The Evil That Men Do

by Robert Gleason

  The hard right’s first major successes were at the statehouse level, where they swept election after election after election. Once in control of the governorships and statehouses, they could gerrymander voting districts and expand voter-suppression laws, making it prohibitively difficult for minorities, college students, the working class, the disabled and the elderly—the base of the Democratic Party—to cast ballots. They quickly commandeered the House of Representatives and marginalized the Democratic Party almost out of existence.

  After that, the Radical Rich were in position to take over the Supreme Court, where they pushed through Citizens United, which allowed the rich to donate almost unlimited sums to political parties of their choosing. At that point, they were effectively able to purchase any legislation that increased their wealth and power. They were even able to channel many of those donations through foundations, which allowed them to take charitable deductions, inspiring Warren Buffett to dub their movement the “Charitable-Industrial Complex.”

  Their political ideology? It came down to money and power, pure and simple. They all wanted to keep the IRS’s carried-interest loophole, which kept the majority of their taxes below 20 percent. The petrochemical barons wanted to castrate the EPA and eliminate pollution restrictions. The Wall Street tycoons wanted to abolish Dodd–Frank and defang the SEC so they could do high-stakes deals unimpeded, then get taxpayer bailouts when their gambles went south—as they did during the debt-derivative debacle of 2008. There were no “ethical principles” involved in their political movement. It was a zero-sum, winner-take-all, war-to-the-knife, upper-one-percent, “I’ll-leave-you-bleeding-from-the-rectum” business philosophy. Mitt Romney summarized their attitude perfectly when he said 47 percent of the country was “moochers and takers” and it was us, the Upper One Percent, against them. They wanted a country run by the unelected rich who were answerable to no one.

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  The U.S. has a vast and heterogeneous transnational economy based on free markets and free trading. For super-rich corporate moguls to turn America’s political-economic system into an oligarchy would be an ambitious—but not an impossible—undertaking. Thanks to decades of highly destructive mergers that have shrunk the number of leading companies in most of the top U.S. industries over the last four decades, we have seen corporate power concentrated into a rapidly shrinking number of hands. Jane Mayer points out that since the oil industry is dominated by only a half dozen mega-firms, it is arguably an oligarchy. The airline industry is dominated by four companies and is, by definition, an oligarchy. Today in the U.S. we also see increasing monopolization within individual cities and regions, particularly in health care services.

  So what would an American oligarchy be like?

  One of the many problems with oligarchy regards erosion of political rights. Since the oligarchs are able to buy the legislators, presidents and judges, they exert undue control over the political/judicial systems, and their rights perforce trump the rights of ordinary people. The political/judicial system then exists to advance their interests. Increasingly, they force the legislature to nationalize their business risks and privatize their economic rewards.

  Since the oligarchs face little if any competition within their various industries, they have immense control over their employees’ wages and working conditions. Consequently, the oligarchs share, if not control, the massive power of the state, and they are subject to relatively few checks and balances. Might makes right, and given the erosion of the legislature’s and the judiciary’s authority, all that is required for a tyrant to assume absolute power is a coup. Caesar Augustus, Napoléon, Lenin, Hitler, and some say Vladimir Putin came to power through coups d’état.

  Russia is very clearly an oligarchy run by an extremely powerful strongman, Vladimir Putin, and while I write about Russia in my novel, my character is not Russia’s current president. I do, however, accurately describe the state of Russia’s economy, that nation’s essential demography, and my statistics are accurate. It is not a pretty picture. One of my characters, the journalist Jules Meredith, writes a newspaper piece summarizing the damage that the tyrant Mikhail Ivanovich Putilov and his oligarchy had done for the Russian people:

  What has Putilov’s oligarchy done for him, and what has he done for his fellow citizens? In the late 1980s, he’d been thrown out of the KGB, and he was a nobody—just a busted-out intelligence agent who had drifted into politics. He had never been a lawyer, doctor, teacher, scientist or scholar—a manufacturer, a financier or any kind of businessman. He was merely a KGB functionary who had created nothing of financial worth or socially redeeming value. Yet twenty-five years after entering politics, Putilov owned twenty official residences with 24/7 round-the-clock staffing. One of them—“Putilov’s Palace”—cost his oligarchical supporters $1 billion. He was the proud possessor of four yachts—one of them worth $50 million—fifty-eight airplanes and almost $1 million worth of watches. One of his favorites was his $60,000 white-gold Patek Philippe Perpetual Calendar.

  Worth over $200 billion, Putilov was easily the wealthiest man on earth, with two and a half times as much money as the second-biggest billionaire, the legitimate businessman Bill Gates.

  How had he acquired such prodigious riches?

  In the 1970s the USSR had kept tens of millions of dollars’ worth of foreign currency in secret accounts concealed in other countries—partly to fund operations abroad. Intelligence agencies worldwide had abundant evidence that Putilov and his brigands stole almost all of it. He then arranged for the theft of over 500 tons of bullion purloined from the old USSR’s gold reserves. He and his crew also mastered the arcane minutiae of asset-stripping, the privatization of government properties, extortion of legitimate businessmen, outright thievery and the simple art of murdering anyone who got in their way. And of course, they exacted bribes on an almost cosmic scale. Even today, a simple meeting with President Putilov costs a Russian businessman $10 million. Some Russian businessmen privately grumble that the cost of doing major deals in Putilov’s Russia is a 35 percent bribe to the new Czar.

  A Spanish prosecutor who had successfully wiretapped many of Putilov’s business partners while they were in Spain—building illicit villas with conscripted Russian military personnel and running various black-market enterprises—said the transcripts proved that Russia’s mafiosi were an integral part of those and many other of Putilov’s operations. In fact, over the decades Putilov, his ex-KGB associates and his coterie of oligarchs had found the Russian mafia to be invaluable allies. They routinely employed them for targeted beatings, killings and other acts of calculated terror, which assured the Putilov clique’s total domination of Russian politics and economic markets. All the while, he and his junta reaped hundreds of billions of dollars.

  Putilov even managed to plunder his fellow plunderers. Setting himself up as the ultimate crime boss, his economic system became known as Putilovism—a tribute system in which all the players bowed to his absolute authority. In exchange Putilov bestowed on them the right to pillage those around them on a historically unprecedented level—he has granted them utter immunity from legal punishment. As part of his protection racket, Putilov awards diplomatic counselorships to his most loyal followers, freeing them of domestic and foreign prosecution and most forms of intrusive surveillance.

  The West assists Putilov and his people at every turn. After Putilov and his pirate crew lawlessly loot their own land, the Western world—with its strict adherence to law and order—sees to it that these freebooters’ ill-gotten gains are safely and secretly secured. Under the aegis of these democratic privacy laws, Putilov has constructed for himself and his cronies a seemingly impenetrable underground labyrinth of thousands upon thousands of hidden accounts.

  To put the sum total of Putilov’s thefts into perspective, consider that the U.S. GDP is $18 trillion and U.S. tax-free offshore accounts contain $2.1 trillion, or 12 percent of its GDP. The world’s GDP is around $75 trillion, and the total amount of
global black money buried abroad is around $26 trillion, or about 32 perent of the planet’s GDP. As obscene as those percentages might be, they pale before those of Putilov’s Russia. The $1.3 trillion that Putilov and his cronies have locked away in Western banks is more than 100 percent of Russia’s GDP, which is only $1.26 trillion. In other words, Putilov and his wolf pack have devoured the equivalent of Russia’s entire annual GDP!

  So we know what Putilovism has done for Putilov and his billionaire partners. It’s made them all unimaginably rich, but what has it done to the Russian people? Theirs is a story of unremitting poverty and brutal exploitation. Despite one statistically aberrant population spurt, that nation now faces a long-term population implosion—not explosion. According to the Brookings Institution by the century’s end, Russia could well see its number of citizens drop from 143.5 million to 100 million people, its 1950 census level.

  Why the contraction?

  Putilov’s oligarchy has stretched his people to the breaking point. Instead of upgrading Russia’s collapsing health care system, he has plundered those programs remorselessly and funneled the money into the pockets of himself and his wealthy friends. Consequently, the depressed and oppressed Russian people labor under some of the highest rates of alcoholism, tobacco abuse and drug addiction on the face of the earth. Deaths from HIV/AIDS are rampant as are loss of life from heart disease, air/water pollution and suicide. Consequently, male longevity in Putilov’s Russia is fifteen years lower than that of men in Germany, Italy and Sweden. The life expectancy of a fifteen-year-old boy in Russia is three years lower than that of a Haitian fifteen-year-old boy. Polish women live an average of six years longer than Russian women. In fact, each year, Russian men kill more women in their families than the Afghans killed Russian soldiers during that entire conflict.

  Such long-term depopulation trends also spell economic disaster. A Yale University study says Russia has entered a “demographic perfect storm.” In thirty-five years, persons of worker-age in Russia will constitute less than 14 percent of the population. Moreover, the country is witnessing a rapid decline in the educational and skill levels of its workers. All of these stressors will put profound pressure on the pension plans and health care providers servicing Russia’s rapidly aging population.

  Unsurprisingly, foreign firms are not eager to set up businesses and invest in Putilov’s Russia. Among advanced nations, Russia under Putilov ranks number one for corruption and bribery; it rates last in legal, financial and political transparency. Moreover, doing business in Russia can be highly dangerous if you are not part of Putilov’s in-group. In the last ten years Putilov’s supporters in the business community have bribed cops, judges and prosecutors to imprison their competitors, putting over 300,000 innocent businesspeople behind bars. According to one estimate, such individuals represent 15 percent of Russia’s prison population.

  Putilov even refuses to build the minimal infrastructure businesspeople need to conduct business. While China during the last decade has built almost 4,500 miles of roadways, Putilov has yet to construct a single transnational highway. Because of corruption, pipelines in Russia cost 300 percent more than they do in the EU. Of the $50 billion Russia spent on the Sochi Olympics, over $25 billion went into the coffers of Putilov and his partners.

  Each year, bribery, kickbacks and extortion under Putilov are estimated to drain 33 percent from its $1.26 trillion GDP.

  The sad truth is that Putilov and his supporters are less interested in running their businesses efficiently than they are in robbing the country’s economic sector and hiding the money overseas. Among the world’s nations, Russia now has, far and away, the highest percentage of its GDP secreted in clandestine foreign bank accounts—many of them in the West. As we mentioned earlier, Putilov and his cadre of crooks have hidden over 100 percent of Russia’s annual GDP abroad.

  The effect that all this corruption has on the financial well-being of individual Russians is devastating. Credit Suisse estimates the median wealth of adults in Russian households to be $871. In other words, half of Russian adults have a total household wealth of under $871. Under Putilov, median household wealth for a Russian adult was 85 percent of that for his or her counterpart in India, where that person was worth $1,040. In Brazil, median wealth is is $5,117; in China it is $8,023.

  According to Credit Suisse, in the Land of Putilov, 111 people control 19 percent of that country’s entire wealth, and the upper 10 percent possess 85 percent of the money.

  While the Russian people under Communist rule historically had a long tradition of literacy and academic achievement, and while they are still relatively well-educated in math and science, there are limited job opportunities for their best-educated people, many of whom are brilliant, creative, ambitious and highly trained in these disciplines. The country produces shockingly little technological innovation or development. The state of Alabama produces more patents each year than Russia. Austria develops thirty-five times as many. Employment opportunities are so dismal that one poll indicated that almost two-thirds of the Russian population seriously considers emigration.

  Under Yeltsin, Russia had financial problems, but people and businesses enjoyed relative personal and financial freedom. Putilovism changed all that. Russia’s expanding free market system was turned into an economic dictatorship with all major business decisions dependent on the whims of a single ruler. To achieve this position of total power, Putilov had to pauperize and subjugate the entirety of the Russian people and rip successful Russian companies apart piecemeal. As Karen Dawisha has written: “Massive companies that had previously flourished in the private sector, like Mikhail Khodorkovsky’s [oil company] Yukos, were raided and taken over by Kremlin insiders.”

  Such tactics have driven most investors out of Russia. U.S. hedge fund magnate William Browder is a classic case. He’d invested heavily in Russia and had done well—until he rebelled against Russia’s corruption and its lack of business transparency. Putilov responded by arresting Browder’s lawyer–auditor, Sergey Magnitskiy, and jailing him. Savagely beaten in prison, Magnitskiy was also starved, subjected to freezing cold and denied medical care. He subsequently died.

  The United States under Barack Obama did fight back. Obama put those responsible for Magnitskiy’s death and for the illegal expropriation of Browder’s assets on a visa-denial list and refused them entrance into the U.S. Russia responded to these actions by trying Browder in absentia and Magnitskiy posthumously—both for tax evasion. After sentencing Browder, who by that time was living overseas, to a long prison term, Russia seized and gutted his Russian companies, funneling hundreds of millions of dollars into Putilov’s private bank account and those of his jackal pack.

  It was also the first time in history a legal system had tried a corpse.

  Meanwhile, Russia’s economy continues to fall apart. Not only has their leader’s ferocity frightened away foreign investors, it has scared Russian businessmen into leaving Russia. Over 300,000 such businesspeople have moved to London, hoping to find a safer environment for themselves and their families. With macabre irony, some of these émigrés have continued to work for their government, ransacking the Russian economic sector. At the same time, however, they and their families rely on law-abiding Londoners and that nation’s respect-for-the-law political system to provide peace and security for themselves and their loved ones. The hard painful truth is that the Western banking system has acted as Putilov’s willful enablers and fraudulent financiers.

  As I said, my character Putilov is fictional, but I accurately describe the statistical effects of oligarchy on Russia’s citizenry. Rule by a handful of super-rich autocrats has typically led to the commandeering of the legislative and judicial branches of government, resulting in state racketeering on a massive scale. In the case of Russia, the compete takeover of Russia’s news media was also predictable, and it, consequently, became a propaganda arm of the state and of that nation’s oligarchs.

  Russia is not the onl
y oligarchic tyranny in recent memory. In The Arms of Krupp, William Manchester describes a scene in which Germany’s top industrialists ask themselves whether they should support Hitler in his campaign for the chancellorship even though he has made it quite clear that he plans on making himself dictator for life. They decide to back him, in large part because he has offered to rid them of their union problems—a promise he would ruthlessly keep. They, consequently, shower massive political contributions on him. Their decision to bankroll an indisputably evil monster is based almost solely on greed.

  Manchester goes on to describe in shocking detail how, after Hitler conquered foreign nations, these same oligarchs would assist him in commandeering the foreign factories, plants, mills, mines and oil operations. Sometimes they and the Reich would simply strip out the heavy industrial equipment and take it back to the Fatherland, where the materials would be refit for use in the oligarchs’ plants. They would bring back hordes of slave laborers to work in their plants as well. One industrialist became so rich and powerful off these “hostile takeovers” that, Manchester wrote, his company’s “smokestacks stained the sky over almost every continental country, from Belgium to Bulgaria, from Norway to Italy.” That firm owned thousands of ore pits and coal mines in foreign lands as well—even in Russia.

  In another blood-chilling scene, a group of these preeminent plutocrats pore over a European map and a list of all the nations in that region that Hitler has recently conquered. They begin chopping up these countries’ industrial sectors like gangsters carving up 1920s Chicago, dividing up factories, plants, refineries and mills among themselves. Throughout the book, Manchester depicts these moguls swelling with pride as their bottom lines swell with black ink generated by Hitler’s conquests.

  The Arms of Krupp dramatically demonstrates what happens to a country when a small clique whose main ambition is to accumulate illimitable wealth seizes power. Totalitarian tyranny cannot be far behind.