How Putin has used ‘elite capture’ to further Russian objectives in Ukraine

On Tuesday, Russian President Vladimir Putin again sought to portray Russia as the victim of NATO and U.S. aggression, ignoring his country’s security concerns and forcing him to mass 100,000 troops on the border with Ukraine.

“Let’s imagine Ukraine is a NATO member and starts these military operations. Are we supposed to go to war with the NATO bloc? Has anyone given that any thought? Apparently not,” Putin said at a news conference in Moscow that followed a meeting with Hungarian Prime Minister Viktor Orbán.

Despite a show of solidarity from NATO, whose ships, planes and troops are being deployed to Eastern Europe in hopes of deterring Russia from invading Ukraine and expanding further, some weak links are showing up among the 30-member Western military alliance. Last week, for instance, Germany announced it would not supply weapons to Ukraine. It did, however, send 5,000 helmets, and Europe’s richest country also hasn’t fully committed to the crippling sanctions the U.S. hopes to hit Russia with if it moves over the Ukrainian border.

For Putin, fissures in the NATO alliance are critical in order to reach his objective of preventing Ukraine from joining the alliance. Of all the persuasion tools that the former head of the KGB employs, however, the most effective may be “elite capture” — offering attractive board positions in Russian companies to former European leaders, including former German Chancellor Gerhard Schröder, who last Friday took aim at Ukraine on his podcast for provoking Russia and voicing his hope that “the saber-rattling from Ukraine will stop.”

How Putin has used ‘elite capture’ to further Russian objectives in Ukraine

Russian President Vladimir Putin, left, with former German Chancellor Gerhard Schröder at an economic forum in 2012. (Dmitry Lovetsky/Pool via Reuters)

The benefits of landing high-level European officials on the boards of Russian companies can be “absolutely enormous,” Edward Hunter Christie, a senior research fellow at the Finnish Institute of International Affairs and former analyst for NATO, told Yahoo News. “It may be more valuable than a propaganda campaign. If you can get one former prime minister on your payroll, it is worth more than a propaganda campaign that convinces 100,000 people.”

Schröder is the most prominent case of Russia’s elite capture, and is viewed by many Europeans as a sell-out after inking a deal in his last hours as chancellor in 2005 for a natural gas pipeline owned by Russia’s state-controlled gas giant Gazprom.

“Let’s not forget,” Latvia’s former president Vaira Vike-Freiberga told Yahoo News, “that my ‘friend’ Chancellor Schröder, literally within days of leaving office as German chancellor, became chairman of the state-controlled Russian Gazprom North European Gas Pipeline company at a very high salary, being already a bosom buddy and close friend of President Putin. He became chairman of the very same Russian company with which he had signed a multibillion pipeline deal just two weeks before stepping down as chancellor of Germany.”

“In my country that would be treated as corruption,” Vike-Freiberga added.

Vladimir Putin, front left, and Gerhard Schröder

Putin, front left, and Gerhard Schröder, front right, in 2019. (Alexei NikolskyTASS via Getty Images)

Economist Anders Åslund, author of “Russia’s Crony Capitalism” regards Schröder as “the leading Russian agent in Germany,” adding that even though out of office, “Schröder pretty much controls German foreign policy on Russia.”

Along with two of his closest allies in the Social Democratic Party, Frank-Walter Steinmeier – now president of Germany – and Sigmar Gabriel, former minister of economy, Schröder helped push through a second Gazprom pipeline in 2015.

With Schröder now holding three positions for Russian companies as the chairman of oil giant Rosneft, which alone pays him $600,000 a year, said Åslund, and chairman of the shareholders committee for Nord Stream 1 and Nord Stream 2 AG, “He’s not likely to make less than $2 million a year in official income from Putin,” said Åslund.

The appearance of graft aside, Vike-Freiberga said she long viewed the Nord Stream 2 deal as a “security threat” for Germany, the European Union and NATO.

“Nord Stream 2 is a pipeline with a spigot that Russia can turn off at any time,” she added. “In blunt words, if Germany is sucking on the nipple of this gas pipeline, it becomes dependent on it and would find any weaning process quite painful. Economic dependency makes a country vulnerable and open to potential foreign influence.”

Sanctions former U.S. President Donald Trump slapped on companies involved with NS2, were waived by the Biden administration this May, being widely viewed as a move to rekindle good relations with Germany, although both the U.S. and Germany signed an agreement to halt the project if Russia used its energy as a weapon. The U.S. also views the pipeline’s possible suspension as a bargaining chip to deter Russia from striking Ukraine.

While Germany initially balked at that idea, Germany’s new chancellor Olaf Scholz said recently that shutting down, or at least delaying the opening of the pipeline is “on the table.”

“I want to be very clear: if Russia invades Ukraine one way or another, Nord Stream 2 will not move forward,” State Department spokesperson Ned Price told reporters last Wednesday. “We will work with Germany to ensure it does not move forward.”

Still, many analysts and officials remain concerned about Germany’s loyalties, and see elite capture as a potential problem in other NATO countries as well. Former French Prime Minister François Fillon works for Russian oil company Zarubezhneft, Austria’s former foreign minister Karin Kneissl and Paavo Lippinon also landed prominent positions with Russian gas and oil companies, Italy has vied to secure its own deal with Gazprom, and Hungary’s Orbán remains so close to Putin that he’s been called the Kremlin’s Trojan horse.

Russian President Vladimir Putin, left, with François Fillon

Russian President Vladimir Putin, left, with François Fillon in the Novo-Ogaryovo residence outside Moscow in 2013. (Alexei Druzhinin/RIA-Novosti via AP)

Emil Avdaliani, director of Middle East studies at the Georgia think tank Geocase, sees Germany and France as the “weak spots” in the showdown between Russia and the West. “In the longer term, this means that Moscow can always exert pressure to a certain level [on them] knowing that this would not bring about a concerted effort from the West.”

Evelyn Farkas, a former U.S. deputy assistant secretary of defense for Russia, Ukraine, and Eurasia, is also concerned about the pattern.

“I do believe that President Putin has done damage by essentially corrupting former high-ranking European officials, offering them lucrative positions within his establishment,” she told Yahoo News, adding, ‘“It should not be acceptable for people who pretended to espouse democracy to take profit from a state responsible for such actions.”

Brussels-based Roland Freudenstein, vice president of the think tank GLOBSEC, said that while he has been mostly encouraged by the unified message NATO has presented on Ukraine so far, he does see Putin making inroads with his larger goal of weakening the alliance.

“My fear and Putin’s hope is that at some point, maybe even after military hostilities have begun, that we’ll see a bunch of Western governments unilaterally declaring to Russia, no matter what the U.S. and the U.K. and the Scandinavians and the eastern members say, ‘We will never let Ukraine into NATO.’” It’s a hypothetical scenario, he admits. “I don’t think it’s probable,” he said, “because even those governments that feel tempted to make such a declaration are aware of what it would mean: Such a divergence in such a dramatic situation would be the end of NATO as we know it, and possibly the end of the West.”

Russian President Vladimir Putin

Russian President Vladimir Putin at the Kremlin on Tuesday. (Yuri Kochetkov/Pool via AP)

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