Putin's Payroll

December 19, 2005
Wall Street Journal
Original Source: http://online.wsj.com/article/SB113495813567926070.html?mod=opinion&ojcontent=otep

Thanks to Paul Volcker's Oil for Food probe, the world has learned that Saddam Hussein had no better political friend or business partner than the Kremlin. Not that this has embarrassed Russian President Vladimir Putin. Apparently he was so impressed with Saddam's success that he's now undertaking his own attempt to use energy to buy influence in the West.
He's already succeeded in Germany, in the form of a lucrative job offer to Gerhard Schröder only weeks after he ended his run as Chancellor. Herr Schröder is set to become chairman of the supervisory board of the North European Gas Pipeline Company, which is controlled by Gazprom, the state-owned Russian energy company. As Garry Kasparov notes on the opposite page, Mr. Schröder had supported the pipeline in office and will now personally prosper from its construction.
But that's not all. Late last week, word leaked that Mr. Putin has offered former U.S. Commerce Secretary Donald Evans a top job at the Russian state oil company OAO Rosneft. A former Texas oil man and close friend of President Bush, Mr. Evans was reported to be considering the offer. Let's hope Mr. Evans turns it down flat.
While former public officials have a right to make a living, the Rosneft job offer has an unseemly taint about it in several respects. The company rose to prominence with the purchase a year ago of the main Siberian oil-producing unit of OAO Yukos, the private oil company that was busted up by a ferocious and highly debatable Kremlin legal assault. Yukos's former chief executive, Mikhail Khodorkovsky, is now serving an eight-year prison term in Siberia for fraud and tax evasion. The assault on Yukos came after Mr. Khodorkovsky had supported some of Mr. Putin's political opponents.
Mr. Evans may think that by joining Rosneft he'd bring some transparency to the Russian company as it seeks to tap Western capital markets next year. But his acceptance would also be cited by the Kremlin as a sign that the Yukos caper was all shipshape, or at a minimum that it is all forgotten in the U.S. You can bet that Mr. Putin figures that in hiring Mr. Evans he would be buying more than just the American's energy expertise.
The odor becomes especially redolent when you consider the contempt with which Mr. Putin has treated Mr. Volcker's Oil for Food probe. The Kremlin stonewalled his investigators every step of the way, even though the probe was officially established by the Security Council that includes Russia as a permanent member. Mr. Volcker asked Mr. Putin personally for his assistance in gaining Russian cooperation, to no avail.
Investigators nonetheless learned from other sources that Russia's presidential office was allocated 21,350,000 barrels of oil by Saddam. The Kremlin steered Oil for Food lucre to its preferred domestic clients while using its veto powers at the U.N. Security Council to promote Saddam's interests. The same Russians who thought Oil for Food was just swell would be Mr. Evans's new business comrades.
One pleasant surprise from the Oil for Food probe has been how few Americans were bought and paid for by Saddam. We suspect one reason is the Foreign Corrupt Practices Act, which prevents Americans from paying or accepting bribes while operating overseas. While Mr. Putin's job offers aren't bribes in that strict sense, they do suggest that the Kremlin believes it can brazenly buy goodwill among the West's political and business elites.
Mr. Schröder may have no qualms about swimming with this oily crowd, but we hope Mr. Evans shows the Kremlin that former American Cabinet members have higher standards.