E2636 CONGRESSIONAL RECORD — Extensions of Remarks December 19, 2007 well known in the U.S. and Europe for his RUSSIA’S NEW OLIGARCHY was the real owner of Russian telecommuni- leadership in helping Russia make the transi- FOR PUTIN AND FRIENDS, A GUSHER OF cations assets currently valued at on less tion to a market economy. QUESTIONABLE DEALS than $6 billion. Reiman has amassed this ex- (By Antlers Aslund) traordinary fortune as a state official, partly But the Yukos Company’s vast energy re- through beneficial privatizations, partly The news that Dmitry Medvedev, Vladimir sources and Mr. Khodorkovsky’s Western through privileged licenses issued to his Putin’s nominee to succeed him as president, leanings proved too much for Kremlin companies. A government with any stand- wants Putin to become prime minister of ards would fire such an official, but Putin operatives eager to assert state control over Russia next year opens one option for Putin suppressed this negative information within the energy sector and discipline Russian busi- to retain power after his term ends. Putin Russia and kept Reiman on, showing that he nessmen who supported opposition parties. has little choice but to stay in power as long accepts corruption. In what was widely reported by major news as he can. The Russian daily Kommersant published a A year ago, a famous Russian journalist publications at the time, Russian authorities long interview with Russian businessman asked me: Is it true that Putin has a net for- Oleg Shvartsman on the eve of the recent used arbitrary and possibly extralegal means tune of $35 to 40 billion?’’ (This journalist, of Duma elections. Sensationally, he described to dismantle Yukos and redistribute $100 bil- course, has long been excluded from Krem- how he raided private enterprises to the ben- lion of its assets to state companies overseen lin-controlled media.) efit of KGB officials described his activity as by the Kremlin. At the end of the day, Amer- This fall, the respected Polish magazine ‘‘velvet reprivatization.’’ Kremlin spokes- Wprost published its annual response to ican investors in Yukos lost somewhere be- men have denied the report. Forbes, its list of the richest people in East- tween $7 and $12 billion and Mr. Even more striking was an interview last ern Europe. Besides the well-known business Khodorkovsky, convicted on trumped up tax month with the Kremlin-connected Russian executives, there is Gennady Timchenko, a political observer Stanislav Belkovsky in charges, was condemned to a penal colony. little-known character with a purported for- the German daily Die Welt. Belkovsky, who Quite simply, U.S. and other would-be for- tune of $20 billion. A small oil trader who re- initiated the Kremlin attack on Yukos, sides in Geneva, Timchenko is from St. Pe- eign investors need to know whether the rule claimed that Putin controlled specific shares tersburg, where he belongs to the same luxu- of law will be upheld in Russia. And the Bush of three companies (Surgutneftegaz; rious dacha collective as Putin. Administration needs to be motivated to start Gazprom; and Gunvor. Timchenko’s com- asking the Kremlin some tough questions I first heard of Timchenko in February 2004. Ivan Rybkin, a Russian politician who pany) worth some $40 billion. Putin has not when it comes to protecting the interests of audaciously opposed Putin in the presi- commented on this allegation. U.S. investors. dential election that year, claimed that According to Transparency International, Russia is growing more corrupt even as most From a Russian perspective, instances like Putin was ‘‘one of Russia’s biggest oligarchs’’ and that he operated through other post-communist countries are control- the Yukos situation will create an uncertainty ling their corruption. The fundamental di- among potential investors, which could result three middlemen, including Timchenko. Rybkin charged that the Putin-Timchenko lemma for Russia, and Putin, is that a sys- in a substantial loss of investment and impede group was gobbling up the embattled oil tem so corrupt cannot be very stable. It’s Russia’s integration into the global economy. giant Yukos. He swiftly disappeared under less clear why President Bush does not call In a December 12, 2007, article in the mysterious circumstances and after he re- Putin out on this or even defend the inter- ests of U.S. citizens and corporations. Washington Post, Dr. Anders Aslund of the emerged, was forced to suspend his cam- Peterson Institute for International Economics paign. f writes that the Yukos incident, ‘‘unleashed a Indeed, the privately owned Yukos oil com- pany has been devoured by the state-domi- INTRODUCTION OF THE BEST BUD- great wave of renationalization in the post- nated Rosneft, whose chairman is Igor DIES EMPOWERMENT FOR PEO- communist world,’’ and that the men in the Sechin, Point’s closest adviser and collabo- PLE WITH INTELLECTUAL DIS- Kremlin are, ‘‘taking over one big, well-run pri- rator. The confiscation, which began in 2003, ABILITIES ACT OF 2007 vate company after another, turning them into was publicly justified with not-very-credible less efficient state-owned firms.’’ citations of tax violations. Rosneft’s gain was probably about $100 billion in Yukon as- HON. ROY BLUNT In support of his assertions, Dr. Aslund sets. U.S. investors in Yukos have lost at OF MISSOURI mentions Leonid Reiman, a former KGB offi- least $7 billion; some claim the figure is as IN THE HOUSE OF REPRESENTATIVES cial, who is now Russia’s Minister of Commu- much as $12 billion. In October, the House Wednesday, December 19, 2007 nications, while still controlling $8 billion in Financial Services Committee’s sub- personal telecommunications assets. committee on domestic and international Mr. BLUNT. Madam Speaker, I am pleased The United States and Russia signed a Bi- monetary policy held a hearing on this, at today to join my colleague from Maryland, the which I testified. lateral Investment Treaty (BIT) in 1992 but the House majority leader; to introduce the Best The Bush administration, however, has not Buddies Empowerment for People with Intel- treaty has not been ratified by Russia. Ratifi- protested this outrageous confiscation of pri- cation of the BIT would provide protection for vate American property. Then-Secretary of lectual Disabilities Act of 2007. As Mr. HOYER U.S. investors against the types of actions State Colin Powell expressed strong support will attest, this is not the first time we have taken by the Russian government in the for Putin in October 2004: ‘‘The Russian peo- come together in a meaningful way in this im- Yukos case. ple came out of the post-Soviet Union era in portant area—and we were both proud when a state of total chaos—a great deal of free- the Special Olympics Sport and Empowerment The failure of Russia to ratify the BIT, has dom, but it was freedom to steal from the Act of 2004 became law in the 108th Con- been a key weakness in the U.S.-Russia eco- state and President Putin took over and re- gress. nomic relationship. Compared to investors stored a sense of order in the country and It’s estimated that between 7 and 8 million from many other nations, U.S. investors are at moved in a democratic way.’’ Putin appre- Americans live with intellectual disabilities, im- a disadvantage. For example, 38 countries— ciated—and might have been encouraged pacting nearly 1 out of every 10 families. For including France, Germany, Ireland, Italy, by—these words. Two months later, Yukon’s these individuals, life is not always wel- Spain and the U.K.—have concluded bilateral main oil field was sold to Rosneft in an auc- tion that Putin’s economic adviser, Andrei coming—and very rarely is it easy. People investment treaties with Russia that have also lllarionov, called ‘‘the scam of the year’’ (for with intellectual disabilities are often excluded been ratified. The presence of these treaties which he was sacked). U.S. shareholders in from society—whether at school, in the work- allows Yukos shareholders from these coun- Yukos have come to realize that the United place or in their communities—simply because tries to sue the Russian government, but that States has no single valid agreement that of their differences. So I was glad to learn of option is not available to U.S. shareholders. safeguards their property rights; European a program called Best Buddies. This organiza- I want to again call on the Bush Administra- investors, though, can sue the Russian state under three treaties. tion. founded in 1989 by Anthony Kennedy tion to persuade Russia to ratify the BIT. By The Yukos confiscation has not cost Putin Shriver, helps integrate people with intellectual ratifying the BIT, President Putin would send a anything. In fact, he unleashed a great wave disabilities into mainstream society, end their strong message to U.S. investors that invest- of renationalization in the post-communist social isolation, and embark upon productive, ing in projects in Russia is safe, and that the world. His chums from St. Petersburg are fulfilling lives. The Best Buddies program Yukos situation is the exception, not the rule. taking over one big, well-run private com- works with volunteers to establish meaningful pany after another, turning them into less Madam Speaker, I recommend to my col- efficient state-owned firms. One of Putin’s friendships with their non-disabled peers in leagues Dr. Aslund’s article in the Washington close friends from the KGB, Leonid Reiman, order to help increase the self-esteem, con- Post of December 12, 2007, and I request that is his minister of communications. Last fidence, and abilities of people with and with- the article be printed in the CONGRESSIONAL year, an independent arbitration court in Zu- out intellectual disabilities.