Anne Williamson is famous for her testimony to the Congress which I posted in earlier post on Russia in the 90’s. She has written a book or manuscript called ‘Contagion:The Betrayal of Liberty; Russia and the United States in the Post-Cold War Era’ which was never published. Recently found the article below by Ms. Williamson in the link below: https://www.lewrockwell.com/2016/08/anne-williamson/bloody-evil-george-soros/.
I am putting the whole article here verbatim. This is about the 90’s Russia and how things happened from a very informed person. Enlightening at the least, the only hope that the whole manuscript will be published one day to the whole world.
Excerpt from Contagion:The Betrayal of Liberty; Russia and the United States in the Post-Cold War Era adapted for lewrockwell.com.
……..Spooked out of Russia after the electorate’s gleeful elevation of political showman Vladimir Zhirinovsky and his party of sometimes fire-breathing, sometimes bungling Russian nationalists (LDP) to the Russian Duma in January 1994, Jeffrey Sachs and his fellow opportunist, Anders Aslund, took their crusade for the application of shock therapy to Kiev. There Aslund picked up work managing a small team of advisors in Ukraine funded by the New York-based George Soros Open Society Institute while doing public relations work for Ukraine, also on Soros’s dime.[i]
Despite the criminal bonfire their advisory team had fueled in Moscow, U.S. Treasury generals considered both Sachs and Aslund to be good soldiers. Both were rewarded with comfy sinecures; the Carnegie Foundation in Washington would give Aslund a position from which he might pose as an allegedly objective analyst of U.S. policy toward Russia and Ukraine, and in June 1995, Harvard would reward Jeffrey Sachs with the leadership of the Harvard Institute for International Development (HIID), a plum position that would soon enough prove itself a poisoned chalice.
In Kiev, a USAID mission was already in place, along with the rest of the usual foreign aid plumage: the IMF, the World Bank, the European Bank for Reconstruction and Development, the International Finance Corporation, the European Union’s bilateral assistance programs, and those of Canada and the U.S.Treasury along with the National Endowment for Democracy (NED). All that was missing was an HIID mission.
In March 1995, USAID sought proposals for assistance to Ukraine for impartial oversight and strategic advice for privatization and market reform programs. In May, however, USAID withdrew the request because Ukrainian officials said they weren’t interested. The Ukrainian rejection struck Aslund and Sachs – and their financier George Soros – as being extremely short-sighted. The three then teamed up in an attempt to revive USAID’s March proposal for assistance to Ukraine and while continuing to polish their own HIID proposal. If successful, the establishment of a second Harvard base of operations on the back of U.S. taxpayers would inaugurate Sachs’s leadership of HIID with a fiscal triumph in Ukraine, a new and potentially long-running stream of the most desirable money on earth, more commonly known as “other peoples’ money.”
Granted, one obstacle was the Ukrainian government’s contention that another USAID program was unnecessary. And it wasn’t helpful either that the IMF maintained that HIID’s proposed work would only duplicate work the IMF was already doing. When the governor of the National Bank of Ukraine told Sachs to his face that HIID’s program was not wanted, those of lesser ambition might have hesitated. Not these three amigos.
They turned to their friends in the executive branch of the federal government; David Lipton, Deputy Assistant Secretary of the Treasury and a former partner at Sachs’s consulting firm, the Washington-based Sachs Associates; and Carlos Pasqual, who served on the National Security Council (NSC), were both enlisted for support.[ii] (If the door were fully open on the U.S. government’s gang of schemers, Lawrence Summers’s silhouette would entirely block the view.) USAID’s Thomas Dine and Tom Pressley were also contacted by or on behalf of Sachs, et al. Embassies to Kiev were undertaken – with a view of lobbying the locals on the matter (that’s when the unpleasantness with the Ukrainian National Bank’s chairman erupted).
In time, dogged determination turned up one soon-to-depart Ukrainian official who agreed to support HIID’s $6-million grant request to USAID for another cooperative agreement, to be granted without any pretense of competitive bidding, with a Kiev-based HIID. But why would any Ukrainian official volunteer to help a pair of foreign academic types to a place at the trough? Shall we count the frog skins? The more interesting question is who ponied up the cash. Soros, Aslund’s home nation of Sweden, a notorious provider of foreign aid tailored to U.S. political purposes, or Harvard?
When HIID’s request came to the attention of the congressional International Affairs Committee in December 1995, its chairman, Benjamin Gilman, a New York Republican, didn’t like the smell of it. Why was HIID receiving so much money on a noncompetitive basis? How had a 1992 $2 million grant for Russian “reform” grown to $57 million, $40 million of which was awarded on the basis of “national security,” thereby evading the competition for government contracts required by statute? What were they accomplishing? What was the point of establishing a similar program in Ukraine?
And why was billionaire George Soros so concerned that Harvard receives a USAID grant for Ukraine that he actually lobbied Congress on Sachs’s behalf?
If Soros wanted Sachs to have $6 million, why didn’t he fork over the cash himself? He often does. He and Sachs had been an item since the late 1980s when they started mucking about together in Eastern Europe. The billionaire had long salted considerable funds throughout Moscow’s “reform” community with grants for study abroad and domestic training programs for privatization and securities markets development under the auspices of his Open Society Foundation. His money had provided funds for both Aslund’s and Sachs’s separate projects, and the billionaire himself shared an office with Jeffrey Sachs in Kiev. So was he simply trying to leverage his widely publicized philanthropy with public dollars?
Or was Soros attempting to take advantage of a nascent, under-developed market that was incapable of policing conflicts of interest? And was he being joined in that effort by Harvard University? In the summer of 1997, the trading desk of Harvard Management Corporation, which invests the university’s endowment, confirmed that they had been active investors for several years in the Russian bond and equities market. (In fact, the endowment was growing fat and sleek indeed thanks to what was not so much a bond market as a pass-through arrangement with triple-digit yields for which Moscow was merely an exotic, hosting venue to the U.S. government’s industrial-sized laundry service.) By late 1995, Soros and Harvard Management had any number of casual opportunities to exchange information with the publicly-funded Harvard reform insiders in Moscow and thereby gain privileged access to the sort of insider information investors prize.
In 1996 and 1997, the secret of insuring a good return from Russian stocks was to purchase shares before a company listed its shares as American Depository Receipts (ADRs) on the NYSE. Of course, any ADR plans on the part of Russian enterprise would entail notifying the Federal Securities Commission (FSC) of the intended issuance as a first step, and the FSC was but one leg of an organizational triad in Moscow known as the Harvard Center, which included GKI, the privatization committee, and an outfit called ILBE – the Institute for a Law-Based Economy, which local wits quickly dubbed “the Institute for a Lobby-Based Economy.” Other matters of interest would concern the prospects for increased liquidity of Russian shares on the international markets, along with information concerning specific bond payments and alerts that would forewarn insiders of exactly when IMF funds available to pay out Russian bonds’ astronomical yields would run dry.
Considering the handsome taxpayer-provided listening post-HIID was operating in Moscow, it’s not surprising that George Soros, whose Quantum Fund invested $2.5 billion in Russia, would be keen to have something comparable flying the Stars and Stripes in Kiev – only with his agents in charge. Under cover of the U.S. assistance program, privileged information could first be obtained and then passed on in discussions devoted formally to -“reform policy.” Surrounded by an HIID set-up, Soros would enjoy a certain authority his money alone couldn’t provide him. But that authority – that extra dollop of importance – can be most helpful even if illegitimate. The natives only know what they see, and nobody sees small pox on a blanket.
Questions and answers between Gilman and the State Department were kicked back and forth for several months. In late January 1996, Sachs contacted Gilman and asked that he remove the hold that the congressman had placed on the money allocated for Ukraine. George Soros too contacted Gilman’s office. Gilman complied and lifted the hold, but with the proviso that the grant had to be awarded on a competitive basis and could not exceed $2 million. After that, he called for a GAO (Government Accounting Office) investigation into HIID’s Russian activities and the grant request for Ukraine……………
And Kept It Working
…… In early June 1998, as Russia’s descent into the spiral of unmanageable debt accelerated, once again the issue of a possible IMF bailout emerged. As the situation went from bad to worse to near meltdown of the bond market, Yeltsin dispatched Anatoly Chubais to Washington to seek approval from the U.S. Treasury for yet more IMF cash.
Simultaneously and coincidentally, Russia’s top auditor, Veniamin Sokolov, Chief of the Counting Chamber, which is the Russian GAO, arrived in the United States with documents detailing incomprehensibly large amounts of corruption involving assistance money, state funds, and dicey natural resource sales on world markets.
It just so happened that World Bank officials were just then looking every which-a-way without success for hundreds of millions of dollars of lost coal loans. Cables flew from Moscow to Washington as the Moscow office tried frantically to stop the scheduled meeting between Sokolov and World Bank president James Wolfensohn, a meeting that was the principal focus of Sokolov’s visit.
Making the rounds of newspaper editorial boards, think tanks, and the U.S. Congress, Sokolov painted a picture of a Potemkin economy in which money itself had been socialized among a handful of large banks and the very top tier of an economically incompetent oligarchy. (Complying with IMF dictates had left the Russian economy a money supply that was only one-sixth of that considered normal for an economy of its size. Consequently, only the banking sector had actual rubles of any significance, leaving the general population ruble-poor.)
“The official economy about which you read in your newspapers has absolutely nothing to do with our national economy. Recently when we finished our audit of the Central Bank, we had to refuse to certify their annual report. It was the same at the Finance Ministry, where we had 150 auditors working for six months,” Sokolov said. “All our financial and banking authorities’ methods are designed to conceal the facts rather than to reveal them.
“When Americans read that Russia has an inflation rate of fourteen percent that figure refers only to the oligarchical economy and hides an eighty percent inflation in the national economy. But since the national economy is cash-starved and lives now by negative barter, meaning I’ll give you this and you give me that but neither one of us will pay the other, nearly our only product is debt. Our enterprises have finally used up all their reserves and this is why we are in crisis,” Sokolov told his U.S. audiences while comparing any new IMF lending to handing a drug addict more narcotics.
Since Russia’s chief auditor was anxious to cooperate in locating the true destination of U.S. and multilateral aid money, and since the Counting Chamber is mandated to audit any and all enterprises and government agencies in the Russian Federation, the U.S. Attorney in Boston and the USAID inspector general, who were assigned to sorting out the burgeoning HIID scandal, flew to D.C. from Boston to meet privately with Sokolov. The FBI followed up, and Sokolov seemed pleased.
What Sokolov wanted was for the U.S. money flow as designed to stop, it was corrupting his country from the top down, and the people were suffering terribly from the poisons it released into the atmosphere. Russia’s misdirected natural resource wealth was enough of a headache, but to have Americans dumping billions more into the country just to keep their artificial bond market functioning on behalf of a small crowd of very rich people and their institutions was a kind of genocide in its effects.
Surely, Sokolov reasoned, savvy Americans and their responsible and practiced legislators would want the money stopped as well. Why would they burn up their own wealth? Sitting beside him as he spoke, I couldn’t help but think a Mr. Smith in the shape of one Russian Mr.Sokolov had come to Washington. Sadly, Frank Capra wasn’t alive to direct and keep an uplifting story on the script.
At the conclusion of an encouraging meeting the following day with the House International Relations Committee head, Representative Benjamin Gilman, in which the two men agreed to collaborate, Gilman insisted his chief staff member arrange a meeting for Sokolov post haste with Republican Senator Jesse Helms, one of foreign aid’s greatest critics. The day’s developments promised results and for somebody somewhere that was apparently a problem.
It doesn’t necessarily follow that it was Representative Gilman’s dinner date with George Soros, then up to his eyeballs in Russia’s illiquid and collapsing equities market, the very evening of his meeting with Sokolov that stalled congressional cooperation with the Russian Accounts Chamber. Nor does it follow that Gilman’s Russian point man on staff two days later countermanded his boss’s instructions independently or that he received new instructions when he professed surprise at being queried as to whether Congressman Gilman would be accompanying Sokolov to the meeting with Senator Helms.
The meeting that Gilman had ordered with considerable urgency had “slipped his mind,” the staffer said, and that meant another hour of Sokolov’s time was wasted in a pointless meeting with a couple of stray staffers dredged up from Republican Congressman Gerald Solomon’s office recalling their personal epiphanies upon realizing that the Russian people, the former Soviets of the defunct Evil Empire, were – well – just folks. In other words, Veniamin Sokolov got the ne plus ultra Washington brush off; he was treated as if he were a constituent.
Later that June, Gilman’s Committee on Foreign Relations, after having passed up the opportunity Sokolov had offered of exploring official corruption and the misdirection of U.S. taxpayers’ billions, instead held hearings on Russian organized crime. Over the coming years, Representative Gilman’s congressional posse never did round up a single varmint, organized or unorganized.
When asked what it would take to move a proper investigation forward, a Treasury Department lawyer replied, “Nothing will make that happen. When the Clintons fired all U.S. Attorneys at once in 1993, they knew what they were doing. All those newly appointed prosecutors got the message. There will never be a Justice Department investigation of any Clinton administration policy or program that might make the Clintons look bad.”
While Veniamin Sokolov was finishing out his fruitless 1998 American journey (he never did meet with the World Bank’s Wolfensohn, the cables worked, and last I heard the World Bank never did recover the 100s of millions in coal loans), Anatole Chubais, former head of the Russian privatization program and deputy premiere, met with Lawrence Summers and Strobe Talbott. The topic was how to get sufficient billions into Chubais’s hands to keep the bond market humming. Other “private meetings” were arranged, and before departure, Chubais informed the Russian ambassador that he, the ambassador, was to consider Anders Aslund the deputy premier’s “personal emissary.” The surprise promotion from the leader of a crowd Aslund refers to as “my boys” failed to prompt the Carnegie Foundation “senior analyst” to register as a Russian government lobbyist as required by law.
Once again Treasury was arguing that Russia’s decreasing hard currency reserves and untenable finances would provide the leverage needed to compel the Yeltsin government to adhere to a responsible state budget, to enforce shareholder rights, and to adopt an effective tax code.
Treasury’s policy recycling effort left Sokolov, who complained of being presented with unsigned scraps of paper authorizing hundreds of billions in ruble transfers to private individuals as evidence of legitimate Finance Ministry expenditures, bemused; “You may tie our businessmen up, incarcerate them, and beat them to unconsciousness, and still it will be impossible to collect taxes from them, because they simply have no money to pay any tax of whatever kind. In our current conditions, further IMF lending will be diverted to the oligarchy. There will be no responsible state financing, only less for the people. Not one bureaucrat will lose his job, only teachers and medical personnel will be cut.”
By mid-June 1998, Sokolov and the U.S. Treasury’s Russian darling Chubais had returned to a country still home to a furious and impoverished population demanding their long overdue wages and pensions. For his part, Sokolov’s homecoming was sweetened by a well-organized Russian media vilification campaign that characterized his efforts in the U.S.as the deeds of a “traitor.” True, Sokolov was a traitor, a “class traitor” in the language of Lenin that is – to the oligarchs, to HIID, to the US-funded Chubais crowd and to one relentlessly self-advertising billionaire.
Adding insult to injury, the FBI returned a copy of Sokolov’s documents, not the originals. The problem was Sokolov’s documents were two-sided, the FBI’s copy one-sided. Sokolov never did get his original material returned, and nobody knows what the FBI did with it. Hmmmm.
Western pundits wrote their editorials pro and con regarding further IMF lending, and official meetings and conferences convened and adjourned, and yet matters were allowed to drift. Daily the Russian government assured the world – and Wall Street – there’d be no ruble devaluation. In mid-July, Anatoly Chubais undertook yet one more emergency trip to Washington to meet with Deputy Treasury Secretary Summers in his suburban lair for brunch and worked out the details of the proposed bailout. After the IMF received yet another assurance the Clinton administration would see to it that the U.S. Congress voted in a fresh $18 billion for their coffers, Chubais returned to Moscow in triumph, crowing a month later over how he had “conned” the West into a bailout commitment of $22.5 billion.[iii]
Once the first tranche of $4.8 billion was delivered to the Russian central bank, the bond market nose-dived. On 17 August, then Russian Prime Minister Sergey Kiriyenko announced a devaluation, which the IMF had anticipated, along with a 90-day moratorium on all debt payments, which the IMF had not anticipated.[iv] In short, Moscow had in effect defaulted on domestic and foreign debts, which led to the collapse of the stock market and major commercial banks. The IMF froze the remaining $18 billion of Russia’s bailout.
Emerging market bond traders in London took solace in the by-then-routine use of metaphor drawn from gruesome details of the Battle of Stalingrad. Commercial bankers and investors in regional debt focused instead on the hidden, possibly mystical significance of one Siberian province’s offer to redeem their bonds in sausage links and oak caskets. But it was the derivative traders who had the really big headache, having made their leveraged bets with rivers of borrowed money. By late August, everybody on Wall Street knew $5 to $6 billion of “guarantees” or “forward contracts” Russian banks had contracted with Western counterparties would never materialize.
Once the smoke cleared, Western bankers and investors found themselves alone, wandering a deserted battlefield littered with empty bags.
Furious comment exploded across a full range of Western media. Amidst the hysteria, nobody had the presence of mind to remember Veniamin Sokolov’s loud assurances six weeks earlier that what had happened was exactly what would happen.
While Taking the High Road
At the late 1990s’ Harvard-sponsored investment conference in Cambridge, Soros had criticized his former ally, Chubais, pronouncing his “robber capitalism privatization” to have been “repulsive” while asserting, “I didn’t want to have anything to do with it.” [v] The Russians in attendance sneered knowingly.
For some folks, philanthropy is just a big word for never having to say “chump change.”
 An American Depository Receipt is a share certificate that entitles the person with that security to shares of a non-U.S. company, which have been deposited in a bank located outside the U.S. This instrument is what allows foreign shares to trade on the NYSE, and their acceptance requires SEC approval.
[i] Wedel, Janine, “The Harvard Boys Do Russia,” The Nation, 1 June 1998.
[ii] “Sachs Appeal,” Euromoney, February 1992.
David Lipton informed government investigators that on account of his previous business relationship with Jeffrey Sachs (Sachs and Associates), he recused himself – verbally, not in writing – from decision making on HIID’s Ukrainian grant effort. Lipton’s deputy confirmed his boss’s unwritten recusal. Nonetheless, government inspectors were puzzled as to why – according to that logic – Lipton did not recuse himself from issues regarding Moscow’s HIID operation. Lipton explained that since Russia was an ongoing program (and Ukraine wasn’t?), he felt no need to recuse himself. In the course of their long relationship, Sachs and Lipton had established a private consultancy – Sachs, and Associates – which was funded mostly by public funds. And despite Sachs’s assertion that he took no money from client governments, Slovenia revealed Sachs and Associates once billed the government $300,000 for advisory services. Slovenia initially declined payment, citing the inadequacy of Sachs’s and Lipton’s “kindergarten stuff” but reportedly the two did eventually get the money.The Slovenians were particularly bitter because Sachs interfered fatally, as he did in Russia, with the government’s employee buy-out privatization program.
[iii] Paddock, Richard C., “Russia lied to Get loans, Says Aide to Yeltsin,” Los Angeles Times, 9 September 1998.
[iv] Helmer, John, “Sour Grapes,” Moscow Times, 15 January 1999.
AFP, “IMF Tacitly Approved Russia’s August Debt Default: Ex-tax Chief,” 16 December 1998 as reproduced on Johnson’s Russia List #2522, Item # 11, 17 December 1998.
[v]Interfax, “Soros Denies Getting Involved in Russian Politics,” 20 October 1997.
While in the midst of denouncing Russia’s “robber capitalism” to Western reporters, Soros said “strengthening the oligarchy would benefit Russia. This would be a step forward for the country.” Ah dear, shades of Alexander Hamilton.