Sunday, August 21, 2016

547 Why was Syria destroyed? Here are the facts.



Ray McGovern who worked all his life for the CIA has become a source of information about what is really happening in the world.

Here he explains why Syria was destroyed:
- To protect Israel, of course !
( No longer a 'crazy' idea of the Conspiracy adepts, since we read it in Hillary's 'secret' emails, where she uses the same words. )

Ray mentions the Neocons who advised Israel with their report 'Protecting the Realm", which was written by them in 1996.
They were jewish Americans with primary loyalty to Israel, not to America.

In 1999 the same jewish Americans publish 'Project for a New American Century', which says in essence:  America must bully the world for the next 100 years, into submission.
( Of course Israel will be the main beneficiary. The Americans are just paying and their safety and furure is offered for this goal.)

In their 'Rebuilding America's Defenses' they write how their army must be made stronger.
In 'Training Circular 18-01' we can read how they will work: using Smart Power: a combination of real weapons ( hard power)  and weaponised other instruments ( soft power)  like: the Media, NGO's,  Hollywood, false flags,  supporting rebels  in the target country, etc. etc.

The result: In the last 15 years 6 out of 7  targeted countries ( Listen to colonel Wesley Clark  in 2007) were destroyed.
Why?  Nobody knows.  But rumours are sent out all the time:  To fight terrorism,  to help sufferiung populations from a dictator, for the oil, etc. etc.
Official Talking Headfs will never say 'it's for Israel'.  You only read that in de-classified or hacked emails. Or in the alternative media off course.

Here is a fine interview with Ray McGovern ( 32 minutes):

Ray McGovern: The Rest of the Story behind U.S., Israel, and Syria


And here is an article which explains what I just wrote here above:

 How We Know ISIS Was Made In The USA


 

Thursday, August 18, 2016

546 Nog een keer: 911.




9/11 - the final curtain:
20 Jul 2016
The end of a 15 years embargo on truth – an iceberg melting
That the event that has formed the modern world more than anything else was an inside job is the only plausible conclusion when analyzing the official facts as well as experts and eyewitnesses from then up till now. The evidence and the circumstances around the creation of the ¨war on terror‘ is more than enough to demand not only a new investigation but a lawful prosecution of the people in political power at the time of the attacks. The long awaited now released 28 ‚secret pages‘ are the tip of an already melting iceberg
Profile photo of Tommy Hansen
The Twin Towers in New York on September 11, 2001, both towers burning quietly. The South Tower (left) is collapsing the whole 400 meters down to ground level around 10 seconds after this picture was taken. Shortly after, the North Tower collapses the same way.
With the July 2016 release of the 28 redacted pages from the 9/11 commission report, we now know that high-ranked Saudi government officials and individuals from the Saudi intelligence community were heavily involved in the 9/11 attacks in the United States in 2001. As were Israel‘s Mossad and the United States‘ CIA, all acting on behalf of the US military-industrial complex which has gained immense momentum through what is effectively a permanent „war on terror“. This war machine feeds corrupt politicians, controls and manipulates journalists and thrives on violence and conflicts. And it is time to break the silence.

The 9/11-attack was planned in the 90s as a shock therapy – a new Pearl Harbor. A war was desperately needed, were the proud American war industry not to collapse, given it no longer had a tangible enemy. Worse, the US was losing its political grip on the world, as the Soviet Union had dissolved and the Europeans and Russians were about to interact in peaceful relations. Everything, that had made America great, was about to vanish.

So in 2000, a new vision for America’s war industry was laid out. The right wing think-tank Project for a New American Century (PNAC), founded by prominent neo-conservatives like Dick Cheney, Jeb Bush, Richard Perle, John Bolton, Scooter Libby, Paul Wolfowitz, Robert Kagan and William Kristol, published a report after three years of intensive work, entitled ‘Rebuilding America’s Defenses’ which provided the guidelines for the rebirth of the American war industry and a way to ensure the United States would remain the world’s mightiest political and military power.

In neoconservative circles, it was believed that the only way forward was a “new Pearl Harbor” style event, and this was openly mentioned in the PNAC report; “this process of transformation is likely to be a long one, absent some catastrophic and catalyzing event – like a new Pearl Harbor.”, the report reads.

And the events of 9/11 clearly had that effect. The nation went to war, and this time it was not against a single conflict against a dictator somewhere, but a persistent, worldwide, random war which could range wherever forces in the US and elsewhere deemed it fit to fight. And those who are “not with the US,are with the terrorists”. Remember that?

This ‘war on terror’ war has enabled the vast US war machine, backed by countries like Germany, France, England and Denmark, to bomb civilian areas in Sudan, Yemen, Syria, Afghanistan and Iraq in an attempt to kill individuals pointed out to the US-intelligence community as ‚terrorists’. It’s a never-ending and diabolicalmerry-go-round – creating terror and refugees through systematically bombing civilian areas.

Fifteen years after 9/11 almost all our respected institutions and values have gone. The US even has a law that allows its forces to intervene militarily in Europe if a US-citizen is apprehended by the International Court of Justice in The Hague. The United Nations Security Council was overruled by the US in the illegal invasion of Iraq, and nowadays US-led western forces can bomb as they please. Even the UN Human Rights Council isnow widely seen as a joke – being headed by one of the most repressive dictatorships in the world, Saudi Arabia.

Now, we even stand on the brink of a new war, also fought a long way from ‘back home in the US’. The build-up of the NATO war machine in Europe has been going on for years and has been intensified with nuclear weapons under President Barack Obama. It appears this war will be conventional, fought on European soil and a lot of Europeans will die -but that’s a risk the US is prepared to accept.

But 15 years after 9/11 we also know who was behind the 9/11 attacks and if we don’t address the issue now, humanity will be lost.

America dependent on war for decades

North America as a nation is dependent on war and has been for decades. In 2014, 57 percent of the US’ discretionary budget was allocated to ‘defense spendings’, and without this war machine running, the nation would have gone broke. Out of 238 years of history, the US has been at war for 222, almost always a long way from home, and now globally defending ‘democracy and freedom’ – or so the story goes. We literally have a war-addicted nation heading NATO, which should have been a defence union serving peace after the cataclysm of World War Two.

Two presidents tried to warn us about this development. President Dwight Eisenhower in his ‘farewell speech’ in 1961 and John F Kennedy three months later, in his so-called ‘secret societies speech’. Both were talking about the military-industrial complex, both were talking about the American “deep state” – the CIA. But since, then no one has talked about this complex, so either the problem has gone away by itself, or the complex hastaken control.

This complex was founded during the Cold War, where immense fortunes were made from preparing for a possible war, and the secret communities and secret weapon programs that were involved. There was practically no limit to the resources used by the Pentagon and the CIA to detect and fight communism and the show even beyond our planet in the so-called “space race”. As the Cold War disappeared, so did the prospects of maintaining these positions of power. And the brilliant answer was an eternal ‘war on terror’, launched right after the ‘catastrophic and catalyzing’ events of 9/11.

Very soon after 9/11, the first hints of Saudi involvement in the events surfaced. Two dozen members of Osama bin Laden’s family were urgently evacuated with private jets from the United States in the first days following the attacks. Later it came to light that 11 of the 19 hijackers had got the Visa-papers at the american consulate in Jeddah, Saudi Arabia, same place used for doing the paperwork in the trafficking of the Mujahedeen-fighters in the 80s.

.

The Israeli spy ring

But the Saudi’s were not alone in this. A 61-page DEA task-force report addresses an massive Israeli spy ring of more than 120 agents, discovered operating in the United States in 2001. 14 Israeli ‘Art Students were according to several researchers inside the twin towers with construction passes and were reported to be active agents in electronic surveillance units of the Israeli military.

These details of a spy ring that operated across the United states employing intelligence agents posing as “art students” to gain access to sensitive U.S. government offices, defense companies, and the private homes of employees of the Drug Enforcement Agency (DEA), started to emerge in early 2002, clearly suggesting involvement of the Israeli intelligence service, Mossad too. The report was later confirmed by the transcript of a four part Fox News Report on ‘Israeli spying in the US’.

Also, confirmed by senator Al Franken in 2004, a number of mostly jewish individuals were being warned not to go to work on 9/11 – they got ‘the jew call’ – another strong suggestion of Israeli involvement in the events. Clearly someone way up in the american circles of power knew – a fact also proved by the massive high-level insider trading on the very day, laid bare by German investigative journalist Lars Schall and several independent university studies.

An operation like those attacks, which incorporated international ties, falsified ID’s and years of traveling, planning and preparation, is simply not possible without the knowledge of various intelligence communities. And the US intelligence communities knew, something was going on. They delivered dozens of memos to President Bush W Bush on the security briefings, especially that on August 6, 2001 when they delivered a briefing with the headline: “Bin Laden Determined To Strike in US”. 

At least someone was determined, that’s for sure. But it certainly wasn’t Bin Laden doing the insider trading on the New York Stock Exchange, and no one has ever accused him of being behind the many warnings to stay away from the Towers on 9/11. And it was definitely not Osama bin Laden who called the Danish prime minister on 9/11, a few minutes before the first tower collapsed, telling him that both towers were going to come down. Still, someone did, and he wasn’t Saudi Arabian either.

A deliberate take over of power

The information surrounding the whole event point conclusively to the fact that this was a deliberate attempt totry ad take over political and military power worldwide – a process now taking place under the disguise of the ‘war on terror’, where president Bush left the rest of the world with two options: “You’re either with us, or with the terrorists/against us” [delete as appropriate. pt]. The whole scenario is like a badly composed Hollywood B-movie, where a bunch of bad guys plan to take over control of the world.

In 1976-77 George H.W. Bush was director of the CIA, and according to journalist Wayne Madsen and others he used the Saudi intelligence service as “his own private CIA” to run black operations disapproved of – or even totally without knowledge of – the US Congress.These operations, we now know, were almost always connected to drug smuggling or gun running and were often used to initiate regime changes in countries criticalof the USA. Through the Saudi intelligence services, the criminal US-neocons literally got themselves a ‘black CIA’ to do the dirtiest of their already very dirty business.

The Bush and Bin Laden families had been doing businesses for more than 20 years, and the young George W. Bush, later president, founded his first oil company partly with money from the Bin Laden family. Also the Bush empire had been growing businesses with the Saudi royal family and numerous princes in Saudi Arabia. The Bin Laden family was even an official investor in the Carlyle Group until the fall of 2001 where the relationship became too embarrassing and the family withdrew its money.

Through the 90s as the US war industry was fighting for survival, PNAC and others were advocating for an invasion of Iraq, as it was seen as the only realistic way for the future of the military-industrial complex in the US to be assured. Moreover, a US presence in Iraq would give access to huge oil resources and pave the way for decades of new business-making conflicts. Shortly after the September 11, 2001 attacks, the PNAC even sent a letter to President George W. Bush, advocating “a determined effort to remove Saddam Hussein from power in Iraq”, or “regime change”. 

The letter suggested that “any strategy aiming at the eradication of terrorism and its sponsors must include a determined effort to remove Saddam Hussein from power in Iraq,” even if no evidence surfaced linking Iraq to the September 11 attacks. The letter warned that allowing Hussein to remain in power would be “an early and perhaps decisive surrender in the war on international terrorism”.

Back in 1998, the PNAC had written exactly the same to president Clinton: “We urge you to turn your Administration’s attention to implementing a strategy for removing Saddam’s regime from power. This will require a full complement of diplomatic, political and military efforts”. The letter as signed by Donald Rumsfeld and Paul Wolfowitz, later Secretary and Deputy Secretary of Defense in the Bush-administration.

The evidence surfacing shortly after 9/11 didn’t point to Iraq, but towards Saudi Arabia and Israel. While the evidence involving Israel is yet to be addressed, the engagement of the state of Saudi Arabia is now out in the open.

„A long and sordid history of financing global terror“

According to US Senator Bob Graham, who has long fought for the declassification of the 28 Saudi’ pages: “The Saudis have a long and sordid history of financing global terror movements, providing the seed money for Al Qaeda as far back as the 1980s, and also providing startup capital for the Taliban [in Afghanistan].”

This 15-year embargo on the truth, Graham says, offers functional “immunity” to the Saudi regime, still complicit in “funding terror organizations such as ISIS,” and which is “training the next generation of terrorists in mosques and schools”.

What Graham points out should be obvious to anyone at this point of time, regardless of the 28 pages: That through decades of co-operation with the corrupt Saudi dictatorship the criminal American neocons have gained not only immense personal fortunes, but a global political leadership that seems to have blinded the democracies in the West. Everything in the ‘Rebuilding Americas Defences’ has come through, even the ‘new Pearl Harbor’.

Through a strategy of mostly proxy wars, the US was ready to invade Iraq, Syria, Lebanon, Libya, Somalia, Sudan & Iran in October 2001, in all cases to install a US-friendly regime and m¡aintain the Petrodollar-business. The ‘War on terror’ made it all possible, and all the mentioned countries are now on their knees.

From the Pentagon Papers (2012) published in 2015 by Judicial Watch we know that the US was willingly and heavily arming groups like Al-Qaeda, the Muslim Brotherhood and the Salafists in northern Iraq because these groups were fighting against the declared US enemy, democratically elected President Bashar al Assad in Syria. The many different groups armed by both the CIA and Pentagon are now even sometimes fighting each other..

Again: Proxy war to secure american interests

This is exactly what happened in Afghanistan in the 80s; a proxy war to secure American interests. On October 6, 2009, then- Secretary of State Hillary Clinton stated on CBS, that Al Qaeda in Afghanistan was created by the United States:

“It seemed like a great idea, back in the 80s to – embolden – and train and equip – Taliban, mujahidin, jihadists against the Soviet Union, which had invaded Afghanistan. And with our help, and with the Pakistani support– this group– including, at that time, Bin Laden, defeated the Soviet Union. Drove them out of Afghanistan, eventually”, Clinton said in CBS News Special Report: The Road Ahead.

But that was only partly true. Apparently she forgot the famous interview with President Jimmy Carter’s security advisor, Zbigbiew Brzezinski in ‘Le Nouvel Observateur’, Paris on 21. January 2007. When asked about the Mujahedeen, Brzezinski said: “According to the official version of history, CIA aid to the Mujahadeen began during 1980. That is to say, after the Soviet army invaded Afghanistan, 24 Dec 1979. But the reality, secretly guarded until now, is completely otherwise. Indeed, it was July 3, 1979 that President Carter signed the first directive for secret aid to the opponents of the pro-Soviet regime in Kabul. And that very day, I wrote a note to the president in which I explained to him that in my opinion this aid was going to induce a Soviet military intervention.”

So not only did the US arm and create Al Queda, but it was not in order to support the resistance against the Sovjet occupation of Afghanistan, it was to provoke the occupation. A proxy war, and the makers of this plan are to be found in the dark circles in the upper echelons of the American political, military and intelligence community – the military-industrial complex which two presidents have tried to warn us against. The military-industrial complex which no one even discusses anymore. Either the problem is gone or these powers already have taken over.

The fact is the western mainstream media in general is controlled by powers very friendly to the US, and its silence and ignorance around 9/11 is just one example. According to Watergate-journalist Carl Bernstein 400 american journalists were on the payroll of the CIA in 1974 when the cold war were at its height and in 2015 a widely known German journalist, Udo Ulfkotte, published a book where he laid open the ongoing and very active role of the CIA in German news organisations.

The CIA works on behalf of the American war machine, and operates at every level: Media, politicians and NGO’s and has done so for decades. Through this almost complete control it has succeeded in changing a prosperous future in Europe, with co-operation and open borders throughout the continent, into a likely disaster. Already, millions have died in this diabolic invention, the ‘war on terror’, declared by a country desperately dependent on war. To think that this machine could not be behind 9/11 is, in light of the facts, naive. This machine thrives onwar, and the politicians going along with it are making millions by pretending that we are all the good guys. Reality says differently, and it is time to break the silence.

The release of the 28 pages, overdue since 2003, is a great step forward. But tens of thousands of documents are still kept secret because of ‘national security’.

For instance, still missing from public scrutiny are documents about the involvement of government-sponsored Saudi religious institutions in supporting al Qaeda as well as documents about Al-Qaeda’s wealthy Gulf donors and support by Islamic banks and financial institutions.  And there is also no mention of the fact that 11 of the 9/11 ‘hijackers’ got their visa papers at the American consulate in Jeddah, Saudi Arabia – same place that arranged the papers for thousands of Mujahedeens in the 80s.

It is increasingly clear that insiders in the American state apparatus played a major role in the 9/11 event, now proven with very likely co-operation from associates at government level in S,audi Arabia – a country defendingWahhabism – the most perverted form of Islam – and systematically – with bombs and terror – trying to destroy all opponents. A country that should be put before the International Court in The Hague along with the most likely perpetrators behind 9/11 and the defenders of wars based on lies. We even know where to start: Bush,both senior and junior, Tony Blair and Anders “Fog of War” Rasmussen, Dick Cheney andColin Powell, Condoleezza Rice, Rumsfeld and Wolfowitz – the rest will come along as we go.

If you look at the greater picture, the US, Saudi Arabia and Israel have been systematically killing millions of people for decades, boosting the war industry, first and foremost in America, but also in countries like Sweden, Germany, England, France and others, where both selected politicians and journalists are equally controlled, both groups being rewarded with personal wealth and a jet-set life.

Based on evidence and simple logic we can exclude the official 9/11 story as an outrageous conspiracy theory. But would the powers that be lie to us on this scale on such a grave matter? And if so, why?

In October 1990, a 15-year-old girl stood crying before the American House of Representative’s Human Rights Caucus. She testified that Iraqi soldiers who had invaded Kuwait on August 2nd that year, tore hundreds of babies from hospital incubators and killed them. Television flashed her testimony around the world and Saddam Hussein was now portrayed by U.S. president George Bush not only as “the Butcher of Baghdad” but “a tyrant worse than Hitler”. 

Coalition forces invaded Kuwait City on February 27, 1991 – but the story about the babies was fantasy. The young girl had been instructed by Hill & Knowltons Washington office, a public relations firm hired to rally the U.S. populace behind Bush’s policy of going to war. The man running Hill & Knowlton’s Washington office was Craig Fuller, one of Bush’s closest friends and inside political advisors. A full-scale invasion based on a deliberate lie.

On February 5th, 2003, Colin Powel stood for the United Nations, presenting ‘evidence’ of weapons of mass destruction in Iraq. Only we now know he too, lied.

Powell played an intercept of a conversation between Iraqi army officers about the UN inspections. However, when he translated what they were saying, he knowingly embellished it, turning it from evidence Iraq was complying with U.N. resolutions into evidence that Iraq was violating them.

The whole U.S. case—relating to biological weapons—was based on the direct knowledge of a single agent known as Curveball, whose credibility had previously been cast in serious doubt. It was all lies, not a single such weapon was found,  either by the weapon inspectors or by the western forces, which invaded Iraq in 2003. A full-scale invasion based on a deliberate lie.

The initial attack on Iraq cost far more than the lives of 100,000 people and the wounding of even more. It is still seen by many as the world’s largest terrorist attack ever – at least that’s how it feels when you’re at the wrong side of the bombs.

At least twice in recent history the US has sent the world into wars based on deliberate lies. So why not on 9/11?

But now, It seems for an increasing number of people around the world the case of 9/11 is solved, and the story about the 19 hijackers with box cutters, remotely controlled from a cave in a mountain in Afghanistan by the ultra-bad Osama bin Laden, is regarded as what is is – a fairy tale. And the official explanation, an insult to common intelligence.

The iceberg is melting. Lies may have been travelling half way around the world for decades, but now, the truth has finally got its boots on.

Wednesday, August 17, 2016

545 The Harvard boys do Russia. Janine Wedel. 1998. The Nation.

The Harvard Boys Do Russia
After seven years of economic "reform" financed by billions of dollars in U.S.



MAY 14, 1998

After seven years of economic “reform” financed by billions of dollars in U.S. and other Western aid, subsidized loans and rescheduled debt, the majority of Russian people find themselves worse off economically. The privatization drive that was supposed to reap the fruits of the free market instead helped to create a system of tycoon capitalism run for the benefit of a corrupt political oligarchy that has appropriated hundreds of millions of dollars of Western aid and plundered Russia’s wealth.

The architect of privatization was former First Deputy Prime Minister Anatoly Chubais, a darling of the U.S. and Western financial establishments. Chubais’s drastic and corrupt stewardship made him extremely unpopular. According to The New York Times, he “may be the most despised man in Russia.”
Essential to the implementation of Chubais’s policies was the enthusiastic support of the Clinton Administration and its key representative for economic assistance in Moscow, the Harvard Institute for International Development. Using the prestige of Harvard’s name and connections in the Administration, H.I.I.D. officials acquired virtual carte blanche over the U.S. economic aid program to Russia, with minimal oversight by the government agencies involved. With this access and their close alliance with Chubais and his circle, they allegedly profited on the side. Yet few Americans are aware of H.I.I.D.’s role in Russian privatization, and its suspected misuse of taxpayers’ funds.
At the recent U.S.-Russian Investment Symposium at Harvard’s John F. Kennedy School of Government, Yuri Luzhkov, the Mayor of Moscow, made what might have seemed to many an impolite reference to his hosts. After castigating Chubais and his monetarist policies, Luzhkov, according to a report of the event, “singled out Harvard for the harm inflicted on the Russian economy by its advisers, who encouraged Chubais’s misguided approach to privatization and monetarism.” Luzhkov was referring to H.I.I.D. Chubais, who was delegated vast powers over the economy by Boris Yeltsin, was ousted in Yeltsin’s March purge, but in May he was given an immensely lucrative post as head of Unified Energy System, the country’s electricity monopoly. Some of the main actors with Harvard’s Russia project have yet to face a reckoning, but this may change if a current investigation by the U.S. government results in prosecutions.
The activities of H.I.I.D. in Russia provide some cautionary lessons on abuse of trust by supposedly disinterested foreign advisers, on U.S. arrogance and on the entire policy of support for a single Russian group of so-called reformers. The H.I.I.D. story is a familiar one in the ongoing saga of U.S. foreign policy disasters created by those said to be our “best and brightest.”
Through the late summer and fall of 1991, as the Soviet state fell apart, Harvard Professor Jeffrey Sachs and other Western economists participated in meetings at a dacha outside Moscow where young, pro-Yeltsin reformers planned Russia’s economic and political future. Sachs teamed up with Yegor Gaidar, Yeltsin’s first architect of economic reform, to promote a plan of “shock therapy” to swiftly eliminate most of the price controls and subsidies that had underpinned life for Soviet citizens for decades. Shock therapy produced more shock–not least, hyperinflation that hit 2,500 percent–than therapy. One result was the evaporation of much potential investment capital: the substantial savings of Russians. By November 1992, Gaidar was under attack for his failed policies and was soon pushed aside. When Gaidar came under seige, Sachs wrote a memo to one of Gaidar’s principal opponents, Ruslan Khasbulatov, Speaker of the Supreme Soviet, then the Russian parliament, offering advice and to help arrange Western aid and contacts in the U.S. Congress.
Enter Anatoly Chubais, a smooth, 42-year-old English-speaking would-be capitalist who became Yeltsin’s economic czar. Chubais, committed to “radical reform,” vowed to construct a market economy and sweep away the vestiges of Communism. The U.S. Agency for International Development (U.S.A.I.D.), without experience in the former Soviet Union, was readily persuaded to hand over the responsibility for reshaping the Russian economy to H.I.I.D., which was founded in 1974 to assist countries with social and economic reform.
H.I.I.D. had supporters high in the Administration. One was Lawrence Summers, himself a former Harvard economics professor, whom Clinton named Under Secretary of the Treasury for International Affairs in 1993. Summers, now Deputy Treasury Secretary, had longstanding ties to the principals of Harvard’s project in Russia and its later project in Ukraine.
Summers hired a Harvard Ph.D., David Lipton (who had been vice president of Jeffrey D. Sachs and Associates, a consulting firm), to be Deputy Assistant Treasury Secretary for Eastern Europe and the Former Soviet Union. After Summers was promoted to Deputy Secretary, Lipton moved into Summers’s old job, assuming “broad responsibility” for all aspects of international economic policy development. Lipton co-wrote numerous papers with Sachs and served with him on consulting missions in Poland and Russia. “Jeff and David always came [to Russia] together,” said a Russian representative at the International Monetary Fund. “They were like an inseparable couple.” Sachs, who was named director of H.I.I.D. in 1995, lobbied for and received U.S.A.I.D. grants for the institute to work in Ukraine in 1996 and 1997.
Andrei Shleifer, a Russian-born émigré and already a tenured professor of economics at Harvard in his early 30s, became director of H.I.I.D.’s Russia project. Shleifer was also a protégé of Summers, with whom he received at least one foundation grant. Summers wrote a promotional blurb for Privatizing Russia (a 1995 book co-written by Shleifer and subsidized by H.I.I.D.) declaring that “the authors did remarkable things in Russia, and now they have written a remarkable book.”
Another Harvard player was a former World Bank consultant named Jonathan Hay, a Rhodes scholar who had attended Moscow’s Pushkin Institute for Russian Language. In 1991, while still at Harvard Law School, he had become a senior legal adviser to the G.K.I., the Russian state’s new privatization committee; the following year he was made H.I.I.D.’s general director in Moscow. The youthful Hay assumed vast powers over contractors, policies and program specifics; he not only controlled access to the Chubais circle but served as its mouthpiece.
H.I.I.D.’s first awards from U.S.A.I.D. for work in Russia came in 1992, during the Bush Administration. Over the next four years, with the endorsement of the Clinton Administration, the institute would be awarded $57.7 million–all but $17.4 million without competitive bidding. For example, in June 1994 Administration officials signed a waiver that enabled H.I.I.D. to receive $20 million for its Russian legal reform program. Approving such a large sum as a noncompetitive “amendment” to a much smaller award (the institute’s original 1992 award was $2.1 million) was highly unusual, as was the citation of “foreign policy” considerations as the reason for the waiver. Nonetheless, the waiver was endorsed by five U.S. government agencies, including the Treasury Department and the National Security Council, two of the leading agencies formulating U.S. aid policy toward Russia. In addition to the millions it received directly, H.I.I.D. helped steer and coordinate some $300 million in U.S.A.I.D. grants to other contractors, such as the Big Six accounting firms and the giant Burson-Marsteller P.R. firm.
A s Yeltsin’s Russian government took over Soviet assets in late 1991 and early 1992, several privatization schemes were floated. The one the Supreme Soviet passed in 1992 was structured to prevent corruption, but the program Chubais eventually carried out instead encouraged the accumulation of property in a few hands and opened the door to widespread corruption. It was so controversial that Chubais ultimately had to rely largely on Yeltsin’s presidential decrees, not parliamentary approval, for implementation. Many U.S. officials embraced this dictatorial modus operandi, and Jonathan Hay and his associates drafted many of the decrees. As U.S.A.I.D.’s Walter Coles, an early supporter of Chubais’s privatization program, put it, “If we needed a decree, Chubais didn’t have to go through the bureaucracy.”
With help from his H.I.I.D. advisers and other Westerners, Chubais and his cronies set up a network of aid-funded “private” organizations that enabled them to bypass legitimate government agencies and circumvent the new parliament of the Russian Federation, the Duma. Through this network, two of Chubais’s associates, Maxim Boycko (who co-wrotePrivatizing Russia with Shleifer) and Dmitry Vasiliev, oversaw almost a third of a billion dollars in aid money and millions more in loans from international financial institutions.
Much of this largesse flowed through the Moscow-based Russian Privatization Center (R.P.C.). Founded in 1992 under the direction of Chubais, who was chairman of its board even while head of the G.K.I., and Boycko, who was C.E.O. for most of its existence, the R.P.C. was legally a private, nonprofit, nongovernmental organization. In fact, it was established by another Yeltsin decree and helped carry out government policy on inflation and other macroeconomic issues and also negotiated loans with international financial institutions. H.I.I.D. was a founder of the R.P.C., and Andrei Shleifer served on the board of directors. Its other members were recruited by Chubais, according to Ira Lieberman, a senior manager in the private-sector development department of the World Bank who helped design the R.P.C. With H.I.I.D.’s help, the R.P.C. received some $45 million from U.S.A.I.D. and millions from the European Union, individual European governments, Japan and other countries, as well as loans from the World Bank ($59 million) and the European Bank for Reconstruction and Development ($43 million), which must be repaid by the Russian people. One result of this funding was the enrichment, political and financial, of Chubais and his allies.
H.I.I.D. helped create several more aid-funded institutions. One was the Federal Commission on Securities, a rough equivalent of the U.S. Securities and Exchange Commission (S.E.C.). It too was established by presidential decree, and it was run by Chubais protégé Dmitry Vasiliev. The commission had very limited enforcement powers and funding, but U.S.A.I.D. supplied the cash through two Harvard-created institutions run by Hay, Vasiliev and other members of the Harvard-Chubais coterie.
One of these was the Institute for Law-Based Economy, funded by both the World Bank and U.S.A.I.D. This institute, set up to help develop a legal and regulatory framework for markets, evolved to encompass drafting decrees for the Russian government; it got nearly $20 million from U.S.A.I.D. Last August, the Russian directors of I.L.B.E. were caught removing $500,000 worth of U.S. office equipment from the organization’s Moscow office; the equipment was returned only after weeks of U.S. pressure. When auditors from U.S.A.I.D.’s inspector general’s office sought records and documents regarding I.L.B.E. operations, the organization refused to turn them over.
The device of setting up private organizations backed by the power of the Yeltsin government and maintaining close ties to H.I.I.D. was a way of insuring deniability. Shleifer, Hay and other Harvard principals, all U.S. citizens, were “Russian” when convenient. Hay, for example, served alternately and sometimes simultaneously as aid contractor, manager of other contractors and representative of the Russian government. If Western donors were attacked for funding controversial privatization practices of the state, the donors could claim they were funding “private” organizations, even if these organizations were controlled or strongly influenced by key state officials. If the Chubais circle came under fire for misuse of funds, they could claim that Americans made the decisions. Foreign donors could insist that the Russians acted on their own.
Against the backdrop of Russia’s Klondike capitalism, which they were helping create and Chubais and his team were supposedly regulating, the H.I.I.D. advisers exploited their intimate ties with Chubais and the government and were allegedly able to conduct business activities for their own enrichment. According to sources close to the U.S. government’s investigation, Hay used his influence, as well as U.S.A.I.D.-financed resources, to help his girlfriend, Elizabeth Hebert, set up a mutual fund, Pallada Asset Management, in Russia. Pallada became the first mutual fund to be licensed by Vasiliev’s Federal Commission on Securities. Vasiliev approved Pallada ahead of Credit Suisse First Boston and Pioneer First Voucher, much larger and more established financial institutions.
After Pallada was set up, Hebert, Hay, Shleifer and Vasiliev looked for ways to continue their activities as aid funds dwindled. Using I.L.B.E. resources and funding, they established a private consulting firm with taxpayer money. One of the firm’s first clients was Shleifer’s wife, Nancy Zimmerman, who operated a Boston-based hedge fund that traded heavily in Russian bonds. According to Russian registration documents, Zimmerman’s company set up a Russian firm with Sergei Shishkin, the I.L.B.E. chief, as general director. Corporate documents on file in Moscow showed that the address and phone number of the company and the I.L.B.E. were the same.
Then there is the First Russian Specialized Depository, which holds the records and assets of mutual fund investors. This institution, funded by a World Bank loan, also worked to the benefit of Hay, Vasiliev, Hebert and another associate, Julia Zagachin. According to sources close to the U.S. government’s investigation, Zagachin, an American married to a Russian, was selected to run the depository even though she lacked the required capital. Ostensibly, there was to be total separation between the depository and any mutual fund using its services. But the selection of Zagachin defied this tenet of open markets: Pallada and the depository were run by people with ties to each other through H.I.I.D. Thus the very people who were supposed to be the trustees of the system not only undercut the aid program’s stated goal of building independent institutions but replicated the Soviet practice of skimming assets to benefit the nomenklatura.
Anne Williamson, a journalist who specializes in Soviet and Russian affairs, details these and other conflicts of interest between H.I.I.D.’s advisers and their supposed clients–the Russian people–in her forthcoming book, How America Built the New Russian Oligarchy. For example, in 1995, in Chubais-organized insider auctions of prime national properties, known as loans-for-shares, the Harvard Management Company (H.M.C.), which invests the university’s endowment, and billionaire speculator George Soros were the only foreign entities allowed to participate. H.M.C. and Soros became significant shareholders in Novolipetsk, Russia’s second-largest steel mill, and Sidanko Oil, whose reserves exceed those of Mobil. H.M.C. and Soros also invested in Russia’s high-yielding, I.M.F.-subsidized domestic bond market.
Even more dubious, according to Williamson, was Soros’s July 1997 purchase of 24 percent of Sviazinvest, the telecommunications giant, in partnership with Uneximbank’s Vladimir Potanin. It was later learned that shortly before this purchase Soros had tided over Yeltsin’s government with a backdoor loan of hundreds of millions of dollars while the government was awaiting proceeds of a Eurobond issue; the loan now appears to have been used by Uneximbank to purchase Norilsk Nickel in August 1997. According to Williamson, the U.S. assistance program in Russia was rife with such conflicts of interest involving H.I.I.D. advisers and their U.S.A.I.D.-funded Chubais allies, H.M.C. managers, favored Russian bankers, Soros and insider expatriates working in Russia’s nascent markets.
Despite exposure of this corruption in the Russian media (and, far more hesitantly, in the U.S. media), the H.I.I.D.-Chubais clique remained until recently the major instrument of U.S. economic aid policy to Russia. It even used the high-level Gore-Chernomyrdin Commission, which helped orchestrate the cooperation of U.S.-Russian oil deals and the Mir space station. The commission’s now-defunct Capital Markets Forum was chaired on the Russian side by Chubais and Vasiliev, and on the U.S. side by S.E.C. chairman Arthur Levitt Jr. and Treasury Secretary Robert Rubin. Andrei Shleifer was named special coordinator to all four of the Capital Markets Forum’s working subgroups. Hebert, Hay’s girlfriend, served on two of the subgroups, as did the C.E.O.s of Salomon Brothers, Merrill Lynch and other powerful Wall Street investment houses. When The Nation contacted the S.E.C. for information about Capital Markets, we were told to call Shleifer for comment. Shleifer, who is under investigation by U.S.A.I.D.’s inspector general for misuse of funds, declined to be interviewed for this article. A U.S. Treasury spokesman said Shleifer and Hebert were appointed to Capital Markets by the Chubais group–specifically, according to other sources, by Dmitry Vasiliev.
In fact, H.I.I.D. projects were never adequately monitored by U.S.A.I.D. In 1996, a General Accounting Office report described U.S.A.I.D.’s management and oversight of H.I.I.D. as “lax.” In early 1997, U.S.A.I.D.’s inspector general received incriminating documents about H.I.I.D.’s activities in Russia and began investigating. In May Shleifer and Hay lost their projects when the agency canceled most of the $14 million still earmarked for H.I.I.D., citing evidence that the two managers were engaged in activities for “private gain.” The men had allegedly used their positions to profit from investments in the Russian securities markets and other private enterprises. According to sources close to the U.S. investigation, while advising the Russian government on capital markets, for example, Hay and his father allegedly used inside information to invest in Russian government bonds. Hay and Shleifer may ultimately face criminal and/or civil prosecution. Shleifer remains a tenured professor at Harvard, and Hay continues to work with members of the Chubais clique in Russia. Sachs, who has stated he never invests in countries where he advises and who is not implicated in the current U.S. government investigation, remains head of H.I.I.D. After Yeltsin’s Cabinet shakeup in March, Chubais was moved to a new position of prominence. His role in Russia’s political-economic affairs had been tarnished by reports of personal enrichment. Two examples:
§ In February 1996, Chubais’s Foundation for the Protection of Private Property received a five-year, $2.9 million unsecured interest-free loan. According to the pro-Yeltsin, pro-reform Izvestia, Stolichny Bank, an institution that enjoys lines of credit from the European Bank for Reconstruction and Development and the World Bank, made the loan in return for a small percentage of the Sibneft oil company when it was sold at auction, and for later control of one of the state’s largest banks. Chubais defended himself by saying such practices were common in the West, but failed to provide any reasonable explanation for some $300,000 in 1996 income not accounted for by his government salary.
§ During Yeltsin’s 1996 presidential campaign, security officials apprehended two close associates of Chubais as they were walking out of a main government building with a box containing more than $500,000 in cash for Yeltsin’s campaign. According to tapes of a later meeting recorded by a member of one of Russia’s security services, Chubais and his cronies strategized about burying evidence of any illegal transaction, while publicly claiming that any allegations of chicanery were the work of political enemies. A protracted, lackadaisical investigation began but was eventually dropped–more evidence of Chubais’s remarkable resilience. He remained valuable to Yeltsin largely because of his perceived ability to deal with the West, where many still regard him as a symbol of Russian reform.
During the five years that the Chubais clique presided over Western economic aid and policy in Russia, they did enormous harm. By unconditionally backing Chubais and his associates, the Harvard operatives, their U.S. government patrons and Western donors may have reinforced the new post-Soviet oligarchical system. Shleifer acknowledged as much inPrivatizing Russia, the book he wrote with Chubais crony Maxim Boycko, who with his patron would later be caught in another financial indiscretion involving taking a “veiled bribe” in the form of advances on a book on the history of Russian privatization. “Aid can change the political equilibrium,” they said, “by explicitly helping free-market reformers to defeat their opponents.”
Richard Morningstar, U.S. aid coordinator for the former Soviet Union, stands by this approach: “If we hadn’t been there to provide funding to Chubais, could we have won the battle to carry out privatization? Probably not. When you’re talking about a few hundred million dollars, you’re not going to change the country, but you can provide targeted assistance to help Chubais.” In early 1996, after he was temporarily removed from high office by Yeltsin because he represented unpopular economic policies, H.I.I.D. came to his rescue by placing him on its U.S.A.I.D.-funded payroll, a show of loyalty that former U.S.A.I.D. assistant administrator Thomas Dine says he supported. Western policy-makers like Morningstar and Dine have depicted Chubais as a selfless visionary battling reactionary forces. In the spring of 1997, Summers called him and his associates a “dream team.” With few exceptions, the U.S. mainstream media have promulgated this view.
United States policy toward Russia requires a full-scale Congressional investigation. The General Accounting Office did investigate H.I.I.D.’s Russian and Ukrainian projects in 1996, but the findings were largely suppressed by the agency’s timid management. The audit team concluded, for example, that the U.S. government exercised “favoritism” toward Harvard, but this conclusion and the supporting documentation were removed from the final report. Last fall Congress asked the G.A.O. to look into Eastern European aid programs and Shleifer’s role in the Gore-Chernomyrdin Commission. Such questions need to be answered, but any serious inquiry must go beyond individual corruption and examine how U.S. policy, using tens of millions in taxpayer dollars, helped deform democracy and economic reform in Russia and helped create a fat-cat oligarchy run amok. 



JANINE R. WEDEL Janine R. Wedel is an anthropologist and associate research professor and research fellow at the Institute for European, Russian and Eurasian Studies at The George Washington University, and the author of Collision and Collusion: The Strange Case of Western Aid to Eastern Europe 1989-1998 (St. Martin's).