Putin has been either Prime Minister or President of Russia since 1999, when he mysteriously ousted Boris Yeltsin. In that time, he’s risen from a mere KGB functionary to de facto dictator of Russia with control of nearly all Russian enterprise. While Putin is thought to be the wealthiest man in the world, one must wonder about that when, in looking at where he's focused his attention, that making money factors highly in his underlying motives for interfering in our election.
Based upon Putin’s boldest actions, especially since 2008, Putin seems laser focused on two goals: growing Russian state oil wealth and building up his cyber arsenal for stealing elections and cementing his power and influence. Putin's long duration and obsession with wealth has led to his use of increasingly bold tactics for stealing oil assets and elections. Given this backdrop, follow below the fold for why Obama's 2014 Russian Sanctions and its impacts on the Exxon-Rosneft deal are likely to have become the primary motivator for Putin to brazenly deploy his well-honed election interference apparatus against the US as a way to get out from under the Russian Sanctions, which scuttled the progress of Putin's most promising source oil profiteering.
During Putin’s first two terms as president (2000-2008), even while he made some infrastructure investments and worked to grow the Russian economy along with rising oil prices, his most notable achievement may be his October 2003 attack on Yukos Oil, jailing Yukos' pro-democracy CEO Mikhail Khodorkovsky, then Russia’s wealthiest man, and taking Yukos’ assets through “unlawful expropriation.” These assets, though years in the wrangling, were eventually transferred for pennies on the dollar to state-owned, Putin-controlled oil companies, Rosneft and Gazprom.
Between 2008 and 2012 (while Putin served as “Prime Minister" for the Medvedev presidency) Putin was a busy guy, plotting his run for an illegal third term in 2012. On top of managing President Dmitry Medvedev (who had some pro-democracy tendencies), Putin had to get the Duma to approve the extension of presidential terms from 4 to 6 years (so he could legally run for his third term). There were some meddlesome international lawsuits filed for the theft of Yukos' assets—which awarded $50 billion to the shareholders—and he had to organize para-military forces to suppress the protests that arose as a result of his successful election-stealing capabilities. Even so, in 2010 negotiations began between Exxon Mobil and Rosneft for a massive $500 billion joint-venture investment deal, which included getting Exxon to transfer and train Rosneft not only in arctic oil exploration technology but also providing access to Exxon’s shale oil technology, which could enable Rosneft to develop considerable Siberian shale fields, something Putin obviously recognized the enormous value of.
As far back as 2000, weird power transfers have happened in Russia. There have been four major presidential elections in Russia alone, and Putin has emerged as the Russian "leader” each time, increasing and improving weaponized tactics for stealing electoral power, feigning popular support and “smoothing over" the resulting protests. He appears to have learned a lot from his failed tactics in the Ukraine election as early as 2004, trying to help his buddy Viktor Yanukovych steal the election. The effort was detected and the election nullified by the Ukraine Supreme Court. This showed Putin the need for more finesse from operatives like Paul Manafort, who went on to help Yanukovych "win” the 2010 Ukraine election (although he was subsequently ousted later) by angry mobs.
Officially named in 2014 by the Organized Crime and Corruption Reporting Project as “the individual who has done the most in the world to advance organized criminal activity and corruption,” Putin also ranked honorable mention in three of five years. It turns out, Putin loves power and money. He maintains power with brutality, his reign marred by multiple high-profile political jailings, shootings, poisonings and other unexplained deaths of prominent politicians, ambassadors, journalists, business executives, lawyers and civilians. Speculation suggests that Putin maintains close associates in the Russian mafia, as invariably such deaths are never adequately prosecuted, or solved. In the lawless environment that is Russia, the only law enforced is Putin's will and he consistently silences his opposition.
Putin was weathering all of the protests about his third term and election fraud when things started to change in 2013. Following the death of Sergei Magnitski, a lawyer jailed for investigating Russian corruption, Obama issued sanctions barring travel and freezing the assets of 18 Russians known to be involved with human rights abuses and possible murders. In response, Putin replied to this “open blackmail” by issuing his own sanctions against 18 Americans (which included Preet Bharara, who was then in charge of prosecuting the case against Viktor Bout, the convicted Russian arms dealer now in federal prison in the United States).
Then, in 2014, it got a lot worse. In response to the Ukrainian ouster of Putin’s successfully-placed puppet, Viktor Yanukovych, Putin had to violate international law to effect his retribution. He perpetrated a cloaked invasion Crimea, effectively annexing a portion of the independent state of Ukraine but nobody was really fooled, despite the extensive cover-up efforts by Putin’s troll army feigning to be pro-Russian Ukrainians. In response, Obama issued two sets of sanctions. The first “Sanctions Target Seven Russian Government Officials, Including Members of the Russian Leadership’s Inner Circle, and 17 Entities” was issued in April 2014 and included Igor Sechin, the President and Chairman of Rosneft, the Exxon's Russian petroleum partner in the $500 Billion investment deal.
By this time, Putin was tantalizingly close to obtaining what he wanted from his friend, Rex Tillerson, CEO of ExxonMobil and unlocking of an estimated 85 billion barrels of oil for Russia. Plus, Exxon had promised Rosneft considerable access to Exxon’s trove of both Arctic oil extraction and shale oil extraction technology, which Russia badly needed to exploit its massive shale oil formations in Siberia. Putin desperately wanted to get his hands on all of this complex hydrocarbon know-how (which was likely too complex to steal through ordinary corporate cyber-hacking).
The final blow was dealt the Exxon-Rosneft deal in July of 2014, with the downing of a Malaysian aircraft by Russian-supported Ukrainian separatists, who were busily shooting down Ukrainian planes in defense of Putin's continued military build-up in the Ukraine. Obama expanded on the earlier sanctions with the following statement:
Today, and building on the measures we announced two weeks ago, the United States is imposing new sanctions in key sectors of the Russian economy: energy, arms, and finance. We’re blocking the exports of specific goods and technologies to the Russian energy sector. We’re expanding our sanctions to more Russian banks and defense companies. And we’re formally suspending credit that encourages exports to Russia and financing for economic development projects in Russia.
At the same time, the European Union is joining us in imposing major sanctions on Russia -- its most significant and wide-ranging sanctions to date. In the financial sector, the EU is cutting off certain financing to state-owned banks in Russia. In the energy sector, the EU will stop exporting specific goods and technologies to Russia, which will make it more difficult for Russia to develop its oil resources over the long term. In the defense sector, the EU is prohibiting new arms imports and exports and is halting the export of sensitive technology to Russia’s military users.
And because we’re closely coordinating our actions with Europe, the sanctions we’re announcing today will have an even bigger bite.
Now, Russia’s actions in Ukraine and the sanctions that we’ve already imposed have made a weak Russian economy even weaker. Foreign investors already are increasingly staying away. Even before our actions today, nearly $100 billion in capital was expected to flee Russia. Russia’s energy, financial, and defense sectors are feeling the pain. Projections for Russian economic growth are down to near zero. The major sanctions we’re announcing today will continue to ratchet up the pressure on Russia, including the cronies and companies that are supporting Russia’s illegal actions in Ukraine.
In other words, today, Russia is once again isolating itself from the international community, setting back decades of genuine progress. And it doesn’t have to come to this -- it didn’t have to come to this. It does not have to be this way. This is a choice that Russia, and President Putin in particular, has made. There continues to be a better choice -- the choice of de-escalation, the choice of joining the world in a diplomatic solution to this situation, a choice in which Russia recognizes that it can be a good neighbor and trading partner with Ukraine even as Ukraine is also developing ties with Europe and other parts of the world.
Thus, Obama not only put a total halt to Putin’s grandest oil escapades and the status and benefits of partnering with ExxonMobil, he showed Putin to be the utter outlaw that he is. So, despite years of unfettered corruption and resounding political control in Russia, Putin was both shamed and had his $500 billion Exxon-Rosneft party cancelled, which love affair he had sealed by granting Tillerson the Russian Order of Friendship Prize. One can just visualize Putin stewing and sputtering racial slurs over his chess board, plotting the brazen moves—far beyond merely slapping reverse sanction against U.S. companies and individuals—he was going to take to checkmate American democracy via our election as both revenge and as the most expedient way to undo Obama’s painful economic sanctions. I posit that it was at this time, specifically in response to these sanctions, that Putin began to conceive of the plan to unleash the well-honed and tested Kremlin election hacking apparatus and for-profit "lipstick-on-a-pig" political expertise afforded by Paul Manafort to extract his retribution and undo Obama's hard line against Russia.
This explains the early cultivation of Trump—a true pig ”in-the-rough,” and of various forces opposing the Democrats, including American Christian fundamentalists, antisemites, anti-Islamists, Nazis, racists, xenophobics, Alt-Right-ers, and especially oil-soaked Republicans. It explains why Russia started testing the use of social media fake news as early as September 2014. It explains why he began ramping up the social media “troll” army with a vengeance. Likely, many of the other “assets” were also ready to go with the right prompting: General Flynn, Carter Page, Jeff Sessions, Julian Assange and WikiLeaks, etc. All that was left was a little lucky hacking for some juicy sleaze to use as grist in the fake news engine and seeing what could be done quietly to support Trump’s primary win. As a bonus, Republicans were already acting in concert by working to suppress Democratic voter access. (Imagine Putin's delight at learning that Republicans don't actually believe in democracy either!) Between his efforts, those of zealous Republican partisans and the general credulousness of Americans, how could they lose?
The only uncertainty in the whole scheme: getting the Obama sanctions lifted. This explains why, out of nowhere, Rex Tillerson became the Trump “choice” for Secretary of State, Jeff Sessions the Attorney General and Wilbur Ross at Commerce. Putin knows that Tillerson has the same interests at heart to get oil deals done, even if he isn’t an actual Russian agent. Putin wanted all of the support he could get and Ross and Sessions were two he thought he could count on for that moment, now just passed, when ExxonMobil’s brazen request for a waiver from Treasury was submitted.
Fortunately, Exxon’s application for a waiver of the Russian sanctions has just been denied by Treasury. So, at least at this point, Putin has not gotten what he was after. He is now sitting in some dark room fuming that he went to all this trouble to attack our democracy, topple the Democrats and he still can't get out from under Obama’s very effective sanctions. Given Putin’s willingness to do whatever it takes, be quite sure that this won't be the last chapter in Putin’s all-out campaign to restart the Exxon-Rosneft joint-venture.