```

[Joint House and Senate Hearing, 114 Congress]
[From the U.S. Government Publishing Office]

114th Congress                                   Printed for the use of the
2nd Session                Commission on Security and Cooperation in Europe
___________________________________________________________________________

 
                      MOLDOVA AT A CROSSROADS
                 

                       SEPTEMBER 22, 2016

                          Briefing of the 
          Commission on Security and Cooperation in Europe
___________________________________________________________________________

                         Washington: 2016

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

                     Legislative Branch Commissioners

           HOUSE                                     SENATE          
CHRISTOPHER H. SMITH, New Jersey         ROGER WICKER, Mississippi,            
          Chairman                            Co-Chairman            
ALCEE L. HASTINGS, Florida               BENJAMIN L. CARDIN. Maryland           
ROBERT B. ADERHOLT, Alabama              JOHN BOOZMAN, Arkansas             
MICHAEL C. BURGESS, Texas                RICHARD BURR, North Carolina         
STEVE COHEN, Tennessee                   JEANNE SHAHEEN, New Hampshire        
ALAN GRAYSON, Florida                    TOM UDALL, New Mexico         
RANDY HULTGREN, Illinois                 SHELDON WHITEHOUSE, Rhode Island                
JOSEPH R. PITTS, Pennsylvania                            
LOUISE McINTOSH SLAUGHTER,                                    
 New York                                 
           
           
                     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 
hearings, issuing reports that reflect the views of Members of the 
Commission and/or its staff, and providing details about the activities 
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)

                           MOLDOVA AT A CROSSROADS

                                 ___________

                              September 22, 2016

                                  

                                                                       Page
 

                              COMMISSIONER

Hon. Joseph R. Pitts, Commissioner, Commission on Security and 
Cooperation in Europe ................................................   1

                              PARTICIPANTS

Alex Tiersky, Policy Advisor, Commission on Security and 
Cooperation in Europe.................................................   1
Ambassador William Hill, National War College, National Defense 
University ..........................................................    4
Matthew Rojansky, Director, Kennan Institute, Woodrow Wilson Center ..   8

                                APPENDIX

Prepared Statement of Hon. Joseph R. Pitts ...........................  23

                           MOLDOVA AT A CROSSROADS

                              _____________
                              
                              

                           SEPTEMBER 22, 2016

        Commission on Security and Cooperation in Europe
                            
                            Washington, DC

    The briefing was held at 4 p.m. in room 2456, Rayburn House Office 
Building, Washington, DC, Alex Tiersky, Policy Advisor for the 
Commission on Security and Cooperation in Europe, moderating.
    Commissioner present: Hon. Joseph R. Pitts, Commissioner, 
Commission on Security and Cooperation in Europe.
    Panelists present: Alex Tiersky, Policy Advisor, Commission on 
Security and Cooperation in Europe; Ambassador William Hill, National 
War College, National Defense University; and Matthew Rojansky, 
Director, Kennan Institute, Woodrow Wilson Center.

    Mr. Tiersky. Ladies and gentlemen, welcome to the briefing on 
``Moldova at a Crossroads.'' If you're here for the meeting on ocean 
acidification, that ended just a few minutes ago; you're in the wrong 
place.
    I want to say nothing other than to welcome Congressman Joe Pitts 
to present his opening remarks. Mr. Pitts, please.
    Mr. Pitts. Thank you. [Applause.] Thank you. [Applause.] Thank you. 
It's a pleasure to be with you, and I'm sorry I'll have to leave when I 
conclude, because we are voting, I think around 4:15--I'll find out. 
But welcome to the Helsinki Commission's briefing on ``Moldova at a 
Crossroads.''
    This briefing marks the latest in a series of events held in recent 
years by the Commission on challenges facing Moldova. The Commission 
has worked hard to keep informed on developments there and drive U.S. 
policy towards greater effectiveness.
    In 2012, Congressman David Pryce and I established the Moldova 
Caucus to act as yet another entity to augment our government's foreign 
policy with respect to the Republic of Moldova. The Caucus helped to 
accelerate collaboration between Moldova's Government and members of 
Congress, and it did so at a critical juncture.
    As Moldova prepares for the Presidential elections scheduled for 
October 30th, the country is at another crossroads. And while it seeks 
to overcome significant internal challenges, Moldova also remains 
squarely in the crosshairs of Russian destabilization efforts intended 
to maintain Moscow's influence, and prevent closer relations between 
Moldova and the West.
    This briefing is intended to explore several issues, including 
Russia's efforts and continued threats to Moldovan territorial 
integrity and sovereignty; Russian destabilizing actions, including 
misinformation campaigns, an economic blockade, and threatening 
rhetoric; and the roles of the Moldovan Government and external actors, 
including the U.S., the EU and the OSCE in addressing Moldova's 
vulnerabilities.
    Let me emphasize that Moldova remains a key concern not only for 
the Helsinki Commission, but also for Congress as a whole. I was proud 
to sponsor a resolution on Moldova, House Resolution 562, which was 
passed by the House in July of 2014. And among other things, the 
resolution reaffirmed that it is U.S. policy to support the Republic of 
Moldova's sovereignty, their independence, their territorial integrity. 
It called upon the government of Russia to withdraw its military forces 
from Moldova, refrain from economic threats, and cease supporting 
separatist movements, and affirmed that lasting stability and security 
in Europe is a key U.S. priority that can only be achieved if the 
territorial integrity and sovereignty of all European countries is 
respected.
    These principles--sovereignty, territorial integrity and the like--
are the cornerstone of the Helsinki Final Act, commitments monitored on 
a continuing basis by the Helsinki Commission. I'm afraid that many of 
the challenges that my resolution sought to address, challenges that we 
have learned about through past Commission hearings and briefings on 
Moldova, are unfortunately still with us today.
    Before turning the briefing over to Alex Tiersky from the Helsinki 
Commission to moderate the discussion, let me say a few words about the 
Commission itself.
    I was first appointed to serve as a member of the Helsinki 
Commission in 1999. In that time, the Commission has given me an 
opportunity to promote and defend core U.S. values and interests on 
issues ranging from religious freedom in Russia to combating child 
pornography and other things. As a Commissioner, I have traveled with 
fellow members of the House and Senate abroad to meet with our 
counterparts from more than 50 OSCE nations to ensure that each country 
is pushed to fully uphold its commitments, including the defense of 
fundamental human rights.
    The Commission often draws attention to issues and countries that 
are not always in the Washington, D.C. spotlight, but are nevertheless 
of crucial importance to the United States. The subject of today's 
hearing is a case in point. While Georgia and the Ukraine--two 
countries in similar circumstances--rightly get a lot of attention in 
Washington, the Commission will continue to make sure that Moldova's 
challenges also get the attention they deserve.
    I'd therefore like to thank Ambassador Hill and Mr. Rojansky for 
once again offering their expertise to the Helsinki Commission. It is 
only through the support of exceptional individuals like our speakers 
today that the Commission can ensure that its work is well-informed, 
that it is relevant, and that it is effective.
    So thank you very much for your interest, for your being here. And 
so now over to you, Alex. Have a good afternoon.
    Mr. Tiersky. Thank you very much, Mr. Pitts. [Applause.]
    Mr. Pitts very modestly noted he's a very longtime Commissioner 
with the Helsinki Commission. And an extraordinarily strong and 
sustained leader, particularly on the question of Moldova, so we're 
very grateful for him coming to kick off our briefing, which he 
actually had asked us to organize in conjunction with our chairman, 
Chris Smith. So I appreciate their asking me to organize this briefing.
    I've been looking forward to learning more about these critical 
questions from our experts today. The Helsinki Commission itself has 
long demonstrated a sustained interest in developments in Moldova, 
including holding several hearings and briefings, such as this one. Our 
agenda has covered issues ranging from democracy, rule of law, human 
rights, to today's main focus, security issues, including a protracted 
conflict in Transnistria. Other types of engagement by the Commission 
on Moldova included a visit to Moldova in 2014 with a congressional 
delegation and participation by the Commission's staff members in the 
context of OSCE Parliamentary Assembly election observation missions.
    So let me just say, I think, a few words that will resonate with 
pretty much everyone in this room. From a security perspective, Moldova 
certainly faces a number of internal and external challenges which have 
a potential to bleed out to the broader region. Corruption, organized 
crime, trafficking in goods and people--in a country that borders NATO 
and the EU, this is, of course, a concern to us.
    And just to name one particularly concerning report that wrapped 
all of these concerns together for me, was an October 2015 Associated 
Press piece that described official suspicions that criminal 
organizations, some with ties to the Russian KGB successor agency, are 
driving a thriving black market in nuclear materials in Moldova. This 
frightening report is only compounded by what appear to be Russian 
efforts to keep Moldova destabilized and rife with lawlessness and 
criminal activity, particularly by perpetuating the so-called 
protracted conflict in Transnistria.
    So we have before us today a great opportunity to better understand 
the current security situation in Moldova, including the hows and whys 
of Russian influence in Europe's poorest country, particularly as it 
heads into an important election season. Guiding us on this tour will 
be two world-class experts on Moldova and Russian policy, certainly no 
strangers to the Helsinki Commission.
    Let me first introduce Ambassador William Hill from the National 
War College, a career Foreign Service officer who served two terms as 
ambassador and head of the OSCE Mission to Moldova, where he was 
charged with negotiation of a political settlement of the Transnistrian 
conflict and facilitation of the withdrawal of Russian forces, arms and 
ammunition from Moldova. Ambassador Hill has a tremendously long list 
of impressive academic and professional accomplishments on his official 
biography that has been made available to you. I can't possibly 
summarize it, other than to say he seems to have worked everywhere and 
done everything at the most interesting possible times, to say nothing 
of speaking six foreign languages. He has been an invaluable witness to 
previous Helsinki Commission events, and we're grateful that he's 
accepted our invitation to once again inform our work.
    As I mentioned, this is also not the first Helsinki Commission 
rodeo for Matthew Rojansky, who directs the Kennan Institute at the 
Woodrow Wilson International Center for Scholars. We're thrilled to be 
able to once again call on his expertise, which he has deployed not 
only at the Kennan Institute but also as deputy director of the Russia 
and Eurasia Program at the Carnegie Endowment for International Peace, 
where he founded Carnegie's Ukraine Program and led a multiyear project 
to support U.S.-Russia health cooperation. Significantly for our 
purposes here, he also created a track II task force to promote 
resolution of the Transnistria conflict. But of course, most important 
for me is that he's an adjunct professor at Johns Hopkins SAIS, which 
is my alma mater. His full biography is also available to you. Matthew, 
thanks for agreeing to share your thoughts with us today.
    I'll first turn to Ambassador Hill, who I've asked to provide some 
perspective on current developments in Moldova, and then I'll turn to 
Matthew Rojansky for some words. Gentlemen, feel free to use the 
podium. And then I'll ask a couple of questions of our panelists myself 
before turning it to the audience for a question-and-answer session. 
So, please, Ambassador Hill, if you would.
    Amb. Hill. OK, thanks. I think I'll stay here, and I think I can 
make myself heard by everyone.
    Thank you very, very much. I am always happy to come back and visit 
and cooperate with the Helsinki Commission. It's now, I think, 31 years 
since I first hosted a Helsinki Commission staff member in Belgrade, 
what was then Yugoslavia, and started a string of meetings and other 
joint efforts with this grand institution.
    I need to say that I am here offering remarks in my personal 
capacity. Anything I may say does not reflect the views or positions of 
the National Defense University, the U.S. Department of Defense, or the 
U.S. Government. So I, and only I, am to blame.
    I'm also really happy, always, to talk about Moldova. I've 
developed over a long period of time a very deep affection and concern 
for the welfare of that country, and it's from this starting point that 
I come to offer my comments today.
    I'm going to talk a little bit about Moldova and Right Bank 
politics; I'm going to talk about politics on the Left Bank, in 
Transnistria; I'll say a little bit about the conflict--the negotiation 
seeking a settlement of the Transnistrian conflict and the role of the 
OSCE; and end up with a couple of observations on general security 
issues in Moldova. And they'll be necessarily brief, but I can try to 
go into more detail depending on what strikes you, or if you disagree, 
or if you have further thoughts on any of these.
    Now, I'd like to start off saying that, at this point in time, I 
think that the political situation on the Right Bank in Moldova is the 
greatest threat to Moldova's stability and security. I say that not to 
minimize the current difficulties with the Russian Federation, the 
continued problems with the Transnistrian conflict, with the failure to 
obtain full withdrawal of Russian military forces and equipment from 
the Transnistrian region of the Republic of Moldova, or a number of 
other things. But there are a number of factors that have come together 
to make the political, financial and economic situation as it's 
developed on the Right Bank a real danger to further progress in 
Moldova.
    With a little bit of background, the post-2009 pro-European 
coalitions in Moldova unfortunately consistently disappointed both 
those who supported them from outside of Moldova and those who voted 
for them inside Moldova. The coalition basically ended up in a very 
deep and bitter fight between the PLDM and the PDM and between their 
effective leaders, Prime Minister Vlad Filat and the deputy head of the 
PDM Vlad Plahotniuc. This feud came out in the open in the fight after 
the Padurea Domneasca scandal, the Imperial or Lord's Forest scandal, 
and it ended up with both men out of the formal offices that they held 
and, eventually, after--in 2015, with former Prime Minister Filat 
charged and in jail. This was due to the fact, largely, that the PDM 
and Plahotniuc effectively, in the division of labors among the 
coalition, controlled the courts and the domestic police organs, which 
worked against the PLDM and the backers of Filat.
    In general--I say this not to favor one party or another--all of 
the parties in the coalition basically failed to address issues of rule 
of law inside Moldova on the Right Bank. This was particularly crucial 
as it affected Moldova's financial institutions and the investment 
climate in Moldova. And what you got out of this was the so-called 
theft of the century, where three banks right at the time of the 
elections of the end of November of 2014 ended up losing--having 
something like almost $1 billion disappear into thin air through non-
performing loans, false loans, other mechanisms. It's still being 
investigated.
    Now, hostile takeovers of the major banks in Moldova and 
channeling/laundering of money through these banks had been apparent 
through open sources, through the press, as early as 2012-2013, and it 
clearly involved by inference and by direct assertion significant funds 
coming out of various sources in Russia, as well as from other 
countries in the region, and passing then through various channels to 
offshore sites through Latvia, Cyprus, Channel Islands, and off to 
destinations that investigators are still determining. In a very 
controversial move that led to the fall of one government and 
contributed to the fall of another one later, the Moldovan National 
Bank ended up making up a large portion of these losses, so that the 
currency simply wouldn't collapse and the Moldovan population at large 
would not suffer even more from this.
    The mechanics of the scheme and who exactly was involved continue 
to be debated. There are charges and counter-charges going on right 
now. One of the investigatory reports by Kroll, a Western corporation, 
was leaked, and the number of stockholders in these dummy corporations 
was really shocking. But the point is that the problem really hasn't 
been fixed.
    The banking system, the financial markets in Moldova, and the lack 
of reliable court and police organs and functions is still evident 
enough that Moldova still remains vulnerable. And there has been a 
significant problem with money laundering, illicit funds, capital 
flight out of the former Soviet Union, with Russia being one of the 
largest sources and problems in this respect. And it's not accidental; 
Moldova was an easy target for licit and illicit actors able to use the 
institutions--to seize control of financial institutions and move 
stuff.
    A succession of governments have been unable to address corruption 
issues, and the fall of these governments, their replacement, have led 
to demonstrations, in particular the winter of 2015-2016, when pro-West 
and pro-Moscow demonstrators joined hands to lead one government, 
Filat's government, out, and to protest the installation of the current 
Filip government.
    Meanwhile, PDM--Mr. Plahotniuc first tried to get himself installed 
as prime minister. President Timofti would not go along with this. He 
has lately been courting Western opinion and using resources, including 
his media empire within Moldova, to create a more favorable impression 
for his party and himself prior to the presidential vote coming up at 
the end of October.
    The EU, the U.S. and other Western actors have taken a sterner line 
with Moldovan authorities after 2015, and have been demanding more 
transparency, better evidence of progress. But one wonders, is this 
closing the barn door after the horse has left? Is it too late?
    I hope not, but Moldova remains in a perilous state now, where 
population of working age continue to leave Moldova to seek employment 
outside the country because investors just don't want to put their 
money in an atmosphere like this. The budget of the country remains 
significantly dependent upon remittances, and if Moldovans stop sending 
money home, the country's going to be in real trouble. And the 
electorate remains badly split. European integration has been widely 
discredited among significant parts of the population because of the 
succession of governments, the so-called theft of the century, and the 
general failure of the programs of pro-European integration and reform 
to show better results.
    One result you can see is those who advocate union with Romania, 
who used to get significantly less than 10 percent of the vote when I 
was there, now poll up towards 20 percent of the vote. And one of the 
candidates for president, Mihai Ghimpu, has said flat out that he's 
running for president simply to advertise union with Romania as the 
only solution to Moldova's problems. The very statehood of the country 
is at stake. And before you can integrate Transnistria into Moldova, 
you've got to make sure that you have a strong Moldovan state. So it's 
not that I minimize the other difficulties which still face Moldova, 
but this is just a challenge that all Moldovans really face right now.
    Now, the Left Bank, Transnistria, is maybe even worse off 
economically. It's an economic disaster. Working-age population has 
fled to Ukraine, to Russia, wherever they can get a job. They're 
sending money back. The Left Bank is significantly depopulated. It has 
large deficits, monetary--financial subsidies from Russia and a high 
dependence--maybe a higher dependence than the Right Bank on 
remittances.
    The current leadership is increasingly authoritarian and arbitrary. 
It is not so much the authoritarian character of his rule but the 
really unpredictable and arbitrary character. He is opposed by Sheriff, 
the large conglomerate from the Left Bank that controls much of the 
retail trade, the media and the Moldovan entry in the Champions League 
in European football--Sheriff Tiraspol.
    The Russians seem to be banking--betting on Sheriff and Sheriff 
champion Krasnosyelsky, former head of the MVD, the police in the Left 
Bank, now the head of the Sheriff-backed party that runs the 
legislature on the Left Bank, the Renewal Party, or Obnovleniye. It 
seems Moscow is going to back him in the elections in December. One 
wonders whether they will be more successful than when they backed yet 
another candidate and lost to Shevchuk in 2011.
    The upshot is there is little prospect for positive change on the 
Left Bank, irrespective of the outcome of the elections, and therefore 
little real prospect for rapid progress in the settlement negotiations 
and reintegration of Transnistria in Moldova.
    The German 2016 OSCE chairmanship had ambitious, although still 
pragmatic, goals for their year in the chair, and it has had some 
successes. They, I think most significantly, convinced the EU to extend 
the unilateral trade preferences for Transnistria through this year, 
despite the terms of the association agreement with Moldova, which 
called for these to end at the end of 2015. So this has not been an 
issue in the Transnistrian settlement talks and they have been able to 
concentrate on other issues.
    The 5+2 talks have met again this year and the Germans got both 
sides off to a special session, informal session, in Bulgaria as has 
been done in years past. They adopted a number of practical, very small 
measures to restore confidence and to eliminate some minor 
administrative irritants between the Left and Right Banks, such as 
recognizing license plates and things like that. These small 
concessions nonetheless provoked a storm of protest from a number of 
leading figures in Moldova and Right Bank civil society that remain 
adamant about any concessions to Left Bank authorities.
    Meanwhile, the status of ethnic or national minorities within 
Moldova in Gagauzia and Taraclia remains really unaddressed. Just today 
I pulled off the Web a recent report just out from the Institute for 
Public Policy, one of the leading NGOs in Chisinau now, which treats in 
detail the situation in the south of Moldova with minorities--Gagauzia, 
Taraclia--and comes to the conclusion that very little has been done 
and it remains with the failure to integrate these regions more 
successfully into Moldovan politics and economy. There is very little 
incentive to Transnistrian elites and push for them to get back into 
Moldova as a whole.
    With the state of politics in Moldova on both banks, there is 
little chance of further progress this year. And I think the best that 
Germany is going to be able to do is to hand off the process intact and 
ready to move for Austria in 2017 if there are opportunities after 
elections have been held on the Left and Right Banks and new 
authorities look at these issues.
    On security, Moldova, happily, seems relatively unaffected by the 
war in Eastern Ukraine. Odessa Oblast seems to have calmed down and 
there doesn't seem to be as much danger as there was in early to mid-
2014, the Russian mischief-making in Odessa, that would call on forces 
coming out of Transnistria and that might spill back over into Moldova. 
Basically, neither Chisinau nor Tiraspol for a long time have had any 
desire to fight each other or to warm up the conflict again. And 
barring relatively small or isolated provocations, I expect the 
military situation will remain calm.
    The Russians, both the peacekeeping forces and the Operational 
Group of Russian Forces, the OGRV in Russian, conducted exercises with 
the Transnistrian forces this summer, which drew some criticism. And 
it's really a mystery why the OGRF, the OGRV, was involved because they 
never were during my time there. They've generally just been there to 
guard the ammunition and not much else.
    I'm not sure that it signifies any real plans on the part of the 
Russians other than the fact that the OGRV has been idle for so long 
that many of them have probably forgotten that they are soldiers. But 
it remains a concern. There is relatively little danger from the 
Russian forces. They are more of a political impediment than a real 
security impediment. The significant forces on the Left Bank belong to 
the Transnistrian authorities. They were Russian during Soviet times. 
They moved over to the Transnistrian flag. And those are the ones you 
need to worry about.
    But the political significance of the stalled Russian withdrawal 
and political impediment that it places in improving Moldovan and, 
generally, European relations with Russia remains there. These remain 
sore points, but the disastrous state of the economy on both banks and 
the deep political divisions and widespread disillusionment on the 
Right Bank, in my estimation are relatively newer and right now are the 
most clear and present danger to Moldova.
    With the Moldovan electorate remaining equally split between east 
and west, you could well have a pro-Moscow candidate win in the 
presidential elections. The polls that I saw in the IPP's Barometer of 
Public Opinion show that the two pro-Russian parties--the Socialists of 
Dodon and Usatii's Partidul Nostru--are polling by far--or, you know, 
much, much higher than any of the other parties in Moldova.
    What the country desperately needs is rule of law, a real progress 
in rule of law which would lead to a more secure investment climate, 
which in turn might lead to the return of some of Moldova's educated, 
working-age elite--capable, young and middle-aged Moldovans who now 
reside from Canada and the United States, through Germany, Britain and 
elsewhere in the West, a workforce and intellectual capability that 
Moldova desperately needs back home to improve its economy.
    It's not clear, as I said, that any of the choices offered in the 
upcoming elections can promise progress on these key issues. But while 
dealing and looking at Russia and looking at other issues in the 
region, I think both the U.S. and the EU need also to focus and keep 
their eye on these issues lest, for looking at security issues stemming 
or emanating from the north and the east, we lose the entity that we 
are seeking to promote, protect and encourage.
    Thank you.
    Mr. Tiersky. Thank you, Ambassador. [Applause.]
    Why don't we go straight to Matt Rojansky, please?
    Mr. Rojansky. Well, thank you, Alex, and to the Commission and Mr. 
Pitts.
    Most of all, I just want to associate myself with pretty much 
everything that Bill has just said, which is not hard for me because I 
always invite him to lecture to my SAIS class about Ukraine, Moldova 
and Belarus--the only class of its kind in the D.C. area, I would note 
for those of you who are still interested in graduate degrees.
    But there is one area where I need to depart, and that is that Alex 
has asked me to talk specifically about the Russian challenge--let's 
call it that--although I fully embrace the notion that Moldova's first 
and foremost challenge does come from its just absolutely tortured 
domestic politics.
    Let me start, despite Alex's very generous introduction, with a 
note of humility about what those of us in the expert community--and by 
the way, although I clearly am at a think tank so it should be obvious 
I'm expressing my own opinion, I do technically work for the Federal 
Government since the Wilson Center was congressionally chartered. And 
so I also apply the disclaimer: Nothing I'm saying is the position of 
the Wilson Center or anyone else except myself.
    So what experts can't do: First of all, we can't read Putin's mind. 
I'm not going to do that. We can't tell Russians what their interests 
are, or Moldovans or anyone else, for that matter. And we can't predict 
what the next crisis is going to be. We have a terrible record of that, 
although it turns out not to be bad for anybody's career. That's been 
scientifically proven. [Laughter.]
    What can we do? What can we actually be useful at? We can pay 
attention to how Russians--and others in the region, but in this case 
Russians in particular--define their interests. What do they say that 
they actually want and not ignore that?
    Second, we can identify patterns, themes and trends in what they 
actually do. And then, third, we can recall what has, in fact, 
happened--past lessons, mistakes, insights. And in that, I would note 
that with certain very notable exceptions, the U.S. Government tends to 
have a very short memory, and it's important, I think, to be a 
repository of that.
    So, that said, let me give you a very quick framework--and I 
introduce it even though it's very broad because I will make reference 
to it--a framework for understanding how I assess the Kremlin's goals 
in general, Mr. Putin's goals specifically.
    The 2000s--if you look at the decade, roughly speaking, between the 
time that Mr. Putin became President of Russia and kind of the end of 
the last decade, I think the theme of what he did in that time, in 
Russia and to some extent in the post-Soviet space, was rolling back 
the 1990s, the idea that he was going to save the integrity of the 
Russian Federation by winning the war in Chechnya, by stopping the 
separatism of various Russian regions and governors and political 
figures and so on. He was going to restore the primacy of the Russian 
state.
    That's what the Power Vertical was all about. He was going to 
stabilize Russia economically versus the basket case that it was in the 
1990s, thereby regaining some degree of respect in the world. And all 
of this is enabled by a kind of social contract with Russians that 
says, stay out of politics and you'll get rich. And it basically 
worked.
    So what then is this decade about? What is the theme of the 2010s 
and Putin's sort of second and third, fourth tour as President, 
whatever you want to call it? What has this been about?
    I think this is about rolling back the 1980s. So rather than 
Yeltsin's chaotic 1990s, this is about Gorbachev's reforms in the 
1980s, and basically saying: These people betrayed the Soviet Union, 
these people betrayed my country, and I am going to undo what they did.
    Now, the analogy doesn't hold perfectly but I think it's a useful 
tool. That's why I introduce it. If you think about it, Gorbachev gave 
away not just the Soviet space, the former Soviet space, but the Warsaw 
Pact. He gave away the influence. This isn't to say direct territorial 
control. Moscow never really had that, even in the post-World War II 
era, but it had levers. It had ways of ensuring that stuff he didn't 
want to happen wouldn't happen. And I think Putin wants those back.
    Russia was clearly--in the guise of the Soviet Union was a global 
great power. And if you look at what Russia is doing in Syria, it's 
very clearly aimed both at an outcome in Syria, but also it's sending a 
message to the United States, to Germany, to China that Russia is a 
global great power to be reckoned with.
    And even the Russian economy--if you think about primarily what 
Gorbachev did, privatization wasn't just about Yeltsin in the 1990s. 
Privatization actually began under Gorbachev, the idea that there would 
be private enterprise, that there would be boards controlling Russian 
Soviet enterprises. In fact, what Mr. Putin has done systematically, 
especially the last 5 to 10 years, is to restore either state or 
nomenklatura--which is a Soviet term for sort of the elite around the 
political power--control of the Russian economy. And if you do that, 
statistically/numerically through the Russian economy you see that that 
is basically true.
    This has been enabled in turn by that same social contract that 
worked during the last decade. It's attenuated, it's hurting as a 
result of Russia's tough economic situation, but it's still basically 
intact because, by and large, the salient period in most Russians' 
memories is still the 1990s--and by any measure they're still doing 
much better--but also by the ``brain drain'' and the departure of this 
enormous--sort of what I call the political safety valve, the fact that 
if you oppose this deal, if you oppose the Kremlin, you can always 
leave Russia, and that wasn't always possible.
    All right, so that's kind of a broad framework for thinking about 
where Putin is headed. How do Russians specifically think about Europe, 
the European project, and how Moldova's European aspirations fit into 
that--so why Moldova even matters for Russians in this context.
    So first of all, the European project, as such, conflicts with the 
Russian world view in a very fundamental level. The European project is 
fundamentally premised on prosperity, the welfare state as we 
understand it in modern Europe, particularly Western Europe. And 
ordinary Russians have never shared that and so they don't buy it. 
They're not sharing in that prosperity. They don't enjoy an effective 
welfare state.
    If you think about some of the sentiments behind the Brexit vote, 
they're actually held in common very much with Russians--and, by the 
way, with a large number of Americans, which has some implications we 
can talk about.
    The European project is built on the notion that there are certain 
rules. We call it a European Acquis; you can call it values, whatever 
you want, but the idea that European countries that claim that status 
have got to play by certain rules. Well, that doesn't work with crony 
capitalism, and that's the system that Putin has built in Russia today 
and so it's rejected by the Kremlin.
    Europe most of all is driven by its really deep fear of what? 
Nationalism and military conflict. These are the two things that have 
brought Europe to chaos and ruin and that the European project is 
intended to avoid. Well, what are the two biggest foreign policy tools 
of Russia today? Nationalism and military conflict, right? And so 
again, fundamental world view is in conflict.
    And then of course this notion of whether European identity even 
appeals to Russians anymore. You can't describe every Russian with a 
broad brush but, broadly speaking, there is more appeal in Russia today 
for the notion either that Russia is the true repository of European 
values and Europe has abandoned them, or the idea that there's 
something distinctly Russian--the old sort of Pan-Slavism, Eurasianism, 
Russophile, Slavophilism, whatever it is.
    How do they think about NATO? Basically as a veil for U.S. 
meddling. So NATO, in and of itself, is not really a thing. What it is, 
is it's a tool that the United States has created to put a certain 
gloss on our interventions in Europe and in the area that Russians care 
most about.
    They ask, what's the difference between NATO's interventions in 
Kosovo, in Libya, NATO training Ukrainian, or for that matter Moldovan, 
troops versus NATO next going into Belarus, into Kazakhstan or into 
Russia itself? So there's really a kind of, you know, reverse domino 
theory if you think about America's Cold War ideology at work there.
    And then there's a different area, which I admit is actually 
contradictory but they co-exist--this is one of the fun things about 
Russia's political discourse--that NATO is actually a naive tool and 
that therefore the United States is a naive instrument of cynical neo-
fascists in Europe. So the Baltic States, Southeast European countries 
like Romania.
    This is where historical memory--and this memory is genuinely held 
by Russians--this is where it matters a lot that, for example, if you 
read the history of this region, in fact it was Romania that occupied a 
big chunk of Ukraine, including Odessa and so on, and it was Romanian 
forces responsible for the atrocities and so on.
    So this does play into genuine, deeply held historical memory on 
the part of Russians, Ukrainians, Moldovans themselves, but the 
narrative is that the United States just doesn't get it. We don't know 
that we're being manipulated. And when NATO shows up in the region, 
we're there for someone else's purposes, nothing that would be good for 
the American people.
    So what are Russia's apparent goals, if they see the world this 
way, if they see Europe this way, and how does Moldova fit in?
    I think, first of all, it's obvious Russia would seek to damage, 
discredit and minimize the European project. That wasn't always true, 
but given the water under the bridge of the last 5 to 10 years, it is 
very true today. That entails exacerbating fissures within European 
countries--refugees, nationalism. We obviously heard the sort of 
glorying, the kind of schadenfreude over Brexit in Moldova.
    Bill has mentioned it--Gagauz, Transnistrian separatism, the use of 
passports, the distribution of pension payments, and of course the 
Russian language itself, right, which is, again, very genuinely 
connected to the history of the region, the experience of individuals, 
family identity, et cetera, and nonetheless is a very valuable tool for 
dividing society.
    Bill I think made the point very delicately, and it is true: 
Support for Romanian unification is higher than it has been in recent 
history in Moldova, but it's still relatively low. It's somewhere south 
of 20 percent, safely. The numbers I saw were in June of 2016: 13 
percent support, 67 percent oppose. And then you have the huge ``I 
don't know'' or ``I won't answer'' number, as usual in post-Soviet 
polling.
    But nonetheless, Moscow's objective would be to magnify that number 
as much as possible, not because they actually want Moldova to join 
Romania, but because that's a very useful narrative, that this is 
Romanian imperialism all over again, and by extension NATO, American, 
et cetera, even the sort of fascist narrative, and puts enormous 
pressure on this already severely weakened Moldovan sovereignty that 
Bill talked about.
    And then of course the promotion of Eurasian alternatives--
pressuring Moldova and other former Soviet republics to join. And the 
success stories there for Moscow have been Armenia and Kyrgyzstan, 
which have more or less acceded to the Russian-led Eurasian Economic 
Union and now Eurasian political union.
    In Moldova, the latest numbers I've seen--these actually go back to 
late 2015--30 percent support the Russian Eurasian alternative; 54 
percent support the European association. I would guess that those 
numbers are probably a little bit closer now, as Bill suggested, but 
this was the latest poll that I had.
    And of course dividing the trans-Atlantic connection--dividing the 
United States from Europe and then a divide on the issue of 
transatlanticism within European states--so referring to European 
states that will host American troops or NATO exercises as being 
``occupied,'' literally using that term, again dredging up a lot of 
historical memory there.
    Moldovans, again according to the October 2015 IRI poll, 31 percent 
support NATO; 38 percent oppose NATO. But geography is what matters 
most there. I mean, if Ukraine is not going to be in NATO, the notion 
that Moldova would be this sort of extra front line, it's kind of 
difficult to fathom that that would be a worthwhile undertaking, 
especially given the Transnistria problem.
    The point about values, Russians make the argument that Moldova is 
a conservative society. That's just simply a statement of fact. People 
are not particularly receptive to kind of modern Western divisive 
social issues--questions of gay marriage and so on.
    And so Moscow makes the argument: We are the repository of 
traditional Christian values--we, us in the East, not the West--and so 
you should stay with us rather than going with decadent ``Gayropa.'' 
And of course Russian-backed media--RT, Sputnik, which we see in the 
U.S.--and then other sorts of media projects in Central and Eastern 
Europe will back that up.
    Money going directly to pro-Moscow parties. It's hard to prove this 
stuff. This is the kind of thing you read in kind of the Moldovan 
yellow press or the Russian-speaking yellow press. But there have been 
a number of theories as to why these parties are suddenly able to 
purchase hundreds of billboards with slogans like ``Together with 
Moscow.'' And, you know, voters have gotten a meeting with the Russian 
leadership, and so on.
    And of course new NATO activities in the region--and this is very 
important--are a double-edged sword, because while it may reassure the 
Baltic States, for example, to have this NATO presence regularly 
rotating into the region, or while it may reassure Romanians and 
Bulgarians--with my recent visit to Sofia--to ask for a NATO flotilla 
to come to the Black Sea, you can imagine how this argument would be 
made by the Russians. ``What is NATO doing there? We're not threatening 
them. We haven't invaded them. NATO is clearly there to claim this 
territory and to threaten us.'' So it really is a tricky double-edged 
sword.
    And if you look--I would argue again, judged by what Russians do, 
if you look at where they have located the three new division 
headquarters in Eastern Europe, they're all on the border with Ukraine. 
They are all intended to surround eastern Ukraine so that if necessary 
they could essentially collapse the pincers and kind of take over what 
they consider to be Novorossiya in eastern and southern Ukraine. They 
are really not primarily designed to threaten places like the Baltic 
States or central Europe, or even, for that matter, Moldova. But 
obviously Moldova could be easily swept up in a conflict.
    And then lastly, of course, it's very much in the Russian interest, 
again, with this logic being taken seriously, to raise the level of 
risk. The more fear there is, the more uncertainty, the more saber 
rattling, the more Russia has to be taken into account, the less Europe 
can choose the option--and this goes as much for Moldova as any other 
country--of sort of, we develop ourselves and our success story on our 
side of the line. And we see that playing out right now in Ukraine, 
where the more Russia can destabilize Ukraine's attempts at reform, the 
more success Russia has in its objectives.
    Why all this matters to Americans--just very, very briefly, I would 
say this is an extension, broadly speaking, of why Europe matters to 
us. You know, we've been pulled into world wars in Europe. Global order 
tends to be determined, just as a factual statement, by whether there 
is order among European states. If there is, there is more global order 
and it looks a certain way; if there isn't, there isn't.
    And of course, the European project has led to the longest period 
of interstate peace in the modern era, but also prosperity. The 
European project promotes free trade, lowering of trade barriers. The 
U.S. economy versus 50 years ago is now three times more dependent on 
trade than it was--28 percent versus 9 percent. Our bilateral trade in 
goods with Europe is almost a trillion dollars, and that I would say 
substantially understates actual trade with Europe because you have 
finance, you have American companies headquartered in Europe that sell 
exclusively in Europe but that the revenues come back to the United 
States. So that's substantially greater than our trade even with 
China--just as a reminder of why this matters.
    All that said, not all interests are created equal. I guess I'm a 
kind of realist in this way. Moldova is small, so the argument could be 
made that one way or the other, right--win Moldova, lose Moldova, it 
sort of doesn't matter, it's so small.
    Here's the thing: It is symbolic. And tipping points tend to have a 
kind of, you know, snowball effect, to mix my metaphors. The Russian 
troops are already present in Moldova through the OGRF and the 
peacekeepers in Transnistria. The United States does relatively minimal 
trade with Moldova, although very significant assistance, I would say, 
proportional to other countries and as a proportion of the economy.
    So while losing--sort of as a narrative--that's not to say it's a 
battle with a winner and a loser--but losing as a narrative would not 
be catastrophic. That's true. On the other hand, it would clearly 
indicate that we are on the wrong track. Clearly I'm not saying it 
wouldn't be catastrophic for Moldova. It clearly would. But in the 
grand narrative, it would indicate that we're on the wrong track.
    So what should we do to help Moldova? And let me try and end on 
this. You know, I really like the British World War II posters--keep 
calm and carry on. But what does that mean in this context? I mean, 
it's always good wisdom.
    First of all, understand what's actually going on. This isn't World 
War II all over again. There are not thousands of Russian tanks that 
are sort of poised to roll over the borders. This isn't the Cold War 
again. You know, don't obsess over Putin. Don't play Kremlinology 
games, counting people's liver spots, who's up, who's down. Don't make 
hybrid war into a magic wand, like the Russians can achieve anything 
they want by waving this magical hybrid war wand. No. Hybrid war, 
whatever it might be--and I have a piece out on the table Alex very 
kindly printed out. Hybrid war is possible in environments that are 
friendly to it, and Crimea was obviously such an environment. Donbass 
was to an extent. Moldova might be. But it's not the same as either of 
those, so we shouldn't presume that the same tactics are possible.
    And then most of all, we've got to manage and minimize the risks of 
accidental escalation. Remember--and here, you know, the obvious case 
up in the Baltics is ships and airplanes getting near each other and 
risking an accident. But remember what happened in Odessa where you had 
the Trade Union building catch on fire and probably unintentionally 
kill a bunch of people who were protesting against the Maidan movement. 
If something like that were to happen in the context of a Moldovan 
protest movement--and we've seen a heck of a lot of protests--it kind 
of reminds me that the whole 2009 change happened because of one 
relatively small casualty. So you put that together with the current 
very explosive environment with the situation in Ukraine--that's the 
type of accident we should be on the lookout for.
    And then carry on--what does that mean? Well, it means focus on 
what we are about. What is the European project? What is the Western 
message? We need to do a self-audit. Where are we vulnerable? Moldovan 
corruption--I don't even have to say anything else. That's all I have 
to say. Bill described it adequately. But also migration, nationalism, 
pluralism, identity, history issues--we're ignoring all of this stuff, 
bottom line.
    This, by the way, is the mission of the Helsinki Commission, is to 
deal with these issues, the so-called human basket issues of the OSCE. 
And I simply want to say it's the right vehicle--the Helsinki 
Commission, the OSCE--but we're not applying the right resources. And 
Germany would have been, could have been, I think, a much stronger 
leader on this. Let's hope that Austria finds the resources to do so.
    And then, of course, the economic factor. How are questions of jobs 
and trade impacted by, for example, Western sanctions policy? It's not 
negligible. There is definitely a negative impact for most of the 
countries that border on Russia and that do a lot of trade with Russia, 
of Western sanctions--which isn't to say it's a bad idea at the end of 
the day. It simply means we have to be very cognizant of the effects of 
that and make sure that much like this argument about we're losing the 
thing that we're seeking to protect, make sure we don't lose the 
population in the course of seeking to assert their interests and to 
protect them.
    We have to be clear about our values. Don't fight fire with fire. 
One of the most frustrating things to me always is to go to this part 
of the world and be told, ``Look at all the Russian propaganda. We need 
our own propaganda. Will you pay for it?'' This is a huge mistake 
because it runs counter to our values.
    And then lastly I'll simply say, the lesson of George Kennan's 
original vision that he laid out in the famous long telegram and the 
Mr. X article--my institute bears his name--is that containment is not 
about running around the world and everywhere the Russian threat comes 
up, you whack it like Whack-a-Mole. That is a recipe for exhausting 
yourself, and it probably also undermines who you are.
    Containment is about getting problem-solving right in the areas 
where you can. And to the extent that we're failing that now, and being 
on Capitol Hill and this institution, I think there are more than 
enough reminders around us--that is our biggest vulnerability. That is 
where any strategy that seeks to counter whatever Russian threat and 
whatever Russian influence there may be in Europe's more vulnerable 
regions is going to fall down. It's not going to be because they have 
magical powers that can overcome where we're strong.
    If I can leave you with one message, it's this--and I'll ask a 
question to end this since I know we're going to transition in a moment 
to the question-and-answer session. I would ask what the lesson of 25 
years of dealing with the Moldova-Transnistria conflict is for Ukraine 
and Donbass today, because I think that is an operative question that 
American policymakers, certainly I think the Helsinki Commission, is 
thinking about.
    Thank you, Alex.
    Mr. Tiersky. Thank you. Fantastic. [Applause.] Thanks.
    I will certainly be the first to put on the t-shirt that says 
``keep calm and embody our values.''
    So ladies and gentlemen, I'd like you to get your interventions, 
your questions ready from the audience, but I do want to first provoke 
and push back a little bit on our speakers.
    Ambassador Hill, very sobering presentation. Clearly you mentioned 
a couple of times you didn't see a lot of prospect or positive movement 
in a number of different areas. Your focus on the internal challenges 
as the most urgent and potentially problematic is very clear and heard. 
I'd like to push you to pivot a little bit to whether or not those 
internal challenges actually invite external influence and potentially 
allow for greater latitude for external actors to play on what is a 
potentially pretty precarious situation.
    I'd also like to ask you--and I think this fits with Matt's 
presentation--should there be a sense of urgency in any particular 
direction, contrary to this idea of keep calm and contain, broadly 
speaking?
    Matt, I'd like you to speak a little bit--and thank you for your 
terrific overview of Russian interests, strategy and memory, frankly--
can you speak to whether Russia--and I promise not to ask you for a 
prediction----
    Mr. Rojansky. Right.
    Mr. Tiersky. Is Russia content with current trends, the status quo? 
What factors--both in Moldova, Transnistria, the other protracted 
conflicts--what factors could change their calculation in this respect, 
and what levers might they pull to accelerate their desired ends, 
without asking you to actually be in their minds?
    And then we will go to audience questions.
    Please, gentlemen.
    Amb. Hill. Well, thanks. No, I want to be clear that my remarks are 
not a call to forget about Transnistrian settlement or other things 
like that. But it's more to pay attention to the fact that for some 
time the international community, specifically the U.S. and the EU, 
have been doing one thing or a set of things dealing with the courts, 
policing the rule of law in Moldova, and it's clearly not working. And 
so there is, I believe, a need to do more and different things.
    Certainly I think a more comprehensive and stricter variation of 
conditionality, a more rigorous set of milestones, standards and 
metrics, needs to be set.
    You know, when I was head of mission in 2005, 2006, we were sending 
people out to survey the behavior in the courts in Moldova. There are 
very fine reports that are on the web now about the status of courts in 
Moldova in the mid-2000s. And you know, this seems like it was a tree 
that fell in the forest and no one did very much about it.
    Certainly the theft of a billion dollars in a country with a GDP of 
under $10 billion ought to be enough to get people to wake up and pay 
attention. One just needs to pay attention to this. It doesn't mean 
neglect the other stuff, but it should--if not a sense of urgency, at 
least a sense of importance, that if this is not fixed, you are simply 
going to repeat the history in different forms. You know, people will 
find new and different ways to steal money and funds that are in the 
country unless both the organs of law enforcement, setting economic and 
enforcing economic standards, and bringing those to justice, are 
reliably reformed.
    And I see some hints of this in both what I see in U.S. Government 
and EU discussions, but there needs to be more.
    In terms of inviting perhaps people like Muscovites to fish in 
troubled waters--they already are. They already were. I mean, look, 
Usatii, he used to work for Russian railroads. We know where that all 
comes from, and it's not a mystery.
    But the point is that Moldova for years has had a Russian-speaking 
population that has seen in the left-wing parties--the Communists, and 
now it's transferred to the socialists, and Partidul Nostru or 
[inaudible]--they see it as protection. There's 30 to 40 percent of 
Moldovan population that probably speak Russian at home even though the 
statistics for Ukrainian and Russian minorities are lower. You have 
mixed families or just Moldovan families who learned--who spoke Russian 
in Soviet times and they haven't yet changed. And you need to integrate 
these people into society, and it calls for a more nuanced, more 
sensitive and more balanced linguistic and nationality and minority 
policies within Moldova.
    The OSCE mission in Moldova has been doing yeoman work on this for 
the last couple of years; others need to do more. It doesn't mean you 
need to punish the Moldovans, but find a way to get authorities in the 
Right Bank to see that this is the way out, this is the way to bring 
the population so that simply the appeal of those who would point to 
the east and say there's a better solution somewhere else will cease to 
have a voting public. Right now they have a voting public which they 
don't need to create. It's there, and all they need to do is point to 
it. It's one of the reasons why the Communists consistently get a high 
percentage--30, 40 percent or more. And these parties--they're seen by 
these Moldovan minorities as a defense of their interests. And until 
Moldovan society and politics changes to recognize that, it's not 
always going to be easy for parties that get support from the east.
    Mr. Tiersky. Thank you.
    Matt?
    Mr. Rojansky. Yes, thanks, Alex.
    So, is Russia content with the status quo, and what might change 
that calculus?
     I think Russia is--as a general rule, Russian political leaders of 
today's type are more content with ambiguity and uncertainty and gray 
than Western leaders are. So all things are relative in the world. They 
thrive more in such an environment than Western leaders, who tend, in a 
kind of classically, Greco-Roman, logical framework, to seek clarity. 
You're sort of either in the European Acquis or you're not. You're 
either in compliance with OSCE norms or you're not.
    You know, I--with all deference and respect and appreciation for 
what our ambassador at the OSCE has been doing since the Ukraine crisis 
broke out, there's only a certain number of times I can hear Americans 
repeat, like, ``Russia, you're in violation; Russia, you're in 
violation.'' It's like, Yeah, right, it's a mess. You know, the whole 
space is a mess, and that is an environment in which the Russians are 
comfortable operating. They can get their interests done and advance in 
that environment. We have much more trouble doing that. For us, that 
is--it throws us way off.
    That said, I think there are a few factors that might change and 
sort of throw the Russians back on their heels and in that sense 
provoke a Russian reaction. And I want to be very clear here: The 
Russians are not always operating according to some ingenious KGB plan 
that they've pulled off the shelf. They are improvising every bit as 
much as we often feel like we are in this town, or Brussels is, or 
Berlin.
    So number one would be domestic politics. They don't necessarily 
know when some issue in the domestic economy or some opposition-
produced video expose about, gee, I don't know, Medvedev's $20 billion 
dacha in Ivanovo Oblast that just came out a week ago--you should watch 
it; it's awesome--that that is just going to go viral and cause--you 
know, they don't know this stuff.
    And when that happens--when and if that happens, then there is 
likely going to be some pressure to stir up something geopolitically. 
It doesn't have to be in the former Soviet space, but that simply tends 
to be the most convenient target. They have the most leverage. They 
have the most assets. And so you could definitely see the desire for a 
sort of rally-around-the-flag patriotic moment for domestic 
consumption.
    Two would be what happens on the ground. Local opposition actors, 
accidents, unintended events like, as I said, the Odessa Trade Union 
fire--but also think in terms of the folks who, during the unfolding, 
the kind of slow train wreck of the Ukraine crisis--a lot of the 
biggest beneficiaries were actually people that the Russians didn't 
fully know existed, or at least not at high levels, sort of local thugs 
in Donbass, in Kharkiv, in Odessa, whoever, who sort of saw an 
opportunity. And if they make enough noise and they create enough of an 
opportunity, of course Moscow's going to exploit that opportunity. 
They're not stupid. We, by the way, would do the same thing if suddenly 
we found someone who appeared to stand up for Western values and 
promise truth, freedom, justice and the American way. Of course we'd 
support that person. So I think they could be tempted in that sense to 
move in that direction.
    And, by the way, there's also a kind of soft linkage at work, 
where, if things are going badly on other fronts, if Russia is being 
pushed back in many other directions, everything is connected. And so 
the notion that Russia would act out in another direction where it 
feels like it has greater capabilities--as, for example, it did in 
Syria, I think in direct response to being thrown back on its heels in 
Ukraine.
    And then, of course, there is the notion of a direct tit-for-tat 
reaction something that is directly connected, even if it's asymmetric, 
to something that the West does. So, for instance, we make an argument 
about Russian democracy being not credible, that Russia is an 
authoritarian country, et cetera. What do the Russians do? They wade 
into our politics and they lay bare, for all the world to see, that our 
political leaders aren't so squeaky clean either and that our system 
has a lot of problems in it. This is the sort of asymmetric tit-for-
tatism. And you could definitely see that playing out.
    In the post-Soviet space, and particularly in the context that Bill 
described, you know, it's de rigueur. It happens every day. But you 
could put more and less emphasis on it, depending on how important it 
is to you.
    Mr. Tiersky. Ladies and gentlemen, we're going to move into 
audience questions and answers. I'll ask our panelists to try to be 
brief. We are running out of time. But I'm honored to let the audience 
know that we've got Mrs. Tatiana Solomon from the Embassy of Moldova 
with us today. I'd like to give her an opportunity to provide any 
comments she might like to make in response to the presentation that 
she's heard so far. Thank you.
    Mrs. Solomon. [Off mic.]
    Mr. Tiersky. Sure. You're welcome.
    Mrs. Solomon. This is my first time seeing--being honored to talk 
in front of the great crowd of people on the Hill.
    I'm really very happy to see a growing attention for my country on 
Capitol Hill. And I am thankful--on behalf of the Government, I would 
like to thank Ambassador Hill, Matt, and the Honorable Joe Pitts, who 
left--he is the co-chair of Congressional Moldova Caucus on the House 
side--and Alex for organizing this event.
    This is a very timely briefing in the Helsinki Commission today. 
And I don't want to miss mentioning Mark Milosch [inaudible, background 
noise]--who tremendously contributed for this event to happen.
    To the keynote speakers, I would like to address a special thanks 
for the insightful presentation and continued interest towards the 
Republic of Moldova. And we do appreciate and we will send back home 
all their expectations and giving their perspectives on the crucial 
topics related to the Republic of Moldova, including the struggles that 
our country goes through.
    Indeed, Moldova has had a troubled path since gaining its 
independence in 1991. Down the road, our independence has been 
questioned and challenged, and it is a good time to reflect on the 
achievements and to assess our government's preferred goals for the 
future of our country and the people of Moldova.
    The year 2016 is a crucial year for our country. Our first 
strategic priority is to anchor our country firmly in the West. To 
reach that, we have embarked on an ambitious and thorough reporting 
process. This is where the battle for hearts and minds is won. We want 
to make sure our development model benefits all Moldovans.
    It is true that the challenges for Moldova are large, and we're 
facing an uphill battle. However, we want Moldova to become a 
successful example of transformation, which, despite all odds, have 
appeared gradually. We highly appreciate U.S. support for Moldova's 
European and Western integration agenda. Implementation of the 
association agreement remains a top priority for our government. And 
the road map of priority reforms agreed between the EU and Moldova 
serve as the main tool to mobilize efforts at national level for the 
implementation of crucial reforms in key sectors.
    We are determined to further implement all these remaining actions 
in the road map of priority reforms until the end of this year. And on 
behalf of the government, I avail myself of this opportunity to assure 
the United States Congress that we have utmost interest to work well 
together and work within the U.S.-Moldova Strategic Dialogue.
    I certainly accept, and we do recognize that the reforms cannot be 
made overnight. It takes a lot to do that, and especially due to the 
country's struggles and challenges during this 25 years of 
independence.
    While Matt said that it might not be very huge loss to not have 
Moldova stable and secure, I would like to say that a stable and 
democratic Moldova, at peace with itself and its neighbors, will 
contribute to regional security and global security. And reforms indeed 
might be painful, but we harbor no doubt that this is the only way to 
offer a better future to our country and the Moldovan people. And from 
now on, Matt, I promise that we will try, while implementing the 
reforms, to keep calm and carry on. [Laughter.]
    Mr. Tiersky. Thank you very much. Thank you, Tatiana. [Applause.]
    Ladies and gentlemen, who would like to ask a question? If you 
could please identify yourselves first. I see a number of questions. So 
why don't we take the two at the front first. Please, why don't we 
start over here? There's no microphone; if you could just project, 
please.
    Questioner. My name is Benedikt Harzl. I'm the Austrian Marshall 
Plan Foundation fellow at CTR SAIS. I would also like to join in 
thanking the two speakers for really very thought-provoking and 
interesting, wonderful keynotes.
    I have two questions. As we have heard from Ambassador Hill, 
Moldova today seems to be occupied with homegrown domestic economic 
problems. But that makes it also possible, the way I see it, for 
Transnistrian authorities on the one hand, and the Russian Federation 
on the other hand, to avoid the proactive engagement in the 5+2 
discussions, which is pointing to this argument.
    But at the same time, it also raises the question to which extent 
do Transnistrian issue and the terms of a possible power-sharing 
agreement are issues to place on the agenda as a pressing issue of the 
Moldovan Government. My question is, is there still a shared vision of 
how such a power sharing in the future--not unitary, but unified, could 
look like? That's my first question.
    And the second one relates to conditionality, which also Ambassador 
Hill has referred to. But one very important element that was 
unfortunately not mentioned by you, but which has been so predominant, 
is the association agreement. Moldova has concluded and ratified this 
document, and has thereby signed up to sweeping reforms with all these 
different issues--benchmarks, monitoring, conditionality. It has even 
signed up to future--[inaudible]--without even being represented in the 
EU institutions, which raises some issues from the point of view of 
democracy. Now, my question is, would this association agreement 
address your concerns in terms of meeting certain criteria and, of 
course, in driving the country forward?
    Thank you.
    Mr. Tiersky. Thank you.
    And one more here. Let's take these together.
    Questioner. Hi. Thank you very much. Andrew Comstock, Georgetown 
University.
    I had a question for Mr. Rojansky. Specifically, I was hoping you 
could clarify your position when you were speaking of these competing 
narratives in Moldova, one of unification with Romania versus this 
alternative to the east. And it seemed in your speech that at times you 
sort of kind of flat-out said that both of these narratives were being 
supported by the Russian Government or pro-Russian civil society. I was 
wondering if you could clarify, because they seem to be competing 
narratives--if you could clarify how that works. What is the mechanism 
behind that?
    Mr. Tiersky. I'd like to try to get in two more rounds of questions 
in the next 10 minutes, if I could ask you to try to keep your 
responses brief. Would anyone like to speak on the sweeping reforms of 
the association agreement?
    Amb. Hill. Well, yes. There are two things. First, the AA--it would 
be wonderful if the Moldovans implemented the Acquis Communautaire. It 
would have been nice if the Romanian and Bulgarian Governments would 
have implemented the Acquis in 2005-2006, before they were let in, 
rather than having to play catch-up afterwards.
    It's understood, yes, this would help. I mean, the EU standards are 
ideals that, if fully implemented, would fix many of the problems. The 
problem is getting people and states to do it. And that's where one 
really needs to be--you go to the website of the EU mission on Moldova 
and you'll see they've taken a much sterner line more recently. Will 
this help? I hope so. We have to see. It's something to look at.
    And power sharing is--the question of status is still theoretically 
on the table in the 5+2 talks. The problem is that neither the 
Transnistrians nor the Russians pay much attention to it. They don't 
need an excuse in order--let me tell you, I've dealt with this for 
seven years, and they need no excuse to avoid engaging in serious 
talks.
    The problem for Chisinau in these circumstances, you know that the 
Transnistrians would like to preserve the status quo if they can. You 
know that the Russians will assist them and push them to do so. The 
question is, what can you do to make yourself more attractive, more 
trustworthy, more believable, so that you can break some of the 
Transnistrian elites away from the Russians?
    There are considerable incentives. Transnistria still does as much 
trade with the EU as it does with the CIS. And if you make it 
attractive for the Transnistrians to work in a Moldovan legal and 
economic space, you have a real chance, because, unlike the Donbas, 
Transnistria is a thousand kilometers away from Russia. But the 
Moldovans need to do that. And this has been one of the consistent 
failings that many Moldovan negotiators and governments have shared.
    Mr. Rojansky. Benedikt, very quickly, does the association 
agreement meet my concerns? No, not because it doesn't say what it 
needs to say, but because, in actual fact, in proof of fact, it has not 
delivered what it needs to deliver yet, which isn't to preclude that it 
ever does.
    The reason why, because we in the West don't understand how the 
political relationships here actually work. It's all a negotiation. If 
you can extract more now, and then also get more later by running a 
high risk and by playing fast and loose with the deal, then that's what 
you're going to do. And the problem is so far, by and large, with some 
exceptions, Moldovan politicians have gotten away with that, in part 
because we--that is, the West--don't have better options. I'm not 
saying I know what those options are. That's the problem. I don't have 
a solution for that problem.
    Andrew, on narratives, it's very simple, because it's not a binary 
choice. It's not greater Romania or return to the Soviet Union. There 
are many very valid choices down the middle of that, including 
successful reform, Moldova as a sovereign, relatively normal, 
functional European country. That's just not a narrative that helps 
Moscow very much. But Moscow can actually find a lot of advantages to a 
narrative that says Moldova is basically selling itself out, is a neo-
fascist, Romanian, expansionist instrument or, of course, well, the 
Moldovans love us because we're all, after all, at the end of the day, 
the same people. Either one of those is fine, just not the stuff in the 
middle.
    Mr. Tiersky. All right. More questions, please? Let's take all 
three at the same time, if I could. Why don't we start over here, 
please?
    Questioner. Hi, I'm Kathleen Weinberger from the Institute for the 
Study of War.
    And I was wondering if you could both give me an idea of how you 
think Moldova [inaudible] NATO activity in Eastern Europe. On the one 
hand we do have--[inaudible] coming up. And I do think Moldova has a 
very strong inclination to, as you were talking about, pursue 
[inaudible]. On the other hand, I can see how this would be construed 
by [inaudible] and by different actors in Moldova. So I was wondering 
if you could give me an idea of how you see this as helping or hurting 
Moldovan security.
    Questioner. My name's Franklin Holcomb from the Institute for the 
Study of War.
    I was curious if you could talk about Moldova's other significant 
neighbor and the developing relationship they have with them. How has 
the Moldova-Ukraine relationship changed over the past few years, 
particularly in relationship to how their relationship with the United 
States as well ? [inaudible]
    Mr. Tiersky. Thank you. And one more.
    Questioner. Isabel MacCay from American University and Senator 
Sullivan's office.
    My understanding, Moldova seems to have a strong reliance on Russia 
and Ukraine for energy resources. And I'm curious, as far as their 
economy is concerned, as Moldova's infrastructure is concerned, how 
that [inaudible] and what their options are. Because, as stated 
[inaudible] they want to think of themselves as a Western nation, how 
that causes a conflict in their energy resources, and what options are 
then out there.
    Mr. Tiersky. Let me add to that already very rich slate, 
Ambassador. I don't want to leave you off the hook that Matthew has put 
you on, which is, what are the lessons of Moldova, Transnistria, if I'm 
getting this right, for the Donbas in particular, 25 years. So if we 
could fix all of this in the following six minutes. Over to you, 
gentlemen.
    Amb. Hill. All right. Well, let's see. Very quickly, NATO causes 
big splits in Moldova. But what really causes the splits are pushing 
membership. And it's simply unrealistic to push that. We've already 
found that with the Bucharest summit. But what NATO likes is PFP.
    I once listened to--someone spoke to then President Voronin 10 
years ago about NATO expecting a diatribe from the Communists. And 
Voronin started in, went on for 10 minutes about all the wonderful 
things NATO was doing in his country. And these are basically PFP type, 
you know, non-war fighting type, cooperative type activities. That's 
the way to get NATO in there, is NATO does an awful lot with 
demilitarization, with security, with disaster relief, with civil 
protection, things like that. And Moldova's been an active PFP member, 
and that is a way to get publicity with the population while avoiding 
the really divisive issue, which is signing up for membership, which 
simply isn't going to happen.
    On the reliance for energy, Moldova historically has been fighting 
battles with Russia because the primary source of energy has been 
Russian natural gas, both directly and to run the big Moldavskaya GRES, 
the electrical office located on the Ukrainian border in Transnistria.
    Recently, pipelines have been finished to Romania, to bring gas in 
through Ungheni, but somebody's got to find the gas for the Romanians 
to buy that doesn't come from Russia in order to go in there. If 
Congress clears LNG exports, it would not be proper for me to tell 
Congress what to do, but, you know, things like this sit there.
    There are increasingly pipelines available to get stuff in, if you 
can find the sources, because the Ukrainians are no longer great fans 
of Gazprom and the Russians and probably would be willing if you could 
get gas from Azerbaijan, say, up to Odessa. Building pipelines would 
probably be prohibitively expensive. There's one in there, but are 
there other ways to do that?
    On Moldova, Ukraine, the relationship has not improved as much as I 
thought it would be. I mean, I'm very encouraged overall. When I read 
Putin's March 18th, 2014 speech, I was really worried because I said 
he's going into Ukraine and he's going after all of southern Ukraine. 
And it turns out that from Odessa all the way up to Donetsk, the 
Ukrainians, even if they speak Russian, seem to want to be part of 
Ukraine rather than part of Russia. And that is very encouraging for 
Moldova.
    What I haven't seen is as much cooperation between Ukraine and 
Moldova and 5+2 talks as I would have expected. And I think that's 
something that both U.S. and EU political leaders might think about, 
about talking both with guys in Kyiv as well as in Chisinau about why 
this hasn't happened and why the change in attitude towards all of 
this. It may be the Ukrainians are just afraid of having provocation, 
having a problem on their southwest when they've got a real problem on 
their southeast.
    But when it comes to the lessons of Donbas, it was no accident that 
The New York Times called me up in August of 2014 and asked me about 
all of these guys that I had dealt with in the Transnistrian conflict 
who now seemed to be in responsible positions in the LNR and DNR. The 
playbook is well known and it's well known how it's run.
    The problem is that barring a military solution there's nothing 
quick you can do about this. But there is a political solution. You can 
avoid letting it screw up the rest of your country. You know, Ukraine 
controls, what's it, 90 percent of Ukrainian territory; Moldova 
controls 90 percent of Moldovan territory. Run that territory well, 
avoid falling victim to provocations as much as you can. Yes, I know, 
the Russians will do all sorts of boycotts, all sorts of other things 
to try to make trouble for you, but we have to look at the fact, the 
positive side, the glass is more than half full, it's 90 percent full 
of territory that's controlled by recognized, reliable authorities 
that, if they pay attention to good governance, can create a society 
that will be attractive to the folks in these separatist entities, and 
the separatist enterprise will be increasingly less attractive.
    I don't expect the Russians to lose gracefully on this. But if we 
play our cards right, we hold the winning hand. I firmly believe that.
    Mr. Rojansky. These were very good questions. I think Bill answered 
the gas question.
    On Moldova, Ukraine, Romania, I think I can't really speak to 
relations with Romania. I can tell you that on Ukraine, what I see is 
that rather than being more coordinated or just closer to each other, 
Kyiv and Chisinau are just more like each other. And that's disturbing 
because I actually think that the Ukrainian post-Maidan reform emphasis 
is also going in the wrong direction right now. And that's not to buy 
into a propaganda narrative, it's just I kind of know too much about 
the guys who are running the show. And they remind me an awful lot of 
the guys who have been running the show in Chisinau for the last 
several years. And so that bothers me because it suggests that anything 
that's possible in Ukraine is possible in Moldova as well, and vice-
versa, in a negative sense. Sorry to be a pessimist about that.
    On NATO, what I find interesting about what Bill says, it's all 
correct, everything Bill says is correct. The problem is the battle of 
narratives. So when you say, you know, we can get NATO in there to do 
all this good stuff, counterterrorism and counter-
trafficking and stability ops and human security, that's all true. The 
problem is that's not at all the way Russians see it.
    They would see getting NATO in there as simply the first step, as I 
said, this veil for American imperialism, the idea of the next step is 
we occupy the region. And the problem is not that that is actually 
going to happen and they'll be proven right. The problem is that that 
narrative then blocks everything else, that it is a useful enough tool 
that everything else you're trying to do in the meantime, all the sort 
of good, glass-half-full stuff about your sovereignty and taking 
advantage of the fact that you actually do control 90 percent of your 
country and so on, goes off the rails because of this narrative.
    Let me answer my own question if I can, 30 seconds. After 25 years, 
I see three lessons. Number one, there is not a military solution. OK? 
You may want there to be one. I know that this august body has just 
passed a bill that entails the possibility of lethal support for 
Ukraine, and that may be a good idea, but it doesn't mean that a 
military solution is there that wasn't there.
    Second, that it may very well be preferable to take the path of 
separate development, to sort of make the 90 percent successful and let 
the 10 percent vote with its wallet or with its feet, rather than 
compromising their sovereignty by doing a deal now when it's a bad 
deal.
    But then the third point is the problem, and that's where we get 
hung up, is that your sovereignty might be compromised anyway and it 
might be compromised by the continuation of the conflict in those 
ambiguous conditions and by your own failure to do the things that you 
would have to do, that are hard things on your own side of the line.
    And if that's the lesson of 25 years of Moldova and Transnistria, 
and I often get shot down when I say this to Ukrainians, then 
unfortunately it doesn't lead me to be very hopeful about how we 
resolve the Donbas conflict in the short term or the long term in 
Ukraine.
    Mr. Tiersky. No, let's stick with the winning hand that Ambassador 
Hill had.
    Mr. Rojansky. Yeah, yeah, I know. The diplomat, right? Half full.
    Mr. Tiersky. Ladies and gentlemen, I can assure you, I can assure 
the embassy that the Commission will continue to monitor developments 
in and around Moldova, certainly with a view towards supporting its 
sovereignty and its territorial integrity and the right of Moldova and 
Moldovans to choose their own future and in support of the reforms 
necessary to make that path a reality. I think as the Commission does 
that, we are fortunate that these gentlemen know that we will call on 
them again and frequently.
    Will you please join me in thanking them for their expertise this 
afternoon?
    [Whereupon, at 5:34 p.m., the briefing ended.]
    
    
    
    
    

                              A P P E N D I X

    =======================================================================

                 Prepared Statement of Hon. Joseph R. Pitts

    Ladies and Gentlemen,
    Welcome to the Helsinki Commission's briefing on ``Moldova at the 
Crossroads.''
    This briefing marks the latest in a series of events held in recent 
years by the Commission on challenges facing Moldova. The Commission 
has worked hard to keep informed on developments there and drive U.S. 
policy towards greater effectiveness.
    In 2012, Congressman David Price and I established the Moldova 
Caucus to act as yet another entity to augment our government's foreign 
policy with respect to the Republic. This caucus helped accelerate 
collaboration between Moldova's government and Members of Congress, and 
it did so at a critical juncture.
    As Moldova prepares for presidential elections scheduled for 
October 30, the country is at a yet another crossroads. While it seeks 
to overcome significant internal challenges, Moldova also remains 
squarely in the crosshairs of Russian destabilization efforts intended 
to maintain Moscow's influence and prevent closer relations between 
Moldova and the West.
    This briefing is intended to explore several issues, including:

      Russia's efforts and continued threats to Moldovan 
territorial integrity and sovereignty;
      Russian destabilizing actions, including disinformation 
campaigns, an economic blockade, and threatening rhetoric;
      and the roles of the Moldovan government and external 
actors, including the U.S., the EU, and the OSCE, in addressing 
Moldovan vulnerabilities.

    Let me emphasize that Moldova remains a key concern not only for 
the Helsinki Commission but also for Congress as a whole. I was proud 
to sponsor a Resolution on Moldova, House Resolution 562, passed by the 
House in July of 2014. Among other things, the resolution:

      Reaffirmed that it is U.S. policy to support the Republic 
of Moldova's sovereignty, independence, and territorial integrity;
      called upon the Government of Russia to withdraw its 
military forces from Moldova, refrain from economic threats, and cease 
supporting separatist movements;
      and affirmed that lasting stability and security in 
Europe is a key U.S. priority that can only be achieved if the 
territorial integrity and sovereignty of all European countries is 
respected.

    These principles--sovereignty, territorial integrity and the like--
are the cornerstones of the Helsinki Final Act, commitments monitored 
on a continuing basis by the Helsinki Commission.
    Ladies and Gentlemen, I'm afraid that many of the challenges my 
resolution sought to address, challenges that we have learned about 
through past Commission hearings and briefings on Moldova, are 
unfortunately still with us today.
    Before turning the briefing over to Alex Tiersky from the Helsinki 
Commission to moderate the discussion, let me close by saying a few 
words about the Commission itself.
    I was first appointed to serve as a member of the Helsinki 
Commission in 1999. In that time, the Commission has given me a 
platform to promote and defend core U.S. values and interests on issues 
ranging from religious freedom in Russia to combatting child 
pornography. As a Commissioner, I have traveled with fellow Members of 
the House and Senate abroad to meet with our counterparts from the more 
than 50 OSCE nations to ensure each country is pushed to fully uphold 
its commitments, including the defense of fundamental human rights.
    The Commission often draws attention to issues and countries that 
are not always in the Washington, DC spotlight, but are nevertheless of 
crucial importance to the United States. The subject of today's hearing 
is a case in point. While Georgia and Ukraine--two countries in similar 
circumstances--rightly get a lot of attention in Washington, the 
Commission will continue to make sure that Moldova's challenges also 
get the attention they deserve.
    I'd therefore like to thank Ambassador Hill and Mr. Rojansky for 
once again offering their expertise to the Helsinki Commission. It is 
only through the support of exceptional individuals like our speakers 
today that the Commission can ensure its work is well-informed, 
relevant, and effective.
    Thank you for being here.
    Over to you, Alex.

  

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