Whitewashing Putin’s Kleptocracy

LetterOne Group

Petr Aven, Mikhail Fridman, and Lord Browne at L1 Energy Launch in New York, May 2015. Via LetterOne Group’s Flickr/CC License 2.0

By Marius Laurinavičius

This piece was originally published by The American Interest.

It takes no less of an author than Peter Pomerantsev to write an extremely insightful book like Nothing Is True and Everything Is Possible that reveals the surreal heart of Putin’s Russia. It is much harder to say what kind of author it would take to write a book on the surrealism penetrating America and the West as a whole, but Pomerantsev’s title would be a good fit if we could re-use it.

At a moment when Russia is under a richly deserved sanctions regime, when some call the present state of affairs a New Cold War, and when Putin’s ambitions are called the most dangerous threat to America by several high-ranking Pentagon and U.S. military officials, it doesn’t seem like the most propitious moment for an awards dinner for one of Putin’s “cronies”—much less one held in Washington by a federally funded U.S. institution.

But, as the book says, everything is possible. And on November 3 the Woodrow Wilson International Center for Scholars, a think tank that receives U.S. government funding, will bestow the Woodrow Wilson Award for Corporate Citizenship to Petr Aven, the chairman of the board of directors of Russia’s largest commercial bank, Alfa-Bank, and a member of the board of directors of LetterOne Group.

It is true that Mr. Aven, unlike several other Russian businessmen, is not a subject of U.S. sanctions. It is also true that, by some accident or oversight, he is not often publicly presented as a “crony” of Putin. However, it is no less true that, prior to the Wilson Center’s award, Mr. Aven, unlike sanctioned Russian oligarchs, was endowed with a Russian state award by Putin personally.

A brief review of the business record of Mr. Aven’s companies should be sufficient to add a note of controversy to the decision to give an award for corporate citizenship to such a businessmen. Aven’s record is marked by repeated and often acrimonious commercial or even legal disputes with partners, especially in the West. Cases such as Norwegian Telenor v Altima and British BP v AAR, in which BP’s U.S. CEO Robert Dudley was literally expelled from Russia and BP threatened to snatch homes of Russian oligarchs in London in return, are the first that come to mind.

But the plan evidently is to convince us that nothing is true, and the Wilson Center has engaged powerful advocates who understand that this means everything is possible.

The first of these is former BP CEO Lord Browne, who has apparently buried his personal knowledge of his Russian partners’ being “ruthless and dishonest”, as some documents submitted to court later revealed: last February he agreed to join ranks with them again. On November 3 Lord Browne will co-chair the awards dinner for Mr. Aven. In Putin’s Russia, it seems, “it’s nothing personal, just business.”

Another co-chair of the event is no less prominent, and no less informed about the true state of play in Putin’s Russia, as well as the way Mr. Aven and his friends have been operating their business in Russia: former U.S. Ambassador to Russia James F. Collins, a senior associate of the Russia and Eurasia Program at the Carnegie Endowment for International Peace.

It is hard to believe that a former Ambassador to Moscow does not know (from “WikiLeaks” at least, if from no other source) how business transpires in a country described by Spanish prosecutor Jose Grinda Gonzales as a corrupt, autocratic Kleptocracy, centered on the leadership of Putin, in which officials, oligarchs, and organized crime are bound together in the creation and maintenance of a “virtual mafia state.” One supposes Ambassador Collins is going do his best to convince us that nothing is true—or at least that these things have nothing to do with Mr. Aven and his business record.

The timing of this award seem rather propitious as well. But perhaps it is just a coincidence that Mr. Aven and LetterOne have recently initiated a charm offensive in the West in the wake of the British government’s decision last spring, citing concerns for national security, to order LetterOne to sell its North Sea gas fields within six months. Though Aven’s name was rarely mentioned publicly in regard to that British government order or the aforementioned business disputes, he was involved in more ways than just as a shareholder or corporate officer.

Mr. Aven’s long-standing business relations to Putin personally are no big secret in Russia. The late Russian oligarch Boris Berezovsky, who once was dubbed by Paul Klebnikov as “a Godfather of Kremlin,” admitted that it was Mr. Aven who introduced him to Putin. And Mr. Aven’s role during the birth of Putin’s kleptocracy, perfectly described by Karen Dawisha in her book Putin’s Kleptocracy: Who Owns Russia is certainly controversial, to say the least. It was Mr. Aven, who made it possible for Putin to originate at least part of his corruption schemes in St. Petersburg, which were later unsuccessfully investigated by the Sal’ye Commission and others.

There is an abundance of other public information that ought to make one think twice before offering him anything like an Award for Corporative Citizenship. In normal circumstances such allegations would warrant, at a minimum, some in-depth investigation prior to the bestowal of any award.

But then again everything is possible. All it takes a lucrative deal involving the sale of TNK-BP to Rosneft and a slick PR campaign to whitewash a soiled reputation. The same Wilson Center that not so long ago hosted a public presentation for Karen Dawisha’s aforementioned book—a book that, not incidentally, makes a number of accusations against Mr. Aven—now turns a blind eye on those accusations, as if nothing is true.

If a Russian plutocrat can have his record whitewashed with the help of a federally funded U.S. institution, please tell me what, if anything, is not possible. And if you don’t accept this as evidence of the penetration of the Russian kleptocracy into the United States and the West as a whole—what Ilya Zaslavski characterizes as the Export of Corrosion—then please tell me what kind of evidence you would accept.

Marius Laurinavičius is senior policy analyst at the Eastern European Studies Centre.