Meet The Forces That Are Pushing Obama Toward A New Cold War
Obama hasn’t ruled out sending weapons to Kiev if the latest ceasefire breaks down. What’s actually driving the hard line against Russia?
Who are the stateside policy wonks so insistent on reviving the Cold War over Ukraine?
The powers with the most skin in the game — France, Germany, Russia and Ukraine — have agreed to a shaky truce. The accord, reached on February 12, outlines the terms for a ceasefire between Kiev and the pro-Russian, breakaway provinces in Eastern Ukraine. It envisages a withdrawal of heavy weaponry followed by local elections and constitutional reform by the end of 2015, granting more autonomy to the war-torn regions bordering Russia.
But not all is quiet on the eastern front. Kiev alleges that the ceasefire has already been undermined. An almost identical compromise, reached in September, broke down soon after. The conflict between Kiev and ethnic Russian separatists has officially killed over 5,300 people to date.
President Obama has said that he won’t rule out arming Ukraine if the recent deal goes the same way as its predecessor. His comments echo the advice of a report issued a week prior by three prominent U.S. think tanks: the Brookings Institute, the Atlantic Council, and the Chicago Council on Global Affairs. The report advocated sending $1 billion worth of “defensive” military assistance to Kiev’s new pro-Western government.
If followed, those recommendations would bring the U.S. and Russia the closest to conflict since the heyday of the Cold War. Russia has said that it would “respond asymmetrically against Washington or its allies on other fronts” if the U.S. supplies weapons to Kiev.
Moscow’s national-security interests are clear. Washington’s are as well, albeit unrelated to the security of the nation in any meaningful sense. Given the stakes, the hard line being pushed against Russia can’t solely be attributed to “Great Game” strategy: the long-running chess battle to control global energy flows.
Different players have different motives. At times they overlap. Elsewhere they diverge.
As for those in the K Street elite pushing Uncle Sam to confront the bear, it isn’t hard to see what they have to gain: Just take a look at the history behind their Beltway-bandit benefactors.
No Reds Means Seeing Red
Following the end of the Cold War, defense cuts presented bottom-line problems for American businesses that relied exclusively on Pentagon contracts, notably the U.S. arms industry. Weapons dealers were told by the Department of Defense that they had to massively restructure or go bust.
Luckily carrots were offered. Norm Augustine, a former undersecretary of the Army, advised Defense Secretary William Perry to cover the costs of the forthcoming industry mergers and acquisitions.
Augustine had a lot to gain from such advice. He was then the CEO of Martin Marietta. Thanks to the merger subsidies, Augustine would become the head of the world’s largest defense contractor, Lockheed Martin, in 1995.
Augustine had displayed considerable foresight. Knowing that U.S. weapons procurement would falter, he was already thinking of future export markets for his company’s goods. In his capacity as the chairman of a Pentagon advisory council on arms-export policy, he was able to secure yet more subsidy guarantees for weapons sales to former Warsaw Pact countries.
But in order to buy the types of expensive weapons that would stabilize the industry’s books, those countries had to enter into an alliance with the U.S.
Other outfits were also ailing during this period. One was the RAND Corporation. Originally a creature of the Douglas Aircraft Company, which is now part of Boeing, RAND relied almost exclusively on producing scientific research and analysis for the Pentagon. As early as 1993, hardline RAND analysts like Ronald Asmus began advancing the idea that NATO expansion into the former Soviet bloc would assure European peace, not irk Russia.
Yet some members of Congress were still wary of shelling money to expand a military alliance that had, on its face, little rationale to exist with the U.S.S.R. gone.
Enter the U.S. Committee to Expand NATO. Formed in 1996, the Committee was a half-lobbying group, half-think-tank that wined and dined elected officials to secure their support for NATO enlargement. Meanwhile, Lockheed buttressed the organization’s efforts by spending at least $1,583,200 in federal contributions for the 1996 campaign cycle.
The Committee billed itself as an altruistic coterie of Americans seeking to keep the newly liberated Soviet states free from Russian influence — a promise that could only be kept by a military alliance like NATO. Its board was ideologically diverse, including neocons Paul Wolfowitz and Richard Perle, as well as Clinton stalwarts David Rothkopf and Greg Craig.
In a sense, the Committee was indeed charitable. Its founder and chairman, Bruce Jackson, was so principled in his desire to see freedom in Central and Eastern Europe that he didn’t even take a salary.
He didn’t have to. Jackson was a vice president at Lockheed Martin.
By Clinton’s second term, everyone was on board. Ron Asmus, the former RAND Corporation analyst and the “intellectual progenitor” of NATO expansion (who would later co-chair the Committee to Expand NATO), was appointed to the State Department. In that capacity, he worked with Clinton’s diplomatic point man on Eastern Europe, Strobe Talbott (more on him below).
Poland, Hungary and the Czech Republic were all in NATO come 1999. The Baltic States would soon follow. By 2003, those initial inductees had arranged deals to buy just short of $5 billion in fighter jets from Lockheed.
As for freedom-purveyor Bruce Jackson, he began running a new outfit in 2002 called the Committee for the Liberation of Iraq.
(36 Lockheed-manufactured F-16s are currently slated for delivery to the newly “liberated” Iraqi government at an estimated cost of $3 billion.)
Endless Brooks of Corporate Cash
The Brookings Institute is Washington’s oldest think tank. Its research used to be funded by a large endowment and no-strings-attached grants from foundations and philanthropists.
But all of that changed when Strobe Talbott — Clinton’s Deputy Secretary of State, an important proponent of NATO expansion and one of the co-authors of the recent Ukraine report — became its president in 2002.
Talbott sought to bolster Brookings’ coffers with aggressive corporate fundraising, taking it from annual revenues of $32 million in 2003 to $100 million by 2013. Though always corporate-friendly, Brookings has become little more than a pay-to-play research hub under Talbott’s reign.
Brookings’ donors represent a wide swath of corporate interests seeking to influence U.S. government policy across the globe. Many of them, as listed by the Center for Media and Democracy, have significant interests in Ukraine.
Among the many corporate donors to Brookings are Boeing, General Dynamics, Raytheon, Northrop Grumman, Lockheed Martin and cyber-defense contractor Booz Allen Hamilton.
Brookings’ board of trustees is co-chaired by David M. Rubenstein, the co-founder and CEO of the Carlyle Group, a private equity firm.
One of the companies in which Carlyle holds a controlling stake is Booz Allen Hamilton.
Booz, which both sells to and operates within the U.S. military and intelligence apparatus, counts four former Carlyle executives among its directors. Ronald Sanders, a vice president at Booz, serves on the faculty of Brookings.
Booz has been active with the United States Agency for International Development (USAID) in Ukraine since at least 2012.
USAID has a shady history, about which I’ve written before. Its “democracy promotion” activities in nations antagonistic to the U.S., often done in tandem with a slew of public-private enterprises within the National Endowment for Democracy (NED), have long been suspected as being efforts at regime change.
Take, for example, Ukraine’s first tilt westward during the 2004 election — the so-called “Orange Revolution.”
Kremlin-favorite Victor Yanukovych had won the election but was unseated by massive protests — the mobs claimed it had been rigged. But those protests began before the election results were even tallied, “after reports of fraud were circulated in the form of leaflets printed and distributed” by a pro-Western Ukrainian foundation that received substantial funding from USAID.
The American ambassador to Ukraine during the 2004 election was John Herbst. He is now the director of the Dinu Patriciu Eurasia Center at the Atlantic Council and is also listed as a co-author of the recent think-tank report.
The Atlantic Council was formed in 1961 as a “consolidation of the U.S. citizen groups supporting” NATO, according to its website.
One of its directors is Stephen Hadley, a former national security advisor to George W. Bush.
Hadley was the driving force behind the creation of the U.S. Committee to Expand NATO (he sat on its board), as well as the Committee for the Liberation of Iraq. Prior to joining the Bush White House, he was also a lawyer for Shea & Gardner, whose clients included Lockheed Martin. He is currently a director at Raytheon.
Hadley isn’t the only veteran of the U.S. Committee to Expand NATO who’s now involved with the Atlantic Council. Julie Finley, a longtime Republican political operative, is as well.
Yet another director of the Atlantic Council is retired General James Cartwright. The former vice chair of the Joint Chiefs of Staff, Cartwright has remained quite active since his retirement. He’s “an advisor to defense and intelligence contractor TASC, defense consulting firm Accenture, and Enlightenment Capital, a private equity firm with defense investments,” according to the Public Accountability Initiative.
Cartwright also sits on the board of Raytheon. His position earned him $124,000 in 2012.
Other notable members of the Atlantic Council include:
- R. Nicholas Burns, former diplomat and current senior counselor at The Cohen Group, a consulting firm which advises, among other defense manufacturers, Lockheed Martin.
- Joseph W. Ralston, former vice chairman of the Joint Chiefs of Staff and currently a director of Lockheed Martin.
- James A. Baker III, George H.W. Bush’s Secretary of State and partner at the law firm Baker Botts, which represents many defense companies.
- Thomas R. Pickering, former vice president of Boeing.
Another author of the Ukraine think-tank report is the former U.S. ambassador to NATO and current president of the Chicago Council on Global Affairs, Ivo Daalder.
Daalder was a member of the Hart-Rudman Commission, chartered by Clinton Defense Secretary William Cohen, from 1998–2001. After completing his service, Cohen formed the Cohen Group, the aforementioned, defense-affiliated consulting firm. Two of the Cohen Group’s senior officials sit on Lockheed’s board of directors.
Cohen’s commission was tasked with outlining the major shifts in national security strategy for the 21st century. Among its commissioners was none other than Lockheed’s Norm Augustine.
The commission concluded that the Department of Defense and intelligence community should drastically reduce their infrastructure costs by outsourcing and privatizing key functions, especially in the field of information technology. The main beneficiaries have been America’s major defense contractors: Raytheon, Lockheed Martin, Northrop Grumman, Boeing, Booz Allen Hamilton and General Dynamics.
Daalder’s benefactor and the outgoing chairman of the board at the Chicago Council is Lester Crown, chair of Henry Crown & Co., an investment firm that handles the fortune started by Lester’s father, Henry Crown.
Henry put the “dynamic” in General Dynamics, helping to turn the war profiteer into the world’s largest weapons manufacturer by the time Lester became its chairman in 1986. The defense behemoth remains the single largest source of the family’s treasure. They’re currently the 35th richest clan in America.
General Dynamics produces many of the equipment types that are proposed for transfer to Ukraine in the think-tank report.
General Dynamics’ revenue tripled between 2000 and 2010 as it acquired at least 11 smaller firms that specialized in exactly the sorts of services recommended for outsourcing by the Hart-Rudman commission. Roughly one-third of GD’s overall revenue in 2013, the same year that Daalder was appointed president of the Council by Crown, came from its Information Systems and Technology division.
Crown’s tapped successor is Glenn Tilton, the recently departed head of JPMorgan Chase’s Midwest division. He is currently a director at Chevron, which inked a potential $10 billion shale gas deal with Ukraine in late 2013. (It has since pulled out, citing regulatory issues, amidst the unrest.) Tilton also serves as a director of Abbott Laboratories and its spinoff, AbbVie Inc., which manufactures pharmaceuticals.
Chevron, Abbott, and AbbVie — which announced its foray into the Ukrainian market in late 2013, around the time that the Euromaidan protests began — all serve as corporate directors of the U.S.-Ukraine Business Council (USUBC). The council was “established in October 1995 to advance U.S. companies’ trade and investment interests in Ukraine’s significant emerging market,” according to its website. It boasts Jay Thompson, Chevron’s international government affairs director, among its executive committee.
Two of the authors of the think-tank report on Ukraine serve as senior advisors to USUBC.
Other USUBC executive committee members include:
- Bryan Lopp: Director of Boeing.
- Brigitte Dias Ferreira: Counsel for John Deere Public Affairs Worldwide.
- Stephanie Murphy: Director at Monsanto.
- David Woodruff: Senior Director at Archer Daniels Midland (ADM).
- Van A. Yeutter: Vice President at Cargill.
Those preceding four are important because of the nature of their businesses. ADM, Cargill and Monsanto are huge agribusiness firms, while John Deere specializes in the production of agricultural machinery.
Ukraine is known as the “bread basket of Europe” for a reason. It’s the world’s fifth-largest exporter of wheat.
The Euromaidan protests in late 2013, which begot the pro-Western coup in Kiev, began over then-President Yanukovych’s decision to scrap a trade pact with the European Union. Tagged along with that deal was a $17 billion IMF bailout package for Ukraine’s struggling economy.
Among the stipulations of the IMF loan were provisions that lifted a moratorium on foreign investment in Ukraine’s agricultural land.
“Ukraine and, to a wider extent, Eastern Europe, are among the most promising growth markets for farm-equipment giant Deere, as well as seed producers Monsanto and DuPont,” said the research director for Piper Jaffray, an investment bank, as quoted in a 2014 report by the Oakland Institute.
A new $40 billion IMF deal was just reached with Kiev, accompanying the latest ceasefire. Its exact terms remain unknown, but “the program will require the authorities’ steadfast determination to reform the economy” — the standard code for allowing Western capital’s foot into formerly cordoned-off doors of victim economies — according to IMF Chief Christine Lagarde.
Lagarde’s counterpart in negotiations over that deal was Ukrainian Prime Minister Arseniy Yatsenyuk. He was installed following the 2014 coup that ousted Yanukovych and his pro-Russian cronies.
Yatsenyuk’s appointment as prime minister raised eyebrows in certain corners.
In a phone call between Victoria Nuland, America’s top European diplomat, and the U.S. ambassador to Ukraine, Geoffrey Pyatt, Yatsenyuk was highlighted as Washington’s number one choice to be Ukraine’s next prime minister — just before being appointed as Ukraine’s prime minister.
At the time, the State Department was vociferously denying that it was meddling in Ukrainian affairs. Unfortunately for them, the phone call was wiretapped, likely by Russian intelligence, and leaked online.
Nuland is currently overseeing Obama’s diplomatic moves in Ukraine. A longtime State Department official, she was the chief of staff for Strobe Talbott while he was overseeing the first round of NATO expansion. She’s also the wife of neocon-savant Robert Kagan.
Kagan is a former Reagan State Department official and is currently a senior fellow at the Brookings Institute, producing research for his wife’s old boss.
In the late 1990s, Kagan sat on the board of, among other hawkish think tanks, the U.S. Committee to Expand NATO.
Profits, Prospects and Priorities
Many might presume that a learned man like President Obama wouldn’t risk an unnecessary proxy war with Russia just for the sake of U.S. corporate profits.
Unfortunately, there’s reason to be pessimistic beyond his track record.
In 2008, James Crown — who sits on the board of General Dynamics with his father Lester — and his wife raised millions of dollars for Obama as two of the presidential candidate’s largest “bundlers” nationwide. Lester Crown claims that he’s been an Obama supporter ever since he first met the president.
Crown was first introduced to the future president in the summer of 1989 when he was a 27-year old intern at the law firm Sidley Austin. It was a pivotal time for Barry. He met Michelle, who would later become his wife, that summer as well.
The connections were apparently a match made in heaven. The First Lady currently serves on the board of the Chicago Council.