“From Russia, With Love”
“Danger, like a third man, was standing in the room.” Ian Fleming, “From Russia, With Love”
When Demagoguery and Oligarchy Come Together
We are in 2024, an election year, a year I call “the Year of the Precipice” for our democracy. To better equip Americans to exercise their civic duty this year, we have begun a series in Democraticus examining important ways of thinking and belief systems which can have a major impact on our democracy’s future.
We Have Not Been Paying Attention
We have been examining leadership styles in a democracy focused, ironically, on the antithesis of democracy, authoritarianism. Authoritarianism is something a large swath of Americans in recent years have been drawn to and are willing to seriously consider for their president’s leadership style. Authoritarianism has various facets to it ranging from fascism to populist demagoguery to oligarchy to “all the above”. But something has been happening “before our very eyes” to hybridize authoritarianism in American. An ingredient has been added that seems to have gone largely unnoticed by most Americans. What is it?
Compliments of Moscow
Most know about the 1991 fall of the Soviet Union.[1] But, have we paid attention since that time as Russian oligarchy has been imported into our nation? Apologies to Ian Fleming, author of the spy thriller, “From Russia, With Love”[2], but what has been sent here from Russia since the Soviet Union’s fall was sent not “with love”. It was sent with the intention of destroying American democracy. And it has made inroads on achieving that objective by combining with radical far right politics here. More than that, it is dangerous to our nation’s security.
Russian oligarchs, following the fall of the Soviet Union, were attracted to countries like the U.S. where the stability of the rule of law could protect their money from arbitrary government actions (like the Russian government seizing their businesses). However, not only has Russian oligarchy and their money come to our nation, but it has found a welcoming home in one of our two major political parties.
With the former communist Soviet Union now gone, we made a critical mistake. We assumed that the love of money and capitalism by this new breed of Russian oligarchs was congruent with our democracy and its values. This has been a major political miscalculation which our politics have reflected ever since as evidenced by the presidential elections of 2016, 2020, and the 2024 presidential election, not to mention the conduct of the Trump presidency itself. In hindsight, seeing the authoritarian regime now in place under Putin in these oligarchs’ home country, it almost seems ridiculous that we assumed the Russian oligarchy would support democracy. Instead, we found that the only thing the Russian oligarchy saw our democracy offering them was a place more stable than Russia to “park” their ill-gotten wealth. Their ties to authoritarian Mother Russia remain strong, as does Putin’s control over them, as we shall see.
Oligarchy’s Toxicity to Democracy
Oligarchy, a term used frequently today, especially in light of the Trump presidency, has a simple meaning. Webster-Merriam defines it as “a government in which a small group exercises control, especially for corrupt and selfish purposes.”[3] It carries the connotation of corruption[4], which is an important part of its definition.
Oligarchy Is Not New to Us
Historian Heather Cox Richardson, in her book How the South Won the Civil War[5], advocates in her historical view of U.S. oligarchy that it has been with us since our nation’s birth.[6] Our history has been one, in Richardson’s view, of unending and mortal struggle between American democracy and oligarchy. In her article for The Nation entitled “The Oligarch’s Revenge”, Manisha Sinha reviews Richardson’s book, commenting that, although the South lost the Civil War, Richardson sees the slaveholder’s world view of America as having ultimately prevailed.[7] Sinha describes how Richardson makes the case for the origins and evolution of our oligarchy to the present day:
“…Arguing that the slaveholders’ idea of an oligarchic America triumphed with the growth of the second American oligarchy in the latter half of the twentieth century, Richardson shows how the rise of movement conservatism, as personified by Barry Goldwater in his 1964 presidential campaign, came to embody this vision of an oligarchic America.”[8]
Richardson’s historical premise is that post-Civil War this reconstituted oligarchy “combined economic domination with racial inequality”, subject to intermittent periods when democracy did assert itself (such as during Reconstruction and World War II). Today this oligarchy’s strength “…lay in a political alliance between the South and the West building off the myth of the cowboy as a self-made man that needs nothing from the government, as well as in the Republican presidencies of Nixon, Reagan, the Bushes, and finally Trump.”[9]
Oligarchy Today in the U.S.
With the globalization of the world’s economy, oligarchy in the United States has taken the elements it developed post-Civil War, especially from the last fifty years, and hybridized them. The American oligarchy has hybridized with elements that represent what is perhaps the most sinister threat for our democracy- the Russian oligarchy’s involvement in American elections and foreign policy.
Jane Mayer, writing for The New Yorker, recounts the words of Pulitzer Prize-winning columnist Annie Applebaum who wrote: “…the real problem wasn’t that Trump is sympathetic to Russian oligarchs, it was that ‘he is a Russian oligarch.”[10] Mayer goes on to explain Applebaum’s statement using her words- Trump “…is an oligarch in the Russian style- a rich man who aspires to combine business with politics and has an entirely cynical and instrumental attitude toward both.”[11]
Mayer cites Northwestern University political scientist Jeffrey A. Winter who defines this modern “oligarch” as “…an individual with enough money to employ the protection of what he calls the “wealth defense industry”. By “wealth defense” is meant the oligarch’s efforts in the U.S. to defend their wealth from redistribution by the government imposing progressive income taxes.
Russian Oligarch Dark Money in the U.S. Today
For Americans like Donald Trump, Russian oligarchs have provided a formidable model of wealth defense via tax avoidance. Likely most Americans do not realize that by viewing this tax avoidance scheme the way Trump does (“That makes me smart.”), they are “…accepting the might-is-right form of governance of oligarchic nation states.”[12] To achieve a low or zero tax rate for themselves, American oligarchs employ armies of sophisticated accountants, consultants, lawyers, lobbyists and think-tank apologists to do it.[13] However, these tax avoidance moves do not come close to the Russian oligarchy’s sophisticated use of their “dark money” in the United States today.
The Sources of Russian Oligarch Dark Money
Anders Aslund and Julia Friedlander of the Atlantic Council (the Council) have taken an in depth, well documented examination of the influence of this Russian dark money on our political system. They concluded that “…Russia has the largest volume of dark money hidden abroad- about $1 trillion…An estimated one-quarter of this amount is controlled by Russian President Vladimir Putin and his close associates.”[14]
Ben-Ghiat argues that in “…Expropriating Russia’s wealth and imprisoning business owners to grab their assets, Putin treats the country he governs much like Mobutu treated Zaire, as an entity to be exploited for private gain. Putin poses as a nationalist defender against “globalists’ but uses global finance to launder and hide his money.”[15] Ben-Ghiat’s estimates that, since 2006, Putin and his associates have removed an estimated $325 billion from Russia.[16]
These Russian oligarchs acquired their wealth when Putin consolidated his political power in 2004 and began to control the Russian economy, allowing “…a few friends to tap the financial resources of state companies and the state itself…Putin and his friends have made fortunes through privileged public procurement at inflated prices and asset stripping, privileged trading, forgiven state bank loans, and stock manipulation. An additional form of enrichment is racketeering…”[17] (emphasis mine)
Ben-Ghiat goes further in explaining the impact of this Russian oligarch money in this country:
“Some of that illicit wealth was likely cleaned with the help of the Trump Organization, given that Russian investors were its central revenue source at the time Trump decided to run for president. ‘We don’t rely on American banks. We have all the funding we need from Russia,’ declared Eric Trump in 2014.”[18] (emphasis mine)
Putting Russian Oligarch Money to Work Disrupting U.S. Democracy
These fortunes have clearly been laundered into other countries, including the United States, with the oligarch’s who acquired this wealth being in a position where the “…Kremlin appears to be able to persuade dependent oligarchs to assist financially in its foreign policy undertakings…”[19] According to the Council, the Mueller Report “…demonstrates how Russian offshore finance and oligarchs were deployed by the Kremlin to interfere in and after the 2016 US election.”[20] The Council’s report explains further the threat of this Russian oligarchic dark money:
“…Members of Putin’s inner circle, themselves often wealthy executives, have been directly implicated in disrupting the democratic process in the United States. Putting this logic chain together, a threat pattern emerges. Anonymous Russian money in the United States is substantial, fast-moving, and in several well annotated cases, directed toward political influence...However, the great concern is the Kremlin forcing big Russian private businessmen to work for it. On the one hand, these businessmen have a large share of their assets in the West, notably in the United States. On the other hand, they still have substantial assets in Russia. The Kremlin can beat them both in Russia…and in the West through Western sanctions.”[21] (emphasis mine)
For example, the Council reports that two Russian billionaires, borrowing from the Russian state bank VTB and the state company Gazprom Investing, heavily invested in “...a row of US Internet companies early on before they had gone public.”[22] Effectively, as reported by the Council, “…this was Russian state financing of US social networks.”[23] The Council also reports that “quite a few” of these Russian businessmen hold U.S. citizenship, the wealthiest being Len Blavatnik, the third-biggest owner of Rusal, the Russian aluminum giant. Blavatnik has contributed $3.5 million to the (US Republican Sen. Mitch) McConnell Senate Leadership Fund between 2015 and 2017.[24] Since he is a naturalized U.S. citizen, Blavatnik “…cannot be sanctioned by the United States, but his funding can hardly be considered legitimate…”[25]
The Council further reported on Blavatnik’s financial contributions to U.S. political races:
“…Around the 2016 elections Blavatnik, who owns Warner Media, became interested in US politics. From “2015 to 2017, he donated at least $6.35 million to Republican party institutions, PACs, and candidates…Most of that cash went to Super PACs associated with Senate majority leader Mitch McConnell and onetime presential presidential candidates Marco Rubio, Scott Walker, John Kasich, and Lindsey Graham. If Blavatnik had been sanctioned as his longtime partner Vekselberg was, this would not have been legal. Now it was.”[26]
“Connecting the Dots” on Authoritarianism in the U.S. Today
It does not take long to “connect the dots” and see the toxicity to our democracy of these authoritarian ingredients- fascism, demagoguery, populism, and oligarchy- when they come together. The effect is offering Americans a style of leadership by certain politicos that is devastating to democracy. What is even more devastating is the clear toxic impact of this dark, and not-so-dark, Russian oligarchy money that has been influencing voter thinking and behavior as well as the conduct of the U.S. presidency from 2016 to 2020. Oligarchy, specifically Russian oligarchy has become, as Ian Fleming said in his book “From Russia, With Love”, a “Danger, like a third man, …standing in the room.”[27] The question for us now is, do we see the danger and what will we do to confront it?
So What, Now What?
If we know the type of authoritarian leadership, especially when it combines populism, demagoguery, and oligarchy, that we should not follow in a democracy, what type of leadership then should we Americans be looking for? What type of leadership best serves a democracy?
We will take a look at that next. Stay tuned…
We will continue exploring topics like this that are not given near enough time and emphasis in our civic education efforts, if they are even taught at all. Democracy is so important. But it’s hard to keep, and it’s easy to lose. It’s up to us, and only us, to protect it. Support democracy, become a Democratist! Spread the word! Please share this Democraticus with others! For more information, go to www.tomthedemocratist.com
[1] Milestones in the History of U.S. Foreign Relations - Office of the Historian, U.S. State Department, https://history.state.gov/milestones/1989-1992/collapse-soviet-union
[2] From Russian, With Love, by Ian Fleming, pp 1-192, Penguin Publishing.
[3]Oligarchy, Definition, Merriam-Webster Dictionary, https://merriam-webster.com/dictionary/oligarchy
[4]Oligarchy, Definition, Merriam-Webster Dictionary, Ibid
[5] How the South won the Civil War, Oligarchy, Democracy, and the Continuing Fight for the Soul of America, by Heather Cox Richardson, pp 205, Copyright 2020, Oxford University Press, 198 Madison Avenue, New York, NY 10016
[6]How the South won the Civil War, Oligarchy, Democracy, and the Continuing Fight for the Soul of America, by Heather Cox Richardson, Ibid
[7] “The Oligarch’s Revenge”, by Manisha Sinha, The Nation, October 6, 2020, https://www.thenation.com/article/culture/heather-cox-richardson-how-aouth-won-civil-war-review
[8] “The Oligarch’s Revenge”, by Manisha Sinha, The Nation, October 6, 2020, Ibid
[9] “The Oligarch’s Revenge”, by Manisha Sinha, The Nation, October 6, 2020, Ibid
[10] “Donald Trump, American Oligarch”, by Jane Mayer, The New Yorker, October 3, 2016, https://www.newyorker.com/news-desk/donald-trump-american-oligarch
[11] “Donald Trump, American Oligarch”, by Jane Mayer, The New Yorker, October 3, 2016, Ibid
[12] “Donald Trump, American Oligarch”, by Jane Mayer, The New Yorker, October 3, 2016, Ibid
[13] “Donald Trump, American Oligarch”, by Jane Mayer, The New Yorker, October 3, 2016, Ibid and “Defending the United States Against Russian Dark Money”, by Anders Aslund and Julia Friedlander, Atlantic Council, November 17, 2020, pg. 2, https://www.atlanticcouncil.org/in-depth-research-reports/report/defending-the-united-states-against-russian-dark-money/
[14] “Defending the United States Against Russian Dark Money”, by Anders Aslund and Julia Friedlander, Atlantic Council, November 17, 2020, pg. 2, Ibid
[15] Strongmen, How they Succeed, How they Fail, by Ruth Ben-Ghiat, pg. 158, Copyright 2020, Ibid
[16] Strongmen, How they Succeed, How they Fail, by Ruth Ben-Ghiat, pg. 158, Copyright 2020, Ibid
[17] “Defending the United States Against Russian Dark Money”, by Anders Aslund and Julia Friedlander, Atlantic Council, November 17, 2020, pg. 7, Ibid
[18] Strongmen, How they Succeed, How they Fail, by Ruth Ben-Ghiat, pp 158-159, Copyright 2020, Ibid
[19] “Defending the United States Against Russian Dark Money”, by Anders Aslund and Julia Frielander, Atlantic Council, November 17, 2020, pg. 2, Ibid
[20] “Defending the United States Against Russian Dark Money”, by Anders Aslund and Julia Frielander, Atlantic Council, November 17, 2020, pg. 4, Ibid
[21] “Defending the United States Against Russian Dark Money”, by Anders Aslund and Julia Friedlander, Atlantic Council, November 17, 2020, pg. 4, Ibid
[22] “Defending the United States Against Russian Dark Money”, by Anders Aslund and Julia Friedlander, Atlantic Council, November 17, 2020, pg. 11, Ibid
[23] Defending the United States Against Russian Dark Money”, by Anders Aslund and Julia Friedlander, Atlantic Council, November 17, 2020, pg. 11, Ibid
[24] “Defending the United States Against Russian Dark Money”, by Anders Aslund and Julia Friedlander, Atlantic Council, November 17, 2020, pg. 12, Ibid
[25] “Defending the United States Against Russian Dark Money”, by Anders Aslund and Julia Friedlander, Atlantic Council, November 17, 2020, pg. 12, Ibid
[26] “Defending the United States Against Russian Dark Money”, by Anders Aslund and Julia Friedlander, Atlantic Council, November 17, 2020, pg. 12, Ibid
[27] From Russian, With Love, by Ian Fleming, pp 1-192, Penguin Publishing.