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Mon April 28, 2014
On The Sanctions List: Russia's 'Darth Vader,' Among Others
Originally published on Thu May 1, 2014 11:09 am
MELISSA BLOCK, HOST:
Among those on the sanctions list is an oligarch dubbed Darth Vader by the Russian press. To talk more about him and others targeted for U.S. sanctions, I'm joined here in the studio by David Kramer. He's the president of Freedom House, a pro-democracy watchdog group, and he was part of an independent taskforce of Russia experts that sent to the White House a suggest list of sanction targets. David, thanks for coming in.
DAVID J. KRAMER: Thanks for having me.
BLOCK: Let's start with that Darth Vader character I just mentioned. We're talking about Igor Sechin, whom Scott Horsley just mentioned, and he heads Russia's leading oil company, Rosneft. Just how powerful is Mr. Sechin?
KRAMER: Mr. Sechin runs the largest oil company in Russia. He is a very close associate of Vladimir Putin. The reason he adopted the nickname Darth Vader is he's a scary looking guy. He isn't someone you'd want to run into in a dark alley one day.
BLOCK: Scary looking or scary acting?
KRAMER: Both, I would say. Pictures of him don't suggest he's warm and fuzzy. But more importantly he's been a real power over the years with Putin. In the Kremlin, he was in the government. He's now running Rosneft. He worked with Putin in St. Petersburg. They have very close and long-lasting ties. And going after Sechin, I think is the biggest name that the White House has targeted so far.
BLOCK: Interesting that the company that Igor Sechin heads, Rosneft, the oil company was not sanctioned. And this is a company that is a top partner of Exxon Mobil, they have a lot of joint ventures together, was not on the sanctions list, this company itself.
KRAMER: Yes, Rosneft is well connected not only to American corporate interests but also to European corporate interests. Rosneft is the largest oil company in Russia. They did acquire most of its wealth by taking over the assets of Yukos, the company that was formerly owned by Mikhail Khodorkovsky who was arrested in 2003 and had his assets in company essentially taken over by the Kremlin.
So Sechin is well-plugged in, there's no question about it. And he is an individual that many company officials turned to when they want to do business in the energy field in Russia.
BLOCK: Is this company insulated than from sanctions, do you think?
KRAMER: No, I think this company is quite exposed. And, in fact, depends to a large extent on exports to the West which means that they are vulnerable to the sanctions. But it would also cause some significant dislocation for European countries and governments and individuals, who would be affected should Rosneft be sanctioned, similar to Gazprom if it were sanctioned, that would have significant reverberations in Europe as well.
BLOCK: And does that explain, do you think, why those companies that you mentioned just now are not on this sanctions list, at least not yet?
KRAMER: It seems that the administration is holding sanctions against Rosneft and Gazprom in reserve should Russian forces moved in the tanks across Ukrainian border. I'm not sure that's the best strategy. I would rather act proactively and preemptively rather than wait for Putin to call the shots. But there's no question that sanctions against these huge Russian energy companies would have significant repercussions in Europe, as well as in Russia.
But at the end of the day, there aren't any easy solutions to solving this problem. There are going to be solutions or responses or answers that are going to impose some costs on the West, as well. This isn't going to be cost free.
BLOCK: We did hear from President Obama in terms of assessing the efficacy of the sanctions. He said we don't yet know whether sanctions are going to work to change Russia's behavior. The goal, he said, is to change Putin's calculus. Do you think these will, in the end, be effective in doing just that?
KRAMER: There isn't much alternative, and the critics of sanctions have not offered an alternative. With the Russian economy already stagnating, with the ruble at an all-time low, the stock market falling, capital flight already in the first quarter of 2014 more than it was last year, it seems that the Russian economy is vulnerable to these kinds of steps. And it is reacting to these sanctions.
I don't know whether it will force Putin to recalculate what he is currently doing in Ukraine. But I do think it will force those around him to say to him, are you sure you want to go down this road.
BLOCK: David Kramer, thanks for coming in.
KRAMER: Thanks for having me.
BLOCK: David Kramer served in the State Department in the administration of President George W. Bush. He's now president of Freedom House. And he was part of a task force that submitted a list of suggested Russian officials and companies for sanctions to the White House.
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