Book Review: The KGB's Fascination With Potions

By Joshua Foust

It can be difficult to stand out in the somewhat crowded field of Russian scare-books. Whether arguing for the resumption of a “new cold war” or whatever conspiracy happens to be topical, recent years have seen an avalanche of books arguing that Russia is not the somewhat broken creature it is often portrayed in the West.

Boris Volodarsky, however, has a leg up. A former Captain in the GRU, he has first-hand access to many of the files, personalities, and programs one would need to discuss Russia’s international espionage activities. It is just this encyclopedic understanding that he brings to The KGB’s Poison Factory: From Lenin to Litvinenko. Though often confusing because of the sheer volumes of names, pseudonyms, shadow programs, and overlapping personalities he puts into play, Volodarsky very clearly argues that the posture of Russian intelligence is essentially the same as has been throughout the 20th century.


Volodarsky argues that Russian intelligence holds as much venom for its individual detractors as for its international opponents, And it is venom that he seems primarily concerned with. Assassinations obviously can take many forms — the U.S. prefers flying robots these days. But Volodarsky argues that Russia has a special affection for poison.

And what a poison it is: The particular hallmark of Russian poisons, besides their creativity, seems to be their relatively long kill time. A victim will languish for weeks, even months, in sheer agony before either barely surviving or dying. Volodarsky describes this tradition while tracing Soviet and Russian poisoneers (for lack of a better term) through early uses of merely unusual plant extracts to the industrial development of unique compounds. The resulting potions are engineered specifically to mimic other problems, usually some form of gastritis, so that by the time doctors eventually realize what’s happened, it’s too late to fix.

The inspiration for Volodarsky’s history is the death of Alexander Litvinenko, the KGB defector slowly poisoned with Polonium-210 in 2006. While it can be difficult to parse the complicated history that Volodarsky writes — this is a book by and for insiders — the picture that emerges is damning of Russia going back decades. This might be where the book would fit in the pantheon of anti-Russia books: Volodarsky argues that the post-USSR poisoning activities of Russian intelligence demonstrate a strong continuity between Soviet and Russian activities.

In fact, if we were to read this in the context of similar books of the Russian government’s capriciousness — those by Anna Politkovskaya, for instance — it would be easy to think that it is more dangerous to oppose Moscow today than it was, say, in the 1970s, even though there was much more concern over it back then. Since Vladimir Putin left the Kremlin, Volodarsky writes, the Sluzhba Vneshney Razvedki, or SVR, Russia’s foreign intelligence service, no longer has to report to the President — they only have to inform him, the prime minister. Given Putin’s almost legendary intolerance for dissent, and the environment he’s created, in which unofficial murders aren’t exactly approved but aren’t exactly punished, it is a pretty terrifying realm that Volodarsky explores.

Unfortunately, that exploration is a real bear to sift through. While the book is engaging as a work of espionage, I found it difficult to keep track of the tangle of personalities and operations. That is in part because Volodarsky’s footnotes aren’t exactly immaculate. Mixed with clinical discussions of operations are Volodarsky’s ideas about what constitutes good or poor tradecraft. While it’s certainly fun to see how central Vienna is to Russian-European espionage, my eyes glazed over during long expositions of place and timing. That’s not to fault Volodarsky’s writing. But for those who aren’t borderline obsessives with the mechanics of tradecraft, the endless detail can become exhausting. It is a little too inside baseball for a layman to pick up and comprehend, and Volodarsky doesn’t provide enough documentation for a layman to follow the breadcrumbs and learn more (though he does, to his credit, highlight other books for more information on individual kills.).

The KGB’s Poison Factory is still a fascinating read. As long as you can slog through. Whether you’re looking for a concise history of Russian intelligence assassinations, or even a taste of how bewildering the intelligence hall of mirrors can be, it is a pretty severe indictment of how the former Soviet capital operates.


Joshua Foust is a military analyst who blogs at registan.net

The Oil and Glory Interview: Charles Clover on the Siloviki's Possibly Lesser Role

The conventional wisdom is that the foundation of Russian Prime Minister Vladimir Putin's power is the siloviki, the current and former intelligence and military officers who have been drawn into powerful political and commercial positions over the last decade. That's why I was surprised by a long piece last week by Charles Clover, the Financial Times' Moscow bureau chief and one of the clearest reporters on Russia. In it, Clover -- my former roommate in Almaty and Tashkent during the 1990s -- reports finding a diminishment in the siloviki's influence. Clover agreed to flesh out his conclusions for O&G. Here is the interview:

O&G: Charles, your latest long piece is decidedly contrarian. You report that Russia's siloviki – who others routinely describe as the ascendant power – actually hit their apex in 2007, and appear to be on the wane. Is that your takeaway? And if so, why do you think that's the case?

Clover: I should probably say in the spirit of full disclosure that I set out to write about how the siloviki are getting stronger – but when I started asking people who keep track of these things, some quoted, some anonymous, most said that actually things have reversed a bit. Now, whether this is a temporary or a permanent trend is of course an open question – I don’t know the answer, and I hope I put enough caveats to that effect in the piece! But I do think the siloviki may have gotten too powerful for their own good, and other groups are trying to cut them down to size. Putin, in appointing [President Dmitry] Medvedev as president, seems to have intended perhaps to rein in the siloviki a bit – his attitude is unclear. It’s useful to remember that in the 1990s, everyone thought the oligarchs were the ascendant power in the land – of course they are still very powerful, but they did not take over the state.

Q: Even so, you do not seem convinced that the siloviki's retrenchment necessarily equates to a greater responsiveness to the public at large, what you call "civil society." Why is that the case?

A: Russia's liberals are not a whole lot more liberal than the siloviki, and I think any 'thaw' will not be a very ambitious one. Nonetheless, there is a sense that things might have gone too far in the direction of autocracy, and Russians by and large want to live in a more normal country.

Q: President Medvedev has made what, compared with the government's previous attitude, are some bold decisions in the Sergei Magnitsky case. Do you yourself regard these as surprising or bold decisions? Do they signal anything larger? What's the context?

A: I think all we can do is wait and see where things go. Yes the developments are surprising, and seem to indicate a shift in the mentality at the Kremlin. There also does seem to be a struggle within law enforcement agencies over this case in particular – though it’s a bit inside baseball to write about this yet. The context is useful to keep in mind though – Russia for the first time in years needs to borrow abroad and is trying to attract foreign investment, so it needs to be seen to be doing something about this case involving a huge portfolio investor, Hermitage Capital. I'm not sure if all they are doing is trying to be seen to do something, or actually doing something though.

Q: Ultimately is this shift significant in terms of how Russians live, and how foreign governments interact with Russia? For instance, are we likely to see a soft-and-cuddly Gazprom? Or friendship break out with Georgia?

A: As I said, I don’t see Russia's "liberals" as much more liberal than the conservatives, though that is a whole different article to write. And I don’t think the siloviki are going to be entirely pushed out of course, just reduced a bit. I doubt Gazprom will start giving out free gas and I don’t expect to see [Georgian President Mikheil] Saakashvili getting invited to the Kremlin any time soon.

Q: You describe Putin's circle of "Orthodox Chekists," referring to their regular audiences with a conservative Russian Orthodox monk named Archimandrite Tikhon Shevkunov. What's the takeaway from this relationship?

A: Kind of like the Bush White House and the religious right – It’s hard to tell how much of this is PR and spin, and how much is genuine ideological sympathy. Archimandrite Tikhon leads a very conservative wing of the Orthodox church, and I think the church generally supports conservative political figures on ideological grounds.

Q: You also say that Igor Sechin – who has seemed fairly influential in a lot of matters including politics and oil – as assuming less influence in his role as a deputy prime minister. Is title so important? Has Sechin's influence truly waned? After all, he still runs Rosneft.

A: I totally agree with your premise – I don't think title is so important. What is important, however, is access to Putin, which Sechin in his previous incarnation had every day – he controlled access to the president and that was his main "resource,” as a former senior Kremlin official put it in a conversation with me. Today, he doesn't have such access, as his position requires a lot of travel, and he has other responsibilities. He remains immensely powerful, but in a more limited sphere – energy. He is not the universal figure he was in the Kremlin.

Q: What does this phenomenon signal about Putinism, the long projected arc of Putin's influence into the next couple of decades?

A: I think I talked about this in the piece (I hope that part didn’t get cut). I think Putin certainly continues to play the hegemonic role in Russian politics. But equally he is a skilled politician who knows that he cannot allow any one faction in government to get too big, as this would threaten his own ability to play the most powerful role. I think if the siloviki see a decline, it is likely Putin's own decision.

Radio Appearance

I was interviewed about murder and death in Russia on My Technology Lawyer, a radio show hosted by Andrew Kreig and Scott Draughton.

Religiosity and the Meaning of the Shift on Missile Defense

One is pressed to name a technology attached to as much religious-like fervor as missile defense. We of course are not talking the type of fanaticism seen in the lines around the block to buy the latest iPod, but truly mob-like anger resembling the debate over evolution. It's been that way ever since Ronald Reagan gave missile defense national prominence in 1983. A quarter century later, while the defense industry continues to work toward a breakthrough that would make the technology reliable, the news in Eastern Europe and Russia brings missile defense back front and center in all its passion and vitriol -- Obama has canceled George W. Bush's planned missile defense components in Poland and the Czech Republic, and to the technology's advocates, that means heresy.

As we have discussed previously at O&G, Obama has been bound to make just this move simply because of the irrationality of attempting to persuade Iran or anyone else that Europe is held safe by a non-working technology. In a column today in The New York times, here's how Defense Secretary Robert Gates himself describes the attacks against him since the decision: "I have found since taking this post that when it comes to missile defense, some hold a view bordering on theology that regards any change of plans or any cancellation of a program as abandonment or even breaking faith."

So what is this lathered-up debate genuinely about? It is whether or not there will be any resulting dividends from Moscow as a result. Naturally, the Obama Administration denies any link to Russia, and technically that assertion is correct -- the cancellation I think would have taken place regardless of the friction with Russia.

But payback is nevertheless an issue -- Russia remains an outlier on extremely important matters, including the troubling arc of developments in Iran. Looked through that lens, Obama can be expected to act to eliminate other irritants, too, that have no legitimate U.S. strategic value.

Hence, look next for a trade opening with Moscow -- there's no valid reason to block Russia from the World Trade Organization if it meets the criteria. But don't expect the U.S. to back down in Georgia -- among other factors, the Baku-Ceyhan pipeline continues to link Georgia strategically to the West. The U.S. will probably also continue to pursue the strategic Nabucco natural gas pipeline despite the lack of enough fuel to make it work.

While both of Russia's leaders -- President Dmitry Medvedev and Prime Minister Vladimir Putin -- suggest that they will be more attentive now to U.S. concerns, my friend Masha Lipman at Carnegie in Moscow remarks that "anything that looks like a concession can be viewed by the Russian side as a sign of weakness."

Generally speaking, Lipman is right. But the reduction in the points of friction between Washington and Moscow is still arguably a valid approach to getting Russia on side.

Russian History and the Passing of the Utility of Pipeline Politics

The Harvard historian Richard Pipes has triggered an interesting debate on the Internet with a long piece that leads the Weekend section of The Wall Street Journal. The piece lays out familiar Russian history -- how and why Moscow is so vexed by independent-minded neighbors; why its people go along with political repression; and its dogged pursuit of a status as "a force to be reckoned with, a country to be respected and feared." Pipes goes on to suggest policy prescriptions, including a recognition that Russians are likely to react badly to a feeling of encirclement, and a renewed attempt to persuade Moscow to adopt western political and economic values.

The piece is important not because it's perfectly presented -- I'm puzzled for example by the continued notion that somehow Russians are going to become like the West -- but because we get someone of Pipes' stature laying out once again the historical record. I myself hear dismay from Russia watchers get up in arms over the suggestion that some recent events there -- the impunity of murderers, and the public acquiescence to it all -- follow an arc going back several centuries. To them, I suggest a fresh read of Pipes. Below, I'm posting a video from a speech I just delivered at the World Affairs Council in San Francisco, arguing that time has perhaps passed by the utility of current U.S. oil policy on Russia, specifically that of pipeline politics.



At the American Conservative, Daniel Larison argues inaccurately that Pipes is merely advocating a continuation of two-decade-long U.S. policy. For instance, Larison takes Pipes to task for failing to insist on a break in NATO expansion, when the piece in fact suggests the opposite.

At the Squirrel's Nest, we get an attempt at the long view from Terry McGarty, a Massachusetts startup investor and one of Pipes' former Cambridge colleagues. McGarty quotes a well-known criticism of NATO expansion by George Kennan, one of the best diplomats the U.S. ever turned out. Kennan asserted that, among other things, NATO expansion would restore the atmosphere of the Cold War, and impale Duma ratification of Start II. Today, no one can project backward with certainty how events would have unfolded absent NATO expansion, but, in the context of Russian history, as Pipes well lays out in his piece, even in the most optimistic of circumstances there would have been at minimum the danger of Moscow creeping back into the vacuum of its former Eastern European satellites. And in a more pessimistic turn of events, eastern and central Europe could have been in similar circumstances to Ukraine and Georgia today, confronting an angry, assertive Russia at their border. Finally, Kennan wholly misjudges the Russian position on nuclear arms. Russian politics could change down the road, but since Mikhail Gorbachev the country has favored almost any nuclear arms control deal; none of the serious nuclear arms accords discussed in the post-Soviet era was ever imperiled as far as Moscow's signature was concerned. Kennan had that backwards -- they were upended in the U.S., by the Bush administration.

Cyber-Attack Strategy: Part of Russian Attack on Georgian Pipelines, Report Finds

John Bumgarner, a former cyber-security expert for the CIA and other U.S. intelligence agencies, is attracting much attention for his report concluding that Russia's military offensive in Georgia last year was coordinated with a pre-arranged civilian cyber-attack on the country. What appears to have gone unreported is Bumgarner's conclusion that the region's oil apparatus was a strategic target of the overall conventional-and-cyber offensive.

The 100-page report, conducted for the U.S. Cyber-Consequences Unit, where Bumgarner is director of research, was distributed to U.S. officials and security experts. Bumgarner and I chatted by phone, and he emailed me the nine-page executive summary (thanks to Josh Foust for agreeing to post it at Registan.net. Incidentally, Foust has a good piece on the media war between Russia and Georgia at CJR).

Bumgarner says the report is the result of an examination of hundreds of public Internet forums, sharing of data with sources at home and abroad, and his own reporting on the attack from almost the instant it began. Others have reported that much of the findings were already known; but Bumgarner's findings appear to be the difference between barstool talk and authentic data. Nor is the report the kid-stuff such as carried out last week against 45 million Twitter users along with Facebook members, apparently by a Georgian blogger calling himself Syxymu (the blogger's attempt to Latinize the name of the Abkhazian capital, Sukhumi.).

Its chief takeaway is that the Russian cyberattack -- which disabled 54 Georgian websites in banking, communications and media with the apparent aim of reducing Georgia's capability of responding to the Russian offensive -- was prepared well in advance. Bumgarner writes:

Many of the cyber attacks were so close in time to the corresponding military operations that there had to be close cooperation between people in the Russian military and the civilian cyber attackers. When the cyber attacks began, they did not involve any reconnaissance or mapping stage, but jumped directly to the sort of packets that were best suited to jamming the websites under attack. This indicates that the necessary reconnaissance and the writing of attack scripts had to have been done in advance. Many of the actions the attackers carried out, such as registering new domain names and putting up new Web sites, were accomplished so quickly that all of the steps had to be prepared earlier.

The Russian Embassy in Washington denies any official Russian or military role in the cyber attacks. And in fact Bumgarner writes that he found no sign of official Russian participation, and concluded that no military personnel, with their distinctive fingerprints, could have carried out the attack. But he adds that there had to be complicity. "The organizers of the cyber attacks had advance notice of Russian military intentions, and they were tipped off about the timing of the Russian military operations while these operations were being carried out," Bumgarner writes.

Yet, the cyber attackers did not go in for the kill, Bumgarner told me -- they didn't attempt to cripple sites that could have caused chaos or injury, such as those linked to power stations or oil-delivery facilities, but merely those that could trigger comparative "inconvenience." "There was a political decision not to attack those critical infrastructures directly. They made the point that they could launch these attacks. They showed they have the capability to do more," Bumgarner said.

This mirrors Russian action against Georgia's paramount strategic installation -- the Baku-Ceyhan oil pipeline, by far the biggest reason why the U.S. and the West as a whole are interested in Georgia. We've discussed here how Russia bombed all around the pipeline without actually hitting it -- a clear message that it could do so if it wished, but would refrain for the moment.

Indeed the cyber attack fit into an overall Russian strategy centered on Georgia's oil infrastructure, Bumgarner concludes. It succeeded, in Bumgarner's view. "Unstable ground conditions, augmented by cyber attacks, soon made all of the Georgian pipelines seem unreliable," he writes.

Certainly that was the impact for the first weeks and months -- Russia demonstrated that the pipeline was vulnerable, not to mention dispelling the illusion that Georgia enjoyed special Western protection.

To a large degree, that remains the fact on the ground -- Georgia and the other former Soviet states of the Caucasus and Central Asia are far more deferential toward Russian wishes. Yet the oil and gas continues to flow.

As for the larger picture, most recently Russia has gotten push-back. This week, Georgia announced that it has officially withdrawn from the Commonwealth of Independent States, the grouping formed as a substitute for the Soviet Union at the same time as its 1991 collapse. (In the 1990s, Georgia's refusal to join the CIS infuriated Russia; in 1993, as Russian-backed Abkhaz troops closed in on Sukhumi, then-Georgian President Eduard Shevardnadze, standing alongside his troops, reportedly shouted, Okay, we will join the CIS! Suing for peace with Moscow, Shevardnadze did so soon after.)

And last week, it was reported that the Obama administration has decided to ignore strenuous Russian opinion and revive its training program for Georgian troops. Matthew Yglesias appears to be shocked that Washington would help Georgia through a ruse -- the U.S. claims the Georgian troops are being trained only for action in Afghanistan. Yglesias says this transparently false form of foreign policy -- obviously Georgia will use the training to rebuild its defense capability against Russia -- is "very, very, very silly."

As reasoning, Yglesias trots out the usual -- that the U.S. would blanch if China trained Mexican troops and formed a military alliance with America's southern neighbor. Therefore, Russia's furious opposition to the U.S. assistance -- and to Georgia's interest in joining NATO -- is understandable. The main weakness of this specious-but-much-used argument is that the U.S. and Mexico aren't military antagonists. More to the point, as benjamin81 comments over at The Plank, "A better analogy would be China or Russia training troops in Guatemala or Cuba. We wouldn't like it, but we probably wouldn't lose too much sleep over it either."

This summer, Russia and Georgia have resumed their usual bellicose relationship. Does this portend more war? After the drubbing he has taken since his adventurism last summer, Georgian President Mikheil Saakashvili is unlikely soon to fall for Russian bait. But Georgia will remain a flashpoint, with or without U.S. involvement.

Russia and Bending: What Biden Didn't Say

Last Friday, O&G wrote of U.S. Vice President Joe Biden's strong grasp of reality in the former Soviet Union, as expressed in his actions in Ukraine and Georgia. But yesterday, Secretary of State Hillary Clinton tried to sweep up in the wake of a later, widely remarked-upon Wall Street Journal interview with the vice president, headlined, "Biden Says Weakened Russia Will Bend to U.S." Clinton's remarks on a Sunday talk show came after a senior adviser to President Dmitri Medvedev asked, "Who is shaping the U.S. foreign policy, the president or respectable members of his team?"

The Russian official, Sergei Prikhodko, said he found the Journal story "perplexing." I do too, but for different reasons: Unless Biden said something more than is in the story and the excerpts posted on the Journal website, he didn't suggest that Russia will accede to U.S. wishes.

This is important because, bluntly speaking, the Journal headline and the follow-on reporting by The New York Times make Biden look wholly misinformed. This isn't nuance -- if Biden truly meant what the Journal reports he did, Mike McFaul, the National Security Council's Russia hand, needs to get over to the Executive Office Building and have a little chat with him.

The Journal story, written by Peter Spiegel, synthesizes Biden's remarks as such: The seriously weakened Russian economy will "force the country to make accommodations to the West on a wide range of national security issues, including loosening its grip on former Soviet republics and shrinking its vast nuclear arsenal."

Within the story, we get this quote: "I think we vastly underestimate the hand that we hold." The story goes on with this Biden quote: "Russia has to make some very difficult, calculated decisions. They have a shrinking population base, they have a withering economy, they have a banking sector and structure that is not likely to be able to withstand the next 15 years. They're in a situation where the world is changing before them and they're clinging to something in the past that is not sustainable."

To summarize, Biden thinks that the Obama administration has underplayed its leverage as Russia suffers from a profoundly weak economy and disastrous demographics. On the merits of the assertion, I'd argue that the U.S. has not underestimated its leverage -- to suggest that the U.S. can parlay Russian impoverishment into changed Kremlin policy on Iran, on missile defense, on European gas policy, and so on, is simply a misread of Russia. But this is beside the point. Biden does not predict Russian capitulation. It's not in the quotes.

Now to the Journal's second point -- that Biden suggested that Russia will loosen its grip on former Soviet states such as Georgia and Ukraine.

Biden says the following: "I don't expect the Russians to embrace -- particularly this government, particularly Putin -- to embrace the notion that [they should] reject a sphere of influence. But I do expect them to understand we don't accept a sphere of influence."

Fair enough -- Moscow ought to recognize that Washington won't shift a position on Central Asia, on the Caucasus, and on the other Slavic states that's existed since George H.W. Bush's administration. But where is the prediction of a Russian accommodation to the West's position? It doesn't appear in the quotes as far as I can see.

This isn't Biden's finest moment. But it's a problem of a different order from what one would conclude from the Journal headline and lead.

What Biden in Ukraine and Georgia Shows: Making Up (With Russia) Is Hard to Do

In a two-day swoop, Vice President Joe Biden has single-handedly signaled something about the reset button: While the idea of rapprochement with Russia that he ostentatiously suggested five months ago is romantic, getting back together usually isn't a good idea for divorced couples. They tend to go back to the same old aggravating habits.

In this case, Biden first went to Ukraine, which he assured that Washington isn't recognizing Russia's claimed entitlement to influence over its neighbors. He said that if Ukraine decides to join NATO, the U.S. is behind it. (Thanks to RealClearPolitics for posting the transcript.)

Then today, Biden flew south to Georgia, where he said the same thing: "We understand that Georgia aspires to join NATO. We fully support that aspiration," Biden said.



Almost nothing is guaranteed to raise the hackles of Russian Prime Minister Vladimir Putin more than the suggestion that Georgia should be permitted to join NATO; a close second would be the same formulation for Ukraine. Russia regards both nations as its own. Indeed, Russian Deputy Foreign Minister Grigory Karasin responded by saying that Georgia is "remilitarizing" after being pummeled by Russia in a five-day war last August, and saying that Moscow might move to stop it.

So why did the Obama administration choose to put irritating language into Biden's mouth? The answer is realpolitik. Washington truly does want calmer, more constructive relations with Russia. It knows that neither Ukraine nor Georgia are capable of meeting NATO requirements; it also knows that the two aren't welcome as members by much of Europe, which -- there is no delicate way of putting it -- allows Russia to call the shots on issues including further NATO enlargement and the direction of new natural gas pipelines.

Yet, putting aside for now the question of whether NATO in fact should expand further, for reasons of politics and appearances, Washington cannot be seen to be acceding to Russia's wishes. So you have speeches like Biden's in Ukraine and Georgia.

It's true that Biden tried to soften the sting by also suggesting that both Ukraine and Georgia could improve their political systems. Biden also refrained from agreeing to Saakashvili's request for a replenishment of armored weapons, which Georgia all-but exhausted in the August war.

Some of the blogosphere is alight with accusations that Washington threw "another ally under the bus," as Pamela Geller over at Atlas Shrugs put it. Others, such as Robert Antonio Hussain, go the other way. "Why must VP Joe Biden stir up the pot all over again about Georgia, Russia, NATO and Georgian Pres. Saakashvili?" wrote Hussain.

The answer to Geller: No he didn't.

The answer to Hussain: Because he must.

The Virtues of the Courts: A Window into How Former Soviet Dealmaking Really Happens

When it comes to the Caspian era in the history of oil, it has required the intervention of New York courts and prosecutors to understand the intricacies of how the huge deals happened. In the just-concluded trial of high-end handbag-maker Rick Bourke, we heard evidence of the alleged payoff demands of the late Azerbaijan President Heydar Aliyev. And in the still-to-be-tried bribery case of New York businessman James Giffen, we have pages of detailed federal allegations of payoffs to Kazakhstan President Nursultan Nazarbayev, the cash coming from America's largest oil companies.

Though Central Asia and the Caucasus clearly didn't have a monopoly on official avarice, Russia has remained largely a subject of pub and law firm-conference room talk. Until now.

In two, side-by-side cases being heard on the third floor in London's Royal Courts of Justice, four of Russia's richest former and current billionaire oligarchs are battling over billions of dollars in claims against one another.

The personalities run the 18-year arc of post-Soviet history: Boris Berezovsky, who was instrumental in both Boris Yeltsin's and Vladimir Putin's political careers before falling out and fleeing to England; Roman Abramovich, Berezovsky's successor as Russia's premier oligarch, who had his own frictions in Russia and now lives in London, where he owns the Chelsea soccer team; Oleg Deripaska, Abramovich's successor as the king of Russian oligarchs, who is trying now to keep his empire from falling apart in the global financial crisis; and Michael Cherney, the toppled metals giant who preceded all of them before fleeing to Israel.

The subject of both suits is the 2001 merger of the joint metals empires belonging to Cherney and Deripaska (Sibal), and Berezovsky and Abramovich (Sibneft). The resulting concern is Rusal, the world's second-largest aluminum company.

The kernel of both suits is that Berezovsky and Cherney want more money. In their separate responses, Deripaska and Abramovich claim the two don't merit any.

As with the Caspian, however, the cases appear likely to open up first-hand testimony on how the innards of Russia really work. They include allegations of "illegal acts by senior officials at the center of government" in Russia, including by Prime Minister Vladimir Putin, according to a Financial Times piece today by Michael Peel and Andrew Jack. Jack spills out details specifically of the Berezovsky case in a companion on-line piece.

Murder and Ramzan Kadyrov

The Washington Post's Philip Pan puts today's murder of Russian activist Natalya Estemirova within the context of a string of slayings of the foes of Chechen President Ramzan Kadyrov. Estemirova was among many who accused Kadyrov of running an exceptionally brutal and murderous regime.

For hours, the blogosphere has been replete with reports on Estemirova's kidnapping and murder, so all we do here is attempt some context. Just three days ago, O&G used the occasion of the five-year anniversary of another Russian slaying -- that of American reporter Paul Klebnikov -- to note the multiple forces in Russia that conspire to keep killers safe from justice. President Dmitry Medvedev has ordered a priority investigation into Estemirova's killing, but until now the Kremlin has been among the forces protecting murderers. Simply put, no major slaying that I can think of has been solved in Russia since the Soviet breakup.

The highest-profile critic of Kadyrov to be murdered was reporter Anna Politkovskaya, who was slain in 2006. Here are a few victims of just the last year: Umar Israilov, a former Kadyrov bodyguard, was shot down in Vienna on January 13. Six days later, Stanley Markelov, a lawyer who represented the family of a woman murdered in Chechnya, was shot dead in Moscow. Two months later, Sulim Yamadayev, a former commander in Chechnya, was killed in Dubai. Yamadayev's brother, Ruslan, a political rival of Kadyrov's, had been shot dead in Moscow the previous September.

That's a good start for any genuine investigation.

Post-Mortem on Obama in Moscow: The Greater Attractions of a Harley

The Wall Street Journal's Jonathan Weisman today puts together the four major policy speeches that President Barack Obama has made abroad -- in Cairo to a Muslim audience; in Prague to Eastern Europeans; in Ghana to Africans; and now in Moscow to Russians. Weisman's takeaway is that Obama is combining "tough" and "love" overseas -- respect for other cultures with demand for concessions on big issues.

I myself noted that Obama didn't get much traction in Moscow. My former Washington Post colleague Masha Lipman regards it as an important speech, and speaks similarly to Weisman in terms of Obama's message in Moscow. "Obama was delicate and subtle, as well as firm and concrete," she wrote in the Post.



Lipman suggests that one reason the speech went under-appreciated in Russia is that it wasn't broadcast live. Russian commenters to her column helpfully provide a link to the translated Russian broadcast of the speech on state-owned Vesti-24. Here is the full broadcast for Russian-speaking readers.



Finally, Lucky Barker, a Lipman commenter with a wicked sense of humor, poses the possibility that Obama was simply upstaged. As it turns out, Prime Minister Vladimir Putin followed his breakfast with Obama that morning with a televised visit to a local biker's club.

The Murder of Paul Klebnikov, and a Tormented Juror

Ellen Barry of The New York Times weighs in today with an interesting five-year anniversary story on the assassination of Forbes correspondent Paul Klebnikov, the New York native who was shot in the back as he walked to the Metro across the street from his office. The angle is an interview with Alexei Rybin, a juror in the 2006 trial that acquitted three suspects. Rybin is tormented because he believes that guilty men went free.

The trial itself seemed destined not to produce an objectively reached verdict. In one passage, Barry describes jurors watching from a window "as a witness fled the courthouse pursued by five men in masks, then was tackled, handcuffed and put in the back of a van."

The piece describes the multiple forces that confound justice. Yes, Russia is still unaccustomed to the jury system, and politics infuses and interferes with jurisprudence. In addition, there is much speculation that the jury was tampered with -- for instance, neighbors of the jurors whispered in their ears that the men were innocent, and they apparently listened.

With President Barack Obama in Moscow last week, the Russians agreed to a joint investigation with U.S. detectives in the case. Yet, a little over a week earlier, Petros Garibyan, the highly skilled investigator of the murders of both Klebnikov and journalist Anna Politkovskaya, wrote a letter telling Klebnikov's lawyers that their probe was over. At the New Yorker, Keith Gessen writes about the problems with both the Klebnikov and Politkovskaya trials.

As we've discussed here previously, as well as in Putin's Labyrinth, Prime Minister Vladimir Putin has at minimum enabled the system of unpunished murder, and President Dmitry Medvedev isn't willing to challenge him on it.

Obama in Moscow: A Cool Reception, and a Dose of Putin

President Barack Obama employed his signature moves -- the candid town hall address; the glamorous wife and daughters -- and to be sure Russian President Dmitry Medvedev seemed to lap it up. But in the end Russia is not Cairo, nor Berlin. This is not 1994, when then-President Bill Clinton led some Moscow women to swoon. In place of the intrigued, still-fascinated eyes of the 1990s, Obama was met largely with disinterest from the Russian public, and the wagging finger of Prime Minister Vladimir Putin in private. In short, he fell flat.

That's a dose of reality. In the best of times, on most topics, the best that can be expected in a U.S.-Russia relationship is probably respectful disagreement.

“We don’t really understand why Obama is such a star,” 25-year-old Kirill Zagorodnov, a student at Moscow's New Economic School, told Clifford Levy and Ellen Barry of The New York Times. “It’s a question of trust, how he behaves, how he positions himself, that typical charisma, which in Russia is often parodied. Russians really are not accustomed to it. It is like he is trying to manipulate the public.”

Stefan Wagstyl of the Financial Times heard the same story from the students he collared after Obama's speech at the school yesterday. But Nikolai Petrov of Moscow's Carnegie Center also cautioned Wagstyl not to go too far with his analysis: "These students are not typical. They are mostly mathematics specialists," Petrov said.

While this slap of reality was telling, probably the most important meeting of Obama's Moscow trip was his two-hour breakfast with Putin. By Wagstyl's description, it appears that Putin put on one of his bravura performances. Putin has been wowing Westerners for years with his three-hour, no-notes discourses on Russian affairs at the annual Valdai Discussion Club. Now Obama got a taste of Putin's presence of mind.

Obama's takeaway? Putin is "tough, smart, shrewd, very unsentimental, very pragmatic." And also in charge.

U.S.-Russia Summit: Warmer Temperatures in Moscow

The chief takeaway of the U.S.-Russia summit is that it's been all upside, and no downside, for the leaders of both countries: Russian President Dmitry Medvedev got to tally up respect points from hanging out and negotiating nuclear arms reductions with President Barack Obama; and Prime Minister Vladimir Putin got to stare fiercely at the American president (video). From Obama's side, he got to take down the temperature with Moscow, Washington's loudest European critic.

Yet nothing that happened in Moscow shifts the shape of world events as they were when Obama arrived there. For instance, the two sides could do nothing to change the direction of events just south of Russia, in Iran.

The State Department has denied that Vice President Joe Biden has given Israel the go-ahead to fly over Iraq and attack Iran. That's not what Biden meant when he said in an interview Sunday that the U.S. won't stand in Israel's way were it to attack Iran, the State Department asserts. In the closing weeks of his presidency, George W. Bush refused to grant such permission. An Iranian official replies that Tehran will mount a "real and decisive" response to any such attack.

This could be mere brinksmanship. Israel itself is pushing the U.S. to put together a fresh set of "crippling sanctions," according to Michael Crowley at The Plank.

Ria Misra at Inside Politics suggests that an ideological split that's just become public in the religious center of Qom "may be the critical leverage that finally forces not only the overturning of the [June 12 presidential] election results, but maybe of the ayatollah as well." She is talking about a critical statement issued Sunday by a reformist clerical group called the Association of Scholars and Researchers of Qom Seminary. Kathy Kattenburg at The Moderate Voice is also impressed with the development.

This could be another bout of getting carried away, as pundits and the media did leading up to the Iranian election. In fact, as Najmeh Bozorgmehr reports in the Financial Times, the most powerful clerical group in Qom, the Society of Scholars of Qom Seminary, issued a simultaneous statement congratulating Iranian President Mahmoud Ahmadinejad on his official re-election.

Meanwhile, opposition leader Mir Hosein Mousavi's outspoken appearance yesterday in public -- the first time he has been publicly cited in three weeks -- is bound to stir up more turbulence. That will offer up a chance for Obama and Medvedev to exercise their new-found camaraderie.

Obama, Medvedev and Obduracy in Moscow

Look for presidents Barack Obama and Dmitry Medvedev to emerge from their long hours of summitry this week massaging each other's shoulders, and riffing on their personal chemistry. While expressing the usual caveats, Prime Minister Vladimir Putin will probably do the same. They will carefully avoid the soul-gazing verbage of George W. Bush, but the meaning will be similar.

That diplomatic lubrication won't make either side yield on the respective postures that mainly irritate the other side: Despite the knowledge that a U.S. missile defense system planned for Poland and the Czech Republic doesn't work, Obama isn't going to outright renounce its deployment, not without a fairly serious tradeoff from Moscow (and it's hard to imagine what that would be); and Medvedev won't relinquish Russia's insistence on a continued sphere of influence that includes the Caucasus, Central Asia and Ukraine, even if Obama outright cedes the right of Georgia and Ukraine to join NATO, which one can't picture him doing.

Certainly Obama isn't going to drive a wedge between Medvedev and Putin, nor drive the prime minister from influence, as seems to be the push in Washington. Obama should get accustomed to the apparent fact that Medvedev and Putin simply see eye to eye -- perhaps by necessity -- on most subjects.

Perhaps this is as it should be. My Business Week colleague Jason Bush and I write in this week's magazine on the business agenda for the summit. But in traditional Washington-Moscow relations, progress is made on the edges of obduracy. And in fact neither side wants much from the other. Washington would like more Russian cooperation on its initiatives; Moscow would like more respect.

On Obama's Plate in Moscow: Iran and Breakfast With Putin

The philosophical underpinning of President Obama's arms-control agenda in Russia next week is that -- by allowing Moscow to preen on-stage, reviving its former role as a superpower state, ostensibly regulating peace in the world -- Russia will be more amenable to persuasion on other topics.

But does this reasoning hold? Will Moscow see things Washington's way on the Caspian, on Georgia, and on the balance of petro-power in Europe?

More important at the moment, could Moscow decouple from Iran, with which it has maintained an alliance of poking-fingers-in-the-U.S.-chest? Now that the chances for a game-changing U.S. opening with Iran have been all-but eliminated by the after-election crackdown in Tehran, is there anything to be done before Israel, for instance, decides it can no longer wait for Iran to become a nuclear state?

I've surveyed some old Russia and foreign policy hands from the George W. Bush and Clinton administrations, and the answer comes back that, at least on Iran, Moscow either can't or won't be able to help restrain Tehran. As for petro-power and the Caspian -- Moscow is capitalizing on the global financial crisis to re-assert power in its struggling neighborhood, and will push back on any attempt to deny it regional domination.

Steve Sestanovich, ambassador-at-large for the former Soviet Union under President Clinton and now a senior fellow at the Council on Foreign Relations, told me that Moscow is already effectively cooperating with U.S. aims on Iran -- while it committed to finishing Iran's Bushehr nuclear reactor and providing S-300 missiles, Moscow for years has failed to deliver either. "Their policy is to avoid annoying anybody too much," Sestanovich says. "The middle ground allows them to make a lot of money. And they hold in reserve a role as a possible diplomatic mediator if the U.S. or Iran indicate they are reconsidering their position."

Georgetown Professor Angela Stent, a former State Department and National Intelligence Council expert on the region, just got off the plane from Moscow yesterday. She says that Russian officials and experts have a mixed view of Iran -- the latter say that Russia can live with a nuclear Iran, just as it lives with a nuclear Pakistan and India; and the former say they don't believe that Tehran is anywhere near obtaining nuclear capability.

Whatever the case, seeking Russian help on Iran is misguided, Stent suggests. "Russia doesn't have the power to deliver Iran," she says.

A former Bush administration official who preferred to speak not for attribution said that any stiffer sanctions -- even if the Europeans and Russia were to agree -- "would not work quickly enough." "They are on the threshold" of nuclear capability, this official said, and this again raises the possibility of an attack by Israel on Iran.

Interestingly, Obama administration officials still talk of the possibility of negotiations with Iran. That seems to ignore political reality both in Iran -- Sestanovich notes that Iranian officials themselves seem publicly at least not to welcome further talks -- and the U.S., where Obama could face a buzz-saw of criticism should he be seen as equivocating after the bloody aftermath to the June 12th Iranian presidential election.

Obama will spend some 10 hours with President Dmitry Medvedev while in Moscow. But on Tuesday, Obama is also going to have a private breakfast for an hour or an hour-and-a-half with Russian Prime Minister Vladimir Putin.

Obama told The Associated Press that Putin "has one foot in the old ways," while Medvedev understands "that the old Cold War approaches to U.S.-Russian relations are outdated." This is a nice public relations setup, but not likely to result in any progress -- Medvedev has done nothing so far to indicate any separation from Putin on foreign policy, and there's no reason I can think of to believe that he will.

The former Bush administration official asserted that Obama shouldn't dignify Putin's behind-the-curtain grip on power by spending time with him; technically speaking, only Medvedev is on the same protocol level, this thinking goes. For that reason, this former official told me, Bush didn't meet with Putin once he was no longer president and began serving as prime minister. That's technically correct but disingenuous. In fact, just prior to Putin's stepping down, Bush violated his own rule precluding meetings with other heads of state unless there was a concrete deliverable to be achieved: Bush did so by flying out to Putin's vacation home at Sochi, hence delivering much prestige to the Russian leader but nothing for the U.S.

Stent says rightly that it's not realistic to ignore Putin. "To move the agenda forward, you have to meet with both of them," she told me. "It wouldn't make sense not to meet with Putin."

Indeed, rolling back a few years earlier, when Bush's father went to Moscow as U.S. president, he met with both Soviet leader Mikhail Gorbachev and his antagonist-for-Soviet-power, Boris Yeltsin, who was then the mere president of the component state of Russia.

Putin is not ignorable, any more than Russia, as usual, keeps itself in the diplomatic game by its willingness to play the outsider.

Putin, Sakhalin, and The Lion's Purr

A narrative familiar to all oilmen with long exposure to Russia is under way: With cash reserves running down and insufficient economic relief in sight, Prime Minister Vladimir Putin, his growl turned into a purr, is welcoming back Western oil companies to work Russia's natural gas fields.

So how should Shell and Total -- both of them the recipients of Putin's renewed niceness -- respond? Are Putin's past revocations of deals, expulsions from fields at knock-down rates, and ho-hum attitude toward shakedowns reason not to do business with him now that Russia is trouble?

Specifically, Shell is being offered an unspecified role in the highly complex, offshore Sakhalin 3 and Sakhalin 4 natural gas projects (BP walked away from the latter last month after drilling dry holes). Total signed a smallish, $900 million deal to work with Russia's independent Novatek on the Termokarstovoye natural gas field, and Putin says it's "entirely possible" that the French company will be permitted to work on future stages of the supergiant Shtokman natural gas field.

The subtext is a World Bank projection last week that Russia's economy won't recover to pre-crisis growth until at least 2012; and an International Energy Agency forecast this week that any global oil supply shortage -- and thus a possible return to $100-plus-a-barrel prices -- isn't likely before 2013.

The necessity for the involvement of foreigners who still have access to credit -- such as Big Oil -- seems plain: Shtokman's developers said in December that the global credit crisis may delay field development.

In other words, for Russia there's little noticeable light at the end of the tunnel. And Moscow needs to be sure that Gazprom can remain the country's most powerful economic driver.

More subtext: O&G readers recall that in 2006, Russia unleashed environmental regulators onto Shell in order to persuade it to relinquish its majority stake in Sakhalin-2 to Gazprom for what many analysts at the time regarded as a comparative firesale price of $7.6 billion. The same year, Total had a similar experience when Rosneft canceled a $3 billion partnership in the Vankor oilfield. Exxon Mobil has been forced to sell the natural gas from its Sakhalin I project at cut-rate prices within Russia rather than as it had planned in higher-paying China, as Paul Ausick reports at 24/7 Wall Street. And then there's long-suffering BP, which, in a series of fresh indignities this year while the Kremlin has stood by, has been powerless as its Russian partners in TNK-BP have steadily swallowed control of the oil-rich venture.

David Lee Smith at Motley Fool suggests that Shell's apparent agreement to let bygones be bygones and embrace the extended hand is "goofy." But Tim Newman, a Briton who lives on Sakhalin and blogs at White Sun of the Desert, writes that Shell will be wise to demand international bank guarantees in exchange for fresh investment. Short of that, Newman says, expect "another round of blubbering and hurt feelings in five years time." Over at TPRR, Tim Pendry argues that the totality of events reflects Russia's "complex gamble on events."

Pendry and Newman are both right. While seeking foreign investment at home, and failing to arrest serious depletion of its domestic fields, Gazprom still hasn't abandoned its geopolitically driven global dealmaking. In addition to continuing to promise to build new multi-billion-dollar gas pipelines into Europe, it signed a deal with Nigeria last week promising $2.5 billion in exploration investment there.

Meanwhile, another natural gas row is on the near horizon between Russia and Ukraine. Ukraine has a $4.2 billion bill coming due to Gazprom on July 7th, and lacks the money to pay. As Carl Mortished at The Times of London reports, the European Union is attempting to get some emergency money for the Ukrainians from the International Monetary Fund or the European Bank for Reconstruction and Development. The good news is that the latest dust-up is not occurring in the dead of winter.



Whether or not another jump in the deep end is wise, in the end Russia is a prime example of Big Oil's history of returning for more to the scene of its greatest debacles. The reason is the usual one: These behemoths need to book fresh reserves, and they are hard to come by.

In Total's case, for instance, the French company capitalized on an alliance not only with Gazprom, which owns 19% of Novatek, its local partner, but with oil-trading king Gennady Timchenko, a favored old KGB friend of Putin's, who owns 18% of the company.

In perhaps a touch of irony, Total CEO Christophe de Margerie said after the signing, "I don't think it's difficult to work in Russia. One only needs to learn to work efficiently with Gazprom, Novatek and Rosneft."

Dueling Scenarios on the Gazprom State

Choose your scenario: Portraits in The Wall Street Journal and The New York Times today provide starkly different measures of Russia's energy might.

The Journal’s Guy Chazan chronicles a fresh set of agreements that, if carried out, will double the size of Gazprom’s proposed South Stream natural gas pipeline. The pact was co-signed by Paolo Scaroni, CEO of Italy’s ENI, a frequent partner of Gazprom’s whose company will help build the line. Standing with Prime Minister Vladimir Putin, Scaroni succinctly described the reason for South Stream: "Most of this gas will substitute gas currently crossing Ukraine, and some new gas."

In other words, South Stream is meant to extract Ukraine from Europe’s natural gas equation. Fair enough – from Russia’s point of view, that's perhaps the only way to end once and for all its annual tugs-of-war with Ukraine over natural gas payments and the resulting gas cutoffs to Europe.

Raising the financing actually to build South Stream is another matter. Yet, despite the plunge in global energy prices and the financial crisis, Russia’s aims seem the same: To reinforce the weight -- its energy heft -- behind its restored global voice.

In the Times, however, Andrew Kramer delivers a page-one, above-the-fold story with basically the opposite message: The Kremlin’s efforts to use Gazprom to “restore Russian influence in the world are now backfiring, slashing both its profits and its influence.” The culprit is the price plummet.

Kramer backs up his lead with detail on the losses being absorbed by Gazprom on its long-term natural gas supply deal with Turkmenistan. Gazprom is paying the Central Asian nation $340 per 1,000 cubic meters for gas that the Russian giant sells on to Europe for $280, or a $60 loss on each 1,000 cubic meters. This has helped to crater Gazprom profits, Kramer writes: The company’s 2008 profits were $30.8 billion on revenues of $160.5 billion, according to annual results released this month. This year, Troika Dialog, a Moscow investment bank, has estimated that Gazprom’s profits will drop to $16.7 billion on revenues of $104 billion.

There is a bit of confusing data -- Kramer says the price received by Turkmenistan is based on a six-month delay; in other words, Turkmenistan is being paid today according to world prices last year (I’ve actually heard that the delay is eight months, but the principle remains the same). If that’s the case, the loss would work its way through the system soon enough: Turkmenistan would eventually start receiving payment based on the dirt-cheap, current price of natural gas.

Whatever the case, another section of the story is key. Kramer suggests that Gazprom has lost ground politically, noting that last week, the European Union signed another agreement vowing to build Nabucco, a rival natural gas pipeline to South Stream. Azerbaijan, Georgia, Egypt and Turkey were present for the accord.

The piece, however, does not note who wasn’t there to sign: Kazakhstan, Turkmenistan and Uzbekistan, the key natural gas suppliers. Nor does it note that there is every chance that Azerbaijan will sell much of its natural gas to Russia, which continues to offer to buy all of Azerbaijan’s supply. (Neither does it mention the South Stream signature agreement.)

For now at least, it seems to me that the Chazan scenario is more credible: Gazprom has its problems: It is failing to invest in arresting the depletion of its Russian fields. All the while, natural gas demand is plummeting.

Yet it’s early to suggest that Russian influence in its backyard or Europe has declined with it.

The Balance of Power in the Former Soviet Union

Moscow's envoy to NATO has signaled that Russia is ready to resume the thaw in relations triggered last month in the G20 meeting in London between presidents Barack Obama and Dmitry Medvedev. Russia had been miffed by NATO exercises going on in Georgia, and canceled a planned meeting with NATO this month. But now Dmitry Rogozin, Russia's envoy to NATO, says, "We will go ahead with restoring relations." Russian Foreign Minister Sergei Lavrov said much the same when he met with Obama and Secretary of State Hillary Clinton in Washington last week.

Yet Rogozin and Lavrov can behave statesmanlike because in a big way recent events have gone Russia's way.

NATO proceeded with the exercises despite Russia's objections, thus ostensibly demonstrating that no country will determine who can join the military alliance, and where it will act. But look under the hood. One of the nations missing from the games is Kazakhstan -- President Nursultan Nazarbayev declined to send troops to the month-long games. Why did this deft balancer of great powers go along with Russia's wishes on NATO? Perhaps he would have declined even if there had been no Russia-Georgia war last summer, when Russian troops overran large parts of Georgia in anger over Tbilisi's violence in South Ossetia (or perhaps Kazakhstan simply didn't want to go, as the country itself explained.). Yet, Russia's former colonies are behaving with more circumspection than, say, a year ago, and one suspects that the August war is much responsible for that.

A super-smart former senior U.S. diplomat to the former Soviet Union told me yesterday over coffee that the U.S. has not yet lost its influence in the Caucasus and Central Asia; the August events, he said, were "a shot over the bow." But an actual "diplomatic disaster," he said, would come only if Russia actually overran all of Georgia, and seized control of the Baku-Ceyhan pipeline, along with some of the financial benefits accruing to such a move. In this former envoy's view, possession of the "economic rent" would be "qualitatively different" from the current state of affairs, because it would amount to effective Russian reconquest of the Caucasus and Central Asian states.

Possession of the economic benefits -- meaning the pipeline transportation tariffs -- would be different. But I don't see Russia making such a move, one reason being that it doesn't have to: Actual occupation of Georgia isn't necessary; rather, with the August war, Russia signaled that it is prepared to go to any lengths -- in this case military -- to enforce its will. The outcome has been one 'Stan after another falling into line.

Kazakhstan's non-participation in the NATO exercises is just one sign of that. In another, just two days ago, the European Union signed an agreement that Dan Bilefsky of the NYT describes as intended to speed up the Nabucco natural gas pipeline, the western-backed effort to reduce Russia's energy influence in Europe; Kazakhstan, Turkmenistan and Uzbekistan -- the current biggest sources of natural gas for the line -- declined to sign. Diplomats told Bilefsky that the three countries did so "because of pressure from Russia." Moreover, after meeting with Medvedev, Azerbaijan President Ilham Aliyev suggested that he will sell his country's natural gas to Russia, at the same time that Europe and Washington have all-but begged him to commit his gas to Nabucco. There has been a mood shift recently in the U.S. on whether Nabucco is singularly important; yet it's one thing determining that in the West, and quite another doing so in Moscow.

Meanwhile, on the military front, there is the U.S. ejection from its military base in Kyrgyzstan in favor of Russia.

Current and former U.S. officials with whom I've spoken in the last week or two hew to the belief that the August events were strategically meaningless to the U.S. That is, that the U.S. retains roughly the same influence across the Caucasus and Central Asia as it did prior to the war.

The truth is that U.S. energy policy in the region is a shambles. A U.S.-Iran rapprochment could change that (there is a genuine chance, for starters, that Mahmoud Ahmadinejad will lose the presidential election next month. His three major rivals, while perhaps not differing substantively from Ahmadinejad, are distinctive from him in tone and approach. Talks with the U.S. could be much smoother.).

The State Department has a super-skilled diplomat on Eurasian energy in the form of Dick Morningstar. At the National Security Council, my former Stanford colleague Mike McFaul is clear-eyed on Russia; and, with the Obama administration fixated on alternative energy and climate change to the exclusion of any expertise in oil and natural gas, NSC Adviser Jim Jones is seeking a much-needed senior director for global energy, I'm told.

Washington has no equivalent in this sphere to the roles played in South Asia by Richard Holbrooke and in the Middle East by George Mitchell. Perhaps the combination of talent in State and on the NSC will be sufficient to handle the complex brief straddling the lines of Russia, the 'Stans, Iran, nuclear proliferation and energy.

Labyrinth Out in Paperback

The updated version of Putin's Labyrinth is out today. It brings events in Russia up to date, including the collapse of the economic miracle with the plunge in oil prices and the global financial crisis, and the January natural gas stand-off with Ukraine. This version is also indexed. Your comments are welcomed.

Medvedev's Signal: Don't Kill Novaya Gazeta Reporters

Dmitry Medvedev has noted in the past that Russians tend to look for signals from their leaders. But, since the Russian president doesn't come from the siloviki -- he is a former law professor, not a retired KGB or military officer -- nor from politics, he is not as noted as his predecessors for skillfully communicating through gesture.

So what was today all about? Why did Medvedev give Novaya Gazeta editor Dmitry Muratov bragging rights for publishing his first Russian newspaper interview (English version)?

My own thinking is that Medvedev is right -- to some degree, ruling in Russia is about signals, often informing a power group or an individual to watch its or his step. And one signal that's been clear over the last several years is that certain murders can take place with impunity -- killers somehow have correctly understood that they will not be held to account.

Novaya Gazeta, long the fiercest critic of Vladimir Putin's rule, wears its bloody past on its sleeve. To this day, the home page of its English-language web site is a full-page tribute to its fallen. They include Igor Domnikov, killed in 2000, Yuri Shchekochikhin, who died in 2003 from a mysterious illness, and, most dramatically, Anna Politkovskaya, slain in 2006.

There had been something of an interregnum since the November 2006 nuclear poisoning murder of Alexander Litvinenko. But in January, that apparent intermission ended. Human rights lawyer Stanislaw Markelov was shot in the back of the head by a killer on a crowded Moscow street in daylight, along with Anastasia Baburova, a Novaya Gazeta reporter who tried to intervene. Being abroad still doesn't make one safe. Last month, Chechen Sulim Yamadayev was shot dead in Dubai.

Medvedev is saying that he's a break from the past -- at a minimum, he doesn't support the targeting of Muratov's reporters. Indeed, this was Medvedev's second such signal -- he met with Muratov in January to mourn the Markelov-Baburina murders.

It's unclear that Russia's killers will honor the signal, nor whether Medvedev is yet a leader whose signals are generally respected. After all, the system of unpunished murder has seemed larger than even ultra-powerful Putin, who publicly mourned the death of Forbes editor Paul Klebnikov, whose murder nonetheless was never solved.

Yet, the gesture was clear.

The Oil and Glory Interview: Mikhail Gorbachev

Mikhail Gorbachev is on one of his regular swings through the West. I caught up with him in Washington, where he appeared at the Reconciliation Forum, a conference sponsored by the Americas Business Council.

This time, the trip coincides with the 20th anniversary of the first vivid signs of the coming Soviet collapse, culminating in the November 1989 fall of the Berlin Wall. Given the state of global finance, triggered by the U.S. banking crisis, Gorbachev is doing not a little bit of gloating.

Speaking before an audience today in Washington, Gorbachev called Georgian President Mikheil Saakashvili "a puppet of the United States." I asked him whether he regarded the financial crisis as a comeuppance for the U.S. He said yes, and later offered up that the worsening war in Afghanistan, too, is just desserts for Washington.

Here is the story in Business Week. Here is the transcript of the interview.

The Other Khodorkovsky Case

Much attention is focused on the latest news of dethroned Russian oligarch Mikhail Khodorkovsky, the imprisoned former CEO of Yukos Oil who is undergoing a new trial in Moscow at the moment. But a second drama is also going on in the six-year-long Khodorkovsky saga -- a $33.4 billion legal battle against Russia being staged by Yukos' divested owners.

In 2003, Russian commandos stormed Khodorkovsky's private jet after he launched a political challenge to then-President Vladimir Putin. He was sentenced to eight years in prison for fraud and tax evasion, and the Kremlin -- backed by western investment banks -- sold off highly profitable Yukos in apparently fixed auctions, mostly to the Russian oil company Rosneft. Also imprisoned was Platon Lebedev, chairman of Bank Menatep, Khodorkovsky's holding company.

Last week, Tim Osborne, a London lawyer who is representing GML, as Bank Menatep is now called, passed through Washington in what has become a routine in the shareholder effort to gather political support for their case in the U.S. and Europe. Osborne visits the State and Energy departments, with congressmen, and has testified before Congress.

Despite Khodorkovsky's imprisonment, his public relations effort remains formidable.

In London, Canadian lawyer Robert Amsterdam is Khodorkovsky's main legal spokesman, writing a much-read blog, delivering speeches and generally talking up his client's cause. Khodorkovsky and Lebedev have another, official web site, too.

In Washington, Osborne is represented by the influential lobbying firm APCO, where he and I spoke. Osborne says that Khodorkovsky is no longer a shareholder of GML, and that the legal battle has no political motive. Yet official interest is almost entirely reliant on western sympathy for the jailed former oligarch. And, if Russia happens to decide that it wants to settle -- something that Osborne doesn't expect -- GML might "do a different deal if Lebedev and Khodorkovsky were part of the equation," he says. Meaning that Khodorkovsky is still woven into the company's fabric.

Despite the loss of the Yukos oilfields, GML retains some $3 billion in assets including real estate, alternative energy investments, cash and bonds, Osborne said. But the oilfields beckon.

The GML case is complicated. It's based on a reading of the Energy Charter Treaty, an obscure agreement meant, among other things, to facilitate the movement of oil and natural gas across multiple borders. It's been signed by 51 states, including Russia.

Osborne argues that, under the treaty, GML can sue in The Hague for compensation for expropriation. GML must persuade the Permanent Board of Arbitration that it has jurisdiction. If GML wins that round, the panel will begin hearing arguments on the merits of the case.

Russia is arguing that it isn't bound to the Energy Charter because the Duma didn't ratify it. Osborne contends that the signature alone obligates, but admits that the assertion "is not a slam dunk" -- in order to make it stand, he needs officials in Brussels, Paris, London, Berlin and Washington to maintain a solid front that the Energy Charter is valid.

"It's really about pressure," Osborne says, "to try to get this raised with the Russians as often as possible by as many people as possible."

New Washington Team and a Fresh Game in Russia, Iran and the Caspian

After much gnawing over the notion, the Bush administration decided last year to issue a White House invitation to Turkmenistan President Gurbanguly Berdymukhamedov. That was wise -- this trained dentist is one of a handful of indispensable players in Eurasian energy.

Alas, the invitation was also late -- geopolitical rival Vladimir Putin had marked up a several-year-long head start of mutual state visits between Moscow and Ashgabat. And it was clumsy: the Turkmen leader was asked to come after the November presidential election. In other words, after Bush was officially a lame duck.

Understandably, Berdymukhamedov declined.

Today, the Obama administration is trying to lower the temperature in U.S. relations with Russia, what it calls a "reset." In two weeks, President Obama will meet with President Medvedev in London. As part of the warming-up exercise, Secretary of State Hillary Clinton is cobbling together a basic agreement for the presidents' perusal on replacing the Strategic Arms Reduction Treaty, which expires in December.

At the same time, the administration is forming its foreign policy team for Eurasia, the former Soviet Union, and energy. Russia has largely regained the upper hand in Central Asia and the Caucasus, which Washington had treated as a region of U.S. strategic interest since it backed construction of the Baku-Ceyhan oil pipeline connecting the Caspian and Mediterranean seas in the 1990s. Washington called it the East-West Energy Corridor.

Will the Obama administration get its timing better in terms of inviting Berdymukhamedov to the White House? If so, he might become friendlier toward the parade of U.S. diplomats and oil company executives who call and email me and others regularly with tales of woe regarding their reception in Ashgabat.

Members of the new team include Mike McFaul, the long-time Russia hand who co-wrote a prescient analysis of the Russian economy in Foreign Affairs a year ago. McFaul is running the Russian and Eurasian Affairs desk at the National Security Council. Also at the NSC is Liz Sherwood-Randall, a key architect of the U.S. embrace of Uzbekistan dictator Islam Karimov in a stint at the Pentagon during the Clinton administration, who will watch the rest of the former Soviet Union. The talk is that NSC chief James Jones will also establish a new NSC slot for global oil, but I've heard the names of no firm candidates. At the State Department, the administration is losing Steven Mann, the ultra-experienced Coordinator for Eurasian Energy Diplomacy, who was offered various posts, but instead is leaving to go into the private sector. Stepping back into Eurasian energy is Dick Morningstar, who served as Caspian czar during the 1990s before leaving to teach law at Harvard and Stanford.

In addition, there's talk in Washington of deputizing Vice President Joe Biden as a direct, regular interlocutor with Putin, along the lines of the Al Gore-Viktor Chernomyrdin Commission of the 1990s, which scored numerous successes on political and commercial issues.

In terms of energy itself, the Obama administration has signaled a break with previous administrations by naming a team focused on climate change and alternative fuels. But, in the case of Eurasia, policy can't be one-size-fits-all. Fossil fuels are king there, and Putin has recently handily bested U.S. diplomacy in that sphere. The final act of his triumph was the five-day Russian-Georgian war last August, which revived Russia's premier great power status throughout the former Soviet Union.

Recently, the U.S. has struck back with an West-East corridor. Turning the trans-regional corridor into a two-way route, West-East is a railroad route to supply U.S. troops in Afghanistan with non-lethal commercial supplies -- food, toilet paper and the like. Want to sell something that the troops can use? This is the way to get it there.

The context is the apparent U.S. loss of the Manas Air Base in Kyrgyzstan, and the uncertainty of the overland supply route from Pakistan through the Khyber Pass.

After Russia helped to persuade the Kyrgyz to eject Manas, it told Washington that it was willing to pick up some of the slack. (One alternative overland route starts in the Baltics, runs through Russia, and on through Kazakhstan and Uzbekistan to Afghanistan; traffic on this route could be expanded, Russia points out).

But the last 16 years in the region have been all about the uncanny power of alternative routes on geopolitics. So the U.S. appears to have politely declined and, in addition to the trans-Russia route, begun to run the West-East corridor through Georgia and Azerbaijan, across the Caspian to the Kazakhstan port of Aktau, then on to the Uzbekistan city of Termez and Afghanistan.

The ultimate game-changer in the region would be a U.S. diplomatic breakthrough with Iran. Clinton has tried to set the stage by inviting Iran to a March 31 conference in The Hague on Afghanistan to be attended by her and ministerial-level officials from some 75 countries.

As part of the attempted thaw with Moscow, Clinton is also trying to get Russia to help forge a breakthrough with Iran. There's talk of an Obama trip to Moscow in July.

Though Clinton is focused on other benefits to be gained by normalized relations with Iran -- mainly a better chance for Middle East peace -- such a change would also open up a new source of oil and natural gas. And that would change the geopolitics of Europe by diversifying its natural gas supply. That makes the Iran policy in part a new Russian policy.