Russia's Interest in Litvinenko
John Mauldin's Outside the Box

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Introduction

Today's Special Edition of "Outside the Box" by my friends at Stratfor gives us a very insightful analysis or Russia, using the recent poisoning of a former Russian as a jumping off point. George Friedman, President of Stratfor, gives us an insider's view of what this means in light of historical Russian events and its current leadership. I must admit that I was initially expecting to be somewhat bored (yet another commentary on the spy poisoning?) but came away fascinated as George takes us inside the mindset of the leaders of Russia and how their system has evolved over time.

Stratfor is the closest thing to a "private CIA" as the organization provides in-depth analysis on geopolitical events spanning the globe. As always, George has decided to give my readers a special 50% discount off his normal subscription rate. You can receive the offer by clicking here. Current readers have just gotten his rather lengthy analysis of the current situation in Iraq as a special report. If you subscribe you will get that report as well.

If you're interested in the geopolitical status of Russia or maybe just want to stay up-to-date on current events of the world, I believe that you will find George's article to be both very insightful and thought provoking.

John Mauldin, Editor

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Russia's Interest in Litvinenko

By George Friedman

The recent death of a former Russian intelligence agent, Alexander Litvinenko, apparently after being poisoned with polonium-210, raises three interesting questions. First: Was he poisoned by the Russian Federal Security Service (FSB), the successor to the KGB? Second: If so, what were they trying to achieve? Third: Why were they using polonium-210, instead of other poisons the KGB used in the past? In short, the question is, what in the world is going on?

Litvinenko would seem to have cut a traditional figure in Russian and Soviet history, at least on the surface. The first part of his life was spent as a functionary of the state. Then, for reasons that are not altogether clear, he became an exile and a strident critic of the state he had served. He published two books that made explosive allegations about the FSB and President Vladimir Putin, and he recently had been investigating the shooting death of a Russian journalist, Anna Politkovskaya, who also was a critic of the Putin government. Clearly, he was intent on stirring up trouble for Moscow.

Russian and Soviet tradition on this is clear: Turncoats like Litvinenko must be dealt with, for two reasons. First, they represent an ongoing embarrassment to the state. And second, if they are permitted to continue with their criticisms, they will encourage other dissidents -- making it appear that, having once worked for the FSB, you can settle safely in a city like London and hurl thunderbolts at the Motherland with impunity. The state must demonstrate that this will not be permitted to happen, that turncoats will be dealt with no matter what the circumstances.

The death of Litvinenko, then, certainly makes sense from a political perspective. But it is the perspective of the old Soviet Union -- not of the new Russia that many believed was being born, slowly and painfully, with economic opening some 15 years ago. This does not mean, however, that the killing would not serve a purpose for the Russian administration, in the current geopolitical context.

For years, we have been forecasting and following the transformation of Russia under Vladimir Putin. Putin became president of Russia to reverse the catastrophe of the Yeltsin years. Under communism, Russia led an empire that was relatively poor but enormously powerful in the international system. After the fall of Communism, Russia lost its empire, stopped being enormously powerful, and became even poorer than before. Though Westerners celebrated the fall of communism and the Soviet Union, these turned out to be, for most Russians, a catastrophe with few mitigating tradeoffs.

Obviously, the new Russia was of enormous benefit to a small class of entrepreneur, led by what became known as the oligarchs. These men appeared to be the cutting edge of capitalism in Russia. They were nothing of the sort. They were simply people who knew how to game the chaos of the fall of communism, figuring out how to reverse Soviet expropriation with private expropriation. The ability to turn state property into their own property represented free enterprise only to the most superficial or cynical viewers.

The West was filled with both in the 1990s. Many academics and journalists saw the process going on in Russia as the painful birth of a new liberal democracy. Western financial interests saw it as a tremendous opportunity to tap into the enormous value of a collapsing empire. The critical thing is that the creation of value, the justification of capitalism, was not what was going on. Rather, the expropriation of existing value was the name of the game. Bankers loved it, analysts misunderstood it, and the Russians were crushed by it.

It was this kind of chaos into which Putin stepped when he became president, and which he has slowly, inexorably, been bringing to heel for several years. This is the context in which Litvinenko's death -- which, admittedly, raises many questions -- must be understood.

The Andropov Doctrine

Let's go back to Yuri Andropov, who was the legendary head of the KGB in the 1970s and early 1980s and the man who first realized that the Soviet Union was in massive trouble. Alone of all institutions in the world, the KGB had the clearest idea of the condition of the Soviet Union. Andropov realized in the early 1980s that the Soviet economy was failing and that, with economic failure, it would collapse. Andropov knew that the exploitation of Western innovation had always been vital to the Soviet economy. The KGB had been tasked with economic and technical espionage in the West. Rather than developing their own technology, in many instances, the Soviets innovated by stealing Western technology via the KGB, essentially using the KGB as an R&D system. Andropov understood just how badly the Soviet Union needed this innovation and how inefficient the Soviet kleptocracy was.

Andropov engineered a new concept. If the Soviet Union was to survive, it had to forge a new relationship with the West. The regime needed not only Western technology, but also Western-style management systems and, above all, Western capital. Andropov realized clearly that so long as the Soviet Union was perceived as a geopolitical threat to the West and, particularly, to the United States, this transfer was not going to take place. Therefore, the Soviet Union had to shift its global strategy and stop threatening Western geopolitical interests.

The Andropov doctrine argued that the Soviet Union could not survive if it did not end, or at least mitigate, the Cold War. Furthermore, if it was to entice Western investment and utilize that investment efficiently, it needed to do two things. First, there had to be a restructuring of the Soviet economy (perestroika). Second, the Soviet system had to be opened to accept innovation (glasnost). Andropov's dream for the Soviet Union never really took hold during his lifetime, as he died several months after becoming the Soviet leader. He was replaced by a non-entity, Konstantin Chernenko, who also died after a short time in office. And then there was Mikhail Gorbachev, who came to embody the KGB's strategy.

Gorbachev was clearly perceived by the West as a reformer, which he certainly was. But less clear to the West was what his motives for reform were. He was in favor of glasnost and perestroika, but not because he rejected the Soviet system. Rather, Gorbachev embraced these because, like the KGB, he was desperately trying to save the system. Gorbachev pursued the core vision of Yuri Andropov -- and by the time he took over, he was the last hope for that vision. His task was to end the Cold War and trade geopolitical concessions for economic relations with the West.

It was a well-thought-out policy, but it was ultimately a desperate one -- and it failed. In conceding Central Europe, allowing it to break away without Soviet resistance, Gorbachev lost control of the entire empire, and it collapsed. At that point, the economic restructuring went out of control, and openness became the cover for chaos -- with the rising oligarchs and others looting the state for personal gain. But one thing remained: the KGB, both as an institution and as a group of individuals, continued to operate.

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Saving the System: A Motive for Murder?

As a young KGB operative, Vladimir Putin was a follower of Andropov. Like Andropov, was committed to the restructuring of the Soviet Union in order to save it. He was a foot soldier in that process.

Putin and his FSB faction realized in the late 1990s that, however lucrative the economic opening process may have been for some, the net effect on Russia was catastrophic. Unlike the oligarchs themselves, many of whom were indifferent to the fate of Russia, Putin understood that the path they were on would only lead to another revolution -- even more catastrophic than the first. Outside of Moscow and Petersburg, there was hunger and desperation. The conditions for disaster were all there.

Putin also realized that Russia had not reaped the sought-after payoff with its loss of prestige and power in the world. Russia had traded geopolitics but had not gotten sufficient benefits in return. This was driven home during the Kosovo crisis, when the United States treated fundamental Russian interests in the Balkans with indifference and contempt. It was clear by then to Putin that Boris Yeltsin had to go. Go he did, with Putin taking over.

Putin is a creation of Andropov. In his bones, he believes in the need for a close economic relationship with the West. But his motives are not those of the oligarchs, and certainly not those of the West. His goal, like that of the KGB, is the preservation and reconstruction of the Russian state. For Putin, perestroika and glasnost were tactical necessities that caused a strategic disaster. He came into office with the intention of reversing that disaster. He continued to believe in the need for openness and restructuring, but only as a means toward the end of Russian power, not as an end in itself.

For Putin, the only solution to Russian chaos was the reassertion of Russian value. The state was the center of Russian society, and the intelligence apparatus was the center of the Russian state. Thus, Putin embarked on a new, slowly implemented policy. First, bring the oligarchs under control; don't necessarily destroy them, but compel them to work in parallel with the state. Second, increase Moscow's control over the outlying regions. Third, recreate a Russian sphere of influence in the former Soviet Union. Fourth, use the intelligence services internally to achieve these ends and externally to reassert Russian global authority.

None of these goals could be accomplished if a former intelligence officer could betray the organs of the state and sit in London hurling insults at Putin, the FSB and the Russian state. For a KGB man trained by Andropov, this would show how far Russia had fallen. Something would have to be done about it. Litvinenko's death, seen from this standpoint, was a necessary and inevitable step if Putin's new strategy to save the Russian state is to have meaning.

Anomaly

That, at least, is the logic. It makes sense that Litvinenko would have been killed by the FSB. But there is an oddity: The KGB/FSB have tended to use poison mostly in cases where they wanted someone dead, but wanted to leave it unclear how he died and who had killed him. Poison traditionally has been used when someone wants to leave a corpse in a way that would not incur an autopsy or, if a normal autopsy is conducted, the real cause of death would not be discovered (as the poisons used would rapidly degrade or leave the body). When the KGB/FSB wanted someone dead, and wanted the world to know why he had been killed -- or by whom -- they would use two bullets to the brain. A professional hit leaves no ambiguity.

The use of polonium-210 in this case, then, is very odd. First, it took a long time to kill Litvinenko -- giving him plenty of time to give interviews to the press and level charges against the Kremlin. Second, there was no way to rationalize his death as a heart attack or brain aneurysm. Radiation poisoning doesn't look like anything but what it is. Third, polonium-210 is not widely available. It is not something that you pick up at your local pharmacy. The average homicidal maniac would not be able to get hold of it or use it.

So, we have a poisoning, and no mistake but that it was deliberate. Litvinenko was killed slowly, leaving him plenty of time to confirm that he thought that Putin did it. And the poison would be very difficult to obtain by anyone other than a state agency. Whether it was delivered from Russia -- something the Russians have denied -- or stolen and deployed in Britain, this is not something to be tried at home, kids. So, there was a killing, designed to look like what it was -- a sophisticated hit.

This certainly raises questions among conspiracy theorists and others. The linkage back to the Russian state appears so direct that some might argue it points to other actors or factions that are out to stir up trouble for Putin, rather than to Putin himself. Others might say that Litvinenko was killed slowly, yet with an obvious poisoning signature, so that he in effect could help to broadcast the Kremlin's message -- and cause other dissidents to think seriously about their actions.

We know only what everyone else knows about this case, and we are working deductively. For all we know, Litvinenko had a very angry former girlfriend who worked in a nuclear lab. But while that's possible, one cannot dismiss the fact that his death -- in so public a manner -- fits in directly with the logic of today's Russia and the interests of Vladimir Putin and his group. It is not that we know or necessarily believe Putin personally ordered a killing, but we do know that in the vast apparatus of the FSB, giving such an order would not have been contrary to the current inclinations of the leadership.

And whatever the public's impression of the case might be, the KGB/FSB has not suddenly returned to the scene. In fact, it never left. Putin has been getting the system back under control for these past years. The free-for-all over economic matters has been ended, and Putin has been restructuring the Russian economy for several years to increase state control, without totally reversing openness. This process, however, requires the existence of a highly disciplined FSB -- and that is not compatible with someone like a Litvinenko, publicly criticizing the Kremlin from London. Litvinenko's death would certainly make that point very clear.

Conclusion

Your just watched James Bond and then read this piece analyst,


John F. Mauldin
johnmauldin@investorsinsight.com

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Posted 12-07-2006 4:33 PM by John Mauldin
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