Corruption in Russia: Sergei Magnitsky's boss speaks out

Attorney Sergei Magnitsky 1972-1979

A  reader writes:

My name is Jamison Firestone and I was Sergei Magnitsky's boss. I sent you an invitation to view our movie earlier today. Please let me know if you got it.

It is an important movie about the death of Sergei Magnitsky the Russian anti corruption lawyer who worked for me and and it's about the people who killed him and the total lack of rule of law in Russia today.  (Video in Russian or English video bellow.)

Firestone's most recent efforts to draw attention to the Magnitsky case appear to have been timed to coincide with the visit of  Russian President Dmitry Medvedev to the United States for meetings with President Obama.

Long-time Jotman readers will be familiar with Sergei Magnitsky, the attorney for Firestone Duncan which was representing the successful American investment firm Hermitage Capital Management on charges of tax evasion and tax fraud.   For example, Jotman blogged about Heritage Capital's owner William Browder's description of the deteriorating situation his company encountered operating in Russia.  Also,  JOTMAN.COM contributor Sanjuro pointed us to story published in the Russian-language Novaya Gazeta. According to the report, in 2005 HCM exposed corruption in a Russian oil company that is alleged to have been owned by Putin.  

Firestone's timely efforts to publicize the case seem to be having some effect.  The Moscow Times reports that "U.S. Secretary of State Hillary Clinton on Friday demanded that "justice be delivered" in the death of Hermitage Capital lawyer Sergei Magnitsky in a Moscow pretrial detention center last November."  The article continued:

The death of Magnitsky, who colleagues say was targeted by Interior Ministry officers he accused of stealing $230 million, is testing President Dmitry Medvedev's commitment to curb corruption.    The Interior Ministry, meanwhile, said it was investigating reports of extravagant spending by an officer, Artyom Kuznetsov, at the center of Magnitsky's death. A ministry spokesman said the accusations contained in documents published by Magnitsky's former colleagues on the Internet last week were being taken "quite seriously."

I forwarded Firestone's email to Sanjuro, who comments:

... and then you have Medvedev talking of hitech innovation etc at the St Petersburg economic forum - the forum's motto is "We have changed". Another funny point is that for the duration of the forum, the police seized the print of a crtical report on Putin's presidency (Putin. Itogi. - itogi can be roughly translated as "conclusions", "results" or "the bottomline"). The report was authored by Nemtsov and another dissident and they initially planned to distribute it among the forum guests.

• The full version in Russian.
• English translation by David Essel posted at his blog.

Most people who have read at it in full, agree that most facts are of common knowledge to Russians and even outside observers. People agree but then say "So what?" Apparently Nemtsov and his co-author Milov (and perhaps many other moderates) do not enjoy much support on the premise that they are lab-grown, controlled "pocket opposition".

Sanjuro also reports to us on press coverage of the Firestone investigation

Gazeta reports that the MVD's Internal Security Dept has started investigation on one of the police officers involved in the Magnitsky case. The investigation was started on Firestone's complaints, he's also quoted by the Gazeta as being not very optimistics about the outcome - he said he was "extremely disappointed" after his communication with the internal investigation people.

Interesting details related to the police officer's lifestyle: in the last three years his family has spent over 3 million dollars (mostly on luxury cars and real estate)...   Earlier in his interview to R. Amsterdam, Firestone speculated that the officers implicated in the case were rewarded with smth about $6 million, for stealing over $200 million from the state (in this case alone). The main benefeciary of the affair is unknown. Russian commenters on the article failed to notice that even if caught, these officers will be a rather small fish.

 Here's the Firestone video:

Will the big risk-takers be the real winners in Afghanistan?

The US may be stabilizing Afghanistan on behalf of Indian and Chinese mining interests. Or should we say the Americans may be keeping Afghanistan just unstable enough to give their Asian competitors the upper hand.

Last week the New York Times reported on a Pentagon study that found Afghanistan may have mineral resources worth $1 trillion.   Apparently, some sources estimate the actual figure may be closer to $3 trillion.  The story wasn't exactly news to mining industry insiders, but the coverage did get a lot more people talking.   Mineweb (h/t Sanjuro) reports on the Afghan government's efforts to attract foreign investors to mining:

Many international mining firms are cautious over bidding on Afghan tenders and Jawad conceded it could be a tough sell.

"We have had a hard time convincing U.S. companies, despite my personal hard lobbying to consider this. One has to be realistic," he added.

"Practically speaking, the two countries in our neighborhood -- China and India -- are in need of these resources and they may be more forthcoming ... Companies from developing countries are less risk averse," he said.

The irony of course, is that the United States far and away the biggest risk-taker in Afghanistan today.   Whether Americans will emerge from the war the real winners remains to be seen.  I think that the longer these kinds of open-ended military engagements drag on, the worse their odds look.

Why is Obama playing hide and seek on cap and trade?

I was just reading a copy of Tuesday's Financial Times, and I came across an article by Edward Luce that seems highly relevant to the question I asked in my Wednesday post entitled, "Did Obama oil spill speech reveal hidden White House energy agenda?".

Prior to the speech Tuesday night, Luce had tried to anticipate what Obama would want to say:

But Mr Obama's larger objective from tonight's address will be to turn the catastrophe to his advantage by painting it as an overwhelming argument for putting a price on carbon in the US.

According to senior Democratic officials on Capitol Hill, he intends to urge the Senate to pass an energy bill that would include some sort of mechanism for pricing carbon, probably a cap and trade system. This follows a deterioration in the Senate bill's prospects after it lost the support of its sole Republican backer, Lindsey Graham, the senator from South Carolina, in April. The House of Representatives passed a cap and trade bill last year.

Following the speech, I wrote: "The fact that Obama did not push for a carbon tax, a gasoline tax, or a carbon trading plan last night was surely significant."  In the post, I explained how Obama even appeared to have used the speech as an opportunity to back peddle on this key issue.  And I attempted to answer the question: Why?

Did Obama oil spill speech reveal hidden White House energy agenda?

Last night, as more oily goo descended on the beaches of the Gulf Coast of the United States, the president announced his willingness to entertain various modest initiatives from same people who strongly advocated increased drilling just two months ago.  Rather than use a major televised energy speech from the oval office to rouse Americans to embrace decisive action on pollution, climate change, and US dependence on fossil fuels, Obama declared his willingness to compromise with the naysayers.  Sound incredible?

Consider what the president actually told Americans last night.  Reading Obama's own words, it certainly sounded to me as if the president has proposed taking a step back from pursuing truly meaningful action on energy and climate change.   I thought this passage of Obama's speech was particularly troubling:

When I was a candidate for this office, I laid out a set of principles that would move our country towards energy independence. Last year, the House of Representatives acted on these principles by passing a strong and comprehensive energy and climate bill - a bill that finally makes clean energy the profitable kind of energy for America's businesses. 

Now, there are costs associated with this transition. And some believe we can't afford those costs right now. I say we can't afford not to change how we produce and use energy - because the long-term costs to our economy, our national security, and our environment are far greater.

So I am happy to look at other ideas and approaches from either party - as long they seriously tackle our addiction to fossil fuels. Some have suggested raising efficiency standards in our buildings like we did in our cars and trucks. Some believe we should set standards to ensure that more of our electricity comes from wind and solar power. Others wonder why the energy industry only spends a fraction of what the high-tech industry does on research and development - and want to rapidly boost our investments in such research and development.

All of these approaches have merit, and deserve a fear hearing in the months ahead. But the one approach I will not accept is inaction.

"Some believe we can't afford those costs now."  Does Obama disagree?   He certainly does not take the opportunity to entirely dismiss this perspective, which is shared by opponents of energy reform.   Note that none of the examples of "other ideas and approaches" -- that Obama is open to hearing about -- represent  sufficient or credible alternatives to either a carbon tax or a serious carbon trading scheme.  Tinkering with the problem of pollution and carbon emissions through rebates, efficiency standards, and research grants is  insufficient.  We desperately need an economy in which market pricing rewards clean energy use.

Only by taxing pollution can market forces be efficiently harnessed in support of clean energy development.   Properly executed,  revenues from a carbon tax could subsidize the cost associated with the transformation to a clean energy economy.   As Royal Dutch Shell Chairman Jorma Ollila told the IPI World Congress in Helsinki last June, "Firstly, we need a cap and trade system [essentially a carbon tax] that a puts a cost on emissions, that credibly commits us to a path of energy reductions by creating incentives to cut emissions."
 
Although Obama wants "action," Obama has no plan of his own -- no apparent convictions of his own -- concerning the most pressing crisis of the day.  He says he wants to see something done.   But he has no apparent notion as to what that something should look like.  The fact that Obama did not push for a carbon tax, a gasoline tax, or a carbon trading plan last night was surely significant.

Yet, let's not be fooled into thinking last night's speech was some kind of "overlooked opportunity."  It was a missed opportunity alright, but I would argue that the White House knew what it wanted -- and how to get it.

Obama's position on energy and climate change is reminiscent of his negotiating tactic during the  health care debate.   Back then, Obama announced at the onset that the "public option" -- generally accepted as the best means of controlling spiraling costs short of a Canadian-style single payer system-- was merely "on the table."  From early on Obama made it clear that the public option was negotiable.

Sure enough, it was negotiated away. 

Similarly, last night, rather than seizing the historic moment, Obama let it be known that he is willing to compromise with "some [who] believe we can't afford those costs right now."    From my reading of Obama's statement, he would be willing to substitute "a strong and comprehensive energy and climate bill" -- one that by definition must include either a carbon trading scheme or carbon tax -- for an array of industry-targeted benchmarks, incentives, and research subsidies.

Think about that for a moment.  Effectively, Obama announced last night that a carbon trading mechanism or carbon tax is negotiable.  If that's what just happened, it's a major development.  Just as the public option was an ideal way to control costs on behalf of taxpayers and consumers, a carbon tax -- or  carbon trading mechanism -- in which proceeds of a tax or trade are returned to consumers is an ideal way to cut greenhouse emissions while helping citizens pay for the cost of the transition to clean energy. 

It's déjà vu.  We saw this all before with respect to the healthcare bill. Obama's comprising stance was critical to shepherding a bill through Congress that did not anger the insurance and pharmaceutical industries.  We saw it early in 2009 with respect to Obama's position on legislation that might have protected mortgage holders from asset siezure by the banks. I think it's no mystery how the Obama Administration juggles public pressure for political change with the interests of powerful corporate donors.  I think it's no accident that this president never quite seems to "seize the moment" in a crisis.   I strongly suspect the administration wants to hold out for some kind of compromise energy bill: a bill that will have consumers and taxpayers subsidizing the profits of big energy companies.

Update:  See my next post concerning questions raised in this post.

Obama oil spill speech: what the president should say but won't

UPDATED
Obama is about to give his first speech from the oval office.  I think Obama should 

1. - call for shared sacrifice, not only pointing out that all Americans share some responsibility for the spill through their way of life, but propose immediate and concrete sacrifices to change course.  This  should include a national gasoline tax.
2. - massively step-up response to the spill commandeering  dozens of supertankers to collect oil and several oil refineries to process the collected oil.  He should announce that hundreds of thousands of Americans will be put to  work cleaning beaches, etc.
3. - sieze control of BP America, nationalizing all its assets and putting its management under the authority of his administration.   This way, there will be no question about matters of compensation.
4. - pin blame for the disaster on Republican free-market ideology.   Those who have pushed hardest for deregulation have been America's self-proclaimed "conservatives".   Although Democrats have not opposed deregulation to a satisfactory extent, it's important going forward that one American political party declare its opposition to this root cause of the disaster.   Obama should point out that "deregulation" was also at the root of the financial crisis.   Obama should not speak another word about bipartisanship. Rather, he should emphasize that which distinguishes Republicans and Democrats.  Obama has an opportunity to show Americans that they have a choice. 

I don't expect Obama to say any of these things.  To the extent he touches on these themes, I anticipate it will just be talk. Obama's first priority as president is protecting the interests, position, and wealth of the corporate powers whom he serves.  Everything else is secondary.

UPDATE:  Sadly, my predication was correct.  Obama -- providing no concrete plan, direction, or specifics -- said, "Even if we're unsure exactly what that looks like. Even if we don't yet know precisely how to get there. We know we'll get there." (Transcript here).

Frankly, Americans deserve better than this from their president.

Wikileaks has Garani massacre video

According to an email circulated by Wikileaks editor Julian Assange this morning:

One of our alleged sources, a young US intelligence analyst, Bradley Manning, has been detained and shipped to a US military prison in Kuwait, where he is being held without trail. Mr. Manning is alleged to have acted according to his conscious and leaked to us the Collateral Murder video and the video of a massacre that took place in Afghanistan last year at Garani.

The Garani massacre, which we are still working on, killed over 100 people, mostly children.

You can read the rest of the email here.

In the email Assange makes no mention of Daniel Ellsberg's concern that the US might try to assassinate him. (Daniel Ellsberg, of course, is famous for having leaked the Pentagon Papers -- a courageous act by a career diplomat which helped to end the Vietnam War.)  Assange's email does, however, refer to the US government's allegation that Manning sent Wikileaks 260,000 classified  State Department cables -- a claim which Wikileaks denies.  Assange writes, "(T)he US government is acting as if the allegation is true and we do have a lot of other material that exposes human rights abuses by the United States government."   Hence Ellsberg's fear.

Ellsberg said in a recent interview with MSNBC's Ratigan:

We have after all .. a president who has announced that he feels he has the right to use special operations operatives against anyone abroad, that he thinks is associated with terrorism.... One American citizen has even been named. Now Assange is not an American citizen. But I listen to that with a special interest. Because I was in fact the subject of a White House hit squad in November on May 3rd, 1972....  For worries they had that I would leak president Nixon’s nuclear threats, which he was making at that precise time in 1972. Now as I look at Assange’s case, they’re worried that he will reveal current threats. I would have to say puts his well-being, his physical life, in some danger now. And I say that with anguish. I think it’s astonishing that an American president should have put out that policy and he’s not getting these resistance from it, from congress, the press, the courts or anything. it’s an amazing development that I think Assange would do well to keep his whereabouts unknown.

Assange canceled his appearance at a speaking engagement that was to have taken place over the weekend in Las Vegas (on a panel with Valerie Plame and Scott Risen). Having been advised against travel to the US, Assange is believed to be back in his native Australia.

According to Assange, Wikileaks requires urgent financial support.

"Ethnic" or counter-revolutionary clashes in Kyrgyzstan?

Jotman contributor Sanjuro, drawing on Russian language news sources, updates us on developments in Kyrgyzstan where the second violent revolution of 2010 seems to be underway.  Sanjuro writes:

Things are getting worse. By now over 100 confirmed dead - presumably most of the ethnic Uzbeks and the death toll is rising. For now localized in the South, most notably in Osh and Jalalabad (former Bakiyev's strognhold), but Reuters says it's spreading. Bishkek/North is relatively quiet.

Russia is sending troops to protect its base Kant. The interim Kyrgyz government is apparently desperate for more military help from Russia and Kazakhstan (see here and here).

Even though it's being labeled as "ethnic clashes" and is currently aimed against the ethnic Uzbeks in the area, I think it's a bit of a misnomer. This looks "ethnic" on the surface, it does speculate on ethnic sentiments, but it seems to have political, counter-revolutionary roots, and is apparently facilitated by the criminal underworld. Ferghana.Ru has some analysis.

I am almost sure that the former president Kurmanbek Bakiyev, operating out of Minsk under protection of the Belarus president, is behind this riots - he's has the motive, he has the money, he has the loyal people in Jalalabad, who stand to lose a lot.

Some commenters on the Reuters speculated that this is Russia instigating, as a pretext to send troops, but I don't think this is the case. I'd rather think that this is mostly Bakiyev's retaliation, plus Alexander Lukashenko's (Belarus president) attempt to play some "multi-vector" game to show Russia his still got some bargaining power.

In this case, I'd rather welcome joint Russian-Kazakh intervention, if it happens soon enough. For Russia this could be a very rare instance of constructive use of force (provided there are some capable troops left) and a chance to repair its international reputation. For Kazakhstan, its own secutiry, plus they must be obliged to support their local Central Asian prestige.

Rightists cheer vigilante police killings in Russian Far East

Surveying the Russian language news media, JOTMAN.COM contributor Sanjuro reports on a "a worrying trend of which I have warned previously [i.e. here, here, here, and here] - growing citizen vigilantism against law enforcement officers." Sanjuro writes:

The issue is particularly worrying because it is prone to hijacking by the ultraright (and sometimes by plain ordinary criminals), and also because it provides a convenient pretext for increased persecution of liberals and radicals alike. I have been following news for the last few days and -- although there are lots of conflicting messages (a recent Moscow Times story is not conclusive) -- what is more or less clear is that:

1. Several (3-5) young men in the Russian Far East with troubled relationships with law, chose to attack policemen and to hide in the woods, mimicking the "Rambo" story. At some point it was claimed that they were led by an alleged Chechen war veteran / an Airborne trooper / a GRU operative who had gone rogue.
2. Russian law enforcement agencies mounted a spectacular containment operation and by now have been able to kill/detain all/most of the vigilantes in an apartment in the city of Ussuriysk.
3. The comments in the Russian internet were quite mixed, with a very visible proportion of commenters hailing the vigilantes as "heroes rising against the police lawlessness" (the language of these commenters was similar to that of the ultraright/nationalist groups), or simply sympathising and wishing luck - these (majority, perhaps) seemed to regular citizens with a contempt for the law enforcement system. In the Russian press the vigilantes were referred to as "partisans" - in reference to the WW2 Soviet guerilla fighters.
4. It is remarkable and not surprising that the story happened in the Far East.
5. The ultra-right link is quite worrying.

With regard both to Sanjuro's introductory remark and fourth point, Jotman wonders if the event could precipitate a Moscow-led clamp-down in the Russian Far East, conveniently sweeping-up dissenters of various political stripes.

Soros says budget deficit cuts will worsen financial crisis

Bloomberg (h/t Scherer):

Billionaire investor George Soros said “we have just entered Act II” of the crisis as Europe’s fiscal woes worsen and governments are pressured to curb budget deficits that may push the global economy back into recession.

“The collapse of the financial system as we know it is real, and the crisis is far from over,” Soros said today at a conference in Vienna. “Indeed, we have just entered Act II of the drama.”

Soros, 79, said the current situation in the world economy is “eerily” reminiscent of the 1930s with governments under pressure to narrow their budget deficits at a time when the economic recovery is weak.

It's as if economic collapse is what they have been asking for.  I say this because before the deepest recession in most peoples' memory had even begun to abate -- before most small businesses were able to access loans, before hardly any workers had been rehired --  a peculiar mindset took root in the US and elsewhere.  Suddenly, everywhere you turned, opinion-makers were saying that countries must immediately embark upon massive budget-cutting to reduce the long-term debt risk.   Curbing long-term deficits suddenly became all the rage.  The spectacle has been downright creepy to witness.

The long-term problem of debt is understandable; the impetus toward drastic immediate action on the issue is not.  To the extent "governments are pressured" it needs to be asked: who or what is behind all the haste?

"Compelling evidence" for Burma uranium enrichment

Robert E. Kelley, two-time former director of the IAEA, has more or less validated the existence of a secret uranium enrichment program in Myanmar.   Maj. Sai Thein Win, a Burmese army defector, supplied the Democratic Voice of Burma with a pile of documents relating to Burma's alleged nuclear activities which Kelley analyzed, issuing a 30 page report.

On account of its friends in North Korea, Russian training, and German manufacturers assisted by Singapore,  it appears as if Burma has been advancing toward a prototype nuclear device. Drawing on Kelley's analysis, DVB concludes:

The total picture is very compelling. Burma is trying to build pieces of a nuclear program, specifically a nuclear reactor to make plutonium and a uranium enrichment program. Burma has a close partnership with North Korea. North Korea has recently been accused of trying to build a nuclear reactor inside Syria to make plutonium for a nuclear program in Syria or North Korea. The timeframe of North Korean assistance to Syria is roughly the same as Burma so the connection may not be coincidental.

If Burma is trying to develop nuclear weapons the international community needs to react...

With today's cancellation of Sen. Jim Webb's planned trip to Burma, the international reaction has already begun.

Filter bubbles: How "want to know" kills "right to know"

Sometimes the worst thing is getting what you ask for.

Ethan Zuckerman, describing "filter bubbles," writes:

We thought the battle on the internet was to defeat the censors, to get the story out of Iran around filters and the police. We thought we needed to circumvent the biases of traditional media gatekeepers. But now we’re facing a re-intermediation, this time by algorithms, not by individuals.

Eli Pariser, who coined the term "filter bubble," recently described how Google and Facebook use algorithms.  Zuckerman writes: 

Google uses 57 signals available to personalize the web for you, even if you’re not logged in. As a result, the results you get on a Google search can end up being very different, even if quite similar people are searching....

Facebook also engages in customization, using information on the links you click to customize the news that appears in your personal feed. Eli tells us that he’s worked hard to add conservatives to his circle of friends and follow them on Facebook – why wasn’t he getting news and links from them. Well, Facebook saw he was clicking more links about Lady Gaga and progressive politics and customized his experience to filter out conservative links.

If you visit the blog of Craig Murray, you can see where many of his readers have been deeply perplexed by the coverage of the Gaza aid flotilla on Google News:  "Why do you think the most covered story by far over the past few days does not appear in Google's list of most covered stories?" asks one reader.  Another: "You have to wonder what munging of the search and indexing system produced a result that has had no mention of by far the biggest story of the past few days."   Another commenter responded, " I suspect that search results are modified for each individual computer user account; that is the sort of thing Google specialise in. Try clearing cookies, or try from a different machine, and see if results vary."   Some commenters speculate the censorship is intentional, but given ubiquity of the algorithms, it's hard to say.

Back when the story was "breaking news," I attempted to use CNN's US website as a platform for learning about the Israeli attack on the Gaza aid flotilla.   In this blog post, I described how my experience on the CNN website had been shaped by collaboration between Facebook and CNN.  I contrasted my personal experience with the observation of a Jotman reader.  The reader had used the same website around the same time yet unmediated by any "filter bubble."

To me, the contrast illustrated how it would now be possible for the press to 1) satisfy to the curiosity of knowledge-networked individuals on a "wants to know" basis, while 2) restricting the American public's access to the same information.

On the positive side, many stories that would have previously gone unreported in the mainstream US media  may now get reported by these organizations.   On the other hand, because the circulation of controversial stories can be strictly limited by algorithm, the "informed few" will often not be aware that only a select group is privy to viewing a controversial headline.

The situation is somewhat analogous to an unintended consequence of the otherwise laudable American charter school movement.   When well-educated parents are most motivated to get their kids into charter schools or subsidized private institutions, these super-empowered citizens do not tend to advocate as hard for the improvement of public education overall. Consequently, whereas for a minority, educational opportunities and standards may improve, for the majority standards either don't change or decline.  Likewise, to the extent that the better informed segment of the public feels satisfied with the quality and content of their "personalized" news, I suspect they will be less likely to care about what media companies are feeding their less well-connected fellow citizens.  Few will notice, fewer will care.  

In the old days, when journalists and press advocates talked about the public's "right to know," acts of censorship were glaring and occasionally sparked outrage. In a future where news is freely distributed on the basis of "want to know" algorithms, who will stand up on behalf of the public's "right to know"?

CNN coverage of attack on Gaza aid flotilla

A reader writes:

Thanks for your nice post on CNN reporting on Wikileaks apache video.

Maybe you could cover the CNN reporting on the Gaza aid ship incident in international waters. No matter whether people agree with Israels actions, CNN has to at least make the information about the incident available to the public, but imho deserves an award for burying the news!

The incident was top news all over the world except the CNN US website. With my UK IP address I was directed to the international version of the site where the incident was the main story. But reading the comments I was wondering why several commentators complained about having problems to find the article....

I know, news is a business, but still... they are journalists and have a duty to the people to provide information. The press is an important part of every democracy for god's sake!!  

Courtesy of the reader, you can compare the two CNN homepages -- US at 04:46 EST (08:46 GMT) and the international at 08:59 GMT -- by clicking here.

I had noticed the same thing about the CNN page around the same time, but was distracted by a new feature on the CNN's website called "friend's activity."  CNN has teamed up with Facebook to monitor the news you and your friends are reading on the Internet. Only because a number of Jotman's Facebook friends had been viewing articles related to the Gaza story, did this story's headline appear on Jotman's CNN news page.   (If you want to disable the spyware, CNN directs you to a Facebook "modifications" page that is an incomprehensible labyrinth.)

The feature appears to have provided CNN with the means satisfy the curiosity of readers with a particular interest, while holding the same story back from wider a US audience.  At any rate, I think this observation  illustrates where social-network-determined news could be headed.