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THE KREMLIN PLAYBOOK 2 the Enablers

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THE KREMLIN PLAYBOOK 2 the Enablers MARCH 2019 THE KREMLIN PLAYBOOK 2 The Enablers PROJECT DIRECTORS HEATHER A. CONLEY RUSLAN STEFANOV AUTHORS HEATHER A. CONLEY DONATIENNE RUY RUSLAN STEFANOV MARTIN VLADIMIROV A report of the CSIS Europe Program and the CSD Economics Program Lanham • Boulder • New York • London The Kremlin – II – Playbook 2: The Enablers About CSIS Established in Washington, D.C., over 50 years ago, the Center for Strategic and International Stu­ dies (CSIS) is a bipartisan, nonprofit policy research organization dedicated to providing strategic in­ sights and policy solutions to help decisionmakers chart a course toward a better world. In late 2015, Thomas J. Pritzker was named chairman of the CSIS Board of Trustees. Mr. Pritzker succee­ ded former U.S. senator Sam Nunn (D­GA), who chaired the CSIS Board of Trustees from 1999 to 2015. CSIS is led by John J. Hamre, who has served as president and chief executive officer since 2000. Founded in 1962 by David M. Abshire and Admiral Arleigh Burke, CSIS is one of the world’s preeminent international policy in stitutions focused on defense and security; regional study; and transnational challenges ranging from energy and trade to global development and economic integration. For eight consecutive years, CSIS has been named the world’s number one think tank for defense and national security by the University of Pennsylvania’s “Go To Think Tank Index.” The Center’s over 220 full­time staff and large network of affiliated schol ars conduct research and ana­ lysis and develop policy initiatives that look to the future and anticipate change. CSIS is regularly called upon by Congress, the executive branch, the media, and others to explain the day’s events and offer bi­ partisan recommendations to improve U.S. strategy. CSIS does not take specific policy positions; accordingly, all views expressed herein should be un­ derstood to be solely those of the author(s). About CSD Founded in late 1989, the Center for the Study of Democracy (CSD) is an interdisciplinary public policy institute dedicated to the values of democracy and market economy. CSD is a non­partisan, inde­ pendent organization fostering the reform process in Bulgaria through impact on policy and civil society. CSD objectives are: to provide an enhanced institutional and policy capacity for a successful European integration process, especially in the area of justice and home affairs; to promote institutional reform and the practical implementation of democratic values in legal and economic practice; to monitor public attitudes and serve as a watchdog of the institutional reform process. Born as a think­tank, the Center for the Study of Democracy has evolved into policy development through dialogue and partnership. Bringing cutting­edge solutions to transition problems is our way of keeping the middle ground Heather A. Conley, Donatienne Ruy, Ruslan Stefanov, Martin Vladimirov Stefanov, Ruslan Ruy, Donatienne A. Conley, Heather between academia and social practice. The CSD has pioneered in several areas traditionally per­ ceived as the inviolable public property, such as anti­corruption institutional reform, and national security. Our belief is that bringing a new culture of cooperation and trust in a milieu of inherited fragmentation and opacity is equally rewarding as the achievement of concrete social goals. © 2019 by the Center for Strategic and International Studies. All rights reserved. ISBN: 978­1­4422­8111­0 (pb); 978­1­4422­8112­7 (eBook) Center for Strategic & International Studies Rowman & Littlefield 1616 Rhode Island Avenue, NW 4501 Forbes Boulevard Washington, DC 2003 Lanham, MD 20706 202­887­0200 | www.csis.org 301­459­3366 | www.rowman.com – III – Acknowledgments This project has given us an appreciation for what a filmmaker must feel like after pro­ ducing an unexpected hit and has the audacity to contemplate producing a sequel. Will it be as popular and impactful as the first edition or will it fall flat? We never anticipated the suc­ cess of The Kremlin Playbook: Understanding Russian Influence in Central and Eastern Europe, released in 2016, and we certainly had not contemplated producing a second study. But after receiving a great deal of encouragement and positive transatlantic feedback, we embarked on this second ride. It now seems like the right decision and the right time—nearly three years after the publication of our first report—to cover another set of European countries and their interactions with Russian malign economic influence. This report covers a study period from 2005 to 2016, with 2017 data whenever available. Our methodology to calculate the Russian corporate footprint and gather FDI data follows the first report’s methodology.1 It takes a talented and dedicated crew to produce a sequel. The Kremlin Playbook 2 would not have been possible without the invaluable contributions of many collea­ gues and experts beyond the report’s authors. We would like to sincerely thank our country experts—Gustav Gressel for Austria, Ana Otilia Nutu for Romania, Vit Simral for the Czech Republic, Filippo Torricelli for Italy, and Ruurd Oosterwoud and Jon Roozen­ beek for the Netherlands—for their detailed country analyses that formed the core of our economic picture and provided important political and cultural context for each case study. We also benefitted enormously from many knowledgeable embassy officials from the case study countries as well as U.S. officials. We are grateful to CSD Chairman Ognian Shentov for his valuable feedback and strate­ gic advice. We thank Nikola Yankov, Dr. Kiril Kolev, Jan Ondrich, Chiara Castello, Mena del Prete, and Liudas Zdanavicius for their substantial comments and feedback on the report. The CSD Economic and Security Programs teams provided crucial additions to the study, and we are grateful to Dr. Alexander Stoyanov, Dr. Todor Galev, Dr. Rumena Filipova, Chris Rolland, and Mariyan Sabev for their expertise. We are grateful to the entire CSIS Europe Program team, particularly Matthew Melino and Holly Geffs, for their support and their hard work overseeing the program’s busy portfolio while we dedicated ourselves to The Enablers. Our fantastic CSIS interns—Annina Claesson and Cole Migas—worked tirelessly as did the terrific intern team at CSD: Tzvetan Moev, Alain Klein, Yanita Nedeva, and Aigerim Kaimano­ va. The CSIS iDeas Lab, particularly Lead Designer Caroline Amenabar, provided the creative talent to make this report visually appealing and to turn very complex concepts into clear graphics. Finally, we thank our former CSIS colleague, James Mina, who was one of the dri­ ving forces for the first Kremlin Playbook, for his advice and counsel on our second iteration. Now, let’s roll the tape. 1 Heather Conley et al., The Kremlin Playbook: Understanding Russian Influence in Central and Eastern Europe (Lanham: Rowman & Littlefield, 2016), XVII­XIX. The Kremlin – IV – Playbook 2: The Enablers Table of Contents 1 Executive Summary 9 Introduction 12 The Enabling Ecosystem 33 The Adaptation of Influence 39 Conclusions and Recommendations Appendix: Case Studies 48 Austria 57 Italy 69 Netherlands 81 Czech Republic 92 Montenegro 100 Romania 109 About the Authors Heather A. Conley, Donatienne Ruy, Ruslan Stefanov, Martin Vladimirov Stefanov, Ruslan Ruy, Donatienne A. Conley, Heather – 1 – Executive Summary In 2016, the major study The Kremlin Playbook: Understanding Russian Influence in Central and Eastern Europe concluded that the Kremlin has developed a pattern of malign economic influence in Europe through the cultivation of “an opaque network of patronage across the region that it uses to influence and direct decision­making.”1 This network of political and economic connections—an “unvirtuous” cycle of influence— thrives on corruption and the exploitation of governance gaps in key markets and insti­ tutions. Ultimately, the aim is to weaken and destroy democratic systems from within.2 Despite the varied nature of the countries presented in the first volume, the names of specific jurisdictions, companies, and members of Vladimir Putin’s inner circle kept appearing in nearly every network of influence. Was this a coincidence? Or could there be enabling forces that unwittingly or purposely amplify Russian malign economic influence? Exploring the answers to these questions formed the basis of our second re­ port, The Kremlin Playbook 2: The Enablers. There has been a visible political awakening to the national security threat posed by Russian malign economic influence since 2016. From the Countering America’s Ad­ versaries Through Sanctions Act of 2017 to strengthened anti­money laundering rules in the European Union, the transatlantic community has taken some steps to address this threat. But The Kremlin Playbook 2 demonstrates just how much work remains to be done. Western democracies must acknowledge their enablement of malign economic influence and uproot it from their financial systems. The Enabling Ecosystem Merriam­Webster defines an enabler as “[o]ne that enables another to achieve an end. Especially: one who enables another to persist in self­destructive behavior [. .] by providing excuses or by making it possible to avoid the consequences of such behavior.”3 Enablers of Russian malign influence allow the Kremlin to achieve its end and avoid some of the consequences of its behavior. By aiding and abetting Russia’s malign influence, enablers assist the Kremlin in self­destructive behavior that siphons funds 1 Heather Conley et al., The Kremlin Playbook: Understanding Russian Influence
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