-Caveat Lector- The 220-page Cox Report is now available online at http://policy.house.gov/russia/home.html RUSSIA'S ROAD TO CORRUPTION How the Clinton Administration Exported Government Instead of Free Enterprise and Failed the Russian People Members of the Speaker's Advisory Group on Russia United States House of Representatives 106th Congress Hon. Christopher Cox, Chairman Chairman, House Policy Committee Stefan Lemieszewski ======================================================= San Jose Mercury News September 24, 2000 Clinton-Gore team aided Russian economy's demise BY CHRISTOPHER COX Rep. Christopher Cox, R-Newport Beach, is the chairman of the Speaker's Advisory Group on Russia and chairman of the House Policy Committee. He wrote this article for Perspective. The collapse of the Soviet Union brought to an end one of the cruelest, most violent, least humane and most viciously ideological empires in the history of the world. The West's victory in the Cold War presented America with its greatest foreign-policy opportunity since the end of World War II: Just as America's defeated enemies, Nazi Germany and Imperial Japan, became free-enterprise democracies and close U.S. allies, so, too, might the new Russian federation. In the final days of the Soviet Union, Communist Party General Secretary Mikhail Gorbachev desperately sought billions of dollars in foreign loans, and many in the West endorsed a policy of providing enormous amounts of aid in an attempt to save the collapsing Soviet economy. But President Bush believed this would not work. ``A shortage of foreign capital is not what plunged your economy into crisis, nor can your economic ills be cured by an infusion of cash,'' he told the Moscow State Institute for International Relations in a speech July 31, 1991, five months before the Soviet Union ended. Bush's advice for Soviet state Instead, Bush stressed the importance of building free enterprise and deconstructing the Soviet state. This approach produced dramatic early success. Before 1993, Moscow worked harmoniously with Washington across virtually the entire spectrum of international issues -- including Operation Desert Storm, waged against the Soviet Union's client state Iraq, and arms control, culminating in a START 2 treaty that will slash U.S. and Russian nuclear arsenals by 66 percent. At the outset of the Clinton administration, building a relationship withthe United States was the highest priority for Russia. But the Clinton administration failed to capitalize on this opportunity. It used America's enormous influence not to build the fundamentals of free enterprise, but to strengthen the finances of the Russian government and transform state-owned monopolies into private monopolies. Billions of dollars in Western aid to Russia thus amounted to mere temporizing, and doomed the corrupt insider ``privatization'' schemes to failure. Worse, by using massive lending and aid to plug the gap in the Russian government's operating budget, the Clinton administration exposed these funds to theft and fraud, and destroyed incentives to reform. The loans also added to Russia's growing foreign debt, which continues to burden the central government's operating budget. In addition, the Clinton administration's unquestioning support for a small circle of Russian favorites, despite their corrupt conduct, damaged Russian perceptions of America. By ignoring and suppressing evidence of wrongdoingand failure by officials, including Victor Chernomyrdin and Anatoly Chubais, the Clinton administration contributed not only to the spread of corruption, but also to Russia's failure to overcome it. CIA officials say they provided Vice President Al Gore in 1995 with information about Chernomyrdin that was ``more detailed and conclusive than allegations of bribery and insider dealing that have been made in the Russian media and elsewhere.'' Yet when asked on ``Meet the Press'' as recently as July whether Chernomyrdin is corrupt, Gore replied: ``I have no idea.'' The Clinton administration also contributed to a climate in which organized crime has flourished by failing to focus its attention on replacing communism with the basic elements of free enterprise. The culmination of the Clinton administration's advice to Russia occurred in August 1998, when Russia's default on its debts and devaluation of the ruble led to the nation's economic collapse. The disaster was worse than America's Crash of 1929. The disaster that began Aug. 17, 1998, spread immediately throughout Russia. Millions of men and women who had deposited their money in Russian banks lost everything. In America's Crash of 1929, stock prices fell 17 percent by year's end; they weren't down 90 percent until four years into the Great Depression that followed the crash. By contrast, the Russian stock market lost 90 percent of its value in 1998 alone. Millions of senior citizens, whose meager pension income had been suspended for months, were cut off completely. When the dust finally settled in March 1999, the ruble -- and with it, every Russian's life savings -- had lost 75 percent of its value. Many Russians, not surprisingly, blamed the United States for intentionally leading Russia down the path of ruin. The heavy-handed and wrong-headed involvement of the Clinton administration in Russian economic policy made America an obvious focus of citizen anger. Since the beginning of the Clinton administration, U.S. officials had urged a steady diet of borrowing to mask the Russian economy's fundamental weaknesses, deepening the eventual collapse. The failure of the Clinton administration's economic strategy for Russia has had profound implications for Russia's policy on proliferation of weapons and technology, and therefore for U.S. national security. The need for hard currency provided an incentive for Russia to sell sensitive weapons and technology as quickly as possible to any nation or groups that would buy them. Consensus on foreign policy Russian policy soon evolved into a rationalization of these arms sales. Under the rubric of ``strengthening multipolarity,'' the purpose of the new Russian consensus on foreign policy and national security is to check the power of the United States. This consensus helps allay any concerns that Russian officials, scientists and businesses might have about transferring weapons or military technology to such countries as Iran, Iraq, North Korea, Libya and the People's Republic of China. Eight years ago, when President Clinton took office, the stated objective of the Russian government was a formal alliance with the United States. Russia pursued a strongly pro-American foreign policy, and the United States enjoyed unprecedented affection and admiration among ordinary Russians. According to identical U.S. State Department polls, 70 percent of Russians held a favorable view of the United States at the beginning of the Clinton administration. This year, only 37 percent held this view. After eight years of mismanagement by the Clinton administration -- and despite a U.S. taxpayer commitment of $20 billion -- the U.S.-Russian relationship is in tatters. In place of the promising future foreseen in 1993, Russia's policy toward America is characterized by growing hostility and divergent perceptions of international realities and intentions. Because of Russia's current and future importance, the consequences of this failure are difficult to overstate: They almost certainly exceed the consequences of the American defeat in Vietnam and the fall of the pro-American government in Iran. The task ahead for Russia this year is essentially the same as it was in 1992. Because so little progress has been made toward building free enterprise, that work must now begin in earnest. But whereas conditions in Russia in 1992 were eminently hospitable to such an undertaking, the ensuing years of policy failure have squandered that advantage, and now the necessary work will be much more difficult. America and Russia have lost a decade. The growing estrangement of Russia from the United States, the hostility to American interests reflected in Russia's foreign policy, and the telltale signs of authoritarianism in the post-Yeltsin era provide ample evidence that Russia faces a more formidable task because U.S. foreign policy was weak, and did not lead. But it is not too late for the United States to stop impeding and start assisting the transition from communism to free markets, from authoritarianism to democracy, and from disorder to order. It simply requires that we begin anew -- but this time, with a clear purpose. ================================================================= Kadosh, Kadosh, Kadosh, YHVH, TZEVAOT FROM THE DESK OF: <[EMAIL PROTECTED]> *Mike Spitzer* <[EMAIL PROTECTED]> ~~~~~~~~ <[EMAIL PROTECTED]> The Best Way To Destroy Enemies Is To Change Them To Friends Shalom, A Salaam Aleikum, and to all, A Good Day. ================================================================= <A HREF="http://www.ctrl.org/">www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance—not soap-boxing—please! These are sordid matters and 'conspiracy theory'—with its many half-truths, mis- directions and outright frauds—is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. 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