Tag Archives: Russian Sanctions

Pennsylvania Avenue Jr. High

I’d be surprised to discover there’s a parent, grandparent, legal guardian, or teacher (anyone who’s had contact) with a middle schooler who hasn’t heard the Great Whine, or forms thereof.  It is a bit disturbing to hear the Great Whines emanating from the White House.   For those who haven’t had a 12-14 year old in close proximity recently, the Great Whine comes with perfectly predictable elements.

I didn’t do it.  Yeah, right.    Like the sheets and towels aren’t blue-gray after a pair of denim jeans (just your size) were tossed into the washing machine?

Okay, but everyone does it.  No.  Only people immature and foolish enough to think that parents don’t notice other parents aren’t getting memos from the school about children who sling toilet paper around the rest room do it.

Yeah, but So and So was the one who made me do it.  Please.  This household believes in Free Will.  You did it, you own it. We also believe in the Pottery Barn Rule — you break it, you buy it.  Next time you might want to have a quick thought before succumbing to some silly antic or prank.

It’s no big deal.  Uh, yes it is. When you screw up it’s a big enough deal.  If it were not a big deal no one would be noticing it, much less commenting.

But, it’s not really bad.   Wrong again me bucko.  If it violates the norms of civilized behavior, causes harm to anyone or anything, is a misdemeanor or perhaps even a low grade felony…it’s bad.

It’s not fair.  Oh yes it is.  Even if your friend didn’t get his skateboard confiscated because he flunked his last English test, even if your friend didn’t get grounded for throwing tomatoes at the neighbor’s cat, even if your friend (real or imagined) didn’t get into trouble for leaving left-over pizza out on the living room table overnight… you are not the victim of a misinterpretation of Universal Divine Law.  You screwed up, and there are consequences.

The problem with the Pennsylvania Avenue Junior High is that the stakes are so much higher than those associated with the usually small misdemeanors of young adolescents.  Yes, there are highly questionable meetings with agents of a hostile foreign power.  There are profound questions about the enforcement of sanctions imposed on that country for invading a sovereign nation, occupying that nation’s territory, and attacking the election processes of western democracies, and for egregious violations of human rights.

There are questions concerning the enforcement of those sanctions by a government the leadership of which may have financial connections of a nature as to make the desires of the foreign power of greater importance than the needs of our own nation. These questions need answers.  Those findings may range from  the inconvenient to the felonious, but applying the Cliché of the Day: We need to follow the facts.

 

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Who Is Supposed To Watch The Henhouse?

Let’s assume for the moment that while we may not yet know the full extent of Russian efforts to attack our election systems and voter rolls, we do know that they did so and will make future efforts to repeat their invasions based on what they have learned from 2016.  If this proposition seems reasonable, then the actions of the current administration are almost incomprehensible.

We have the official announcement that Chris Painter will leave the US State Department’s office of cyber issues at the end of this month. [TheHill]   Why the coordinator for US cyber issue policy would be leaving isn’t clear, but what is worthy of note is that Secretary of State Tillerson says staffing is a matter of “leaning in” and that the Cyber Security unit of the Department of State was organized by Secretary Clinton in 2011 to organize disparate parts of the department which dealt with cyber crime, cyber-security, internet freedom, and the protection of dissidents’ digital security. [NextGov]  One possible conclusion is that Tillerson is further truncating an already compressed organizational chart.

There are at least 50 reasons why more, not less, departments of the US government should be gearing up (not down) before the next round of elections: Alabama…Wyoming.

In September 2016 ABC News reported that Russian hackers targeted nearly half the US state voter registration systems and were successful in infiltrating four of them.  By that time 18 states had reached out to DHS Secretary Jeh Johnson for assistance with cyber-security.  As of June 2017 reports were published saying that there may have been as many as 39 breaches of state cyber security in regard to voter rolls and/or election systems. [VF] The hackers may have targeted swing states, and voter registration officials.

This onslaught would seem to support the idea that MORE needs to be done by the US Department of State, the Department of Justice, and the Department of Homeland Security (as well as the Election Assistance Commission) to help states prevent future hacks and assaults on our elections.  At this point the obvious clashes with the ideological.

There is baked into Republican ideology the notion that more can always be done with less.  The central concept appears to be that offices are filled to the transoms with unnecessary employees doing unimportant jobs.  However, consider the manpower needed to assist 50 states with 50 disparate voting systems from attacks by foreign powers intent upon doing everything from malicious mischief to outright fraud.  We might well ask not only who’s watching the hen house, but who’s even available to answer the phones?

The irony of the current situation lies in the 2016 Republican Platform which made some important promises:

“The platform highlights the recent passage of cybersecurity information sharing legislation and calls for a U.S. response to national state attacks that would include “diplomatic, financial and legal pain, curtailing visas for guilty parties, freezing their assets, and pursuing criminal actions against them.” It also calls for the U.S. to take an offensive strategy against cybersecurity attacks “to avoid the cyber equivalent of Pearl Harbor.” Supply chain issues, cyber workforce, cyber insurance, and the right to “self-defense” against cyber attackers were also included in the platform.”

Indeed, we’ve had the cyber equivalent of Pearl Harbor, but all we’ve heard from the current Republican administration is the disparagement of investigations of Russian interference as a Witch Hunt and Hoax, the suggestion that it would be “nice” if we had better relations with the Russians, talks about returning the Russian spy compounds in New York and Maryland, and now the Department of State will be operating without a coordinator for cyber-security.

What Americans should be advocating are:

  1. Full and adequate funding for the Election Assistance Commission, the only agency specifically tasked with testing and certifying election equipment in our elections.
  2. Adequate staffing and funding for cyber-security activities in the Department of Homeland Security, the Department of State, the Department of Defense, and the Department of Justice.
  3. Prioritization of cyber-security efforts to prevent attacks on our election systems by agents of foreign powers or the foreign powers themselves, as demonstrated by a nationwide effort to coordinate with all the election jurisdictions in this country to assist them in countering cyber assaults.

What happened in 2016 was a serious attack, a “Pearl Harbor” in GOP parlance, and the American public deserves to have this issue taken seriously.

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Bargaining with Babies

The Obama Administration closed down two lovely mansions used by the Russians to further their surveillance operations in the United States. We know that the mansions weren’t merely for tennis and tea dances because CBS reported that when the Russians decamped they destroyed documents and equipment, among the wreckage antennas, electronics, and computers.  Not the sort of thing on which one keeps score of bridge games or tennis tournaments among a few friends.  Now the Kremlin wants them back.  Their Foreign Minister says the closure was daylight robbery.  Better still, the Russians want them back,no little strings or threads attached.  One has to admire the chutzpah.   If the compounds (read SIGNIT stations) aren’t returned the Russians will “retaliate.”   The timing is interesting.

There was no “retaliation” in December, the obvious time for that sort of thing.  There was no threat of retaliation until: After Gen. Flynn was removed from the administration; and then more statements about ‘retaliation’ after the ill fated June meeting with 2, 4, 6, 8 (How many more Russians crashed the Gate?) with a Russian lawyer and lobbyist who wanted to discuss “child adoptions.”

By now, only the most willfully ignorant, or those who have been in a vegetative state since last December, don’t know that “child adoptions” is code for the Russian retaliation for the enactment of the Magnitsky Act.  This makes the following news bit disturbing:  “The State Department wants a deal that could include restarting U.S. adoptions of Russian children. It also has to deal with concerns at home – the FBI and some U.S. intelligence professionals fear giving back the sites would aid Russian spy efforts.”

The stoppage imposed on the US family adoptions of Russian children was Vladimir Putin’s reaction to the enactment of the Magnitsky Act.   And, the US State Department “WANTS” a “DEAL” to restart the adoption process?  Please tell me that the US State Department is NOT using babies and young orphans as cover for reducing the sanctions on a hostile foreign adversary that very much wants to sow discord among NATO allies, maintain its control of Crimea, indulge in military operations in eastern Ukraine, support the murderous Assad Regime, threaten its Baltic nation neighbors, and assault US, German, and French elections.

Not only should the US NOT cave to Russian threats and tantrums, but the House should pass S. 722 to maintain and upgrade sanctions against the Putin Regime — and this should happen now, and not later.

A word to one’s Representative in the House would be wise.

 

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Whatever Happened To… S 722 Russian Sanctions?

Whatever happened to S 722, the sanctions bill passed by the US Senate on a 98-2 vote?  Perhaps a more timely question is what happened to the amendment concerning US sanctions on the Russians:

“The amendment would do a number of things. It would codify and
strengthen six existing Obama administration Executive orders on Russia
and Ukraine and on Russian cyber activities and the sanctions flowing
from them.
It would provide for strict congressional review of any effort by the
President to relax and suspend and terminate or waive Russian sanctions
patterned after the Iran Review Act.
It would require mandatory imposition of sanctions on malicious cyber
activity against the United States, on corrupt Russian actors around
the world, on foreign sanctions evaders violating the Russia, Ukraine,
and cyber-related sanctions controls, on those involved in serious
human rights abuses in territories forcibly controlled by Russia, and
on special Russian crude oil projects around the world.”

Seems reasonable in light of what’s been going on to keep the sanctions, codify them, and give Congress a hand in the process in case the administration tries to modify them.  Although there is an argument to be made that allowing Congress to interfere with the sanctions process is problematic, there is a valid counter argument asserting that when an administrative proclivity toward softening sanctions against an international ‘bad actor’ is displayed, Congress needs to have some mechanism for putting on the brakes.   We might also want to pay particular attention to that last line in the amendment description, “and on special Russian crude oil projects around the world,” because this element is a thorny proposition in relation to the pro-fossil fuel policy of the current administration and State Department.

The amendment description continues:

“It would authorize broad new sanctions on key sectors of Russia’s
economy, including mining, metals, shipping, and railways, as well as
new investments in energy pipelines.
It would crack down on anyone investing in corrupt privatization
efforts in Russia–something we have seen a lot of over 20 years.”

This, of course would definitely not be music to the Oligarchs’ ears.  The “privatization schemes” began in the 90s, including the Aluminum wars and the oil grabs, along with other highly questionable distributions of Russian assets, natural and manufacturing.  The Wilson Center analysis is one of the better, more succinct, summaries:

“The small groups of individuals who emerged in control of the privatized enterprises fall into three different groups, according to Goldman. The first is former factory directors that became factory owners. This group outmaneuvered the workers, who were not organized, to gain control of the factories. The next two groups, argued Goldman, were the ones who obtained the greatest wealth–the nomenklatura and non-nomenklatura oligarchs. The nomenklatura oligarchs were the Soviet economic elites who took advantage of their positions to privatize the industries that they regulated. For example, Viktor Chernomyrdin, who oversaw natural gas production during the Soviet era, went on to head up Gazprom, the Russian natural gas monopoly and richest company. When Chernomyrdin went on to become Prime Minister, he passed control on to his deputy who worked under him in the Ministry.”

It’s easy to see why and how privatization became piratization.   And now we come to some of the items in the amendment the current administration might find potentially problematic:

“It would broaden the Treasury Department’s authority to impose
geographic targeting orders, allowing investigators to obtain ATM and
wire transfer records so Treasury can better target illicit activity of
Russian oligarchs in the United States.
It would require Treasury to provide Congress with a study on the
tangled web of senior government officials from Russia and their family
members and any current U.S. economic exposures to Russian oligarchs
and their investments, and that includes real estate.”

Let’s move to a side track for a moment and look at those geographic targeting orders in light of recent activity by FinCen:

“The Financial Crimes Enforcement Network (FinCEN) today (2/23/17) announced the renewal of existing Geographic Targeting Orders (GTO) that temporarily require U.S. title insurance companies to identify the natural persons behind shell companies used to pay “all cash” for high-end residential real estate in six major metropolitan areas. FinCEN has found that about 30 percent of the transactions covered by the GTOs involve a beneficial owner or purchaser representative that is also the subject of a previous suspicious activity report. This corroborates FinCEN’s concerns about the use of shell companies to buy luxury real estate in “all-cash” transactions.”

Now, who’s in the “high end residential real estate” business?  This brings to mind that transaction between Donald Trump and the Fertilizer King in south Florida.  Sometimes, it appears, the shells weren’t even thought necessary? However, the high end real estate market is attracting a stream of foreign “investment” which is perilously close to, if not definitively part of, good old fashioned money laundering.  Thus, providing Congress with a study of those tangled webs of Russians and their ‘investments’ and our economic exposure to their machinations might be embarrassing to the current administration?

The amendment also gives the administration some homework:

“It would require the administration to assess and report to Congress
on extending secondary sanctions to additional Russian oligarchs and
state-owned and related enterprises.”  (link to pdf)

Not only would be administration be tasked with enforcing or perhaps even increasing sanctions on the Oligarchs, but it would have to study whether secondary sanctions should be applied on those with whom they do business.

We should recall that this bill, including this amendment, sailed through the Senate on a 98-2 vote.  No sooner did the bill hit the House of Representatives than the leadership thereof displayed a heretofore relatively quiet amorous relationship with the Origination Clause.   Senator Bob Corker (R-TN) thought the origination questions had been settled in the final version of the Senate bill, but House Republicans continued to argue the question had not been resolved.

And now we turn to Nord Stream 2 pipeline, not exactly a subject of banner headlines in the US, but nevertheless an important piece in the sanctions discussion.  The Financial Times reports that the pipeline will pump gas from Russia to European countries in 2019, and is a “flagship project” for Gazprom; among those sanctioned would be investors in the pipeline.  The Oil and Gas lobby is particularly “concerned,

“Rep. Bill Flores, a Republican from Texas, said he’s been approached by “five or six of the majors” based in his state. The energy companies have told him they worry the bill as it stands is overly broad.

“You could restrict the sanctions of those activities within the borders of Russia, that might be a quick fix and also the national security carve out as well,” Flores said when asked how the sanctions bill might be changed to address those concerns. “Most of us are fine with having sanctions on U.S. interests operating inside Russia, with Russian companies, but then going outside of Russia is too broad.”

“Going outside of Russia” appears to be code for “Nord Stream 2.” Somewhere between Nord Stream 2 and the inspection of money laundering and other dubious transactions in the high end real estate business may lie the explanation for administration/House Republican opposition to the passage of S 722.

While Nevadans are calling Senator Heller’s office urging him to vote “no” on the health insurance bill, they may also want to contact our Congressional Representatives about advancing S 722.

Representative Mark Amodei (R-NV2) can be reached at 775-686-5760 (Reno) 775-777-7705 (Elko) or 202-225-6155.   Representative Ruben J. Kihuen can be reached at 702-963-9360 or 202-225-9894.  Representative Jacky Rosen’s Las Vegas office number is 702-963-9500 and Representative Dina Titus can be reached at 202-225-5965 or 702-220-9823.

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The Russia Sanctions: From Headache to Migraine for the Trump Administration – Updated

The US Senate approved amendment S. Amdt 232 to S.722 (Iran Sanctions bill) on June 14, 2017 on a 97-2 vote (No. 144) and it’s worth our while to look at precisely what this amendment provides [Congressional Record]:

The amendment would do a number of things. It would codify and
strengthen six existing Obama administration Executive orders on Russia
and Ukraine and on Russian cyber activities and the sanctions flowing
from them.

The Obama Administration imposed sanctions on Russian in the wake of Russia’s incursions and take over of Crimea, described by Reuters on December 20, 2016. The article notes that the incoming administration, Rex Tillerson included, were in favor of easing these sanctions.

It would provide for strict congressional review of any effort by the
President to relax and suspend and terminate or waive Russian sanctions
patterned after the Iran Review Act.

This provision likely won’t be well received at the White House, as it removes the administration’s power to unilaterally ease the sanctions, including the ones added in the aftermath of Russian meddling in the 2016 election.  The ‘cyber’ sanctions included the removal of 35 Russian diplomats and the closing of two Russian properties identified as “rest and recreation” locales, but commonly believed to be intelligence centers by US authorities.  It was reported last May that the administration was giving consideration to returning the two controversial properties to the Russians.[WaPo]

It would require mandatory imposition of sanctions on malicious cyber
activity against the United States, on corrupt Russian actors around
the world, on foreign sanctions evaders violating the Russia, Ukraine,
and cyber-related sanctions controls, on those involved in serious
human rights abuses in territories forcibly controlled by Russia, and
on special Russian crude oil projects around the world.

The use of the term “mandatory” is important in this context.  The message is clear, should the Russians or their agents engage in further acts of “malicious cyber activity, then imposition of sanctions is an absolute, non-negotiable, manner.  Notice, please, the list of activities which would trigger sanctions: Violating sanction controls, human rights abuses, and Crude Oil Projects.  The latter will be of great interest to the Russian oligarchs and “comrade” Putin.

It would authorize broad new sanctions on key sectors of Russia’s
economy, including mining, metals, shipping, and railways, as well as
new investments in energy pipelines.

The inclusion of “metals” is interesting,  considering the Trump promise to build oil pipelines with American steel.  The promise has a compromise:  On March 31, 2017 the Los Angeles Times reported that about half the steel for the Keystone Pipeline would come from an Arkansas plant and the rest will be imported. The rationale?

“The steel is already literally sitting there” waiting to be used, White House spokeswoman Sanders told reporters, explaining the reversal. Evraz Steel, a Canadian subsidiary of Russia’s Evraz PLC, had signed on to provide 24 percent of the steel before the project was rejected under Obama, according to Reuters, and some pipe segments have already been built.” [CSMonitor]

It would crack down on anyone investing in corrupt privatization
efforts in Russia–something we have seen a lot of over 20 years.
It would broaden the Treasury Department’s authority to impose
geographic targeting orders, allowing investigators to obtain ATM and
wire transfer records so Treasury can better target illicit activity of
Russian oligarchs in the United States.

A few translations might be in order.  “Corrupt privatization” is an analytic term used to describe Russian versions of privatization as essentially corrupt — “corruption has resulted from the privatization of public assets whether “bought” (typically at grossly undervalued prices) or by government officials in effect taking private control of assets still officially publicly owned.”  “Geographic targeting” refers to the authority given to the Department of the Treasury to regulate sanctions over regions, and not just specific countries or companies.  ATM and wire transfer records are of great interest to FINcen, and FINcen is the division of the Treasury which investigates financial fraud and other illegal activity.  (See also OFAC FAQ compliance)  At the risk of unsupported speculation, we can muse that if FINcen has the power to investigate wire transfers to Russia, and if the Special Counsel has access to FINcen investigations, then any attempts to evade sanctions can end up in the hands of the Special Counsel’s investigation.  This might get messy indeed.

It would require Treasury to provide Congress with a study on the
tangled web of senior government officials from Russia and their family
members and any current U.S. economic exposures to Russian oligarchs
and their investments, and that includes real estate.

This portion of the amendment widens the net.  “Any current US economic exposure to Russian oligarchs and their investments” is sufficiently broad to include anyone, any company, any corporation, and any family.  And, while we’re discussing real estate, this opens the possibility — even the probability — of a report on the transaction in which Russia’s “Fertilizer King” bought a Trump property in Florida at a price well over the market. [Miami Herald]  The term exposure could also extend to the fine art of money laundering, succinctly explained by this Business Insider article.  When the word “investments” pops up we can assume that the powers thus authorized in the Amendment can look into shell corporations.  “The real big shots don’t bother with casinos, crooked bank managers, junkets, or smurfs. They manage to transfer millions, or billions, without handling cash or involving banks at all, instead funneling their money through corporate deals (bribes, kickbacks, and embezzlement schemes), which are exempt from currency controls.”

It would require the administration to assess and report to Congress
on extending secondary sanctions to additional Russian oligarchs and
state-owned and related enterprises.

We can also safely assume that an administration which wanted to ease sanctions on Russia will not be best pleased with having to self-report on the possibility of extending secondary sanctions to “additional Russian oligarch,” etc.  For clarification, “secondary sanctions” are defined as follows: “Secondary sanctions are a relatively new kind of sanction that has been implemented frequently over the past five years, particularly relating to Iran. These kinds of sanctions supplement other sanctions programs by targeting non-U.S. persons (primarily foreign financial institutions and foreign sanctions evaders) who do business with individuals, countries, regimes, and organizations in Iran.” [OFACnet]  The Amendment provides for an administration report of the relative effectiveness of levying such secondary sanctions.

So, what to expect?  Since the administration failed to apply the brakes on the Senate, we could reasonably expect it to try to ameliorate these provisions in the House.  This should separate the Reagan Would Be Spinning In His Grave Republicans from the Dear Leader Trump Is Always Right Crowd.  Speculation Warning: Trump friendly representatives may try to argue that the Senate Amendment is “too broad,” or “too vague.”  The problem with this is that the Senate amendment is neither too broad or “void for vagueness.” There will be the “sanctions don’t work” argument perhaps — but this falters if those in favor of reverting to the old level of Cuban sanctions try to have it both ways — Cuban sanctions OK, Russian sanctions not OK.

Not to put too fine a point to it, but 97 members of the US Senate have just elevated the administration’s Russian sanctions headache to a full bore hemiplegic migraine.

Update: S. 722 (Iran Sanctions Bill with Russian Sanctions Amendment) passed the Senate on a 98-2 vote (number 147) The only members of the Senate voting against the bill were Sanders (I-VT) and Paul (R-KY).

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