tv Helsinki Commission Holds Discussion on Russian Corruption CSPAN July 21, 2017 3:05am-4:35am EDT
as the helsinki commission hosted this event. thank you for coming, welcome to today's briefing in russia. iem for a policy advisor responsible for economic and environmental issues at the helsinki commission. combating corruption is an imperative of the organization for security and cooperation. corruption takes many forms but the one that concerns us today is nowhere is the idea of corruption a system of government more fully realized than in the russian federation.
russia has been on a steady path for the authoritarianism ever since putin entered the scene a teen years ago. since then a new generation has entered adulthood, one that does not remember a russia before the enputin. as these young men and women enteentered the workforce to confront institutions in both the public and private sectors that have been completely assimilated into the architecture and are left with a choice to either be co-opted into this system or ejected from it. while putin is a central figure responsible for russia's descent into the rule, he is not the only one. the strawmen of the kremlin is surrounded by a loyal group who aided anaid and abet the presid, complicit in the robbery of the russian people in the sad state
of russian democracy. moreover, they enable the kremlin to export its brand into neighboring countries, transforming corruption into a potent geostrategic weapon. our briefing today will examine the dynamics of the closest circle in order to establish who most strengthens hand and if it's from his rule. additionally, briefers analyze how these cronies advanced putin's goals and interests. we are grateful to have such distinguished panelists with us here today. i look forward to hearing your thoughts on this important issue. first, we have brian whitmore who joins us all the way from prague. he is a senior russian analyst and also writes the power vertical blog.
prior to joining in 2007, he worked eight years for the "boston globe." first and the globe moscow bureau and later as a central and eastern europe correspondent based in prague. following brian, we have delia. and i understand your wife just had a baby, so thank you so very much for being with us here today rather than at home. ' understand what a sacrifice you are making to talk about this important topic. who joins us from the not the russian federation but the free russia foundation, where she is a research expert and an academy associate. in addition, he has free speech llc which runs a project on the export of corrosive practices from post-soviet states to the west.
we will then hear from the doctor was a senior fellow at the atlantic council and a professor at georgetown university. a leading specialist on economic policy in russia, ukraine and eastern europe and worked as an economic adviser to the president of ukraine from 1994 to 1997. following, we have marios -- help me out here, who joins us even further away than prague, a senior analyst at the institute for public an analysts and formr fellow at the hudson institute. a highly regarded journalist from lithuania comey has been reporting on russian domestic and foreign policy for over two decades. and finally, we will hear from
ambassador daniel fried at the atlantic council. one of the u.s. government's foremost experts on russia and the former soviet spear. his career in the service stand over four decades and seven presidencies. wow. ending earlier this year when he retired from his post at the state department coordinator on sanctions policy. very relevant for this discussion. we will conclude with a q&a session. i would like now to give the floor to the first panelist, brian whitmore, who will provide us with an overview of the russian political system. the floor is yours. >> should i start again or did everybody hear me. i can't say how delighted i am that this issue is finally get
attention. we've been talking the last few years about the information and seminars. i am enjoying all of them but harping on the issue that we need to broaden the aperture of office because the information is just one of the things the kremlin has organized and in my opinion, the most important thing that weaponize is his corruption. i will start by saying i think it is a bit misleading to characterize as simply cryptography because this implies the regime's primary aim is the enrichment of the elite and i don't think this is the case. russian corruption has been instrumentalist here at home and it's been weaponize abroad. the domestic role of corruption is to control the ob and maintain its loyalty. they monetize their positions so
long as they remain politically loyal and politically useful to the putin regime. only those who proved disloyal or not useful are ever prosecuted. when there's a corruption case, the first question i ask myself is not that he or she do what he or she is accused of giving because of course they did. but who did they cross politically, what happened? that's always the first question to ask in a corruption case in this regime. internationally, it's been weaponize and used as a tool of statecraft. the kremlin seeks to capture deletes and establish networks of influence abroad by ensnaring officials in corrupt deals and i'm not going to get into the hills because house because i wt brief to go into the details later. moreover, the russian state has
these ideological elements to it. it's what i call the two russians. sometimes the ideological russia do in the work hand in glove and by ideological russia i mean the project to essentially make russia a great again to bring it back up off of its means to restore it to what it believes to be its rightful place as a world power. sometimes corruption and ideology go hand in hand but at other times they are in tension with each other and operate at cross purposes. closely related is the weaponization of the russia organized crime which is also used as a tool of statecraft. but just as it is incorrect to classify russia, it's also incorrect to classify it as a
mafia state as many do. more accurately, as my friend and colleague wrote in a recent report on the council for foreign relations, russia is a state with a nationalized mafia. the securities upgrade closely with organized crime and often precipitating their activities as the result of security services they are able to establish the so-called black account which has untraceable cash that can be used for all sorts of off the books operations and influence operations abroad and i could go into a little more detail about this but i will keep my opening remarks brief. they are often pressed into service to perform tasks the kremlin wants to keep its fingerprints off which is smuggling weapons in, fascinating troublesome dissidents in london and so on and so forth.
it's very important to understand. in conclusion i will say one of my favorite talking points is the headline of a piece i passed out to the other panelists here. corruption is the new communism. the kremlin's black cash is the new red menace. it has to be looked at that way. corruption is spreading from moscow and spreading for the tool of influence but if you think about this, communism despite the fault, they did attempt to appeal to universal human ideals and aspirations although in practice it often worked against these. corruption on the other hand appeals to the most universal and basic human instincts.
sadly, it's often in sync with human nature which makes the new red menace potentially more dangerous and insidious than the old one. finally, corruption today is not just a matter of good governance anymore. it's not something we want to fight because we want to be honest and good, although we do, but corruption is a national security issue of the highest order needs to be treated as such. >> thank you very much brian for that fascinating overview, as well as these sorts of elaborations on how the regime is structured, that's not simply ruled by thieves but it has these ideological components to it. i read your article, corruption is the new communism today and it's an incredible piece. i think framing the issue in those terms is precisely the way u.s. foreign policy needs to approach this topic. with that i can the floor over.
>> thank you for coming. as brian correctly said, finally this topic is out in the open, everyone is discussing it and we can go from not discussing it to a term that i recently heard. [inaudible] everyone understands the problem but no one knows how to handle this unbelievable flow of information and what to actually do with that. i've been studying this topic since 2011 and i'm been a junior expert with other people and senior experts on russia and europe warning about national security implications of corruption for the west coming from its base and even though before, aggression against ukraine happened, i predicted in 2015 that especially the russians are taking their corrosion practices and corruption to
europe and the u.s. with at least 25 corrupt channels including lobbying media and the nation is influencing discourse and so forth. in this briefing, i want to put forward a third warning and prediction. i think the west, especially the u.s. as leader of the democratic world has been so negligent of post-soviet corruption and obstruction of democratic values under boudin. even under the best case scenario, the russian will not be eradicated -- russian corruption will not be eradicated in the near future. we must try to contain negative global impact and try
preserving its own democratic institutions. in a nutshell, this problem is no longer just about russia or kosovo, it's really about the u.s. and the west. in my research paper that slated to come out in the next two months called. [inaudible] and their influence in the west. i really want to emphasize the nonstate actors were supposedly nonstate actors. the biggest difference with soviet union is not not only there is this business interaction between supposedly private sector and in the west, but the nature of transactions has changed considerably and there is little understanding, in my view, in the west despite ample evidence that from soviet times we now see a
fusion of three different worlds and values coming from the base in one elite so in soviet times we used to have three different worlds. communist party, kgb and different security services in law-enforcement and actual organized crime. they were antagonistic and conflicting with each other especially in some important points, but now i argue that in russia and surrounding kosovo and has asked on, they took the worst of the most practical values and business practices from each of the free world and brought them into one comprehensive ideology and tactic and my friends, special investigative
journalists have been showing that in st. petersburg in 1990s vladimir putin has already tested all of this free world practices and he came to power with the team which has been experienced and he has networks from all those worlds. i think one of the important conclusions of that study and other studies we do in free russia foundation is that there are no systemic or any kind of liberals in russian government. it's a big myth which is still somehow spread in europe by countries like finland or germany that still cooperate with russia on many business levels. they have been implicated in those years under vladimir putin or caught together with vladimir putin. i would argue that i highly
recommend this study and it's emblematic that the military raises this question that there's russian style corruption is the style of big businesses in russia. it became a common feature and they don't want to implement any measures to protect businesses. previously last year, in the report for free russia foundation i also argue that the term oligarch is no longer meaningful. in fact, it's commonly widespread that it's some sort of private businessmen exist in russia. they don't. they been hijacked by criminal groups. business in russia really means state favors, tax
breaks, sponsors from kremlin and the oligarchs are really cash handlers of cash flows allowed by vladimir putin and kremlin has special compromising material or other leverage. even these previously considered oligarchs live in the west and appeared to be a western businessmen and have lifestyle like western businessman but they are vladimir putin handlers because their bases in russia but they want to spend money and enjoy best of two worlds. this brings me to my second major point. it's no longer case. [inaudible] without exaggeration i believe their strong indicators that as the 1930s, the very existence of liberal captives
so with ideals of good government are in jeopardy due to the rise of capitalism in post-soviet space china and other world. i call this g13 versus g7 and g20. g7 itself would be not seen as that much about western liberalism. if you look at countries like italy et cetera. we see that most developing countries seem to be learning business practices and capitalism based on the rule of law and proper separations of power is no longer an ideal for most society the way people have adapted sophisticated and seemingly comfortable and acceptable forms of state-level corruption. corruption is a new accepted norm on many levels in society both in the west and
post-soviet space and elsewhere. together with the pre-russia foundation and group of 2000 activists around the world, we are preparing research project called undermine this which you mentioned in my introduction. i think this is a new term that we believe is more relevant than oligarchs and other nonstate actors. it shows we have a group of people and nonstate actors connected with the rees regimes that endure illicit profits in russia and spend them in the west. i believe these individuals and corporations are more sophisticated financial and high-tech to mask their own interest. there are examples that i will go into a few in the session. what can we do and i know i have one minute to discuss this. i think we need a new system
against russia that will enforce existing laws to create more up-to-date laws that deal with international corruption, especially in regard to companies and offshore jurisdiction that are anonymous. there's many anticorruption groups that are now discussing this. i also think we need to build awareness among the public that will create this understanding, acknowledgment in the minds of people about the link between trans- national topography. so far i've seen very few actual examples of that. people in london now finally realize it's in their own city especially students and people because they are raising real estate prices. we need more examples like this. i will finish my presentation
with a warning that the price we pay today in the west to stop this is considerable we have to understand there will be a price. we need too, especially in the business sector we need to do containment. we need to really prevent some of the cash flow but also many different levels of subversion and corruption need to be eliminated. this is smaller than the one we are likely to face to pay tomorrow or the day after tomorrow. >> thank you very much. i think your, that oligarch is no longer meaningful is extremely important point to hit home especially given that steven colbert recently went to russia and did a little piece on a day with an oligarch. these oligarchs are really oligarchs. they are cronies of vladimir putin. it's certainly not like it was in ukraine where the oligarchs have a competitive political environment. they're not competing with one another, they're just working for vladimir putin.
it also like to backup your comments on the work of the cryptography and give a shout out to chil charles davidson pretty was a panelist that recently did on asset recovery and he talked about the corruption services industry in the west where lawyers and bankers are ready and willing and advertise to take these funds and hide them in the west. as far as you say so negligent and appeasing, yes very much so. i will handed over to doctor oswald. >> thank you very much for this invitation, and indeed i think the cryptography is a very important topic. when i worked as an economic advisor to the government, my
vision of corruption was like this. a pyramid, little at the top and a lot of the bottom. then, change like this, the. amid was inverted, lots of corruption at the top and little at the bottom. it works much better now than it used to but now it looks like this. it has become an atomic mushroom with all the corruption at the top and i think there's been two important things said. organized crime and oligarchy are over. they have been assumed by the state and in addition is the considerable extent they have been legalized. vladimir putin is a lawyer and he thanks about legalizing many of the things that he is doing. it's more a matter of how the
system functions whether or not it's legal or not. there are several books about russia and soviet union economic reform. right now it's the final part of the new book with the working title russia's crony capitalism. the main idea is very much vladimir putin has successfully integrated enrichment of the elite in his economic system. i would say i see the russian economic system today and power system as four different circles. the first circle is state power and judicial power are no independent court in russia. therefore there are no real property rights.
if you have it abroad, why bother getting it in russia because it stops here enrichment. also the state corporation. russia's state sector, 12 years ago, according to official russian statistics, generated 35% of gdp. today it is 70% of gdp. the big state companies are buying out the other companies from the former oligarchs weekly at half the price because the oligarchs are not allowed to sell to one another or to foreigners. they have to sell to vladimir putin's friends were to state companies and then the prices are at most half of what they
should be there for we can see that the prices on russian stock exchange are extremely low. if you think the most outstanding state company, it was worth, at the peak on the london stock exchange, $369 billion. today it is down to $50 billion. this is an extreme example but it's not atypical. in 2007 vladimir putin did something quite extraordinary. he transformed six big state companies with one to state corporations which are called nongovernmental organizations. he effectively privatized assets of more than $1 billion
of value. you wonder who controls these nongovernmental organizations. well, of course it's vladimir putin who controls at all. there's a third circle that is the cronies. four of them have been sanctioned by the u.s. government. [inaudible] this is the real vladimir putin circle. these are not kgb people. they don't work in state companies. they are his real friends whom the u.s. government assumes is a part of newton's wealth. analyzing this, you wonder how do they make the money. essentially in two ways.
asset stealing, that is they buy assets, financial control companies and television companies cheaply and they get big state procurement orders that are massively inflated. and there's no competition because these are vladimir putin's friends and everyone knows they've been given it. looking at the numbers, i come to the assessment that 10 - $20 billion. year has been taken out by this group of essentially half a dozen people. if you added up, this is 100 - $200 billion that has been taken out by this small group of people. of course a consequence of
this is there's not much corrupt avenues left for the others. corruption in russia today, it's quite legalized. they get the state procurements legally and it's very concentrated, but what i will shock you with is the fourth circle. that is the west. this would not happen in the way it does without the west. after this money goes through cypress, the cyprus is only a channel. then it goes to some caribbean island, a british virgin island is typical. then it goes to two places. london and new york, or the u.s. more broadly. it goes through anonymous companies.
it can also be in wyoming and south dakota. this should not happen, but it does. the other problem is that the money passes not through the bank system which is properly regulated, but through law firms by well renowned law firms who consider this to be attorney-client privilege. in this way, wall street journal had an article on the 2h of december last year that at least $40 billion. year goes into this country in this fashion. these are the two things i suggest we should focus on stopping. there should be no anonymous companies whose beneficiary owners are not known and there should be absolutely not any accepted transfers of money
through law firms backed by the bank system. these are the two suggestions i have that the united states congress should really do something about. thank you. >> thank you very much for that comprehensive analysis. you have been such a wealth of knowledge for the commission for so long. thank you once again for running us through such an important thing. to reiterate your circles. one is state power, after sb, another is state corporations, three are the cronies and friends of vladimir putin and four is us. that's a lot to digest. the floor is yours. >> thank you. i would like to thank the organizers were getting here and i would like to give credit to to institutions, i work for them for a year and
wrote a report to them and i really believe these guys in the focused initiative. they are the best in terms of expertise. the other institution i would like to mention is the institution. [inaudible] think we in the baltic region in eastern europe, we have something to share with you because almost everything you are expressing here in the united states were in western
europe, we have experienced a ready. information war, economic influence, you name it. everything we have experienced already. i will try to speak today about this particular experience because i believe you will find some parallels to the processes in the west. first of all i would like to say i was asked to talk about autocracy. i should say it's not a tool, it's a weapon. it's not only vladimir putin, it's also about the system. his regime weapon i sent
cryptography and it's not only about certain goals. the second thing is, we are dealing with not a normal steestate, we are dealing with mafia state and that makes a difference. they are rejecting all kinds of influence which is not usual to state influence. talking about our experience, he said he started to be interested in these topics in 2013. i started to be interested and work on this in 2003.
the relations, which at that time which is considered normal business in relation to the criminals because on the list of the people who were related to people with the president and those who were on the u.s. fbi list. i started to work on that and later i look back to the history and i should say this capitalism work cryptography in russia started not in the year 2000 when vladimir putin came to power, it started at
least in 1991, or i would say it started even earlier when the communist party and kgb made a plan to transfer money, huge amounts of money that are different calculations, but at least $50 billion were transferred and up to $100 billion. they are projecting the influence over the rest using this money and using this influence and network of influence. the other example i would like to give you is from our neighboring country latvia. now there is a coalition that is led by the party of the mayor of.
[inaudible] and what is interesting about him, he is definitely not called a russian agent but what's interesting is he started his business in 1991. they tried to not just achieve foreign policy goals, they tried to capture elites of the country and institutions and the ultimate goal, if possible to capture the entire state. first of all not only having
other people, now they are looking again, looking back to history, i can say they projected the russian influence through several governments of latvia which were not called pro- russian. [inaudible] they had clear business relations with russia and were semi- pro- russian, but the thing is when we don't call mr. lindberg as a progression, we should remember he was a guy who publicly called them occupational ones. the thing is no one cares about that and no one looks
into the history of his business. the same thing i should say about, well even u.s. attitudes in 2003 because it was when we were talking about russian influence and a supporter of the impeached president was u.s. ambassador. every day or every second day he went publicly to defend the president saying that he is a normal guy and that it's just about politics, not about russian influence. working on the initiative, i
put several documents on the issue so you can find yourself. to make it to the end, i should say we should look at the issue, having in mind the quotation of the famous prosecutor. i don't remember the exact quotation, but he said about the network of criminals working for the russian regime, he said you know, when the russian state comes for one reason or another to achieve something by the means of the state, they employ criminals. in the same manner they employ cryptography to employ some goals the state can't achieve itself. >> absolutely.
thank you. especially for the in-depth look at the perspective of how far back this goes. i think that is the most surprising thing, starting in 1991 and now in 2017 we are finally taking an in-depth look at it. finally we have ambassador daniel freed who will talk with us about what the united states might be able to do about this. >> thank you. my point of departure is to assume the previous speakers are correct about russian cryptography at the hands of the russian regime. i make this assumption because i agree with it. i need not go over the ground that has been covered. what then do we do? first of all, as was the case during the cold war, nothing will work if we lose political
and ideological struggle. we need to have faith in our own democratic system, in ourselves, in the free world and when we do that, we have a foundation from which to proceed. i say this because now that very foundation is also under attack, both from without, from the russians but also from within, from people not necessarily at all connected with russia so this is a different kind of a struggle. it's not my purpose to go into that, but i want to mention it. secondly, a u.s. policy designed to push back against russian club autocracy needs to be -- there's nothing
incompatible against pushing back on russian aggression and seeking those areas of common ground where it may be possible. i wouldn't be too hopeful about the positive agenda, but you don't rule it out. a second point is this is not, the americans may have discovered this recently, but this has been a problem well before we discovered this on the front pages of our newspapers. europeans have been dealing with this for a long time and the baltic states and poland and bulgaria have been dealing with it since 1991. the answer should not be made in the u.s. it has to be coordinated with europe and within the g-7.
that said, what are our options. the first is exposure. we should not let the corruption take place in the shadows, in the darkness. this is a job principally for nongovernmental organizations. from journalists, for the 21st century cadre of investigative journalists, and that sort of means tech savvy younger people who are adept at exposing influence. they're all over, including in russia. we need to expose what the russians are doing better to amass the ties it. just as it was not popular in the united states to be associated with the soviet union as their agent or is there useful idiot, there
should be a price to be paid for doing the kremlin's work for it. secondly, this is more in the area of government, there is pressure. there are both sanctions and there are enforcement of financial regulations, treasuries and the financial crimes enforcement network is not a sanctions organization but it goes after foreign international crime. they are very good. they need to be, their expertise and resources can be useful in exposing what the russians are doing. secondly, and this requires some discussion, but russian investment is often strategic. they want to buy up elements of a country's infrastructure using cutouts free of money, false fronts. in the united states there is a committee on foreign
investment which screens for national security purposes. it works. it may be that european countries and study that and learn from the example. i understand a body like that can be a hindrance in a bureaucracy to legitimate foreign investment, but when you are dealing with money that isn't what it claims to be, governments may want to provide themselves with protection. now sanctions, they may have a place here. my last job in government was the state department sanctions court nader. i don't want to overestimate or oversell the ability of sanctions to solve the problem, still it is a useful tool. the magnets the act was not designed to go after corrupt officials, it was designed to go after major human rights abusers but it turns out and
we know from the panama papers that the corruption at the russian lawyer who was basically murdered because he uncovered corruption and he had uncovered a lot more than we realized that first. read the panama papers. when you pull on a russian thread come you never know what comes out the other end. the magnets the act seems to bother the russians, so much so that they want to talk about adoptions with just about anybody. adoptions being the euphemism for the deal it would take to roll back the act because the russians imposed a ban on adoptions, american adoptions of russian children as retaliation. when you hear someone talking adoptions with the russians, what it really means is they are talking about getting rid of that act. that was not designed to deal with this problem, but it
stumbled into it. threads in russia tend to lead to one another. the global act and the creation in a way, does explicitly deal with corruption. it is a legislative vehicle, now a law which allows for us to go after corrupt russian officials. in my experience it is hard to demonstrate this, but that means you go to work including nongovernment sources of information, this army of investigative bloggers and tech savvy people i mentioned earlier. the ukrainian sanctions when after vladimir putin cronies by design. they were not intending to make things pleasant for the kremlin after it had invaded one of its neighbors for the
second time in ten years. the senate bill which passed 90 - to which is now being taken up on the house on russian sanctions includes among many provisions, to provisions dealing with corruption, one on privatization, allowing the administration to go after individuals who unjustly benefit from privatization. again it may be hard to demonstrate but it is a useful vehicle and more generally, corruption, similar to the act. sanctions are not going to solve the problem but they are a useful tool. i mentioned the various threads that come together. all of the tools i mentioned are useful to the degree that
we americans, and the europeans, and the g-7 takes seriously the challenge of an autocratic russia which wants to export its corruption and seems to be aiming to make the world safe for russian autocracy. that is by weakening democratic institutions and weakening the idea of democracy. let's do things that's an original thought on my part, it's about 200-year-old russian policy from the time of niclas the first. no need to remind a lithuanian about him who used his army to crush every revolution it could reach. better to keep out the infectious ideas of the enlightenment. i do not believe that russia
is doomed to live forever its worst history. i don't accept the notion of a civilizational divide. in russian history, russia does, when it fails at external aggression, it turns to internal reform and has sometimes been successful. the time that gave us world class literature and art and at the beginning of a more modern economic system came as a result of the failure of its aggression and failure in various wars. the crimean war which was a japanese war. i mention this because it's important to remember what it is we're trying to achieve. we are not trying to achieve a
weakening of russia. we're trying to achieve a defeat of russia, better to have a better relationship with that better russia. that is my view being a neighbor of russia may have a more jaundiced view of russian history. >> but remember, the current era reminds me more than any other time period of the early 1980s when russia was hostile to the west, everyone in the world was worried about the outbreak of war and they were beginning to whisper that things cannot go on like this. reagan administration's approach to russia had to periods.
reagan appended his more rigid cohort and reached out to gorbachev and maybe that one of these years i russian attempted internal reform will achieve. rather than and on a note of toughness and heading back, i wanted to talk about the potential of a better future. that time will come, though it is not today. >> thank you very much ambassador freed. great talk. let me add, for the much deeper perspective going back to the 1980s and also going back 200 years and conversely for the shout out to the role of young people in getting this done, both tech savvy and politically engaged. i know there are a lot of politically engaged people in this room. that leads to my first question, we now enter question-and-answer and this
is for ilia. in march and june, major protest against corruption broke out. they led crackdown and imprisonment. does this signify cracks in vladimir putin's regime or is it a splash in the pan. what can be done to provide assistance to those russians who want to see a democratic human rights russia in the future. >> that is a good question that all russians asked themselves and they are divided now as russian opposition is usually divided. i would say definitely a hopeful sign that this new generation of senior students from school and students from universities are in touch with prospects in life and social mobility and the rampant corruption they face and the
huge brain drain and immigration out of russia is the only option to really succeed. the question is how sustained this process can be, and how much resistance young people can provide because one thing that is not realized in the west enough is russia in soviet times was a dramatic experience of state oppression and that's why in my report it's a system of prison and oppression. it's nothing cowardly to say people fear repression and there is a limit to how much
people can withstand. many of us in this room, including myself had to leave russia because we faced unprecedented danger to our lives. i would say, the good way to support, but also to engage in what i would call filtered containment. definitely keep people to people contact and programs. i myself, in 1994 dissipated in a program called freedom support act sponsored by the u.s. congress and i saw thousands of students from countries and then becoming long-term advocates of democracy in their own country, even if they couldn't really enforce their views in a political light.
it's a long-term game. i would say i agree with ambassador freed that one day this regime will collapse. it's inevitable. the question is, it may take a decade or 15 years or a lifetim lifetime. it's a long game which requires a multilayered approach. >> thank you very much. >> three comments. first is about he is focusing on one theme, the top team corruption. it's not about what kind of reforms that should be done. i think this is very wise. this is what you do when you want a democratic breakthrough. the second is about learning
from protest in 2011 and 2012 that were very concentrated in moscow and did not excite the rest of russia and they are trying to engage 200 different cities around russia, the whole country and as he said, he is focusing on the young. the third is quite interesting. it's criticizing one specific person after the other but not vladimir putin. we know what happened to the one who went after vladimir putin. >> thank you very much. given that we are coming up to our time constraint, let's have a half hour from audience questions. i will refrain from asking another question. [inaudible]
>> i don't know what it would look like in the vladimir putin administration, but in a russian reform package would have to involve getting rid of the club photography, opening up the economy, the rule of law at home, and all supported by a better relationship with the west. the russian economic reformers , such as they are make the case that it is precisely russia's hostile relationship with the west and its failure of the rule of law at home which keeps the economy backward. so, you would have a series of liberalizing reforms at home and in anticorruption campaign. that is a little bit hard to imagine under the current
leadership only because president vladimir putin has a bit of the king lear problem. you can't go into retirement after the things you've done to stay king, but the person who knows the state of russian economic reform thinking and can do a better job answering. the con tent of what a reform package would look like. >> doctor osmond. >> i would say that first you need to get rid of the regime. you can't change anything with people who are all dependent on the corrupt system. you have to change the people, the leadership. that's the only way. in order to do that, you need democratic election. only democratic elections of both president and parliament
and then after that economic reform we know how too do. that's not a big problem. >> additional questions. >> right there. [inaudible] i heard a rumor for many years which is that vladimir putin is probably the richest man in the world. for many years i heard he's worth 70 billion now i heard 120 billion.
you pointed out why people inside russia can't afford, literally and figuratively, but i wanted to get your reaction to that. >> before he speaks, can you give your name and organization. >> well he didn't so i didn't either. >> yes i should've brought that up. [inaudible] >> all if all audience numbers could do that, that would be great. >> the simple answer is that we don't know. i think something in the order of $100 billion would be reasonable. as i suggested, they take out 10 - $20 billion of russia each year. what we know from a man who
was involved in 32 offshore companies and he fled the country afraid of losing his life. what he said was that vladimir putin owns about one third in each company. he owns it directly. if you take $200 billion and give him one third, that something like $70 billion in that chunk would make sense, but we can't know. we have no idea how many anonymous companies there are in this country. in britain, prime minister david cameron had a bit more of an ego and said there was 9000 buildings in britain that were owned by anonymous companies. these are normally buildings
that cost several million dollars each for this is a lot of money. >> some things to add to that. to my mind, it's a bit misleading to focus just on vladimir putin. we are usually doing this mistake saying it's about him and his regime and his wealth and his cronies. i would say it's much more about the system itself and the system is based on kgb. it's not just, of course it's a hybrid system, not just kgb but looking through the history in years of the 1990s, someone already mentioned when the kgb and mafia took place, i should say
looking back to the history we can say that they were controlled by kgb in the soviet times so it's based on the kgb and kgb managed. we should look at the year of 1991, what they did at that time and they managed to come back to power in ten years. so answering the previous question, we need to do something with all of the system not just vladimir putin and his cronies. >> thank you. additional questions? >> she will bring you a microphone. >> hello my name is alan and in an intern.
i was wondering if you can discuss more about how this relates to business ties and undermining democracy. >> we will start with brian. >> will give you an example. back in 2010 i was researching an article i ultimately co-authored called the velvet surrender. it was looking at russian influence in the czech republic network of influence. i came across this company that was an energy trading company with a mind bogglingly opaque structure that led. [inaudible] about ten to 12% of the check energy market and the ties to it were unsurprisingly supportive of the kremlin line.
>> >> and to be perforated and the sites pop up in europe with opaque structures which not surprisingly have a very anti-american line. these are not unrelated to each other when that corrupts the most basic value and with the gene 13 this is an eloquent way we're not in a new cold war right now we have so nervous
systems with it teeseven verses the g third team but they appear to be under so right now. with the subordination of power and based on what we are talking about with the panel today with the coronation of so lot to power. so we don't have to hermetically sealed not by a the iron curtain and they do see it to the other side it is forcing their values to the extent that we let them and that is the operative phrase.
because it receives russian money but it is already. so the way to solve this to make our society less full verbal to that kind of interference that brought the west to its current path where we are vulnerable. but a contributing to the problem. >> can we interpret where all this money is coming from? to and from my initial comments him back in
september 2015 and with the european union's state what was really telling for the case for me is what they were investigating it was crucial to understand. with the cigarette ring to facilitate by the federal security service of the russian federation. so this just looks like getting rich off the of cigarette smuggling. so it was creating the black account. so with hugh multiplied that
the russian organized crime to be facilitated with and traceable cash. in then to support the is alternative media sites. this gives the kremlin a lot of money to play with with no fingerprints. >> additional questions?. >> talking not have instrumental this system is with the kgb obviously they were not kgb trained.
mobilization with the kgb officers in the nationalist and britain has said very clearly to get the russian education. >> so let's try to do water to more questions. >> such talk about the corruption of the ideological level so how do those two aspects were how they work in concert?. >> guess i can with the putin project to make a a
great power again so there is good and bad corruption. so to undermine customer credit institutions -- undermining those institutions are would still echo wed morial said earlier everything we experience now they experienced before. but so this works hand in glove of the regime so we can talk about that complex of the structure of this company that buys that
energy assets in the czech republic so it is not like it is in competition with each other with ideological and democratic russia working across purposes and what pooches started to call his inner circle one of the most powerful men in russia loses jobs. with the anti-narcotics that does nothing of the sort. but this side interpreted as putin trying to re in in
those elements of the inner circle and work a little bit harder so this is the attempt to of radiological russia because let's face it is very expensive. so this is what we need to keep our eye on. sometimes they are working hand in glove. >> with that we will conclude the briefing banks to the panel. [applause] [inaudible conversations]