Published on May 15th, 2017 | by Zachary Shahan
Russian Oil, Russian Billions, Trump World, Russian Hacking, FBI Director Firing, & Democracy
When you think of healthy democracies, you definitely think of petrostates, right?
Some would like to characterize Russia as a more varied and robust economy — not quite a petrostate — but the US Energy Information Administration has pegged 50% of Russia’s government income as coming from oil & gas (for some reason, that link is broken for me at the moment, but hopefully it will come back online). If half of the government’s cash would disappear without oil & gas, I think it’s pretty clear what role that industry plays in the government and society. Our own Susan Kraemer laid out the story well — and how it seems to relate to Donald Trump’s presidency — here, here, and here.
Susan also dove into the link between undemocratic autocracies and dependence on oil. Here’s a quote from that article that originally comes from a Bloomberg story announcing that Russia had become the world’s largest oil producer:
By now, Russia’s reputation for corruption is a cliché, but it is impossible to overstate how it defines public life at every level, all the way to the Kremlin. Russia is one of the few countries in the world to slip steadily in Transparency International’s annual rankings. Out of a hundred and seventy-eight countries surveyed in 2010, Russia ranks a hundred and fifty-fourth, a spot it shares with Cambodia, Guinea-Bissau, and the Central African Republic.
Corruption has reached such extremes that businesses involved in preparing the Black Sea resort of Sochi for the Winter Olympics of 2014 report having to pay kickbacks of more than fifty per cent. The Russian edition of Esquire recently calculated that one road in Sochi cost so much that it could just as well have been paved with, say, nine inches of foie gras or three and a half inches of Louis Vuitton handbags. In October, President Dmitry Medvedev announced that a trillion rubles—thirty-three billion dollars—disappears annually on government contracts. This is three per cent of the country’s G.D.P.
Before I keep going, let’s take one break to recognize the power of the free-market consumer here. Each of us — if we decide to bicycle for transportation, drive an electric car, or use mass transit — can cut into oil-soaked kleptocracies and autocracies. Want to do something to protest these corrupt, murderous, thieving mafia-like governments? Drop gasoline and diesel.
Anyway, let’s move on to the connection between Russian billions and “Trump World” (Trump private business and associated investors/collaborators/supporters). It’s still not clear if Trump’s presidential campaign coordinated with Russians in order to “hack” the US election and get Trump elected to the White House (or “Southern White House,” as it may be). There are a LOT of odd connections, but we are not aware of any conclusive evidence of collusion. However, Trump’s family business has reportedly taken a ton of cash from Russians in recent years/decades. That info essentially comes right from Donald Trump’s sons.
Golf reporter and author James Dodson has shared a conversation he had with Eric Trump in 2014, after being surprised to discover that the Trumps had $100 million to fund renovations at the new Trump golf course they were visiting:
“As we were setting off, I said, ‘Eric, who’s funding? I know no banks — because of the recession, the Great Recession — have touched a golf course. You know, no one’s funding any kind of golf construction. It’s dead in the water the last four or five years.’ And this is what he said. He said, ‘Well, we don’t rely on American banks. We have all the funding we need out of Russia.’ I said, ‘Really?’ And he said, ‘Oh, yeah. We’ve got some guys that really, really love golf, and they’re really invested in our programs. We just go there all the time.’ Now that was three years ago, so it was pretty interesting.”
It seems this wasn’t a one-off deal. Several years earlier, in 2008, Trump’s other adult son said something even more revealing. Here’s some Think Progress coverage of this story:
This wouldn’t have been the first time one of the Trump offspring bragged about Russian funding. At a real estate conference in 2008, Donald Trump Jr. said that the Russian money was “pouring in” to the Trump business.
“And in terms of high-end product influx into the US, Russians make up a pretty disproportionate cross-section of a lot of our assets; say in Dubai, and certainly with our project in SoHo and anywhere in New York. We see a lot of money pouring in from Russia,” he said.
As sources of financing for Trump business ventures go, this wouldn’t actually be that unusual: After most American banks stopped lending to him due to his history of risky investments and dealings, Trump turned to other streams of funding to build his empire, including borrowing heavily from German-owned Deutsche Bank, to which he still owes millions.
Incidentally, Deutsche Bank also had deep ties to Russia back then that it got busted for, and the only American who landed near the top of a Cyprus bank connected to all of that was a Wilbur Ross, our current US Secretary of Commerce thanks to Donald Trump and a complicit Republican Congress.
Shit gets weird, but I really recommend watching that clip.
What’s the message? Like I said before, I don’t know of any conclusive evidence of direct collusion with Russia at this point, but there have been over a dozen oddities in regard to Russia and Trump, including: super suspicious campaign leaders and advisers, statements (and lack of statements) from Trump with regard to Putin and Russia, and some shocking moves by Trump since he became president.
In the kindest, most accepting description I can think up:
- Trump’s private business has had a lot of dealings and taken a lot of money from rich Russians.
- That leads Trump to like Russians more than the average Joe.
- That and Trump’s positive comments about Putin made Russia prefer Trump to hawkish and well informed Hillary Clinton
- All of that led Russia to meddle with US democracy.
- Trump doesn’t feel like he did anything wrong, doesn’t have knowledge of campaign team members doing anything wrong, absolutely does not want to admit any wrongdoing or possible mistakes, and doesn’t want the media or FBI focusing on this.
- Trump fired FBI Director James Comey (Jim Comey) out of frustration with media coverage and public statements from Comey regarding the Russia investigation — Trump basically said exactly that in an interview with Lester Holt last week, and numerous leaks to the media have confirmed the same.
The fifth point above fits perfectly with Trump’s branding approach and messaging style — in the most positive of scenarios, it seems he either didn’t have a sense of how politically inappropriate firing Comey was and how bad that would be for his brand, legislative efforts, and daily grind as a result.
In a more negative scenario, of course, Trump knows there’s stuff he doesn’t want uncovered and he saw firing FBI Director Jim Comey as very important to stopping or weakening an FBI investigation into the matter, which was clearly heating up and getting more attention.
Again, bringing this back to the key building block, here’s the story:
→ Modern oil dependence has led to numerous oil-soaked kleptocracies and autocracies.
→ One of those, possibly the biggest of them, is Russia.
→ Trump World has reportedly used a lot of money from rich Russians (presumably tied in some way to Putin and official Russian interests, including Russia’s oil & gas industry). This money was a big help to Trump World after Trump bankruptcies drove away US banks and also in the midst of the financially drained Great Recession.
→ Whether indirectly or directly, Trump and Russia’s leadership were “on the same team” during the 2016 presidential campaign.
→ Since Trump took over the White House, Russia-connected scandals have led to Trump’s National Security Adviser (Michael Flynn) getting fired in record-fast time, Trump’s Attorney General (Jeff Sessions) recusing himself from the Russia investigation after it was discovered he lied about a meeting he had with a Russian diplomat (widely considered to be Russia’s top US spy) during the campaign season, and Trump’s son-in law (in charge of an insane number of things despite no experience) also getting busted for not disclosing meetings he had with Russians (that he was legally supposed disclose).
→ Now, Trump has fired the FBI director leading the investigation into the Trump campaign’s ties to Russia.
But that’s more or less the story of one petrostate’s ties to the current White House. There’s another semi-petrostate to discuss as well.
Oil & Gas Industry US Political Donations
As much as we like to think of the United States as a clean democracy, one of our two political parties is all in with the oil & gas industry. Almost all political funding from the US oil & gas industry goes to the Republican Party. The Republican Party, meanwhile, votes on energy, air, climate, and water issues as if it is a heartless ExxonMobil robot voting on these things.
The US is not a petrostate, but the Republican Party — which is now in control of the presidency, the House of Representatives, and Congress — treats any related policies as if the US is a petrostate and should remain one. For all effective purposes, what’s the difference when Republicans are in power?
Think of the fact that longtime ExxonMobil CEO Rex Tillerson is now US Secretary of State (that’s not more suspicious than Hillary Clinton using a convenient private server while in that role, eh?), the head of the Environmental Protection Agency (EPA) is now Scott Pruitt (a man who let oil companies write letters for him to send to the EPA when he was attorney general of Oklahoma and who repeatedly sued the EPA), and the head of the Department of Energy (DOE) is a former governor of oil & gas state Texas who has financial ties to the oil & gas industry and vowed as a presidential candidate in 2015 to eliminate the DOE if he was elected president.
Does that not sound like a petrostate to you?
How would a petrostate kleptocracy act differently than the Republican Party and Donald Trump are operating today?
So, despite all the hype about American patriotism and democracy, is it really a surprise that the oil-soaked Republican Party and Russia-friendly Donald Trump are acting as the political arm of ExxonMobil and Russia’s oil billionaires?
And is it really surprising that Republican “leadership” in Congress has essentially let Donald Trump get away with firing Republican FBI Director Jim Comey just as the FBI’s investigation into the Trump campaign’s potential collusion with Russia seemed to be heating up? After all, as Susan wrote in December, “What’s Good for Putin is Good for ExxonMobil.”