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Chubais – The next neoliberal head to roll in Russia?

I venture that few outside the Russian Federation will even know the name of Anatoly Chubais, today the CEO of a Russian high-tech company called Rusnano. Following the high-profile November 15 arrest of Prime Minister Dmitry Medvedev’s Minister of Economics, Alexei Ulyukaev, on charges of accepting at least $2 million in bribes in a state privatization involving Rosneft and Bashneft energy companies, the spotlight has turned to the company of Anatoly Chubais, Boris Yeltsin’s 1990s privatization czar, today CEO of state-owned Rusnano. If charges are formally brought against Chubais–undeniably one of the most hated of the Yeltsin-era kleptocrat “reformers” who worked with the CIA during the 1990’s to plunder Russian state assets worth hundreds of billions for just pennies – it will signal that Putin feels in a strong enough position to purge the pro-free market liberal mafia that still holds a lock grip on the development of the Russian economy.

by F. William Engdahl for the Saker blog

On 16 November, the day after the dramatic arrest of Ulyukaev, state prosecutors and police raided the offices of Chubias’ Rusnano. Notable about the reports of the prosecutors’ questioning Chubais and other top officers at Rusnano, is the fact that several have fled Russia in recent months to avoid prosecution. To the present, Chubais remains, and vehemently claims innocence.

In my view, there is vastly more at stake here than the innocence or guilt of Chubais. This move, if combined with the arrest of Ulyukaev, signals a major cleanup of corrupt elements who, beginning even before 1991, organized to sell Russia to the CIA and Western speculators like George Soros.

Some history that has generally been blacked out in the West about the true role of Anatoly Chubais and the Yeltsin Presidency are instructive to also understand the irrational rage of Washington and US banks and oligarchs directed at Putin and at everything he does to re-establish Russian sovereignty and stability.

Part 4 - Oligarchs buy Yeltsin re-election

By 1996, with the Russian economy deep into hyperinflation, Yeltsin faced certain defeat in scheduled elections. The head of the Communist Party, Gennadi Zyuganov, promising a return to stability, was far ahead in the polls. Some of Yeltsin’s close advisers ever suggested canceling the elections and declaring a de facto dictatorship. By then Yeltsin’s daughter, Tatyana Borisovna Yumasheva, had become her father’s closest adviser, together with Berezhovsky, Guzinsky and the other USAID and CIA-made oligarchs. Russian media labeled the clique controlling Russia, especially after Yeltsin’s heart attack that year, “The Family,” as in mafia family, not blood family, though with daughter Tatyana the de facto Capo di tutti capi of the family owing to her influence over the President.

Following the Russian Communist Party success in the December 1995 parliamentary or Duma elections, the International Monetary Fund made an extraordinary $10.2 billion loan to the Yeltsin government in which $1 billion was secretly intended by Washington for the campaign to keep Yeltsin President in the 1996 elections. Tape recordings of conversations between Clinton and Yeltsin later made public, showed that in return, among other favors, Yeltsin would exempt longtime Clinton supporter and campaign donor, Arkansas-based Tyson Chicken’s exports to Russia–then a $700 million annual business–from a threatened 20% tariff increase.

Berezhovsky and Guzinsky, the Washington-backed new Russian oligarchs, fearing loss of their stolen billions to the opposition communists, formed what they called the “Group of Seven,” which included Berezovsky, Gusinsky, Khodorkovsky, Potanin, Vinogradov, Smolensky, and Friedman. With aid of US Madison Avenue spin doctors, the Group of Seven–which owned the two major TV stations with the third still state owned, and as well major press– ran a US-style media campaign assault, at the same time blocking Zyuganov from buying media time. Yeltsin posters carried the slogan, “Choose with Your Heart.” Another ad featured Yeltsin family photos, while Yeltsin in TV spots recalled events in his childhood: as an athlete, a rebel, a father, and a grandfather. All the while, sentimental music…

The oligarchs hired Anatoly Chubais, the man responsible for creating their fortunes, as Yeltsin’s campaign manager. He created a private fund called the Center for the Protection of Private Property and received $5 million from the Group of Seven for the campaign. Fake newspapers were created and printed stories claiming discovery of secret minutes of a Communist Party leadership meeting where Zyuganov was alleged to have said, “We will not be able to give the people anything that we promised.” Gaidar’s re-election fund also funneled hundreds of thousands of dollars, a fortune in the time of hyperinflation of the ruble, to major journalists to write fraudulent articles in praise of Yeltsin and discrediting Zyuganov.

The fact that the oligarchs had a near monopoly on Russian TV and print media made it possible to tilt the vote to Yeltsin 54%. The Russian Corporate Politburo was now firmly in the saddle, with Yeltsin and Chubais their horses.

The human cost of the US-imposed Russian Shock Therapy brought by Anatoly Chubais, Yegor Gaidar together with George Soros, Jeffrey Sachs and a stable of CIA-linked financial and legal operators such as Jonathan Hay and Andrei Schleifer, was beyond belief. Between 1991 and 1997, Russian GDP – the value of all goods and services that Russia produces – collapsed by 83%. Farm production declined 63% as state support for agriculture ended and cheap US imports such as Tyson chickens replaced their domestic production. Industrial and other investment decreased 92%. More than 70,000 factories were closed down. That led to Russia producing 88% fewer tractors, 76% fewer washing machines, 77% less cotton fabric, 78% fewer TV-sets and on and on. In a country without unemployment under the Soviet era, 13 million people lost their jobs. Those who still had work had their wages cut in half. The average life span for men had been shortened by six years, down to the same level as in India, Egypt or Bolivia. Alcoholism became epidemic as depression and unemployment spread among the population. It was a shock indeed, the kind of shock a country experiences only in a major war. The average life span had decreased, in just a few years, to the same level as in India, Egypt and Bolivia.

The fact that Anatoly Chubais is now under enormous pressure and likely to be prosecuted is about far more than corruption of a corporate director. It goes to the heart of the corrupt circles that have tried since the ascent of Vladimir Putin in December 1999 to resume the Wall Street rape of Russia, so far without success. For them Putin is the symbol of that defeat. For the vast majority of Russians who lived through the rape of their country in the 1990’s, Anatoly Chubais is the symbol of that devastation and destruction.

Source and references:


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