Sheer Hypocricy:  How America and Americans Interfered in the Election of Boris Yeltsin

Boris Yeltsin

PT 2 – The Gentlemen From Harvard

Russia has been invaded, but it has never been conquered.  When the Mongols invaded her Ivan responded first by becoming their agent and collecting tribute from the other princes, then later by refusing to pay them their tribute and finally by uniting the princes against the invaders.  The Nazis tried, but they faced a strong and inspired people on their own bitterly cold land and were defeated by both.  In the 20th Century America sent not warriors but armies of their best and brightest to defeat her, and they came very close to succeeding.  But for one man, Vladimir Putin, Russia would today be little more than a distant and large part of the American empire.  Putin has neither forgotten nor forgiven them for the economic rape and pillage of his beloved country, and they in turn, have never forgiven him for outsmarting them.

It was something of an omen, that in the same year that Vladimir Vladimirovich Putin became President of the Russian Federation, a U.S.-Russian Investment Symposium was held at Harvard’s John F. Kennedy School of Government. It was, at least in the context of this story, that this symposium took place at Harvard.   Among those who attended the symposium were scholars and spies, bankers and politicians, and leaders of institutions who shaped the world.  What all these strange bedfellows had in common was a desire to take control of Russia and to profit from doing so.

Two of the men in attendance, Boris Berezovsky, a former professor of Mathematics who, because of Chubais’ initiatives went on to become one of Russia’s greediest and most influential oligarchs, and Boris Nemtsov, who had been a professor of quantum physics and then turned to politics, eventually forming an opposition movement against Putin, would later die under suspicious circumstances.  Berezovsky, who sometimes visited Putin before he became president, would die on March 23, 2013 at his home in England.  Exiled from his country and profoundly in debt, he ostensibly died by his own hand

Nemtsov, quantum physicist turned political agitator had, for some unknow reason, been mentored by Yeltsin who made him first governor of one of Russia’s regions and then deputy prime minister (1997-98) of the energy sector.  He was either fired or resigned from that post and went on to serve Ukrainian President Viktor Yushchenko.  He along with Garry Kasparov, a renowned chess champion and an outspoken critic of Putin, led a very small opposition against Putin. However, even as he called for a more open political system with fewer restrictions on independent parties, Nemstov showed little concern for the people of Russia.  He called for radical reductions in subsidies on rents, utility bills and medical services.  It was enough that he opposed Putin for the Western media to consider him one of their golden boys. When he was shot to death on a bridge in the very shadow of the Kremlin, the Western media poured out outrage and pointed their finger at Putin.  Considering his history and background, there is every reason to make me believe that he had “gone over to the other side” and was working for the CIA as an operative, as one of those whose job it was to build opposition to President Putin.

An important attendee at the conference whose name should be remembered as my story unfolds, is that of then Secretary of the Treasury Lawrence Summers.

At the meeting IMF First Deputy Managing Director Stanley Fisher, World Bank Vice President for Europe and Central Asia, James Wolfensohn, and others preached the same message to Russia: that Russia was very important to them (you betcha); that the U.S. government and the international institutions really do care about and are ready to help Russia, but that before they did so Russia had to narrow the gap between expenditures and income.  Representatives from European Bank for Reconstruction and Development, the World Bank, and the Overseas Private Investment Corporation which mobilizes private capital to bring about developmental strategies in keeping with American national security objectives, then spoke of the assistance available to Russia if it only did what it was told.

But to one who believes in omens, the most prophetic omen was the shocking and memorable speech made by Yuri Luzhkov, Mayor of Moscow, who spoke via video link from the Capital City of Russia itself.

When Luzhkov spoke, it was not to praise these men, their plans or their institutions, but to condemn them.    His condemnations extended of course to Chubais and the economic policies he had implemented, policies that brought the Soviet Union and its people to their knees.  But he did not stop with Chubais but included his host, Harvard University, singling out H.I.I.T. and its advisers for the role they had played in helping Chubais to cast his own country into the flames.  The advisors to whom he referred were the same men to whom Putin had referred in the statement above as CIA agents: they names were Shleifer and Hay.

Jonathan Hay was an American who had gone to Russia to study at Moscow’s Pushkin Institute for Russian Language.  He would also work as a consultant for The World Bank.  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 and in the following years was made H.I.I. D’s general director in Moscow, positions which allowed him to wield a great deal of influence over Chubais’ circle.  As 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.  It was Jonathan Hay and his associates who drafted many of the decrees.

Born in Russia, Andrei Shleifer, had achieved the distinction of becoming a tenured professor of economics at Harvard while still in his thirties.  It was he who became director of H.I.I.D.’s Russia project. Shleifer became a close friend of the man who had mentored him at Harvard,Lawrence Summers.  In addition to having himself been a former Harvard economics professor, Summers served as Under Secretary of the Treasury for International Affairs under Clinton, and then as Deputy Treasury Secretary.  He had also been Chief Economist of the World Bank. He would go on to be named President of Harvard.

When Summers assumed these powerful positions in the U.S. government it gave both H.I.I.D as well as Shleifer and Hay connections to the very highest level of power in the American government.  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 without any competitive bidding.Thus H.I.I.D. helped steer and coordinate some $300 million in U.S.A.I.D. grants.

We need to pause now and look at the U.S. Agency for International Development (U.S.A.I.D.) that so willingly gave so much money to the boys from Harvard.    It was created in 1961 to help the United States win the “hearts and minds” of citizens in poor countries through political action, economic aid and humanitarian assistance. As a cold war policy tool, the agency was, at times, used as a front for C.I.A. operations and operatives. Among the most infamous examples was the Office of Public Safety, a U.S.A.I.D. police training program which, among other things, trained torturers.

Beginning in 1994 USAID began to set up Offices of Transition Initiatives (OTIs)to be installed by USAID around the world.  The objective of the first OTIs was to support the transition towards capitalism in Eastern European countries, but they soon expanded their range of operations to many other places where the US needed to secure its hegemony. The function of the OTIs wasto install networks of political parties, media outlets and NGOs in the countries in which they operated as well as fund and train individuals in those organizations to implement U.S. objectives.  They would then move to achieve those objectives through Coup d’état’s, by inciting insurgent struggles, political demonstrations or even military insurrections.

Thus, it shouldcome as no surprise that The U.S. Agency for International Development (U.S.A.I.D.) was willing to hand over funds and the responsibility for reshaping the Russian economy into one more aligned with capitalist principles to The Harvard Institute for International Development (H.I.I.D). H.I.I.Swas 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. The HIID oversaw and guided disbursement of $300 million of US aid to Russia with little oversight by USAID or anyone else.

With help from his H.I.I.D. advisers andfollowing the template used by the OTIs, 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-wrote Privatizing 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.  Just as Hay and Schleifer, due to their connections with Summers, were able to operate without constraint or oversight, so too Chubais was able to do the same due to his connection with Yeltsin.  Huge amounts of money placed in the hands of a few men who had the power to do what they wanted with it was a formula for chaos and corruption…which is what would ensue.

In late August of 1996, Deputy of the Secretary, Lawrence Summers warned his friend Shleifer, as they were walking along a Cape Cod beach together, to be careful, because Russia was a very corrupt place.  Shleifer already knew this as he himself was part of that corruption, as did Summers, who had already come to know that “Shleifer and his wife, Nancy Zimmerman, a noted hedge fund manager, had been investing in Russia.  Though he didn’t know the specifics, he understood just enough to worry that the couple might run afoul of myriad conflict-of-interest regulations that barred American advisers from investing in the countries they were assisting.”

In 1996 multiple complaints had begun to come in to the U.S. congress regarding Shleifer and Hay’s activities in Russia.  In turn Congressed asked the General Accounting Office to investigate the HIID activities in the Russian aid program Less than eight months after Summers conversation with Shleifer on the shores of Cape Cod the Department of Justice would order the FBI and the U.S. Attorney’s Office in Boston to launch a criminal investigation that would bring out evidence of fraud, money laundering and the use of U.S. government funds for private purposes.  The Departmentof Justice ruled that the damage caused to the US by Shleifer and Hay amounted to $34 million. A Federal judge ruled that, by quietly investing on their own accounts while advising the Russian governmentShleifer and Hay had conspired to defraud the US Agency for International Development (USAID), which had been paying their salary.

On April 25, 2013, President Putin publicly identified Hay andSchleifer as CIA agents. Referring to their work on Russian asset privatization for Chubais, and the subsequent US prosecution, Putin said: “we learned today that officers of the United States’ CIA operated as consultants to Anatoly Chubais. But it is even funnier that upon returning to the US, they were prosecuted for violating their country’s laws and illegally enriching themselves in the course ofprivatization in the Russian Federation. They did not have the right to do this as active CIA officers. In accordance with US law, they were not allowed to engage in any kind of commercial activity, but they couldn’t resist – it’s corruption, you see.”

Vladimir Vladimirovich, take good care of yourself.

Mary Metzger is a 72 year old retired teacher who has lived in Moscow for the past ten years. She studied Women’s Studies under Barbara Eherenreich and Deidre English at S.U.N.Y. Old Westerbury. She did her graduate work at New York University under Bertell Ollman where she studied Marx, Hegel and the Dialectic. She went on to teach at Kean University, Rutgers University, N.Y.U., and most recenly, at The Moscow Institute of Physics and Technology where she taught the Philosophy of Science. Her particular area of interest is the dialectic of nature, and she is currently working on a history of the dialectic. She is the mother of three, the gradmother of five, and the great grandmother of 2.


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