```

[Joint House and Senate Hearing, 115 Congress]
[From the U.S. Government Publishing Office]

115th Congress                                                                              Printed for the use of the
2nd Session                                                            Commission on Security and Cooperation in Europe
________________________________________________________________________________________________________________________                                                          

                           
 Reality vs. Rhetoric: Assessing the Trump Administration's Russia Policy 
 

                                      June 15, 2018

                                                                              
                  
                                   Briefing of the
               Commission on Security and Cooperation in Europe
__________________________________________________________________________________________
                                    Washington: 2018                                                

                    Commission on Security and Cooperation in Europe
                          234 Ford House Office Building
                              Washington, DC 20515
                                  202-225-1901
                               [email protected]
                               http://www.csce.gov
                                  @HelsinkiComm
                                  

                              Legislative Branch Commissioners
                              

              HOUSE                                     SENATE
CHRISTOPHER H. SMITH, New Jersey               ROGER WICKER, Mississippi,
          Co-Chairman                                  Chairman
ALCEE L. HASTINGS, Florida                     BENJAMIN L. CARDIN. Maryland
ROBERT B. ADERHOLT, Alabama                    JOHN BOOZMAN, Arkansas
MICHAEL C. BURGESS, Texas                      CORY GARDNER, Colorado
STEVE COHEN, Tennessee                         MARCO RUBIO, Florida
RICHARD HUDSON, North Carolina                 JEANNE SHAHEEN, New Hampshire
RANDY HULTGREN, Illinois                       THOM TILLIS, North Carolina
SHEILA JACKSON LEE, Texas                      TOM UDALL, New Mexico
GWEN MOORE, Wisconsin                          SHELDON WHITEHOUSE, Rhode Island                 
          
     
          

                       Executive Branch Commissioners
                     
                           DEPARTMENT OF STATE
                         DEPARTMENT OF DEFENSE
                        DEPARTMENT OF COMMERCE

                                 (II)

ABOUT THE ORGANIZATION FOR SECURITY AND COOPERATION IN EUROPE

    The Helsinki process, formally titled the Conference on Security 
and Cooperation in Europe, traces its origin to the signing of the 
Helsinki Final Act in Finland on August 1, 1975, by the leaders of 33 
European countries, the United States and Canada. As of January 1, 
1995, the Helsinki process was renamed the Organization for Security 
and Cooperation in Europe [OSCE]. The membership of the OSCE has 
expanded to 56 participating States, reflecting the breakup of the 
Soviet Union, Czechoslovakia, and Yugoslavia.
    The OSCE Secretariat is in Vienna, Austria, where weekly meetings 
of the participating States' permanent representatives are held. In 
addition, specialized seminars and meetings are convened in various 
locations. Periodic consultations are held among Senior Officials, 
Ministers and Heads of State or Government.
    Although the OSCE continues to engage in standard setting in the 
fields of military security, economic and environmental cooperation, 
and human rights and humanitarian concerns, the Organization is 
primarily focused on initiatives designed to prevent, manage and 
resolve conflict within and among the participating States. The 
Organization deploys numerous missions and field activities located in 
Southeastern and Eastern Europe, the Caucasus, and Central Asia. The 
website of the OSCE is: .

ABOUT THE COMMISSION ON SECURITY AND COOPERATION IN EUROPE

    The Commission on Security and Cooperation in Europe, also known as 
the Helsinki Commission, is a U.S. Government agency created in 1976 to 
monitor and encourage compliance by the participating States with their 
OSCE commitments, with a particular emphasis on human rights.
    The Commission consists of nine members from the United States 
Senate, nine members from the House of Representatives, and one member 
each from the Departments of State, Defense and Commerce. The positions 
of Chair and Co-Chair rotate between the Senate and House every two 
years, when a new Congress convenes. A professional staff assists the 
Commissioners in their work.
    In fulfilling its mandate, the Commission gathers and disseminates 
relevant information to the U.S. Congress and the public by convening 
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of the Helsinki process and developments in OSCE participating States.
    The Commission also contributes to the formulation and execution of 
U.S. policy regarding the OSCE, including through Member and staff 
participation on U.S. Delegations to OSCE meetings. Members of the 
Commission have regular contact with parliamentarians, government 
officials, representatives of non-governmental organizations, and 
private individuals from participating States. The website of the 
Commission is: .

                              (III)

 
             Reality vs. Rhetoric: Assessing the

             Trump Administration's Russia Policy

                              ___________
                              
                             June 15, 2018

                                                                           Page
                                  
                              PARTICIPANTS

    Rachel Bauman, Policy Advisor, Commission on Security and 
    Cooperation in Europe ................................................    1

    Herman Pirchner, Jr., President, American Foreign Policy Council .....    2

    Dr. Alina Polyakova, David M. Rubenstein Fellow, Foreign Policy, 
    Brookings Institution ................................................    4
    
    Yulia Latynina, Journalist, Echo Moskvy and Novaya Gazeta ............    7 
    
    
                              (IV)

                Reality vs. Rhetoric: Assessing the
               Trump Administration's Russia Policy
                              ----------                              

                             June 15, 2018

Commission on Security and Cooperation in Europe
                  Washington, DC
                  

    The briefing was held at 10:00 a.m. in Room 562, Dirksen Senate 
Office Building, Washington, DC, Rachel Bauman, Policy Advisor, 
Commission on Security and Cooperation in Europe, presiding.
    Panelists present: Rachel Bauman, Policy Advisor, Commission on 
Security and Cooperation in Europe; Herman Pirchner, Jr., President, 
American Foreign Policy Council; Dr. Alina Polyakova, David M. 
Rubenstein Fellow, Foreign Policy, Brookings Institution; and Yulia 
Latynina, Journalist, Echo Moskvy and Novaya Gazeta.
    Ms. Bauman. Good morning, everyone. Call to attention. Thanks, 
everyone, for coming out this morning and hi to everyone joining us on 
Facebook. My name is Rachel Bauman. I will be moderating the discussion 
today. I serve as a policy advisor for Russia, Ukraine, Belarus, 
Moldova, and the Baltics on the Commission on Security and Cooperation 
in Europe, which is also known as the Helsinki Commission. We're an 
independent agency of the Federal Government charged with monitoring 
compliance with the Helsinki Accords and advancing comprehensive 
security through promotion of human rights, democracy, and economic, 
environmental, and military cooperation in 57 countries.
    Today we're going to be focused on what the U.S. Government, and 
namely the Trump administration, has been saying and doing to address 
these issues in the context of Russia on a bilateral basis, as well as 
to see where the rhetoric meets the road. As we know, Trump has 
repeatedly expressed a desire to improve U.S.-Russia relations. 
Nevertheless, policies thus far during the Trump administration have 
been less than friendly to Putin's regime, including quietly approving 
the first sale of lethal arms to Ukraine, which is a departure from the 
Obama administration's de facto lethal arms embargo. And as we know, 
the recent escalation of sanctions has further shaken the Kremlin 
elite.
    Despite all of this, it's natural to contrast the president's 
rhetoric with concrete policy achievements. Where does Trump the man 
diverge from the Trump administration? How does that affect the way 
Moscow reacts to American policies? Does the United States even have a 
coherent Russia policy outside of sanctions? And is our relationship to 
Russia today really any different than it would be under a President 
Clinton?
    To speak to some of these questions, as well as placing them in 
historical context, we have here today three distinguished panelists. 
Their full biographies can be found in your folders, but I will 
introduce them briefly. To my left I have Herman Pirchner. He's the 
founding president of the American Foreign Policy Council. Next is Dr. 
Alina Polyakova, the David M. Rubenstein fellow in the foreign policy 
program at the Brookings Institution. And finally, Yulia Latynina, a 
journalist with Echo Moskvy and Novaya Gazeta, some of the few 
remaining Russian independent news outlets.
    So to start out, each of us are going to make a statement, and 
we'll get into some discussion, and then a question and answer session 
from the audience. And a note to those of you on your phones, our 
Twitter handle is at @HelsinkiComm, C-O-M-M, if you would like to tweet 
about it. And you can also like us on Facebook at Facebook.com/
HelsinkiCommission. So without further ado, I'll turn it over to Mr. 
Pirchner.
    Mr. Pirchner. As a student, when I first started thinking about 
politics, Richard Nixon was president. And I remember reading an 
article in The Economist where Nixon was telling his supporters: Don't 
pay any attention to what I say, watch what I do. And I think, as 
Rachel indicated, we're in a time when many people are starting to pay 
more attention to what Trump says than what he does. Actually, I think 
both formulations are incorrect. What is done is very important, but 
what is said also carries weight and has to be considered as part of 
overall policy.
    Briefly, what has he done? From the time that he came into office, 
there have been a long series of moves that can be regarded only as 
very unfriendly to the Putin regime. In April 2017, he bombed Syria 
after Assad's use of chemical weapons, against Russian objections. In 
August, he signed a bill that placed sanctions on a variety of Russian 
industries. September 2017, training exercise in the Baltic States. 
December 2017, sanctions on the great Putin ally and Chechen warlord 
Kadyrov. 2017 December, the sale of sniper systems--which, by the way, 
is more important than you think because at the time the range of 
sniper systems that Russia had and were using against Ukraine had a 
much longer range. And therefore, Ukrainians could not adequately 
defend against these sniper attacks.
    More recently, in March 2018, you had--following the Skripal 
poisonings, five Russian entities and 19 individuals were sanctioned. 
Later 60 Russian diplomats were kicked out of Russia. In March, the 
Javelin missiles went to Ukraine. These are anti-tank missiles and 
reduce the chance of a Russian advance--certainly would raise the costs 
of any further military action.
    In April, sanctions against seven members of the Putin elite, 
including Putin's son-in-law and Oleg Deripaska, who is known to be 
very close to the Kremlin. In April, when the Wagner Group, which is 
really under Putin's control, moved against American positions in 
Syria, we launched an attack killing perhaps a few hundred ethnic 
Russians, Russian citizens. So the response has been tough to actual 
Putin actions.
    Now, some people have made the counter argument that this is only 
because Trump has been pushed into these positions. But who is pushing 
him? The people that had long documented pro-Russian positions--Bannon, 
the first national security advisor--they have been pushed out. Who has 
been picked by Trump since? You have Pompeo at State, you have Bolton 
at the National Security Council, and before that you had Mattis, all 
with demonstrably tough lines against the Putin administration. So you 
have--if you think that he's being pushed by these people, remember 
that he's the person that pushed--that promoted them, that appointed 
them. And he did so with the knowledge of their longstanding positions 
against the Russian regime.
    Now, having said that, confusing signals have been sent. We have 
the recent statement that Russia should be readmitted to the G7 to make 
it G8 again. You have a constant reluctance to criticize Russian 
actions, and especially Putin directly. How does that play into the 
hard line that's been taken in practice? In kindest interpretation, it 
perhaps encourages Europe to rearm, to begin to take care of its own 
defense, to look at the danger that comes from Russia. In non-kindest 
interpretation it's a signal that maybe when an actual big summit 
happens between Putin and Trump, that Trump won't hold the hard line. 
And this insecurity, which would be caused among American allies and 
American friends in the world, could well leave those countries to 
hedge their bets, to make an accommodation with Russia. It all depends 
on how Trump's words are read.
    And in the words of Don Rumsfeld, I think what Trump is really 
thinking is a known unknown. I don't believe it's possible to get 
inside of Trump's head to know what he's doing. I'm reminded of a scene 
from the movie ``Patton,'' where the famous American World War II 
general addresses his senior commanders before a battle. And he goes 
into a rage and says: Don't anybody--nobody should come back alive if 
we can't secure victory. And when all the generals and colonels leave 
the room, Patton's top aide turns to him and says: Sir, you have to 
understand that our officers don't know when you're kidding and not 
kidding. And Patton: it's not necessary for them to know. I have to 
know.
    So my bottom line on this is we have to hope that when Trump is 
making all these statements on Russia, that he does know what he's 
doing. Because if he doesn't, then it could lead to things that are not 
too attractive.
    Maybe a couple words on where I think policy should go before 
turning it over to my colleagues. Solzhenitsyn talking about the Soviet 
Union said that such a system can only exist on the big lie. And while 
Putin's Russia is certainly not the Soviet Union, the lie is important 
to keeping him in power. That's why all the internal and external 
propaganda. And the West has done a very bad job about conquering that 
propaganda, both inside in Russia and externally. I think we can't 
overstate really how effective this propaganda is, even among those in 
the Russian elite that understand that propaganda is being made.
    In the early 1990s, after the breakup of the Soviet Union, I hosted 
a prominent Russian economist who was clearly part of the elite--his 
first time in the U.S. And I took him to an upend grocery store. And 
this was at a time where you couldn't with a thousand bucks buy a 
banana in Moscow. And even if you went to the [Communist] Party stores, 
which only party members could go into, it was not a very impressive 
array of food. And he looked at it for a while and said, well, that's 
just how you rich people live. Then I took him to a Safeway in one of 
the poorest neighborhoods of Washington. And he looked at all the food 
there, and he was very silent.
    And finally he said to me--he said, you know, I had access to a lot 
of things from the West, and I thought I knew, but until now I didn't 
understand how much I'd been lied to. And I think this is true very 
much of the Russian people, and even the Russian elites. And this lack 
of understanding reality, in my mind, leads very much to some of the 
predatory Russian policies today. It has to be counteracted.
    We also have to step up the pressure on the elites around Putin. 
Public opinion counts in Russia, but what really counts is opinion of a 
couple hundred KGB/oligarchs that surround Putin. They're the people 
who keep him in power. Now, many of these people not just did 
legitimate business, but worked very hard to steal their money. And if 
you want to know what they think about the future of Russia, or what 
any elite thinks about the future of the country, look what they do 
with their money and look what they do with their children.
    All these people in Russia have two, maybe three or four passports. 
They all have foreign bank accounts. They often have children abroad. 
And why? Because they don't know when things could go bad for them in 
Russia. There's no protection of law. Why? Because they don't know when 
Russia itself could go bad. And they want a place to go where they can 
begin to live large.
    But the current Russian policies and the increasing isolation of 
Russia from the West has begun to cramp their lifestyle. And it becomes 
hard for them to enjoy their hard-stolen money in Europe. It becomes 
hard for them to do business. And while nobody, I think, is willing to 
stick--in this crowd--is willing to raise their head to challenge 
Putin, Putin certainly understands that there is unease. And at some 
point, that unease will become a big problem for him. So to the extent 
that we can use the people around him to put pressure on Putin, we 
stand a better chance of improving relations, because Putin is the type 
of guy whose appetite is increased by the eating. And if he doesn't 
find very hard reasons to stop things that cause him a problem, he's 
not going to stop. And we've--the pressure, to my mind, has to be 
increased.
    Additionally, things like Javelins to Ukraine, things like putting 
NATO troops in Poland and the Baltics, are real reminders of American 
commitment. And to the extent that the Russian elite understands that 
there is a firm commitment, there's less chance that we will have 
fighting with Russia, and there's a greater chance that some reasonable 
accommodation can be made, and there can become a sound basis for 
improving the relationship.
    Dr. Polyakova. So Herman took a lot of my talking points already, 
but I'll try to add to those a little bit. [Laughs.] But I think it 
also says something that we actually agree on the basic premise that 
you outlined. And I think that is also a significant thing to note. 
Right now, we have in the United States the toughest Russia policy 
since the end of the Cold War. But if you just read the president's 
tweets, you would never know it. And that's the reality of the 
phenomena of decoupling between the president's statements on Russia, 
which have been--as Herman also pointed out--more favorable, positive 
toward Mr. Putin, toward the Russian Government, and then the actual 
policy actions of this administration.
    So Herman and Rachel started to highlight some of those policy 
actions, but I think it's actually much larger than we even can 
understand if we just look at very discrete things that happen month to 
month. Since January 2017, there have actually been 26 distinct policy 
actions that this administration has launched in relation to Russia. 
And some, there are 205 new sanctions against Russian entities and 
individuals, the largest expulsion of Russian so-called diplomats in 
the history of the United States, including Cold War history. This is 
significant.
    In addition to that, the National Defense Strategy, National 
Security Strategy, clearly points to Russia as an adversary and a 
competitor to the United States, alongside with China. We can quibble 
about whether Russia and China should actually be on the same level as 
competitors to the United States, but the reality is that this is a 
profound shift in how the U.S. sees its place in the world, and how the 
U.S. sees its relationship vis-a-vis Russia specifically. And this is a 
shift from what we've seen under Obama, Bush, Clinton, and going all 
the way back.
    And I think the other issue that I would highlight that's 
significant is the National Defense Authorization Act [NDAA], which 
just went through markup in the Senate. And if we look at funding to 
shore up Europe's east, the European Deterrence Initiative [EDI]--that 
used to be called the European Reassurance Initiative--that was started 
under President Obama. In 2017, 3.4 billion [dollars] was allocated to 
EDI. In the 2019 NDAA, the amount that has been approved by the Senate 
is 6.3 billion [dollars], which is almost a 3 billion [dollar] increase 
in just a period of 2 years.
    These funds look a lot like--they reflect a strategy of very 
traditional deterrence against Russia. They reflect an investment in 
NATO's eastern flank, an investment in protecting and expanding U.S. 
presence--forward presence in the Baltic States, also in Ukraine. 
There's an additional 200 million [dollars] allocated and authorized 
for U.S. military training and support of Ukraine. This is separate 
from the weapons sales, the Javelin sales that Herman also talked 
about.
    So if we take the whole broad spectrum of what this administration 
has done on Russia, it is a significant and important set of actions 
and activities that, as I said, looks a lot like a very traditional 
deterrent strategy that I would argue we probably would have had--
though I don't like hypotheticals or counterfactuals--a pretty similar 
strategy or set of actions under a Hillary Clinton, if she had won the 
presidency. Now, we don't know for sure. And I think the one profound 
difference is that, of course, it does matter what the president says. 
And what the president has been saying, though his administration has 
not been doing, has started to draw and ignite certain rifts and 
tensions in the transatlantic relationship.
    And that is a serious issue that I don't think we would have had, 
had we had a different president. The biggest example that we just saw 
that I think encapsulates on the one hand the decoupling that I've 
talked about between rhetoric and action, but also the kinds of 
problems and tensions that this administration will continue to have--
particularly Western European allies--is, of course, what just happened 
at the G7, where basically in one day you have the president suggesting 
that Russia should be readmitted, G7 allies saying no.
    And then within, I think, hours of that you have the Director of 
National Intelligence Dan Coats giving a speech--I was actually at the 
speech where he gave it in France--outlining a very, very hawkish and 
very tough Russia policy. This is within hours of the president's 
tweets. And then you have an additional set of sanctions imposed on 
Russian entities and tech firms who the U.S. Government has charged as 
being enablers in Russian cyberattacks and intelligence-gathering 
operations. And this all happened within 24 hours.
    And so I think we are in a situation where European allies--and I 
go to Europe quite often--don't understand who to listen to in this 
administration. Should they be paying attention to the president's 
tweets? Should they be listening to what Secretary Mattis or Director 
Dan Coats says? I think this is producing a certain set of confusion 
with our key allies in Europe. I think this is going to be kind of a 
continuing pattern that we'll see throughout this administration.
    So that being said, just a few words on policy--and I completely 
agree with what Herman outlined in terms of where this should be 
heading. Where we are today is that we have a very conventional 
deterrence, possibility the beginning of a containment strategy vis-a-
vis Russia. This administration is not communicating that very clearly. 
They could do a better job of that. It's clear to me that the national 
security advisor and also the secretary of State and the secretary of 
defense are aligned on their views of Russia. And there also is 
continued bipartisan support in Congress on a much tougher approach to 
Russia.
    This was, of course, culminated in the Countering America's 
Adversaries Through Sanctions Act [CAATSA] legislation the president 
signed which, you know, nothing--almost nothing ever passes Congress, 
it seems, with almost unanimous support. And this was the one bill that 
did. And I think this is really, really important. We shouldn't forget 
that this happened. But we're not really thinking about next steps, 
meaning right now the U.S. and also Europeans are using existing policy 
tools, primarily sanctions, expulsions, and various other elements of 
those two policy implements. But we're not thinking about how to get 
ahead of the emerging threat that Russia and China represent to the 
United States.
    And those emerging threats are not going to be in the conventional 
military space. Yes, Russia is a nuclear superpower. So is the United 
States. I don't think we're going to be entering a nuclear war with 
Russia anytime soon. That's not in the Russian interest. That's not in 
the U.S. interest. But it's become very clear that Russia tries to 
balance out its own asymmetries against the West--meaning the fact that 
the Russian military cannot compete with the Western alliance, meaning 
that the Russian economy cannot compete with the West either--and then 
try to balance against these imbalances, and so the more conventional 
space, by investing in its capabilities in the asymmetrical space.
    So things like hybrid war, right? These gray zone activities, 
disinformation, cyberattacks, using energy as a tool to try to continue 
European dependence on Russian gas, specifically the Nord Stream II 
project. These kinds of activities we have not developed a good set of 
deterrence strategies against, specifically when it comes to things 
like disinformation in the digital domain, and potential cyberattacks.
    In March of this year, the FBI and DHS released a joint report that 
found the same malware that existed on Ukraine's electrical grids and 
caused a massive blackout in Ukraine two years ago on the critical 
infrastructure grids in this country, including nuclear, waterways, 
electrical, et cetera. What this looks like to me is that the Russian 
proxies, you could say the Russian government, has basically planted 
cyberbombs on our critical infrastructure systems. And so the question 
is, how will we respond to that kind of provocation, and do we think 
it's a provocation? Have we responded to that provocation? Those things 
remain relatively unclear to me.
    So aside from developing our strategies in the asymmetric space, we 
also need to be thinking about how do we target the Russian elite, who 
have been stealing massive amounts of money from the Russian people, in 
a way that doesn't actually hurt the living standards or the views of 
the Russian people toward the West, or toward the United States. And 
going after the oligarchs, as this administration has done with 
targeted sanctions, is a good first step, but it's not enough. Because 
it's very easy to get around those sanctions. Most people that are 
billionaires can easily transfer their wealth over to if not their 
grandmothers, their girlfriends, cousins, whoever else. And we have to 
work much harder to be able to maintain that sanctions regime.
    This administration has dissolved the Office of the Sanctions 
Coordinator in the State Department. And it's not clear they've 
replaced that office with another unit that would be involved in doing 
this. And this is something that I think I would encourage the 
administration to consider doing as sanctions become a bigger part of 
U.S. policy vis-a-vis Russia and other countries. But exposing the 
kinds of corruption that not just Putin but those individuals close to 
him that compose the Kremlin elite, is absolutely critical to trying to 
draw some cracks among the Kremlin elite and among the oligarchic 
system that this government in Russia has set up, to the detriment of 
its own people.
    And I think we shouldn't forget that, that whenever we're talking 
about Russia we're not talking about--at least, I'm not talking about 
the Russian people. I'm talking about the regime, which is a 
kleptocratic, patrimonial, oligarchic system that functions basically 
as a parasite off the Russian people and the assets of the Russian 
economy. So I will stop there.
    Ms. Latynina. Well, it takes gumption to speak about American 
policy toward Russia to an American audience, being a Russian. 
[Laughter.] So I better stick to the Russian side of the equation. And 
first, I would like to underline the fact that Russia belongs to an 
ever-widening circle of countries, most of them failed or rogue states, 
that lead by hating America. And this sort of takes place of setting in 
their picture of the world. And that setting is responsible for 
everything, including the shortage of toilet paper in Venezuelan shops. 
And basically the worse the situation gets inside the country, the more 
desperately it needs this setting to explain away its problems.
    For instance, the Kremlin really believes the United States stands 
behind the Islamic extremists in Russian Caucasus. They really believe 
that the United States are behind Russian opposition. And their symbol 
of faith is that the United States created ISIS. It's a very warped 
picture of the world. And it's very hard to have a productive policy 
toward the country with psychic issues, because, well, how do we behave 
toward an abusive neighbor who, say, likes to crap on your lawn or who 
tortures your cat? If you try to accommodate him, he will think you're 
a weakling and he will use the ground gained as a forward base for the 
next attacks. And if you retaliate, he will say to his family, see, we 
are surrounded by enemies.
    So basically there is no good diplomatic strategy in dealing with 
Mr. Putin, like there are no good diplomatic strategies in dealing with 
violent Islamists, because both are the worst type of aggressors--an 
aggressor who claims to be a victim. And this is bad news. The good 
news is that hybrid war, we are talking so much about against the West, 
is not actually Putin's invention. It is a Soviet invention. And I 
think there is simply no comparison between Soviet hybrid war and the 
current Russian one, because the old Soviet subversion machine, 
especially in the 30s, was really powerful. These were the days of 
Harry Dexter White, of Alger Hiss, or Laurence Duggan. These were the 
days when half of American China hands were Soviet spies and, worse, 
they were not just spying, they were directing policies.
    These were the days when people like Ernest Hemingway were used as 
useful idiots by USSR. And people like my favorite detective writer, 
Dashiell Hammett, were simple and pure communists. So we have nothing 
comparable nowadays, because when Stalin stood up and said that Moscow 
trials of 1937 is the real thing, he was believed by half of European 
intellectuals. It was unfashionable not to believe Stalin then, as it 
is not to believe in global warming today. When right now, Russia 
stands up and says, for instance, that Skripals were injected with 
chemical agent after they came to hospital, as a Soviet 
representative--or, a Russian representative in the United Nations 
claimed--well, it's just hilarious. So basically my premise is if the 
open society survived the Soviet hybrid war, it will certainly survive 
Putin.
    The second important thing about the hybrid war is that you cannot 
really win it. It can wreak havoc on somebody you consider your enemy, 
but you get no gains, economic, territorial, for yourself. And we can 
also see that Russian hybrid war is not directed to support this or 
that person. What actually numerous investigations found is that Russia 
didn't support Trump, per se. It supported those whom it considered to 
be the most disruptive and divisive. This is why it supported Trump, 
why it supported Bernie Sanders over Hillary. It supported every 
divisive view. It supported Black Lives Matter and white supremacists, 
militant Islamists and violent Islamophobia. Moreover, the minute Trump 
won, Russia switched its support to try and bash us. And actually, you 
should know that the most successful public event ever organized by 
Russian trolls was a public anti-Trump rally, organized on November 
12th, 2016, just 4 days after his victory. Thousands attended, 
including filmmaker Michael Moore, who played the role of unwitting 
useful idiot.
    Actually, this makes us wonder, because when Kremlin so publicly 
and demonstratively supported Trump's victory, was this just a visceral 
reaction to Hillary's defeat, because by this time she was undoubtedly 
personally hated by Kremlin? Or this more strategic play, with Kremlin 
perfectly aware of its reputation, was expertly using its alleged 
support in order to weaken the institution of American presidency? 
Otherwise speaking, I think that the current job he's doing--I'm 
completely in agreement he's doing a very good job of containing 
something that's really hard to contain. And its most important 
achievement actually I think is not sanctions; it's the military 
containment. And that's precisely what lacked during the previous 
administration.
    I would remind you that Putin embarked on a bloody career of hybrid 
aggression in year 2008 in the cause of Russia-Georgian war. It was an 
open act of aggression against a sovereign nation. It was carried out 
exactly in the same manner as all things Putin later did in Ukraine. 
For Putin operated through cutouts and volunteers, through the runaway 
republic of South Ossetia. He was an aggressor posing to be a victim. 
And he was claiming that the real aggressors are the United States. In 
Kremlin's point of view, they stood behind Saakashvili.
    And Russian media were telling that, yes, fighter pilots attacked 
Tskhinvali. This is the capital of this runaway republic. And actually, 
I do remember a press conference in which none other than a deputy 
commander of Russian general staff produced a passport of an American 
citizen, the citizen in this case was Michael Lee White, as a proof 
that it was the U.S. military who were fighting Russian in Georgia. 
This was classic, vintage, fake news, for it was later proved that this 
Michael Lee White, he lived in China for 10 years, his passport was 
stolen from him in year 2005, when he transited from Beijing to United 
States via Moscow.
    And after all this, President Obama announced the reset policy. And 
by doing so, in Kremlin's eyes, he was a weakling. Moreover, in 
Kremlin's eyes, that meant he acknowledged the basic Kremlin narrative 
about the war, that is the narrative that the United States was somehow 
responsible. In Kremlin's eyes, he said, oh yes, we did all these 
things you claim we did, and we are sorry. He acknowledged that Michael 
Lee White was fighting in Georgia. And I think if there was no reset, 
there would have been no Crimea annexation.
    We can see this story repeating itself in August 2013, when Assad 
used chemical weapons against thousands of civilians and crossed the 
red line. Instead of bombing the hell out of Assad, President Obama 
said that he will explore other options. And these other options 
involved President Putin's offer to act as intermediary. Putin 
volunteered to supervise the destruction of Assad's chemical weapons. 
Well, we all know that Assad kept his chemical weapons.
    And I'm not criticizing American administration. I'm just saying 
that this was basically one way to deal with a wild neighbor who pisses 
on your lawn and tortures your cat. You try to engage him. And you get 
more aggression in return. And by year 2014, Putin was thinking he can 
get away with anything. So after year 2014, after Crimea annexation, 
and especially after Putin tried to meddle in U.S. elections, we're in 
phase two. The police has been called for the wild neighbor. The wild 
neighbor got his due and Russia is under sanctions.
    Actually, does this change the situation? Well, no, because Putin 
is using sanctions to build up hysteria inside Russia. Kremlin is 
saying we are surrounded by enemies. They love us not. Actually, an 
even worse thing is happening because prior to 2014, main Putin support 
base was Russian elite who, as you put it, stole in Russia and kept 
money in the West. Now, and that's unfortunate and that's part of the 
sanctions, this support base is shifting more and more toward 
underclass, toward the poor people who have never been in the West, 
never seen it, never had any money, and who want a reason for all their 
suffering. And they get this reason. Yes, we are suffering, but this is 
because in the West--they in the West, they hate us. And why do they 
hate us? Oh, because we are so spiritual.
    Does this mean that sanctions are counterproductive? Of course not. 
That's the same conundrum society has faced when dealing with 
criminals. Every social worker worth his mettle will tell you that it 
is counterproductive to put a criminal in jail. And jail is a bad 
place. It does no good. Yes, jail is a very, very bad way to deal with 
criminals, not counting all the others. And you can say the same about 
Kremlin. Sanctions are very bad with the Kremlin, not counting all the 
others. But the most important point I would like to point out is that 
the only effective strategy is not sanctions, it is the military 
containment. And we can point to very significant developments. They 
have been talked already about by Herman and by Alina.
    The first was Deir Ez-Zor, when on April 8th around 200 Russians 
were wiped out by U.S. air strikes because they attacked United States 
positions and the positions of the allies. And actually these--by this 
time, Kremlin was stating for years on end that the United States are 
attacking Russia. And we would have supposed all hell to break loose on 
Russian TV. Instead, there was not a peep. Why? Precisely because it 
was a humiliating defeat, and because United States acted and not 
talked. If United States were to show notice, address the issue, 
convene the United Nations, I guess there would have been very strong 
Russian reaction. Where 200 Russians were just killed, there was zero 
reaction.
    And then, of course, we had the red line story once again this 
April, when President Trump ordered the air strikes against Assad, and 
Russia made a great show and issued a lot of warnings, but in the end 
were very careful not to shoot down a single U.S. missile, let alone to 
sink a U.S. ship. So President Trump basically stared Mr. Putin down. 
And actually, that's the last point I want to make. And that's a 
question I wanted to address specifically--what is more valuable to Mr. 
Putin? Statements of false moral equivalence or sanctions relief, which 
is not forthcoming?
    And then finish with another striking example. And this is the 
example of Israeli Prime Minister Bibi Netanyahu, Benjamin Netanyahu, 
who came to Russia on Russia's Victory Day. He marched with Putin in 
celebratory columns. And the very next day, the Israelis wiped out 
nearly all Iranian air defense systems in Syria. They had tried to call 
it Iranian names, like Pantsir, Buk, Dvina--the famous Buk that is 
superb, as we know, against civilian airliners. But it did not perform, 
it seems, as well against Israeli F16s. And again, Putin did not as 
much as beep.
    So this shows that PR reality that is Israeli prime minister 
marching alongside with him was much more important to Putin than the 
real thing. And actually at Deir Ez-Zor, we could see that Putin does 
not want a real war. He doesn't want a short, victorious war, which he 
has ample grounds to believe will be neither short nor victorious. What 
he wants is a PR war, a war in which he has all the advantages and none 
of the setbacks. And it is to Russia to fear the conventional war, and 
not the West.
    So there are two basic advantages of the current administration. 
President Trump is not afraid to use force, and he is unpredictable. 
This is his greatest asset and his greatest liability, because actually 
unpredictability in foreign policy is associated with authoritarian 
leaders. It is an authoritarian leader who can flip and flip back and 
forth, who can turn in 2 days 200 degrees. The democracy is a ponderous 
thing to turn. So it turns out that what is probably the last line, is 
that Mr. Trump is superbly equipped to deal with bullies because he is 
not a small bully himself. And it is a good thing in a world of 
bullies.
    Ms. Bauman. Okay. Thank you guys for that. I just want to start off 
with a little bit of discussion before we go to question and answer. 
Herman and Alina both mentioned the problem of Trump's statements, 
alienating European allies over things such as trade as well as Russia 
recently, we see. I'm wondering if you think that these squabbles on 
other issues that maybe aren't directly related to Russia might cripple 
U.S. policy by making Russia appear more favorable in comparison? Do 
Europeans place more value on what Trump says than what's actually 
going on? I don't know if any of you want to speak to that.
    Mr. Pirchner. Russian economic penetration, especially of Germany, 
plays a big factor into how our relationships with Europe as a whole 
play out. And to the extent that statements are made by the president 
that are subject to a variety of interpretations, I think it 
strengthens the hand of pro-Western forces within Germany. Having said 
that, eventually Europe will have to grips with the reality of Russian 
aggression. They'll have to come to grips with the need to defend 
themselves. They'll have to come to grips with the Russian propaganda, 
which will become less rather than more effective as greater portions 
of the European elite and European intelligentsia understands how 
they're being lied to and how their own individual internal political 
processes are being manipulated.
    Dr. Polyakova. So I think the bigger question you're asking, 
Rachel, is whether President Trump's statements and potential 
alienation of our European allies is kind of pushing them toward 
Russia, right?
    Ms. Bauman. Yes, and undermining our----
    Dr. Polyakova. And our interest and the alliance--transatlantic 
alliance. I don't think those are related. There have been so-called 
Putinversteher in German for a very long time among the central left. 
Gerhard Schroder stands out as the Number 1, who is the former 
chancellor of the SPD, the Social Democratic Party of Germany, who now, 
within a month of losing his election in Germany, became chairman of 
the board of Gazprom and now also serves a similar position for the 
Russian State oil monopoly, Rosneft. And continually lobbies for 
Kremlin interests within Germany, including for Nord Stream II, the 
pipeline project that would make Europe deeply dependent on Russian gas 
for many years to come and would cut Ukraine out from transit fees.
    Same thing in Italy. We now have a new government composed of 
right-wing populists, League and the Five Star Movement, who have for a 
very long time been pro-
Russian, very clearly. And we have these similar kinds of political 
forces essentially across all European countries today. So that was 
happening before the U.S. elections in 2016. In Europe, it's been 
happening at least since the 1990s, frankly. And the Russian 
Government, as part of its asymmetric warfare against the West, has 
strategically cultivated alliances and relationships with fringe 
political parties, primarily on the right but also on the left.
    As Yulia was saying, this is part of the chaos strategy. It's not 
about choosing a specific individual or associating yourself with 
specific ideology. It's about chaos, right? So you support challenger, 
insurgent political forces on both sides.
    So my last comment is that Putin, though, is, I think, very good at 
seeing power vacuums and divisions, and then knowing how to insert 
himself into those divisions between allies or between member states 
within the EU itself. And we saw him doing this recently.
    So just at the end of May, Russia hosted the St. Petersburg 
economic forum, to which President Macron attended directly after this 
very well-publicized bromance with President Trump that he had here. 
Angela Merkel also flew to meet with President Putin in Moscow. We 
don't actually know why. There was--I didn't see an official readout as 
to the visit. And what was interesting is that Putin greeted her with a 
bouquet of roses. And in the past, he's greeted her with his black 
Labrador retriever, because she has a fear of dogs. So this was a very 
marked change in how Putin himself, I think, was trying to court 
European allies.
    He then, himself, went to Austria for a series of meetings. 
Austria's also a country like Germany, that has its share of 
Putinversteher. And he's been doing this, cultivating these kinds of 
relationships to try to pull away some of the European allies from the 
United States. So, yes, the tensions that we currently have in the 
relationship, Putin is trying to step in to make those divisions wider. 
But is the Trump policy actually pushing Europeans toward Russia? I 
think these trends have been going on in Europe for a very long time.
    Ms. Latynina. Probably I would add that there was this thing--this 
roses bouquet thing was quite controversial, because this meant he 
presented it to a woman and not a head of state. So there was a lot of 
discussion about this as well, whether it was intended as insult after 
the Labrador--nobody saw the Labrador around. Probably it probably 
died. [Laughs.] So actually, I would agree that Putin is very good at 
exploding cracks. And this is why it is important not to overestimate 
that--not to ascribe to him all the--all the divisions that are 
happening both in European and American society because the cracks are 
here for real. The cracks are about serious issues. And if you don't 
want the Kremlin to be inserted into these cracks, then the Western 
world should really address the issues.
    For instance, immigration is a very serious issue in Europe. And if 
the current mainstream parties don't address the issue, then of course 
the marginal parties would. And it is not a good thing to explain all 
these things, oh, it's just Putin's influence and Putin's money. 
Otherwise, we will be behaving themselves. Just as sure as the Kremlin 
one says, well, all the Russian opposition is financed by United States 
and there's no real ground for discontent.
    Ms. Bauman. And one more thing I would talk about, since we are 
here in Congress, is the role of Congress in policy toward Russia. I 
know we mentioned CAATSA, which Trump signed and eventually 
implemented. [Laughs.] But that, of course, did originate in Congress. 
And I was wondering if any of you saw that as a kind of insurance 
policy? Maybe in case Trump did something or said something--in the 
beginning of his presidency there were thoughts that he might actually 
get rid of the sanctions. So what do you think Congress' role is, in 
light of CAATSA as well as possible future endeavors?
    Mr. Pirchner. I note that that bill, which passed with large 
bipartisan majorities, was signed by Trump. He could have let it go 
into law without signing it. So I think the charge that he wasn't going 
along with it is not completely accurate. If he really had strong 
objections, he would not have signed it. I think there remains 
skepticism in Congress regarding how hard a line the president will 
continue to take on Donbas and other situations in the world. And the 
large bipartisan majority I think certainly will be a factor in shaping 
policy, because it's a reality of power in D.C.
    Dr. Polyakova. I actually think right now is a really important 
moment for Congress, which typically is not as involved in foreign 
policy, which is the domain of the executive in the United States, to 
play a much more leading role when it comes to Russia. And Congress has 
done this with CAATSA very clearly, by stepping into fill what I think 
some members of Congress probably saw a potential threat that this 
administration moved quickly to remove sanctions. Certainly candidate 
Trump talked about that during the campaign. So I think that was a fear 
that many congressional members had at the time.
    I don't think that was the main motivator for CAATSA, because it 
was so much more expansive than just codifying the Obama-era executive 
orders related to sanctions. It could have just done that, but it went 
much, much further and actually gave the administration a significant 
mandate and authority to impose new sanctions related to energy, 
related to illicit finance from Russia, and also related to the defense 
and intelligence sector. And they have used those authorities. Again, 
they didn't have to use them.
    The Kremlin--so-called Kremlin list that the administration 
released as a part of CAATSA at the end of January, the public version 
was a bit of a joke because it was basically a culmination of a Forbes 
list and added there was some Russian officials from the Kremlin 
website. But the classified version--which I have not seen but I've 
talked to people who have, maybe some of you have--was a real report 
that was well done, well researched. And I have no doubt the sanctions 
that came afterwards that we talked about in early April, that were 
really tough, were based on that classified information and net 
assessments about specific individuals and companies that are involved 
in some of the dirty dealings of the Kremlin's hybrid war.
    So I think there's a lot more that Congress can still do. But 
specifically, much more--and what we've all been talking about--in this 
hybrid war, asymmetric warfare space. We haven't done very much to 
really understand how American tech firms, like Facebook and Twitter 
and Google, have played a significant role in propagating Russian 
propaganda and disinformation alongside so-called fake news. I was, 
frankly, a bit disappointed--a bit--[laughs]--with the Mark Zuckerberg 
hearings that happened in Congress, that didn't really get to the heart 
of the matter. And I think this industry and the role that it's served 
in being manipulated by the Kremlin will continue to be an issue. And 
at some point, regulatory measures will have to come, in the same way 
that regulatory measures came over television and radio and print.
    And so this is, I think, a place where Congress can continue to 
have a very important role in understanding: How do we get the 
situation under control? Because it's not getting any better based on 
the voluntary actions of these companies.
    Ms. Bauman. And, Herman, did you want to make a quick statement 
here?
    Mr. Pirchner. There's been a long and very vigorous debate among 
constitutional scholars about the role in national security of Congress 
versus the executive branch. And the reason it's been so vigorous is 
there's a lot of ambiguity in the Constitution. In practice, when the 
executive branch or Congress has gone so far, the opposing branch has 
made a big effort to reassert its rights on things like war powers, but 
not only. And my personal view is in recent years Congress has 
abnegated a lot of power it could exert if it was willing to do so.
    Ms. Bauman. And Yulia? No comments? That's fine. [Laughter.] All 
right.
    So we're going to turn it over to the audience. For question and 
answers, please state your name and your affiliation. And keep it 
brief. I also want to hear actual questions rather than comments. If 
you keep going for too long, I will cut you off. So if anyone has any 
questions? Yes. We have a microphone here. Yes. It's coming.
    Questioner. Thank you. Hello. My name is Kristen Chang [sp]. I'm 
with the office of Senator Schumer. I'm an intern there.
    Dr. Polyakova, you spoke briefly on Facebook's impact on what's 
happening, what we're looking at. I was wondering if I could get all of 
your thoughts on how we should move forward with the cybersecurity 
threat? I know you've spoken a little bit about that, but I'd love to 
hear more about it if you have anything else to say.
    Thank you.
    Dr. Polyakova. Should we take them one at a time?
    Ms. Bauman. Yes, if anyone wants to respond. Not required, but----
    Dr. Polyakova. Well, I do think when I mentioned about the role of 
social media companies is different than the cybersecurity element. 
They're intertwined, but different. So we're talking about the spread 
of disinformation, which is different from misinformation, is the 
intentional spread of inaccurate information to try to manipulate 
society and certain narratives, which is what the Kremlin has been 
doing, but also others have been doing. And that's different than just, 
you know, putting up false stories to make a little bit of money from 
advertising. So I think we have to separate those.
    And the cyberthreats question, I think a lot of the actions on that 
end have to happen in the classified space, and have to be led by the 
intelligence community, for obvious reasons. And as a result, I don't 
know exactly--because I don't have clearance--what we have already done 
in that space. But I would hope that the Department of Defense, along 
with the Office of the Director of National Intelligence, are thinking 
through their own vulnerabilities. I was happy to see the early 
administration, they banned the use of Kaspersky Lab software on U.S. 
Government computers. That was a good first step, but that was a small 
first step.
    I think the bigger threat in the cybersecurity domain is not as 
much Russia as China. And what we've seen Russia actually become is 
more of a hub for cyber criminals, which the Russian Government 
sometimes uses to do its own things, its own projects. But I also think 
that this is a really deeply complex issue. I know I'm not giving you a 
satisfying answer, but I think that's because a lot of the actions have 
to happen in the intelligence space. And if any of you are working for 
the intel communities, I would hope that you're thinking through this.
    Mr. Pirchner. The American Foreign Policy Council has run a series 
of briefings on cybersecurity. I think 52 Senate offices attended those 
briefings over the past year. And we have them summarized in a primer 
on cybersecurity. And there's also a full book that's gotten rave 
reviews from Harvard Law. And if anybody in the audience wants to do a 
deep dive on it, talk to Amanda Eisenhower--if she raises her hand--
from the American Foreign Policy Council, and we'll get them to you.
    Ms. Latynina. Okay. I would just like to add up a couple of things. 
Maybe not many people remember, but the first attack that ever 
happened--that ever was devised by Kremlin was in Estonia. And it was 
called Bronze Soldier Riots, when the Estonian Government decided to 
move a monument to Russian--well, to Russian liberators who liberated 
Estonia from Nazis, and at the same time included it into Soviet Union, 
to another place. And besides the attacks--besides the riots, there 
were immediate cyberattacks on Estonian eGovernment. And as Estonia has 
one of the most advanced systems of eGovernment in the world, this was 
of course quite dangerous. And this led to the fact that right now the 
cybersecurity center of NATO is situated in Estonia.
    I would like to point out about this Estonia thing two things. 
First, the attack--the Bronze Soldier Riots were actually organized in 
a very interesting way. I tried to pay more attention to the detail, 
and that's what I found out. That actually it was a perfect setup 
because what happened is that a lot of Russians who live in Estonia, 
they listen to Russian State TV. And the Russian State TV started 
announcing that people are rioting. And after it started announcing 
that people are rioting and publishing news about it, they came and 
rioted. It was as simple as that. And actually, I think it was perfect 
type of an organization of an event. And that's one thing to think 
about, that Russian cyberwar actually started with Estonia, and 
Estonia's a member of NATO.
    And actually, I think that Russia can be dangerous when it comes to 
cyberattacks. And actually, there's one thing I never mentioned--I 
never heard any consequences and any news after it happened, because 
several weeks before the American presidential elections there was a 
huge DDOS attack, distributed denial of service attack, on various 
American commercial services, and they went down. And actually, 
somebody said, yes, it was probably due to Russia. And it was not 
followed up. And I think this is actually much more serious than 
Russian fake news. Because I think there's a lot of hype about Russian 
fake news and what's happening in Twitter and in Facebook.
    And I'll tell you one thing, there's one case that's--there's one 
thing that is malicious intent. And there were obviously these troll 
farms who were trying to meddle. But there is another thing that is a 
real influence. And I don't think they exerted any real influence for 
one very specific thing. Here am I, sitting before you and talking in 
English. And my English is not a native language. And despite the fact 
that I'm a fairly good speaker and I read in English more than Russian, 
I certainly cannot pass as a native American in my Facebook messages. 
So don't you believe for a second that Russian people, Russian Facebook 
trolls who are uneducated, who don't even have the level of English I 
have, can pass for an American. It's as simple as that.
    As I said, there's a question of malicious intent. And the intent 
is something that also should be punished. But there's also a question 
of real influence, which is almost negligible. In Russian law there's a 
specific thing for this, it's an attempt with the means that are not 
sufficient for the attempt. I don't know whether such a thing exists in 
American law.
    Ms. Bauman. Okay. Another question? Right there. Thank you.
    Questioner. Hi. I'm Brooke Hartsuff with the Tom Lantos Human 
Rights Commission.
    Continuing the topic with hybrid warfare, with Wagner's private 
military company operating in southwestern Syria and ties to Putin's 
regime, and then obviously their attack on U.S. troops in February of 
this year that's making it the deadliest U.S.-Russian clash since the 
Cold War--as private military companies have shown ties to Putin's 
regime, what does this mean for the future of U.S.-Russian relations 
and military action?
    Ms. Latynina. Well, first of all, I think we should understand that 
private military company in Russia actually do not very compatible 
things. Because, see, if you look at Russian regime carefully, well, 
Kremlin nationalized everything, beginning with oil and going down to 
TV. So it beggars belief that a leader who is as intent as Putin is on 
governing anything in his country leaves a private military company 
operating like in some medieval times. There are no private military 
companies that go to war in the present-day world, except, as I've 
said, for medieval times, because obviously the state monopoly on 
violence is one thing that makes the state tick.
    So I think that instead of private military companies, we should 
talk of the policy of plausible deniability by Mr. Putin. He wants to 
create a common structure in which he will not be held responsible for 
what is happening under his broad guidance. And I think that this 
possible--what Putin wants is diminished liability. And actually, what 
he gets--this is also true--is diminished control because in things 
like shooting down Malaysia Boeing, or maybe even at this Deir Ez-Zor 
thing, we cannot be 100 percent sure that Putin controlled the whole of 
the operation, because he had definitely given an umbrella permission. 
But unfortunately, when people get arms into their hands and it's a 
private guy who has these arms, he starts going after his own goals.
    I would like you to direct your attention to a piece you probably 
know. There's a very perfect piece in The Washington Post, on what 
actually happened at Deir Ez-Zor, because it had some leaked 
information. And this leaked information was as following: That, first, 
Mr. Prigozhin--this is the guy who is the head of--who is the nominal 
head of this Wagner brigade, who is responsible for it--for the upkeep 
of it--that first, Mr. Prigozhin was contacted by some Syrian official 
who promised him a reward for doing this. And then Mr. Prigozhin 
contracted a man whose name was Mr. Ostrovenko. And Mr. Ostrovenko was 
a deputy to the head--to the chief of staff of Mr. Putin's 
administration.
    So what I'm trying to point out, that actually for an operation 
that is planned from the top, it's sort of a very roundabout way of 
carrying out an operation, because, you know, Mr. Prigozhin is no 
military man himself. And he's contacting a guy who is, God forbid, the 
civilian deputy of the chief of staff of Mr. Putin. So what I make out 
of it--of course, I can't just suppose it. But what do I make out of 
it, is that Mr. Prigozhin has got a sort of umbrella permission and go-
ahead from Mr. Putin. Then he sorted out the details with these Syrian 
guys, and he was promised some remuneration, which is okay by Kremlin. 
It is not something that is not permitted. It is okay. So then he 
contacted Ostrovenko in order to inform him of the details of the 
operations, because he had no direct access to Mr. Putin himself, 
right, at this time.
    And he was doing this because Mr. Shoygu--that's the Russian 
minister of defense--hates his guts, which is just obvious because when 
you're a private military contract and the regular army, they hate each 
other's guts. And he wanted to sort of, you know, have an insurance 
policy in case things go south. So actually, things went south, and Mr. 
Prigozhin was probably able to say, well, Mr. Shoygu sanctioned this. 
So this is a very, very roundabout way. And what I'm trying to say, 
that this all goes under the heading of plausible deniability and the 
resultant diminished control. So this is just exactly intended. So we 
could not sort head or tail of it, and understand, was Kremlin really 
responsible for trying to attack U.S. troops, or was it just a freak 
[thing]?
    Mr. Pirchner. And I think it's important that this plausible 
deniability is understood to exist in Ukraine as well. This whole 
fantasy of separatists. Make no mistake, the operation there is Russian 
planned, financed, equipped, directed. Officer corps is all Russian. 
But under the umbrella of deniability, even though there's full control 
out of Moscow. And if you have somebody local that gets out of line, as 
happened in Donbas, they get assassinated, and everybody else gets in 
line.
    Dr. Polyakova. Just very briefly, because you asked about what does 
this mean for the future, I think Yulia's detail of the Wagner conflict 
in Syria is absolutely correct. But what it points to is this plausible 
deniability leads inevitably to warfare by proxy. Whether that be in 
the conventional space, which is the situation with Ukraine and the 
Syrian example, and also in the nonconventional space, meaning the use 
of cyber criminals, activists, as Mr. Putin volunteers--patriotic 
volunteers, as Mr. Putin has called them, and the disinformation space 
as well.
    So there's no--it's not maybe a coincidence, but it is interesting 
that Prigozhin was also in charge of the Internet Research Agency, the 
troll factory project, and the Wagner Group, right? So it seems that 
there is a system of control that is ambiguous--purposely ambiguous, 
where a certain guidance or directive is given from the Kremlin, from 
Mr. Putin, but then the details are figured out on the ground. And 
sometimes things go wrong and the Kremlin can deny. And sometimes when 
they go well they can take some credit for it, which is what happened 
with Crimea eventually--though Crimea might be a slightly different 
example.
    And I think we're going to see more and more and more of this. And 
I think the role--what does that mean for policy? It means that 
European and American policymakers have to be much more clear about 
pointing the finger, even if you don't have, you know, smoking gun 
attribution. So this administration did that with the NotPetya attacks, 
where they clearly said this was the responsibility of the GRU, the 
Russian military intelligence. And we need to do more of this instead 
of being fearful about saying, as the Obama administration was during 
Ukraine, where I remember in 2014 no one was willing to use the words 
war, Russian war, invasion. The favored term was crisis. I was like, we 
know it wasn't a crisis. This was a war. But nobody was willing to say 
those words. And now we have a very different situation. Those word are 
being used. And the reality is being spoken about. And we need more of 
this kind of communication.
    Ms. Bauman. Paul, there.
    Questioner. Thank you. Hi, my name is Paul Massaro. I'm the policy 
advisor for anticorruption at the Helsinki Commission. And thank you 
all so much for being here today.
    Dr. Polyakova, thank you for pointing out the parasitic, 
kleptocratic nature of the Putin regime. Something that we talk about 
quite a lot in the circles I run in is the way that those that steal 
all this money need to go then and hide it in the West and hide it in a 
rule-of-law country for a number of reasons. Three that come to mind 
are so the next bigger fish won't steal it, so your people don't see it 
necessarily, and so you can hedge, of course, against the collapse of 
the regime. And that's something that you pointed out.
    So my question is, when it comes to those within the United States 
and perhaps in the United Kingdom that assist in the transfer of this 
wealth, in the hiding of this wealth, and then perhaps also the 
middlemen that clean this money in Cyprus and Latvia, what has the 
administration done and what can the administration do further, seeing 
as this is truly the Achilles heel of the Putin regime?
    Dr. Polyakova. Thanks for the question. Just a quick comment, but 
all of us have talked about this to a certain extent because this is 
the area of focus, to my mind, that will really get at the heart of the 
Kremlin under Putin. I think there's a few things that can be done. 
Clearly, the U.K. has a serious problem with dirty Russian money. It's, 
I would say, probably less of a problem in the United States, although 
certainly in New York, in Miami, and in Delaware--[laughs]--there--in 
New York and Miami there are these empty apartment buildings that we 
all know about now that have been bought up with--as a way to clean 
dirty money, basically.
    And what this is doing to real estate price is very obvious, that 
normal citizens can't afford to live in these places because prices are 
going up. I think most citizens, whether it be in the U.K., in Europe, 
or in the U.S. are not making those connections, right? One reason why 
you can't afford an apartment in Miami is because of this dirty money 
that's just being parked there, and these apartments are empty. But the 
real estate doesn't exist.
    One major thing that worries me about the U.K., because of Brexit, 
is that the U.K.'s financial system has become so deeply dependent on 
this foreign money--not just from Russia, from China as well, and 
elsewhere. But as they exit, supposedly, the European Union, they will 
inevitably have capital flight. And as a result, they will need to be 
much more dependent on attacking this kind of money to maintain the 
current financial prestige that London city has acquired. And so the 
U.K. is considering much more strict legislation. Those specifically 
point to identifying transparency and disclosures around the final 
beneficiary of accounts.
    We still have that loophole here. And it's one of the few places we 
have that loophole. But I think to get really shell companies--which is 
really complicated--you have clear laws about disclosing the final 
beneficiary of accounts. And that, I think, would also go for funding 
for political ads as well online, where you can't set up a shell 
company or a shell group to put a local ad, like Young Muslims for 
America, by some, you know, Americans for Puppies kind of organization 
or something. So I think also somewhere Congress could act to enforce 
those kinds of disclosures.
    Mr. Pirchner. Congress should take a look at the laws that were put 
into place during the last days of Cameron, before May came to power. 
And they require substantial disclosure of where the money originated, 
the source of the money. As Alina pointed out, they haven't been 
implemented because of the penetration of Russian money into the 
coffers of the Tory Party and the Labour Party. And many legitimate 
businessmen make money out of the Russian oligarchs that are there. I 
went to England, I don't know, maybe 5, 6 weeks ago. And I understand 
that the debate is alive on how far they should go to implement these 
laws. But there are pretty good laws on the books. And it may be worth 
a look-see for those of you who are on staff here to see what may have 
applicability here.
    Dr. Polyakova. Just as a followup, law firms are also being used as 
money laundering organizations--they don't have to disclose because of 
client confidentiality privilege where their money is coming from. So 
what happens is Oligarch X, Company Y, you know, you transfer millions 
to a law firm, which is recorded as client fees. And the law firm, by 
law, does not have to reveal where that money comes from and what it 
was for. And that also sets up--it's not just real estate and it's not 
just bank account holdings that there be disclosures around. And this 
is why Delaware has become, oddly, a place where there's high 
concentrations of these firms that are being used to launder money.
    Ms. Latynina. Just one thing I would like to add. What I think is, 
first of all, you need to know about Russian money is to differentiate. 
Because if you use the highest ethical standards, that all Russian 
money is dirty money because, you know, everything in Soviet Union was 
state property. And the minute it was privatized, I can assure you that 
no Russian oligarch worth his mettle was paying any taxes. And I know 
how they were going around about not paying it. And of course, even in 
Yeltsin's time they were all using administrative resources to get more 
money. And I would concede that this is normal, because business is not 
about politics. Business is about making profits. And if the guy could 
make more profits by using administrative resources, he was using it.
    So if we don't differentiate between the people who say, well, 
oligarchs became oligarchs under Yeltsin, in a sort of competitive 
corruption. Yes, and people who became oligarchs simply because they 
were Putin's friends or because they were Putin's officials who were 
just taking money as bribes. Then we are doing a very bad thing, 
because actually if we judge by the highest ethical standards we should 
ask ourselves a question: What would Rockefeller or Vanderbilt do if he 
were brought in Russia and he were a businessman in Russia in 1990s? 
And probably, he would behave very much like, say, a guy whom I don't 
like, like Mr. Deripaska or other guys.
    So first, I think that actually each case should be treated 
individually. And when it's individually, it means it's not treated by 
a law, but it's treated by a special service. And a special service 
looks into the guy, and maybe even he's a Putin official and all his 
money is stolen. And maybe it can make a deal with him, and he will rat 
on his comrades. Maybe it is better to make a deal.
    Ms. Bauman. Okay. I'm going to see if I can go to this side of the 
room. Won't discriminate. In the front here.
    Questioner. Zdravstvuyte i spasiba [hello and thank you]. So, 
hello, my name is William Lee. I'm with Senator Murkowski's office in 
Alaska.
    So several weeks ago the Ukrainian Government executed a sting 
operation involving anti-Kremlin journalist Arkady Babchenko. My 
question for you is, what do you think this tells us about Eastern 
European states' effort to resist Russian expansion, and perhaps what 
can we do to help them?
    Dr. Polyakova. The Babchenko case is really interesting. Thanks for 
that question. And highly controversial, obviously. Aside from that 
case, which had a lot of unique characteristics to it--there have been 
many, many assassinations or attempted assassinations of critics of the 
Putin regime who went to Ukraine to escape persecution or because they 
were fearing for their lives. I think Yulia can speak to that in more 
detail than I can. But there's been a long-standing pattern of Russian 
independent journalists being harassed, being killed, even if they 
leave Russia.
    So the Babchenko case is different from that. Babchenko was a 
Russian journalist, who was controversial in Russia as well, who went 
to Ukraine because he said he had fears for his own safety. What 
happened in that operation, was, I think, basically a botched PR media 
operation by the Ukrainian intelligence services. So I don't know if 
all of you are familiar with it, but just very quickly Babchenko, the 
journalist, was living in Ukraine at the time from Russia. A big report 
comes out that he's been killed, shot. But then 24 hours later, after 
every single Western media source has reported that this was the 
Russian intelligence services, he appears, giving a press conference 
alive and well. And the Ukrainian intelligence services say, well, this 
was a sting operation to try to catch his actual assassins.
    And a lot of questions have been raised about that. But in terms of 
was this really a good thing to do, was their reputational risk for the 
Ukrainian intelligence authorities, should they have taken on that 
risk--because it made it look like they were spreading fake news--my 
comment on that is there's a very big difference between a strategic 
intent to undermine and try to influence narratives and discourses and 
societies over time, which is what the Kremlin has been doing, versus a 
discrete intelligence operation which you could say has been botched, 
because it didn't really communicate well. So there's two very 
different cases that we can point to.
    I think the bigger picture, though, is that the message that many 
of those who dissent to the Putin regime is that you're not safe 
anywhere anymore. And that goes true for former intelligence 
operatives, like Skripal. It goes true for many Russian journalists. 
And I think this is just the reality that we live in.
    Mr. Pirchner. I agree completely. It's important to note that Putin 
feels vulnerability.
    And that's why he has the need to make examples of anybody who 
sticks their head up to dissent. If he were truly secure, he could 
ignore them.
    Ms. Latynina. I'd just address a little bit specifically the 
Babchenko case, because just as Alina has said, there were many people 
who were killed in Ukraine, including Pavel Sheremet, a very famous 
journalist. Another case was Denis Voronenkov. Not a very good guy and 
actually a fraudster, but a fraudster proclaimed to fight Putin's 
regime, and who was killed for it. There were two attempts on the life 
of a guy called [Okuyeva?], that's the Chechen field commander, 
actually an Islamist who was fighting on the Ukrainian side. There were 
two attempts on the life of Anton Gerashchenko. We can roughly say that 
this is the PR secretary for their ministry of internal affairs.
    So the Babchenko case is perfectly believable. And I don't classify 
it as fake news. I classify it as a sting operation. And actually, I 
can claim that I believe the majority of things the Ukrainian 
intelligence says about the operation. But the biggest problem with me 
is precisely this word ``belief.'' Because as a journalist, and 
especially in an age where there is video recording, audio recordings, 
I don't have to believe anything. I have to know the facts. And now 
instead of the real proof, electronic proof, the Ukrainian intelligence 
services just asked to believe that this is the culprit, this is the 
organizer, and these are the guys who in Russia were standing behind 
this. And so I think the Ukrainian intelligence definitely 
underperformed. That they should have continued with the case. That it 
cannot be argued that this is just a sting operation and everything 
will be evident during the trial, because it was as much a PR operation 
as a sting one. So the minute we found out that Babchenko is alive, we 
had to see the proof. And if we are not seeing the proof, as I said, 
it's probably not a sign that it was, you know, fake. But it's probably 
a sign that Ukrainian services, as usual I would say, performed very, 
very much--underperformed.
    Ms. Bauman. Okay. I think we have time for one more question. So 
are there any more questions? If there aren't--ah, there's one here.
    Questioner. Hi. I'm Viola Gienger. I'm a writer, reporter and 
editor for Just Security, the blog at NYU Law.
    And I'm wondering about--there have been some comments in recent 
events where U.S. officials, to the extent of Russia continuing its 
operations in the United States--disinformation operations--in advance 
of the midterm elections. Do you have any sense of what entities are in 
charge and running those? And has there been any information about any 
replacement for the Internet Research Agency?
    Ms. Latynina. Well, actually, right now there are just rumors. I 
haven't seen any clear facts. But I would like to point out two things. 
Just recently Mr. Putin has been asked by an Australian journalist 
about the activities of Mr. Prigozhin. Yes, and he replied that, well, 
the United States has George Soros. And I have my Mr. Prigozhin. That 
was basically his contention. This is a picture of the world in which 
Mr. Putin lives. As I said, he really believes that the United States 
is standing behind everything bad--everything problematic that's 
happening in Russia. And he's really thinking George Soros to be the 
agent of U.S. Government. I just forget whose president's personal cook 
George Soros was. [Laughter.] Maybe he earned his money by cooking for 
President Bush. I sort of forgot. [Laughs.]
    So that's one thing. This is a very clear picture of Putin--what 
Mr. Putin is thinking about. That's how he believes the world to 
function. And the second thing, which we're not talking about and which 
is actually very important in Russia, is that we all think of these 
operations as pursuing some political gains. But for a lot of people 
who are carrying out these operations, it just an operation to earn 
some money. And actually, the reason these operations go horribly wrong 
when it comes to killing, or when it comes to infiltration, or when it 
comes to fake news, is precisely that there's a lot of money which 
comes from the top. And then it sort of trickles to a very, very 
shallow stream, because a lot of money gets appropriated at the top. 
And the guy who carries out the operation just gets peanuts. And for 
peanuts, you can hire only a guy who is not very good.
    So if we think of this fake news propaganda machine as a machine 
that is earning money and producing money for the people who operate 
it, that means it will stay in operation precisely because they need 
something to show for their efforts and later claim, say, war contracts 
or other things because they'll say, okay, we spent so much money on 
this, we did such a great thing, please give us some money. So I think 
it is not the kind of operation that can be wound down. And the only 
thing that can be really done is that if the United States does not 
discern whether it is Putin or somebody beneath him and puts 
responsibility square on the guy who is responsible for the general 
thing.
    Mr. Pirchner. I think it's important to remember that this isn't 
anything new. During the whole Cold War the Soviet Union, to a greater 
or lesser extent, interfered in U.S. elections. What's different now is 
you have social media and the computers and so much more can be done 
than could be done in the days of paper and carrying around bags of 
cash.
    Dr. Polyakova. Just a very quick comment. If you're interested in 
this question of what specifically can Congress do on this 
disinformation front, there's a paper I wrote recently with Ambassador 
Daniel Fried, who used to be the U.S. sanctions coordinator and served 
for 40 years in the U.S. Government, called ``Democratic Defense 
Against Disinformation,'' that lays out just policy recommendations for 
the U.S. Congress. And the other compendium to it is ``The Future of 
Political Warfare,'' which looks at the emerging threats that are 
coming in this space. But that's just a plug for that.
    Ms. Bauman. No problem. All right. Thank you guys for coming. And 
hope it was equal parts entertaining and informational. [Applause.]
    [Whereupon, at 11:26 a.m., the briefing ended.]
 

  

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