In Background, Feature Articles, Ukraine

Interview with David Kerans, by Victor Olevich for Russia Insider, April 20, 2015

Victor Olevich: Western strategists started talking about the idea of igniting the Ukrainian fuse shortly after Russia acted to prevent Washington’s plans to launch military action against Damascus in the fall of 2013. What role did growing Russian engagement in the Middle East, the Snowden Affair and Moscow’s willingness to stand up to the United States on the international arena play in America’s decision to act decisively against Russian interests in Kiev?

David Kerans

David Kerans

David Kerans: The catalysts to U.S. meddling in Ukraine that you mention are plausible, but to different degrees. I would say that Russia’s granting of temporary political asylum to Edward Snowden was less significant than Moscow’s derailing of U.S. belligerence towards both the Assad regime in Syria and Iran. Prime Minister Lavrov’s orchestration of an agreement for the Assad regime to rid itself of chemical weapons minimized U.S. influence on the Syrian conflict. Likewise, Russia’s insistence on arranging monitoring programs for Iran’s nuclear energy program reduced America’s pressure on Iran.

Russia’s resurgent potency in cases like these implies a more challenging environment for the U.S. on the global stage going forward, so we can safely assume that by the late summer of 2013, Washington was ready to bait Russia, if any opportunities might arise. It is important to take note of a 2013 op-ed from the President of the National Endowment for Democracy, Carl Gershman, exhorting the West to put heavy pressure on Putin, to undermine Russia’s interests in former Soviet republics like Ukraine in particular.

But the National Endowment for Democracy (which the U.S. Congress funds) had been doing this sort of work for many years – since the Orange Revolution of 2004, at least – by funding NGOs that furthered America’s political interests in Ukraine.

I think we can agree that America’s enthusiasm for the Maidan movement is grounded in antagonism towards Russia, not any deep-seated concern for the people of Ukraine. Ukraine has never played any independent role in U.S. political discourse. It is simply a lever in the struggle to undermine Russia. The deeper question is why the U.S. has continued to target Russia beyond the West’s victory in the Cold War and the collapse of the Soviet Union. And here we have to speak openly about the corruption of the U.S. political and economic system over the last few decades, and how it has hijacked foreign policy to serve the interests of a narrow elite, not the nation as a whole.

Corruption has blossomed exponentially in the U.S. over the last generation. For the most part, we are talking about “corruption, American-style”, as economist Joseph Stiglitz called it. In contrast to most other countries, where vultures pay off officials to look the other way, powerful people in America find ways to suborn legislatures into arranging laws and regulations to cater to their interests. For example. the financial crisis of 2008 stemmed largely from the manipulation and twisting of regulations to allow financial elites to enrich themselves beyond all measure – and crash the economy in the process.

Corruption has also flourished in the U.S. defense sector, but here, I’m afraid, it has been more primitive. Consider first the mushrooming of military spending. The wars in Afghanistan and Iraq served as an excuse to inflate the defense budget by 44 percent over the first decade of the century, adjusted for inflation. The base defense budget for the decade was $5.9 trillion. Meanwhile, monitoring and control of these funds are shamefully weak. Already in 2001, then Secretary of Defense Donald Rumsfeld admitted that the Pentagon could not track $2.3 trillion in expenditures made over many previous years. And as budget allocations increased thanks to the wars, waste and misappropriation seem to have accelerated. Thus, we know that in 2005 both the Government Accountability Office (GAO) and Office of Management and Budget singled out the Pentagon for being particularly lax in managing its money. And figures made available in 2009 showed an astonishing $300 billion in research cost overruns for 96 ongoing weapons programs. Further, the scale of the overruns had jumped sharply, from an average of 27 percent in 2001 to 42 percent in 2008.

The Pentagon’s response to evident mismanagement on an enormous scale was telling: the Department of Defense reduced audits of its contracts with equipment and service providers, inviting ever more rampant abuse, in the form of overpricing-plus-kickback schemes. By 2010, the value of non-competitively sourced contracts had nearly tripled from 2001, to $140 billion. The percentage of non-competitive contracts in the military sector finds no parallel elsewhere in U.S. government. And, not surprisingly, the officials dispensing these contracts reap rewards on leaving government service for private industry. The number of Pentagon functionaries leaving through the “revolving door” has doubled since the 1990s.

Congress is aware of the escalating waste and malfeasance in the defense sector, and it could take steps to clean the sector up. A model is at hand, namely the experience of the U.S. Senate Special Committee to Investigate the National Defense Program, popularly known as the Truman Committee, which functioned from 1941 to 1948. the Truman Committee genuinely rooted out corruption and war profiteering, and during the mid-2000s, a number of Senators agitated openly for establishment of a similar effort. But the Bush administration actively resisted this proposal, and it got little support in Congress. This raises another question, of course: what is to explain Congress’s disinterest in monitoring the use of the funds it sends to the defense sector? The answer is not merely payoffs, campaign donations, and revolving door employment offers, but also the structural dependency of the economies of a large minority of congressional districts on military projects. As researcher Rebecca Thorpe outlines in a recent book, The American Warfare State, the U.S. made a conscious effort from the end of the Second World War to broaden the geographical apportionment of defense sector contracts. In consequence, large numbers of districts depend heavily to this day on the defense sector. A large minority of congressmen, therefore, are predisposed to vote up defense allocations at every opportunity.

So the upshot is that prodigious amounts of defense sector money are sloshing around Washington, which would suffice all by itself to tilt America’s foreign policy posture towards confrontation with real or imagined enemies. Combine this with a large and intractable constituency in Congress for ever increasing military spending and you get a system geared to projecting power beyond its borders. It is a system which does not serve the needs of the American people or the U.S. economy. It is also a system that needs enemies, and Russia is a primary legacy candidate.

Victor Olevich: The coup in Kiev orchestrated a year ago with the assistance of Western powers was made possible, in part, by decades’ long engagement with Ukrainian political and business elite, which became increasingly dependent on its American and European partners. How was Washington able to outmaneuver Russia in Ukraine, which only thirty years ago boasted the title of the “second Soviet republic”?

David Kerans: I sense that Western facilitation of the Maidan movement had more to do with sponsorship of NGOs than with courtship of Ukrainian political and business elites. The National Endowment for Democracy that I mentioned above has been very active in building NGO networks in Ukraine since the turn of the century, and these networks did a lot to prepare Ukrainian society for a radical break with Russia. I am not saying that the West ignored Ukrainian politicians and businessmen. But I don’t know if the West outperformed Russia with respect to Ukrainian elites. Russia obviously built strong ties with many industrialists and politicians. But did Russia articulate an approach towards Ukrainian society, in the sense of building some vision of an improving future for Ukraine? If so, not sufficiently.

Russian policy towards Ukrainian society was complacent. It is true that Russia was a primary beacon for Ukrainian labor, and this is important. According to research in 2007, for instance, 40 percent of young Ukrainians wanted to leave their country for employment. But Ukrainians looking for work abroad did not rely only on Russia. Russia’s labor market by itself did not psychologically tie Ukrainian society to Russia. The West, for its part, has powerful ammunition to entrance the Ukrainian into antagonism with Russia: the higher living standards of the EU and the U.S.A. Ukrainians should think twice before assuming they will live just like Germany in the near future. But not everyone thinks twice. Not everyone takes the time to weigh up the burdens and risks of reorienting the economy away from Russia under terms Western financial institutions will more or less dictate.

Victor Olevich: In recent years, Russia has taken a number of steps as part of a “sovereignization” initiative to curtail potential Western influence on government officials and decision makers. Key officials are no longer allowed to purchase or retain real estate and other property abroad. What other steps could be effective in minimizing Western influence on Russia’s domestic political process?

David Kerans: The so-called sovereignization measures are fairly bold as they are. I think if the state could conveniently take stronger measures, it would already have done so. Actually, I assume stronger measures are in motion, but behind the scenes, in the form of surveillance and privately expressed pressure on highly-placed officials.

Victor Olevich: Why have European powers taken such an active interest in destabilizing Ukraine, despite potential threats to their own security from an armed conflict essentially raging on their border?

David Kerans: The European powers do have some incentive to destabilize Ukraine, notwithstanding the obvious risk of disorder and war in Ukraine bringing adverse consequences to Europe. Crudely put, European capital stands to profit from wrenching Ukraine completely out of Russia’s orbit. I won’t be so old fashioned as to assert that European capital welcomes an influx of Ukrainian labor, so as to drive down wages and dilute the strength of Europe’s trade unions. The calculations are more subtle than that. First, the financial sector wants the Ukrainian government as a captive customer. And European industry wants the Ukrainian market. It wants a full integration of Ukraine into the commercial and legal codes of the EU – and that is not a bad thing, in that via these codes, the EU has imposed all kinds of environmental and labor protections on its member states and trading partners. If the Ukrainian economy could get back on its feet, therefore, Europe would eventually profit.

Notwithstanding the long-term economic incentives at play, however, Europe is still too closely tied to Uncle Sam to set its own geopolitical course — even in regard to Ukraine, which is so close to Europe and so far from America. Atlantic solidarity is alive and well, and if the U.S. wants to amplify the pressure on Russia via Ukraine, it is not easy for any major European leader to steer a more sober and constructive course. As soon as eastern Ukraine put up stiff resistance to the Maidan regime, the risks of Washington’s and Kiev’s belligerent approach came into clear focus, and the major European powers have openly encouraged negotiations between Kiev and the east. This has kept a lid on Kiev’s aggression in the east, and now Chancellor Merkel and others are registering strong opposition to proposals afoot in Washington to supply the Poroshenko government with lethal weapons.

The question now is whether pressure to deescalate confrontation with Russia will build from the European left and drive a real wedge between Europe and the U.S. I cannot say I am optimistic, but perhaps I am overestimating America’s hold on European public opinion.

Victor Olevich: During the Cold War, the Soviet Union pursued a foreign policy goal of driving the United States and its Western European allies apart. These attempts at scuttling the transatlantic relationship had very limited success. A similar policy pursued by Russia today is facing the same difficulties. What bonds between the U.S. and Europe are the hardest to break? Economic? Historic? Civilizational?

David Kerans: At the outset of the Cold War, the U.S. had serious advantages over the USSR as regards the shaping of European political opinion. The U.S. economy towered over the rest of the world, and Stalinism’s betrayal of the humanitarian dimensions of the Russian Revolution had discredited the Soviet Union even among much of the European left. Moreover, the remarkable achievements of the Roosevelt administration from 1933 to 1945 deprived the Soviets of their most important trump card: Roosevelt’s New Deal softened capitalism in the U.S. The social safety nets and governmental controls over finance and industry that Roosevelt introduced served to protect society from a rerun of the Great Depression. With the New Deal in place, the American economic system was no longer a plausible bogey man for Soviet agitation. The Great Depression wasn’t coming back. So it would not be a stretch to argue that the durability of the New Deal was what won the Cold War for the West.

Similarly, the U.S.’s willful dismantling of its New Deal structures over the last three decades has opened cracks in the Transatlantic alliance. Europeans feel the threat from neo-liberal economic policy acutely, and their governments remain much more accountable to public opinion than does the U.S. Congress and presidency. Social democracy has remained a real force in Europe, and complimentary movements like the Green parties reject the U.S. economic model explicitly. Beyond that, America’s heavy handedness on the international stage has become increasingly insufferable to wide swathes of the European public. Consider the recent record: wars of aggression in the Middle East, torture programs, NSA mass surveillance, and the financial crisis of 2008. America is digging a deep hole for its reputation, especially now since the Obama administration, the presumed antidote to George W. Bush, has been almost completely inefficacious in correcting these transgressions.

So the relationship between Europe and the U.S. is eroding without any Russian involvement. The problem for Russia is that European consciousness and policy are not diverging quickly enough from the Transatlantic alliance. If they were, the Ukraine would not have endured the turmoil of the last year. Can Russia do anything to speed the process along? Probably not.

Victor Olevich: What role has been assigned to Eastern European nations in American and NATO strategy against Russia?

David Kerans: By now the West has achieved most of its initial post-Cold War goals in Eastern Europe, by absorbing a raft of countries into NATO, and gradually integrating the region into the EU. Of course, the proximity of NATO weapons to Russia’s border exerts some latent pressure on Russia, even if military strikes (let alone war) are never more than the most remote possibility. Both sides know that Eastern Europe is relevant much more in diplomatic and economic terms than in military terms. The West wants to be able to count on Eastern European support in the UN, in the Council of Europe, and in other ad hoc forums and negotiations. And, of course, it wants Eastern European markets for itself, which means weaning them away from Russia as much as possible.

Russia still has plenty of economic influence in Eastern Europe, but the West is trying to undermine that influence wherever it can, often in behind the scenes negotiations. Instructive examples of Western leverage on Eastern European governments surfaced in U.S. Senator Chris Murphy’s account of his diplomatic mission to the Balkans last fall. Murphy was not traveling simply as a Senator, but as Chairman of the Europe Subcommittee of the Senate Foreign Relations Committee. He was speaking for Washington, not for himself, in other words. And he says he warned Prime Minister Alexander Vucic of Serbia that entering into formal military and energy agreements with Russia (such as the South Stream gas pipeline) could jeopardize Serbia’s prospects of entering the EU. His reasoning was legalistic – namely, he advised Vucic that formal agreements with Russia might violate some EU laws. But the message was loaded with power politics: the U.S. doesn’t want Serbia strengthening ties with Russia, and if Serbia does not comply, the U.S. is ready to bring pressure on Serbia via the EU.

Meanwhile, Russia is playing its own cards in the region, and some of them are quite strong. President Putin’s visit to Hungary in February is illustrative. Hungary is a member of NATO and the EU, but it sees good reasons to cooperate closely with Russia, notwithstanding the friction this might cause it with its formal allies in the West. The Russia-Hungary talks went well beyond fields of ongoing cooperation, such as nuclear energy and natural gas. Thus, Russia is facilitating Hungary’s resurrection of its national airline, Malev, which collapsed in bankruptcy in 2012. And Russia is prepared to help Hungary’s agricultural sector, which has taken large losses from the combination of EU sanctions on exports to Russia and Russian countermeasures to those sanctions. The EU has programs to compensate exporters for losses related to the sanctions, but the compensation has been far from sufficient. So Putin discussed lifting the Russian countermeasures and opening the door to Hungarian imports. Further, Putin negotiated terms to provide Hungary with a number of small or medium-sized Russian-made non-nuclear power plants.

Even where Russia makes progress in Eastern Europe, however, the West will try to curb this progress with countermeasures of its own. In the case of an EU state like Hungary, EU levers of control can thwart important deals. For example, in early March, a plenary session of EU commissioners found a legal argument to veto Hungary’s most important project with Russia, the expansion of a large nuclear power facility in the town of Paks. (Euratom, the EU’s nuclear power regulatory arm, rejected Hungary’s plan to import nuclear fuel exclusively from Russia). We have to assume that many other duels are playing out behind the scenes nowadays as the West tries to undermine Russian influence in Eastern Europe. Russia can be an important partner to a number of countries in the region and is even finding ways to extend its influence in some places. But it is expending quite a lot of energy in this effort.

Victor Olevich: Moscow has been able to make some inroads on the governments in Hungary and Greece, nations that have suffered under the yoke of EU economic policy dictated by Brussels. What further steps could Russia take to gain more leverage with political elites in Eastern and Southern Europe?

David Kerans: As we just discussed in relation to Hungary and Serbia, the EU casts a dark shadow over Russia’s relations with Eastern Europe. EU member states like Hungary automatically concede some of their sovereignty to EU regulatory bodies and cannot always deal freely with Russia. Non-member states like Serbia, for their part, have to think twice before running afoul of EU policy when dealing with Russia, unless they are willing to abandon aspirations of joining the EU. Obviously, contemporary Russia has nothing like the platform the USSR had, in terms of tempting other nations with the vision of a sharply different economic system and social order. Russia’s critical role as a provider of energy resources does give it a beachhead in negotiating for an extension of its influence in Eastern Europe. But it must rely on tactical opportunities to make progress. It has to capitalize on local crises in individual countries, by offering to fill needs Western powers are not satisfying.

The wild card here, of course, is the prospect of the EU crumbling on the peripheries of Greece, Spain, Ireland, etc. I rate that prospect as remote, but serious analysts have sketched out paths that lead that way – should Greece abandon the Euro currency and set a variety of consequences in motion, for example. The EU is not invulnerable, but I won’t hazard a mature analysis of its vulnerability here.

Victor Olevich: The Minsk Agreements have resulted in a temporary cessation of hostilities between forces loyal to the regime in Kiev and the rebels in Donbass. Yet, few observers believe the ceasefire will last. Why was the American side absent at the Minsk talks? Why is Washington pushing the government in Kiev to take a harder line against Russia, even after Ukrainian forces have suffered massive defeat at the front lines?

David Kerans:  The prevailing skepticism regarding the durability of the cease fire makes sense to me, largely because of the cynicism and aggressiveness of the U.S. Earlier, I registered my conviction that the U.S. does not have the interests of Ukraine in mind in this conflict, and I would add here that Washington has few scruples about the blood being spilled. So the U.S. is ready to encourage Kiev to intensify the fighting. At the same time, and this is important, Washington will not pressure Ukraine into significantly harsher military action if the resistance in eastern Ukraine continues to strengthen. The biggest players on the American side (in this case, the Obama administration, the State Department, and the Pentagon) do have something to lose. They will lose some of their authority at home and on the international stage if they facilitate heavy bloodshed in the conflict but do not break the resistance in eastern Ukraine. It is no wonder, therefore, that Obama has stepped away from proposals from prominent congressmen to provide the Ukrainian army with lethal weapons.

The upshot of this is that the people of eastern Ukraine can affect U.S. policy in the region by standing firm against Maidan. And if U.S. pressure on Kiev slackens, the chances for the east to secure semi-autonomous status in a Ukrainian federation will rise sharply. Whether the conflict in Ukraine resolves in establishment of a stable federation or something much worse, I am not optimistic about U.S. attitudes towards President Putin and Russia. The coarsening of political culture in the U.S. has infected foreign policy as well as domestic policy, and the habit of vilifying opponents is an important feature of the contemporary political culture. In 2008, then-candidate for president Obama reminded Americans of how much U.S. diplomacy had changed – for the worse – when he chastised the Bush administration’s refusal to negotiate in any way with regimes it demonized. Obama said he would keep lines of communication open to anyone. He may have kept his word, in the sense that he will at least consider picking up the phone to speak with leaders from any nation. But throughout Washington, the urge to vilify enemies remains as strong as ever. Russia is now being typecast as an enemy, and so it is not surprising that the U.S. did not participate in the Minsk negotiations.

Victor Olevich is a Russian-American political analyst based in Moscow. His articles have appeared in Izvestia, Planeta, Komsomolskaya Pravda and other major Russian- and English-language newspapers and magazines. He is a frequent guest on Russian political talk shows.

David Kerans is a specialist in Russian history and the author of “Mind and Labor on the Farm in Black-Earth Russia, 1861-1914” (Central European University Press, 2011). He served as a political observer for the Washington bureau of the ‘Voice of Russia’ in 2013-2014.


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