verifiable laagers west of Kiev.

As Russian officials have been making clear for months, no US terms of agreement can be trusted on paper, and nothing at all which Blinken says. A well-informed independent military analyst comments on the Russian options: “The best response is continue the special military operation, destroy the Ukrainian military in their present pockets, complete de-electrification and destruction of the logistics, then either take everything east of the Dnieper or establish a de facto DMZ, including Kharkov. Blinken and the others cannot be trusted to follow through if they think they have a chance to stall for time. The Ukrainian Nazis are conspicuously absent from this proposal – and they remain to be dealt with. We know there will be no end to trouble if the Russian de-nazification objective against them stops now.”