The Obama/Clinton Russian Reset Has Backfired

By: Nevin Gussack
Accuracy in Media


Exclusive to Accuracy in Media

President Obama’s former Secretary of State Hillary Clinton may be best remembered for the security failures that led to the massacre in Benghazi, in which four Americans were killed in a terrorist attack. But she also engineered a “reset” with Russia, supposedly to improve relations. It is time to see whether she is prepared to accept responsibility for that blot on her record.

She now says she “regrets” the policy failures resulting in the deaths at Benghazi. But what about the Russian “reset” that has only served to bolster the authoritarian regime of Vladimir Putin?

On the eve of the Winter Olympics in Sochi, Russia, we are already starting to hear about political and financial corruption in connection with the games. “Security is just one reason why the Sochi Winter Olympics are the most expensive in history; rampant corruption is another,” reported CBS News. Correspondent Mark Phillips spoke to a former Olympic contractor who blew the whistle on payoffs to Russian officials—some in “high places”—and had to flee to London out of fear for his life.

In another more sensational case, former KGB agent Victor Litvinenko, who fled to London and revealed the secrets of the KGB’s successor, the FSB, was poisoned in 2006. British authorities blame the regime of Vladimir Putin for his death.

More recently, American journalist David Satter, who had a record of investigating the activities of the Russian security services, was denied a visa to report from Russia. With justification, he blames the FSB for keeping him out.

Democracy or Dictatorship?

The nature of the Putin regime is emerging as a very sensitive subject as the games approach, with evidence that Islamic terrorism in Russia has sometimes in the past been the work of the FSB. This means that the prospect of more terrorist incidents cannot be assumed to be the work of Islamist groups, and may actually be the work of provocateurs connected to the Russian regime. One purpose of such “false flag” terrorism is to frighten the public into believing that Putin and the “new Russia” are opposed to terrorism, and to solidify Putin’s control over the levers of state power.

While focused on the threat of terrorism, the liberal media in the U.S. have also suggested that a big problem in Russia today is that they passed a law banning gay propaganda for children. President Obama has named several homosexual athletes as delegates to the games in order to make a statement showing his concern about this tter.

In response, Putin has tried to come across as a protector of children from potential predators, a stance that is designed to make him attractive in the eyes of some American conservatives. Putin has also advertised himself as a Christian, even visiting the Vatican to appear devout.

But Lt. Gen. Ion Mihai Pacepa, the highest-ranking Soviet bloc defector, says that Russia is “the first intelligence dictatorship in history,” and cannot be trusted. He makes the case in his book, Disinformation: Former Spy Chief Reveals Secret Strategies for Undermining Freedom, Attacking Religion, and Promoting Terrorism.

The evidence is unfolding before our eyes. In Ukraine, a former Soviet republic of 46 million people, Putin puppet President Viktor Yanukovych, is presiding over a bloody crackdown on pro-democracy forces that have toppled communist statues from the Soviet-era built in honor of Vladimir Lenin. A country victimized by Soviet dictator Joseph Stalin’s murder of millions, Ukraine’s people are hoping to turn away from Russia and integrate into the Western alliance of free nations.

As Russia enters the international spotlight, it is time to re-examine the Obama administration’s relationship with Russia, especially the President’s decision to grant Permanent Normal Trade Relations (PNTR) to Moscow. It appears that the U.S.-Russia relationship is developing along the lines of the Chinese example of massive trade imbalances and increasingly aggressive behavior on the international stage.

Russia’s embrace of NSA leaker Edward Snowden, who has severely damaged U.S. surveillance activities, also suggests that the Obama/Clinton “reset” has been a complete failure.

Even leftist journalist Fred Kaplan acknowledges that Snowden’s disclosures have gone way beyond the NSA’s “domestic surveillance” program, and that “The documents that he gave the Washington Post’s Barton Gellman and the Guardian’s Glenn Greenwald have, so far, furnished stories about the NSA’s interception of email traffic, mobile phone calls, and radio transmissions of Taliban fighters in Pakistan’s northwest territories; about an operation to gauge the loyalties of CIA recruits in Pakistan; about NSA email intercepts to assist intelligence assessments of what’s going on inside Iran; about NSA surveillance of cellphone calls ‘worldwide,’ an effort that (in the Post’s words) ‘allows it to look for unknown associates of known intelligence targets by tracking people whose movements intersect.’”

Hence, Snowden has weakened our defenses against both terrorism and espionage.

The Russian Surveillance State

As the Olympics approach, the Western media are beginning to acknowledge that the Putin regime looks a lot like its Soviet predecessors.

“Since the Cold War, Russia’s reputation as an intrusive state has been well established. But as the Sochi Olympic Games approach, the host country appears to be aiming for surveillance gold,” reports Nahlah Ayed of CBC News. “In fact, security experts are warning athletes, journalists, spectators and government officials that the coming Olympics will see the most invasive security measures the Games have ever seen.”

The CBC reporter based her report on the work of two Russian investigative journalists, Andrei Soldatov and Irina Borogan, who examined open source documents relating to preparations for the Games by Russian authorities, including the FSB, which is in charge of securing the Olympics. They wrote the book, The New Nobility: The Restoration of Russia’s Security State and the Enduring Legacy of the KGB.

“Critics say the FSB is emboldened to take such extraordinary measures by the first Russian president ever to have once been an active agent of the KGB (the FSB’s precursor)—and for whom the Sochi Games is a deeply personal project,” Ayed reported.

In a piece entitled, “Putin’s Olympic Fever Dream,” The New York Times nibbled around the edges of this problem, noting that “Not since Stalin favored Sochi as the sunny retreat of the Soviet elite has so much been done to remake the city’s landscape.”

Reporter Steven Lee Myers added, “Soviet history is replete with these megaprojects, top-down endeavors that, in the name of collectivism, industrialized the nation, conquered the Arctic, built the military that crushed the Nazis and stood toe to toe against the United States and NATO. They were ideological as much as economic, intended above all to demonstrate the superiority of the Soviet political system.”

In this sense, therefore, coverage of the Olympics by NBC could become a modern-day version of Leni Riefenstahl’s film “Olympia,” a tribute to the Nazi-sponsored Olympics in Berlin in 1936. NBC networks will telecast 1,539 hours of programming from Sochi.

In addition to NBC serving as the “broadcast partner” of the games, the top 10 major international corporate sponsors are Atos, Coca-Cola, Dow Chemical, General Electric, McDonald’s, Omega, Panasonic, Procter & Gamble, Samsung, and Visa.

The “Fall” of Soviet Russia

During the period from late 1989 to 1991, Western European and U.S. policymakers cheered at the seeming victory of the Free World in defeating the towering menace of the Soviet Union and the fearsome Red Army, and its intelligence services, the KGB and GRU. It appeared that Russia ceased to be a threat, and the West sought to include Moscow into the community of nations, bound by the ties of free trade and market reforms.

The U.S. “reset” in the relations with Russia received a gigantic lease on life when President Obama sought to increase trade and political cooperation with Putin’s United Russia Party regime.

After December 1991, the USSR was officially dissolved by the Communist Party bosses. However, underneath the surface, they maintained the levers of control and had access to tremendous financial resources. Moscow continued their military maneuvers and espionage actions against the U.S., and their support for Islamist and Communist regimes worldwide continued.

Soviet military and intelligence officers who have defected to the U.S. since late 1991 have warned of the continuing anti-American biases of the allegedly “reformist” Russian leaders.

Former KGB Col. Sergei Tretyakov declared, “I want to warn Americans…You believe because the Soviet Union no longer exists, Russia now is your friend. It isn’t, and I can show you how the SVR [i.e., KGB] is trying to destroy the U.S. even today, and even more than the KGB did during the Cold War.”

Former KGB Lt. Col. Victor Kalashnikov said, “…the Russians are putting the West in a dire strategic position, because of al Qaeda, because of a new dependence on Russian gas and oil, because sections of the Western business community are collaborating with Russia in commercial ventures; and this will allow Moscow to expand its military-political endeavors across the globe. Russia today has resources it could only dream of during the Cold War. They need not spy on British Petroleum, since they are helping British Petroleum. The same is true of the Western media, finance, etc., etc. The field of intelligence has changed, and different tactics are being used. So the nature of spying has changed. It is not less than before, but even more intense.”

Many Democrats and Republicans felt after the end of the Cold War that a new day was dawning for Russia to enter the community of nations. However, according to former KGB officer Konstantin Preobrazhensky, “Russia is not a country of trade. Imperial Russia before 1917 was such a country. The current Russia and USSR, to which she is an inheritor, is a country of espionage.” He added, “…As far as I know, the oligarchs were mostly reliable KGB agents to whom the KGB gave Communist Party money in order to turn them into KGB milk cows.”

Since the granting of PNTR (Permanent Normal Trade Relations) to Russia in late 2012, the United States has not gained any additional leverage with the Putin regime. Despite PNTR, for example, the U.S. government has had no leverage in its attempt to extradite Edward Snowden back to the U.S.

Supporting Anti-American Regimes

Also despite PNTR, the Russians tightened their relationships with anti-U.S. Islamic or socialist dictatorships in such countries as Syria, Iran and China. The Russians signed a contract with the Islamic Republic of Iran to upgrade the Bushehr nuclear power plant, and continue to provide technical assistance to the Iranians at this nuclear facility. In light of the fact that the Iranians continued to develop nuclear weapons, this should be considered a most troubling development. The current Ayatollah Ali Khamenei was an alumnus of the old KGB recruiting ground in Moscow, the Patrice Lumumba University, and is reliably pro-Russian.

There is even evidence that the Russians planned to sabotage the U.S. economy. According to former Treasury Secretary Hank Paulson, the Russians made a “top-level approach” to the Chinese Communists “that together they might sell big chunks of their GSE (government sponsored entities) holdings to force the U.S. to use its emergency authorities to prop up these companies.” According to Paulson, the Chinese declined. Paulson commented that “The report was deeply troubling…heavy selling could create a sudden loss of confidence in the GSEs and shake the capital markets. I waited till I was back home and in a secure environment to inform the President.”

The Push for “Normal” Trade

President Obama placed the pro-Russian policies of Presidents Clinton and Bush on steroids when he pushed for PNTR for Russia. PNTR for Russia was also supported by organizations representing large multinational companies, such as the U.S. Chamber of Commerce, the Business Roundtable, the Association of Equipment Suppliers, the U.S.-Russia Business Council (with members such as DuPont, KPMG, GE, GM, Google, J&J, Xerox and Oracle), the Coalition for U.S.-Russia Trade (with 160 members including Caterpillar, International Paper, Alcoa, Ford, JP Morgan and Microsoft), and the National Association of Manufacturers (NAM).

The Business Roundtable noted that there was “a universe of support for Russian PNTR.” Christopher Wenk, the Chamber’s Senior Director for International Policy, noted that “We have no leverage over Russia if we don’t recognize them. The whole point of this exercise is that they are agreeing to a set of rules and we’ll all be under the WTO tent.” The Hill noted that the Business Roundtable, U.S. Chamber of Commerce, National Association of Manufacturers, National Foreign Trade Council and others had been lobbying hard for Russia PNTR, and that the U.S.-Russia Business Council, a coalition of groups that includes the Chamber and BRT, had spent $460,000 on Russia PNTR lobbying through October 31, 2012.

Furthermore, it was noted by the Voice of Russia that “the U.S. National Council for Foreign Trade and lobbyists from major business associations have spoken against the decision to tie the human rights issue to trade.”

The apparatus of the Obama administration went to work promoting PNTR with Russia. At a Senate Finance Committee hearing, United States Trade Representative (USTR) Ron Kirk said that PNTR would “expand jobs here at home…Without it, the United States will have no leverage with Russia over areas of disagreement.” Secretary of Agriculture Tom Vilsack also supported PNTR for Russia.

The Russia PNTR legislation was introduced in the Senate by a bipartisan group of senators that included Max Baucus (D-MT), John Kerry (D-MA), John Thune (R-SD) and John McCain (R-AZ).

PNTR with Russia united many “progressives” with “conservatives” and libertarians oriented towards fulfilling the needs of big business. Even some “Tea Party” anti-socialists in the Senate voted for PNTR for Russia. They included Senators Jim DeMint (R-SC), Ron Johnson (R-WI), Pat Toomey (R-PA), and Rand Paul (R-KY).

The final Senate vote was 92-4 vote in favor of PNTR for Russia.

Interestingly, some of the far-left Democrats such as Representatives Barbara Lee (CA), Dennis Kucinich (OH), Marcy Kaptur (OH), Judy Chu (CA) and Maxine Waters (CA) joined with blue-collar Democrats such as Rep. Tim Ryan (OH) to oppose PNTR for Russia. Some Republican congressmen such as Walter Jones (NC), the libertarian Ron Paul (TX), and other conservatives such as Frank LoBiondo (NJ) voted against PNTR for Putin.

On the other hand, many solid conservatives such as Congressmen Allen West (R-FL), Mo Brooks (R-AL), and Steve King (R-IA) all voted for the bill, no doubt because they thought that a rider to PNTR on human rights would allow the U.S. to exercise leverage over improving Russia’s atrocious human rights violations.

In opposition to PNTR for Putin, a group called the Coalition for a Prosperous America (CPA) noted that “Russia is not a free-market economy, and the Russian government has reasserted a dominant role in key industries. Further, Russia maintains the ability to manipulate its currency, subsidize its state-favored companies and increase its value-added taxes charged to imports from the U.S.” The CPA noted that “In 1999, the same proponents of PNTR for Russia argued for and pushed through a bill granting Permanent Normalized Trade Relations for China. The same export growth arguments were made while ignoring the potential import explosion. The import explosion that materialized was made possible by those same proponents outsourcing American jobs to China…The problem has been caused by America’s inability or unwillingness to neutralize foreign unfair trade practices, including state capitalism and its inherent barriers and subsidies. The U.S. cannot afford to continue making the same mistakes again and again.”

The lessons of PNTR for China should have been instructive in forcing the majority of our congressmen and senators to exercise extreme prudence and caution when providing vast economic benefits to yet another adversary of the United States. The end result with China has mostly been large trade deficits and an atrocious human rights record, while that country has continued to be a threat to the security of Asia and the United States.

However, the arguments for PNTR for Russia—and the country’s admission to the World Trade Organization—sounded convincing, even to many conservatives, and the deal went through.

For example, Americans for Tax Reform (ATR) had supported PNTR for Russia, claiming that it would “lead to lower duties on U.S. exports and promote the endurance of an environment that allows American businesses and farmers to compete with those from around the world in Russia.” It said failure to pass the bill “would re-create Cold War-era difficulties in the U.S. trade relationship with Russia.”

The Cato Institute said that “Free trade is an essential component of economic freedom and is inherently anti-authoritarian. WTO membership makes the people of Russia freer; the ability to engage Russian policy at the WTO through dispute settlement empowers the U.S. government to help the Russian people escape harmful state intervention in their lives.”

The Heritage Foundation claimed that “As a fellow WTO member, the United States should be in a position to benefit from Russia’s ascension…Extending PNTR would allow the U.S. to fully benefit from the concessions Russia made in order to join the WTO.”

But the undeniable historical fact is that authoritarian regimes and dictatorships tend to aggregate economic power away from the people and into the hands of government, which holds the monopoly on power. Russia today is a non-free market economy with crony capitalist features, whose long range interests are hostile to the United States and the free nations of the world. It is an adversary, if not an enemy.

The Experiment Has Failed

Our increased trade with the Russians throughout the Cold War and in the alleged “post-Cold War” period did not result in a lessening of economic aggression committed by Moscow, or benefits accruing to average Americans and independent businesses. And the benefits did not even flow to the multinational corporations pushing PNTR. The American Foreign Policy Council commented in November, 2012 that “Despite Russia’s initiation into the World Trade Organization in August, U.S. businesses have yet to see the perks.”

Census Department figures indicated in 2013 that, despite PNTR for Russia and all the flowery promises of Obama and the multinationals, the U.S. trade deficit with Russia was at $14.4 billion. Adding insult to injury was the recent call by elements in the Russian Duma to ban the circulation of the U.S. dollar within Russia itself.

As a result, U.S. policymakers should consider the admittedly discomforting, but realistic, observation of geopolitical analyst Jeff Nyquist when he stated: “It is our determination, as a people, to believe what is convenient and to accept enemy-generated propaganda about ourselves. We want to invest in Russia and China. We want to believe that capitalism has triumphed. But capitalism is dying right here, right now, on American soil. How do we explain this? Have we properly accounted for what is happening? Our long prosperity has spoiled us. Our wealth has inoculated us from the truth. We have now become a people who prefer pleasant lies to unpleasant truths. We had better wake up. There isn’t much time left.”

The Russian usage and control of Edward Snowden, the continued support for an aggressive Iran, and the Duma’s proposal to ban circulation of the U.S. dollar within Russia are concrete examples of the fact that PNTR with Putin did not provide the U.S. with any leverage in its relations with Moscow. Western capitalism is once again building the anti-American bloc.

This issue is perfect for the Tea Party movement, which arose in response to a federal government out of control on issues like spending and debt. The failed promises of favored nation trading status for both Russia and China are ready to be addressed in the context of fixing the American economy and restoring America’s manufacturing base.

If anything, the Sochi Olympics are shaping up as an opportunity for the media to educate the public about the dangers inherent in trade with nations that desire hegemony over the United States and oppress their own people.

Nevin Gussack, a professional librarian, is a writer and researcher on issues related to trade, American manufacturing, and the history of totalitarianism.


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