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Russia offering energy jobs to European ex-politicians

Oligarchy is a weekly newsletter tracking how the super rich are changing the world for the rest of us. In this edition: Russia offering energy jobs to European ex-politicians; Why stolen money is rarely returned to the victims of corruption

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NORD STREAM 2

The Swiss company that is building Nord Stream 2 – the new pipeline connecting German gas consumers, with supply from the Russian behemoth Gazprom – issued a statement last week announcing that it was beginning preparations to bring it into service. There are, of course, many hurdles still to clear, but the project is inching ever closer to completion. Germany’s local elections at the weekend suggest the Greens’ appeal is waning, so domestic opposition looks unlikely to stymie development. Even the United States, which has opposed Nord Stream 2 under three successive administrations, has recognized it is now effectively a “fait accompli.”

Nord Stream 2 is remarkable in three separate ways: it embeds fossil fuels deeper into the European economy at a time when we desperately need to decarbonize; it enriches the Kremlin at a time when we should be starving it of funds to deter its ever-more-aggressive policies; and, it removes what scant leverage Ukraine and Poland have over the policies taken by their neighbors in Berlin and Moscow, at a time when Russia is already occupying parts of Ukraine and coming ever-closer to swallowing Belarus. Any one of those points would be sufficient to make it a disastrous idea; taken together they make it pretty much the worst foreign policy development in recent European history. 

American think tanks (from all sides of the political debate) have been particularly scathing about the project of late, which is perhaps unsurprising in the aftermath of the Solar Winds hack, which showed Russia’s cyber-capabilities to be as aggressive as ever. But there has been significant opposition in Europe too, including a huge vote against the project in the European Parliament in January. None of that has stopped Angela Merkel’s government from cracking on.

There is no need to look for an explanation more sinister than the obvious one: as a rule, nothing stops the German government from prioritizing its precious exporters, who want as much cheap gas as they can get. National venality is significant enough, without worrying about whether individual politicians might also be venal.

However, it’s also noteworthy that the Russian policy of offering jobs in the fossil fuel sector to European ex-politicians of negotiable virtue began with German ex-Chancellor Gerhard Schroeder, who currently chairs the “shareholders’ committee” for Nord Stream, as well as the board of directors of Rosneft. His indecently hasty willingness to take a job for a Russian state company in 2005, just weeks after leaving office, and to help run a project that he had himself approved, provided a name – Schroederisation – for the whole policy. See evidence from former Estonian President Tomas Ilves on page 65 here, for a particularly scathing example of its usage.

It may look like Western countries have been unusually united in their policy towards their Eastern neighbors this year, with – for example – a surprisingly firm EU response towards Belarus’ hijacking of the Ryanair flight last month. However, behind the headlines, it’s also been a great year for Schroederisation, which has now spread beyond Germany.

Earlier this month, Austria’s former foreign minister Karin Kneissl – who you may remember from her dance with Vladimir Putin at her wedding, footage of which was screened on RT – joined the board of Rosneft. She already writes columns for RT, and has helpfully collated them on her personal website, for your perusal. You will be shocked to hear she favors “dialogue instead of sanctions” in the EU’s Russia policy.

A week later, the Russian government announced it would be nominating former French prime minister Francois Fillon to the board of Zarubezhneft, a smaller state oil company. Fillon was a front-runner for the French presidency in 2017, but he then faced allegations that he paid his wife and others more than a million dollars out of government funds for work they never did, which capsized his political career. He was convicted in a French court last year, and is appealing a guilty verdict and a five-year prison term, but has been given a warm welcome in Russia in the meantime. He sounds like just the kind of guy any modern, outward-facing oil company would fall over itself to employ!

Why does Russia like to employ people like Schroeder, Kneissl and Fillon? Well, obviously, they’re intelligent, resourceful, well-educated and well-networked people or they would never have risen to the top of their professions in the first place, so there are plenty of good reasons to employ them. But it’s also true that Russia has long tried to counteract its relative economic weakness compared to the European Union as a whole, by pressurizing or rewarding individual member states so they can derail the bloc’s consensus-based policy making. 

Ensuring that politicians from particularly influential EU countries can earn a useful post-retirement income is a potentially useful way to encourage them to remain friendly pre-retirement.

On that note, here’s an interesting snippet about Russia seemingly using its tourists as leverage against Bulgaria and Greece, to force them to be friendlier. There’s only a single source for the story so I’m not entirely clear if it’s indicative of something larger or just a cock-up, but it’s certainly interesting that cheap flights have been canceled, depriving the two EU members of crucial revenue from Russian holidaymakers. Russia’s ambassador to the EU, Vladimir Chizhov, denied Russia was controlling its tourism flows for geopolitical reasons, but did so in a way that doesn’t exactly inspire confidence.

  • “I would warn journalists against the temptation to try to find a black cat in a dark room,” Chizhov said in a written statement. Considering Russia’s general policy towards journalists, I’m not sure what to make of that.

NIGERIA

This is a depressingly familiar tale. Nigeria’s Guardian newspaper reports that money confiscated overseas from accounts controlled by ex-ruler Sani Abacha may have been re-stolen after being returned to Nigeria. 

  • “Corruption has gotten worst. Policies are only on paper and never implemented. The second tenure of this administration is even worse. It is business as usual. We need to make people give account of what has been happening,” said Faith Nwadishi, Executive Director of the Centre for Transparency Advocacy.

It is very hard to make sure that the fruits of corruption are spent in the interests of that crime’s victims, rather than its perpetrators. In Kazakhstan, tight controls ensured that money did end up benefiting ordinary citizens, but in the main, it doesn’t happen very often.

Part of the reason why it happens so rarely is that only a fraction of money stolen from countries like Nigeria is ever confiscated in the first place, let alone repatriated. However, news this week from the Metropolitan Museum of Art in New York suggests we should never give up hope. In the late 19th century, in an early example of kleptocracy – or colonialism, as we used to call it – British forces looted around a thousand bronze works of art from Benin, Nigeria (as well as thousands of other objects), and they were dispersed to collections all around the world. This was controversial as soon as it happened and – after more than a century of campaigning — the Met has finally agreed to send three pieces in its possession back to Nigeria, where they will be displayed at last in their homeland.

  • “We welcome the rapprochement developing in the museum world, and appreciate the sense of justice displayed by The Metropolitan Museum of Art. Nigeria enjoins other museum to take a cue from this. The art world can be a better place if every possessor of cultural artefacts considers the rights and feelings of the dispossessed,” said Alhaji Lai Mohammed, minister of information and culture of Nigeria.

Germany and the University of Aberdeen in Scotland have already committed to returning their Benin Bronzes.

  • “It would not have been right to have retained an item of such great cultural importance that was acquired in such reprehensible circumstances,” said George Boyne, Aberdeen university’s principal and vice-chancellor.

The British Museum, which has the largest collection of the bronzes, has not yet followed suit, nor can I figure out what its position is from the page of waffle on its website. However, now Western countries are at last taking steps to undo the legacy of 19th century looting, then perhaps 20th century looting will one day be made good too.

WHAT I’M READING

Turkmenistan is one of the few ex-Soviet countries I’ve never been to (if you exclude a nerve-wracking five minutes when an Uzbek bus took an unexpected detour over the border a couple of decades ago, before re-emerging unchecked and unmolested), partly because it’s by far the more repressive and thus the hardest to be a journalist. Much of what the outside world knows about the place comes from the antics of its two post-independence presidents, who are given to stunts that presumably look better at home than they do abroad – naming months after members of their family, DJing, winning obviously staged sporting contests

The slightly ridiculous image is misleading, however. Turkmenistan is the most repressive place in the former USSR, and takes corruption to an extent seen almost nowhere else on earth. As a result, I have been devouring this report from Crude Accountability, which lays out how kleptocracy works within the Turkmen elite, and which institutions enable it.

  • “Money that should rightfully be spent on the people of Turkmenistan is embezzled, secreted away in foreign bank accounts, used to buy real estate in Europe and the United States, or otherwise wasted on vanity projects that reinforce the president’s personality cult. The country’s model of governance does not serve its people, and has been compared to a private company owned by the president’s family, or even an organized crime group,” the report states.

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Oliver Bullough

Oliver Bullough is an author and journalist from Wales, who specializes in writing about financial crime, often when it has links to the former Soviet Union. His most recent book is Moneyland, why thieves and crooks now rule the world and how to take it back, and he is currently trying to write another one despite lockdown.

@OliverBullough