Un­plug Putin’s P.R. ma­chine

The Washington Post Sunday - - SUNDAY OPINION - BY DAVID J. KRAMER

Even be­fore Rus­sian Pres­i­dent Vladimir Putin de­ployed forces to Syria, U.S. mil­i­tary of­fi­cials de­scribed his regime as an “ex­is­ten­tial threat” in light of his in­va­sion of Ukraine. Putin, who over­sees one of the most cor­rupt, klep­to­cratic regimes in the world, has been driv­ing the in­ter­na­tional agenda of late — from Ukraine to Syria — while Western lead­ers, in­clud­ing Pres­i­dent Obama, have been re­ac­tive and de­fen­sive. Wouldn’t it be nice to go on the of­fen­sive, in a non­mil­i­tary way, to knock Putin on his heels, while also shut­ting down his odi­ous pro­pa­ganda ma­chine? Here’s how it can be done:

Freeze the as­sets of Putin’s state-funded RT cable net­work, not be­cause of the odi­ous things it spews but in com­pli­ance with two court rul­ings against the Rus­sian gov­ern­ment in­volv­ing the multi­bil­lion-dol­lar Yukos oil com­pany. Those rul­ings were is­sued last year by the Per­ma­nent Court of Ar­bi­tra­tion in The Hague and the Euro­pean Court of Hu­man Rights (ECHR) af­ter they de­ter­mined that the Rus­sian gov­ern­ment owed a com­bined $52 bil­lion in dam­ages to share­hold­ers of the since-dis­solved Yukos.

Ac­cord­ing to the courts, the Rus­sian gov­ern­ment in­flicted un­due harm on those share­hold­ers through puni­tive tax claims and as­set seizures in the af­ter­math of the 2003 ar­rest of Yukos founder Mikhail Khodor­kovsky, pre­vi­ously Rus­sia’s rich­est man. Yukos’s as­sets were dis­trib­uted to front com­pa­nies and later ac­quired by Ros­neft, which be­came the largest oil com­pany in Rus­sia, and other sta­te­owned and regime-friendly en­ti­ties such as Gazprom. This wiped out the hold­ings of Yukos’s share­hold­ers, and they sued.

Af­ter years of de­lib­er­a­tions and hear­ings, those share­hold­ers pre­vailed in both The Hague and the ECHR. For the case to have been brought be­fore The Hague, both par­ties — share­hold­ers and the Rus­sian gov­ern­ment — had to con­sent to ar­bi­tra­tion and agree to abide by the court’s rul­ing. Moscow even nom­i­nated one of the three judges who heard the case; all three judges ruled against Rus­sia. More­over, un­der the New York Con­ven­tion, to which Rus­sia is a sig­na­tory, share­hold­ers can ask other gov­ern­ments to en­force the court’s rul­ings by seiz­ing Rus­sian state as­sets. As for the ECHR, Rus­sia is a mem­ber of the Coun­cil of Europe and has been on the los­ing side of hun­dreds of ECHR ver­dicts, so it has no grounds to ob­ject to the court’s ju­ris­dic­tion in this case.

Rus­sian author­i­ties have ap­pealed The Hague rul­ing, but their prospects for over­turn­ing it are slim be­cause ap­peals are lim­ited to “tech­ni­cal” is­sues. Mean­while, more than a year af­ter the de­ci­sions, Rus­sia has shown no in­tent to com­ply with them, leav­ing it to other states that re­spect the rul­ings of The Hague court and ECHR to find ways to force com­pli­ance.

In July, Bri­tish author­i­ties froze RT’s ac­counts to com­ply with the ver­dicts. Bel­gium and France also launched pro­ceed­ings to take sim­i­lar ac­tion against Rus­sian state as­sets. The United States and other Western gov­ern­ments should fol­low suit in an or­ga­nized ef­fort, es­pe­cially in light of a pe­ti­tion for the United States to do so by Yukos’s former prin­ci­pals. (Khodor­kovsky is not a party to the suit.)

RT is the key to Putin’s pro­pa­ganda ef­fort to dis­credit the West and ob­fus­cate the truth of Rus­sian ac­tions. It has a global reach through cable and the In­ter­net and claims an au­di­ence, likely ex­ag­ger­ated, of 700 mil­lion peo­ple in 100 coun­tries. It has a large stu­dio in Wash­ing­ton and bu­reaus through­out the United States and Europe. Rus­sian gov­ern­ment fi­nanc­ing for RT and sim­i­lar pro­pa­ganda out­lets, in­clud­ing Sput­nik news, is roughly half a bil­lion dol­lars.

Seiz­ing Rus­sian Em­bassy and con­sulate prop­erty in Wash­ing­ton and else­where is not an op­tion given the in­vi­o­la­bil­ity of diplo­matic mis­sions. That leaves few other pos­si­bil­i­ties for go­ing af­ter Rus­sian prop­er­ties — and makes RT an invit­ing tar­get. Even for Rus­sia, with more than $350 bil­lion in hard cur­rency re­serves and the most nat­u­ral-resources wealth of any coun­try in the world, $52 bil­lion is a lot of money, es­pe­cially in the midst of an eco­nomic cri­sis, low oil prices and the squeeze of con­tin­ued sanc­tions against the regime.

The Krem­lin is ner­vous, as ev­i­denced by its hir­ing of ma­jor Western law firms to chal­lenge pos­si­ble as­set seizures. Over the sum­mer, it warned the United States that it would snatch up U.S. as­sets in Rus­sia in re­tal­i­a­tion for any such steps taken by U.S. author­i­ties, and leg­is­la­tion has been in­tro­duced in the Rus­sian par­lia­ment al­low­ing for con­fis­ca­tion of prop­erty of for­eign states in re­sponse to Western mea­sures. Stand­ing up to such threats is best done by many Western coun­tries act­ing in con­cert, and Rus­sia can only go so far. Any Krem­lin tit-for-tat games would drive in­ter­na­tional in­vestors and cor­po­ra­tions out of Rus­sia in a hurry, an ex­o­dus that Rus­sia’s weak econ­omy can­not af­ford.

En­forc­ing the Yukos ver­dicts ad­vances rule of law and re­spect for pri­vate prop­erty, and hav­ing RT bear the ini­tial brunt of th­ese ver­dicts is a way to get started. It has the added ad­van­tage of do­ing se­ri­ous dam­age to Putin’s pro­pa­ganda ma­chine. It is time for the United States and its Western al­lies to teach the cor­rupt Putin regime that there are con­se­quences for out­ra­geous be­hav­ior. It is time for the demo­cratic com­mu­nity of na­tions to go on the of­fen­sive.

The writer is se­nior di­rec­tor for hu­man rights and democ­racy at the McCain In­sti­tute for In­ter­na­tional Lead­er­ship.

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