Janine Wedel - Shadow Elite - How the World's New Power Brokers Undermine Democracy, Government, and the Free Market

Sources for Åslund’s business activities in Russia and Ukraine also include a number of additional reports and sources in Russia, Ukraine, Sweden and Washington. For details of Åslund’s Ukraine activities, see Wedel, Collision and Collusion , pp. 168–170. Information from the Russian Interior Ministry’s Department of Organized Crime on Aslund’s investments is from interview with Vyacheslav Razinkin by author Anne Williamson, February 23, 1995.

For Åslund in the press, see, for instance, Anders Åslund, “Russia’s Success Story,” Foreign Affairs vol. 73, no. 5, September-October 1994, pp. 58–71. For Åslund as an oft-cited analyst in the Western press, see Cohen, Failed Crusade , p. 287, n40.

33. I have called this practice “transidentity capability,” the ability of an individual player, based on official (or apparently official) authorization from two or more parties, to change whom he represents, regardless of which party originally designated him as its representative. See Janine R. Wedel (“Tainted Transactions: Harvard, the Chubais Clan and Russia’s Ruin,” The National Interest , no. 59 [Spring 2000], pp. 23–34; and “Courtage International et Institution Floues” with Siddarth Chandra, ACTES de la Recherche en Sciences Sociales , no. 151–152 [March 2004], pp. 114–125). The concept of transidentities draws on anthropologist Fredrik Barth’s notion that individuals possess repertoires of identities. Fredrik Barth, Ethnic Groups and Boundaries: The Social Organization of Culture Difference (Boston, MA: Little, Brown & Co., 1969).

With regard to players representing more than one nation, notable cases of players doing so simultaneously or interchangeably can be found in the annals of international socialists of the early twentieth century. For instance, Angelica Balabanoff, the Jewish Ukrainian communist and social democratic activist, represented both Italian and Russian parties at various times. See Angelica Balabanoff, My Life as a Rebel (Bloomington, IN: Indiana University Press, 1938).

34. Information about Hay’s signature authority was obtained from author’s interview with and documents provided by Chamber of Accounts auditor Veniamin Sokolov, May 31, 1998. See State Property Committee order no. 188 (which gave Jonathan Hay veto power over the Committee’s projects), October 5, 1992.

35. Information about Hay’s decisions “as a Russian” were gleaned from author’s conversations with Louis H. Zanardi, who spearheaded GAO’s investigation of the Harvard Institute’s activities in Russia and Ukraine.

36. In one scheme alone, some 10 million investors lost their savings. See Kirill Bessonov, “Pyramid Scheme Bilks Thousands,” Moscow News , no. 9, June 3, 2008, http://mnweekly.ru/trend/mn09_2008/. See also, for example, Barbara Rudolph and Sally B. Donnelly, “Poof Go the Profits,” Time Magazine , August 8, 1994, http://www.time.com/time/magazine/article/0,9171,981229,00.html, and Vladimir Kovalev “Pharaoh of Russian Pyramid Scheme Finally Arrested,” Transitions Online , February 10, 2003, http://www.cdi.org/russia/johnson/7056.cfm##13. Support for the Russian government fund was provided through the World Bank’s Investment Protection Fund. With regard to consequences for the fraud victims, Russia’s Chamber of Accounts reported that not a single kopeck had been paid to a defrauded investor in the first year and a half of the fund’s existence, although the fund’s Western consultants had been receiving their salaries. Matt Taibbi, “Picked Clean: How a Small Clique of Americans Scavenged the Remains of Defrauded Russians,” Exile , January 15, 1998, reprinted in Johnson’s Russia List , no. 2021, January 16, 1998.

37. For United States’s denial of entry to Kokh, see Radio Free Europe/Radio Liberty Newsletter , January 4, 1999, http://www.rferl.org/content/article/1141813.html.

38. See, for instance, “Chubays’s Business ‘Empire’ Exposed,” Moskovskiy Komsomolets , December 10, 1997. Report by Kirill Viktorov, “Shadow Empire: ‘Anatoliy Chubays and Co.’ Individual Private Enterprise is Successfully Operating in the Country,” reprinted in Johnson’s Russia List , December 19, 1997, no. 1442, http://www.cdi.org/russia/johnson/1442.html.

39. While in fact acting in the interests of the Chubais-Harvard partners, Vasiliev, for instance, could claim that he had made decisions on behalf of “The Russians,” not just his own group, thereby lending legitimacy to the decisions. That is how the partners edged their competitors out of contracts that the group itself wanted (as in the Chubais-Harvard partners’ rejection of Stanford), secured roles for their members on the Gore-Chernomyrdin Commission, and diluted the accountability of a banking-support institution. With regard to the latter point, an associate of Hay’s, Julia Zagachin, an American citizen married to a Russian, was chosen by Federal Securities Commission chairman Vasiliev to assume a position designated for a Russian citizen. Zagachin was to run the First Russian Specialized Depository, which maintains the records of mutual fund investors’ holdings and was funded by a 1996 World Bank loan. As journalist Anne Williamson has reported, the World Bank had established that the head of the Depository was to be a Russian citizen. But Vasiliev and other members of the clan apparently had determined that if their associate Zagachin headed the Depository, they would retain greater control over its assets and functions, so as to evade accountability if necessary.

40. For analysis of flex organizations, see Janine R. Wedel, “Blurring the State-Private Divide: Flex Organisations and the Decline of Accountability,” Globalisation, Poverty and Conflict: A Critical Development Reader , Max Spoor, ed. (Dordrecht, Netherlands and Boston: Kluwer Academic Publishers, 2004), pp. 222–231; and Wedel, Collision and Collusion , pp. 145–153.

41. The Russian Privatization Center received some $45 million from USAID (U.S. General Accounting Office, Foreign Assistance: Harvard Institute for International Development’s Work in Russia and Ukraine [Washington, DC: GAO, November 1996, p. 56]) and millions of dollars more in grants from the EU and Western Governments. As of June 1996, Japan was the largest contributor among the G-7, according to Ralf-Dieter Montag-Girmes, director of postprivatizion support with the Russian Privatization Center (author’s interview of June 12, 1996) with Germany, the British Know How Fund, and “many other governmental and non-governmental organizations” contributing, according to the Center’s annual report (Russian Privatization Center, 1994 Annual Report , pp. 5, 24).

42. For the governing role of Harvard in the Center, see, for instance, U.S. General Accounting Office, Foreign Assistance: Harvard Institute for International Development’s Work in Russia and Ukraine (Washington, DC: General Accounting Office, November 1996), p. 60.

In one example of U.S. government officials treating the Center as a governmental entity, U.S. assistance authorities asked the Center to nominate one person to serve on a technical evaluation panel to select a contractor. U.S. General Accounting Office, Foreign Assistance: Harvard Institutefor International Development’s Work in Russia and Ukraine (Washington, DC: GAO, November 1996), pp. 26, 27, 50. According to USAID contracts officer Stanley R. Nevin, USAID normally chooses this representative from a recipient government ministry, not from private bodies (author’s conversation with Stanley R. Nevin, September 24, 1996). Dine quote is from author’s interview with Thomas A. Dine, August 16, 1996.