Steve Gutterman's Week In Russia

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A pioneer retreats as U.S. auto icon Ford announces the closure of three plants in Russia, while an ally of Prime Minister Dmitry Medvedev is jailed on a corruption charge. Moscow comes out with its own take on the Mueller report, sight unseen, and injects about 100 military personnel into the standoff over Venezuela.

Here are some of the key developments in Russia over the past week and some of the takeaways going forward.​

'End Of An Era'

Whenever a big American brand is in the news in Russia, it tends to come with a supersize side of symbolism -- a unmistakable sign of the times.

When Mikhail Gorbachev appeared in a Pizza Hut commercial in 1997, it meant one thing. When Russian authorities targeted McDonald's with a politically charged series of restaurant closures ostensibly based on health concerns in 2014, it meant something else.

Accelerate to 2019 and the U.S. brand in focus, so to speak, is Ford: The company announced on March 26 that it will close three factories in Russia this year, ending car production in a country where its vehicle sales fell from nearly 190,000 in 2008 to more than 130,000 in 2012 and about 53,000 in 2018.

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Ford To Close Three Factories In Russia, Resulting In 'Significant' Job Losses

And this time, the matter goes substantially deeper than symbolism, even though the symbolism is strong -- both because of the iconic prominence of the company's name worldwide and because it was a pioneer in a place where, before the collapse of communism, car ownership was far rarer than in the United States.

Even after a big boom in vehicle ownership in the late Brezhnev years, in 1985 there were 44 cars per 1,000 people in Russia -- compared to 744 in the United States.

Out Of His Flivver

The plans to close two plants that produce passenger cars and one that makes engines is a major reversal for Ford, which opened its first assembly line in Russia in 2002 -- outside President Vladimir Putin's hometown of St. Petersburg during his first term -- and once manufactured the most popular foreign car in the country.

Ford's flight is part of an effort to make its European operations more lucrative, but it is also a symptom of what a Bloomberg news article called "the dismal state of car sales in a market that, at the start of the decade, looked prime to become Europe's largest."

More broadly, it is "the latest sign of foreign companies and investors souring on Russia" where a sluggish economy and Western sanctions -- imposed to punish Moscow for its seizure of Ukraine's Crimea region and other actions that U.S. officials have called "malign activities" abroad -- have taken some of the glitter off a once-glittering prize: nearly 150 million potential consumers seeking a dream that is not only American: a home, a car, a happy family.

Nothing To See Here

OK, shifting gears here: You're back in high school, and one afternoon you run into your longtime crush -- seemingly unattainable -- at the diner. They ask about the calculus homework, and a classmate later reports seeing the two of you in a booth, heads bent close.

Then the ruling comes down from the person and their friend group: THERE WAS NO DATE!

In response, you: a) Claim it was a date; b) Agree that you met by chance and were just helping with the homework; or c) Deny you were even at the diner that day -- or at any diner ever.

Option c) is pretty much the path the Kremlin took in response to U.S. Attorney General William Barr's letter to Congress about Special Counsel Robert Mueller's report on his 675-day probe into Moscow's role in the 2016 U.S. presidential election and whether Trump or his associates colluded with Russia in an effort to sway the vote. He also examined whether Trump obstructed justice.

According to Barr, Mueller wrote that his investigation "did not establish that members of the Trump Campaign conspired or coordinated with the Russian government in its election interference activities."

So, no finding of collusion. But Russian officials sought to take it a few steps further -- big steps -- by suggesting that Moscow had somehow been cleared of interfering in the election.

Confucius Confusion

Russian President Vladimir Putin's spokesman, Dmitry Peskov, reiterated the assertion that Russia has not interfered in elections in the United States or anywhere else, and said it was natural that the probe did not establish collusion between Russia and associates of Trump.

"It's hard to find a black cat in a dark room, especially if it's not there," Peskov said on March 25, attributing the words to a Chinese philosopher and suggesting that thickheaded folks "across the ocean" still don't get it centuries later -- thus setting off a debate about whether Confucius or any other Chinese philosopher ever said that, as well as a side debate about whether looking into that question was a worthwhile way for Western journalists to spend time.

The Russian Foreign Ministry, meanwhile, suggested that Moscow is owed an apology.

Russia hopes that "in time," the United States will "officially admit not only that there was no 'collusion' but that all the insinuations of 'Russian intervention' are groundless slander invented for use in the domestic political struggle in the United States," it said in a statement.

Without seeing the Mueller report -- which has not been seen by anyone outside the U.S. Justice Department -- the ministry concluded that "Mueller's investigation produced no evidence of Moscow's involvement in the notorious cyberattacks and other attempts to 'undermine American democracy' that Russia is being accused of without end."

'Multiple Offers'

Furthermore, it said the indictments of 25 Russians linked to the Internet Research Agency, the St. Petersburg "troll factory" that Mueller's probe said was behind the social-media prong of Russian attempts to divide Americans now "look just laughable."

Hard to see how: There may be many ways to read Barr's summary, but that's not one of them.

The brief letter refers repeatedly and unequivocally to Russian interference. It says Mueller's probe determined there were "two main Russian efforts to influence the 2016 election" -- one involving attempts to "sow social discord" though "disinformation" on social media, the other "computer hacking operations designed to gather and disseminate information to influence the election."

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The Key Findings Of The Mueller Investigation

Barr also said Mueller's report described "multiple offers from Russian-affiliated individuals to assist the Trump campaign."

With President Donald Trump claiming "complete and total exoneration" after a 22-month probe that has haunted his time in the White House, it's understandable that Putin might see the end of Mueller's investigation as a chance to put one fraught phase in relations with the United States behind him and start with a clean slate, or at least a cleaner one.

A couple of mid-sized stars in the Kremlin constellation suggested as much when they made -- as the same ones seem to do every time -- the first prominent Russian comments on the matter.

Konstantin Kosachyov, chairman of the International Affairs Committee in the upper parliament house, the Federation Council, echoed Trump's derision by asserting that the Mueller probe was accompanied by "two years of incessant lies" and that "we in Russia knew from the start" that there was no collusion.

'Complete And Total'

There is now "an opportunity to reset a lot in our relations, but there is still a question as to whether Trump would take that risk," he said. "We, of course, are ready."

There's no sign of a spring thaw.

Instead, the nuclear-armed countries at odds over military conflicts in Syria and Ukraine traded verbal blows about the situation in Venezuela, where Russia is backing Nicolas Maduro's efforts to hold onto power and keep it out of the hands of Juan Guiado, the opposition leader who is recognized as interim president by the United States and more than 50 other countries.

Trump, speaking to journalists at an Oval Office meeting with Guaido's wife, Fabiana Rosales, four days after two Russian military planes landed outside Caracas carrying nearly 100 military personnel the U.S. government believes include special forces and cybersecurity experts, said that "Russia has to get out" of Venezuela. He warned that "all options" to achieve that were on the table.

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U.S. President Donald Trump Tells Russia To 'Get Out' Of Venezuela

Predictably, Russia's response amounted to: No, we don't.

"Russia is not changing the balance of power in the region, Russia is not threatening anyone, unlike [officials] in Washington," Foreign Ministry spokeswoman Maria Zakharova said the next day.

The "Russian specialists" were sent to Venezuela under a military cooperation deal, she said, and would remain "for as long as needed."

Arresting Developments

Back in Russia, it seems like there's an arrest of a prominent official or ex-official every week now.

This week there were two: Viktor Ishayev, who was Khabarovsk governor from 1991 to 2009 and a vice president at oil company Rosneft from 2013 to 2018, is accused of stealing from the state-owned company through fraud. He was placed under house arrest by a Moscow court on March 28.

Ishayev has been a towering figure in the Russian Far East, one of the longest-serving governors in Russia. But his arrest was in some ways overshadowed by that of former cabinet Mikhail Abyzov, who was ordered jailed for two months of pretrial detention on March 27.

Like Ishayev, Abyzov is accused of stealing money through fraud -- in this case, of being involved in a criminal group that allegedly embezzled 4 billion rubles ($62 million) from the Siberian Energy Company and Regional Electric Grid in Novosibirsk.

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Court Orders Russian Ex-Minister Abyzov Kept In Jail On Fraud Charges

Abyzov is seen as a member of the liberal camp in the Russian elite and an ally of Prime Minister Dmitry Medvedev. It could hardly be otherwise, given the name of the government body he headed from its creation in 2012 to May 2018, when it was abolished as Putin began his fourth term: The Ministry of Open Government Affairs.

Money Or Politics

In high-profile cases in Russia, specific suspicions aired by the law enforcement authorities -- however credible or not -- are rarely seen as the full explanation for an arrest. In Abyzov's case, cash-driven conflicts with tycoons such as Mikhail Fridman and Viktor Vekselberg are part of the backdrop.

But suspicion and speculation has gravitated to the Kremlin and to the question of succession: Will Putin -- who steered Medvedev into the presidency as a placeholder in 2008 and then returned in 2012, but is again barred by term limits from seeking reelection in 2024 -- turn to Medvedev a second time?

Analyst Tatyana Stanovaya, as paraphrased by the media outlet Meduza in its March 28 newsletter, said that the "latest crackdown" on the prime minister is gathering strength as the enemies of the liberal camp, the siloviki, --Russian slang for members or veterans of the security services -- "realize that Medvedev's untouchability doesn't extend to figures associated with him."

Why not? Because, the theory goes, Putin may be protecting Medvedev as a possible successor -- again -- but at the same time ensuring he is bereft of strong allies, making him dependent on his senior "tandem" partner and powerless to pose a threat to Putin's ultimate sway.

Far from foreshadowing Medvedev's dismissal, journalist and commentator Yulia Latynina wrote in the newspaper Novaya Gazeta, Abyzov's arrest suggests "the exact opposite -- it means that the boss sees [Medvedev] as a backup option for 2024."

"Abyzov is just the latest in Medvedev's network to be targeted," Mark Galeotti, a senior associate fellow at the Royal United Services Institute think-tank in Britain, wrote on Twitter. "Perversely I wonder if [it] means he's actually in a stronger position than we assume (perhaps as VVP's non-threatening successor)."

Otherwise, Galeotti wrote, why would Medvedev's "enemies bother undermining him? Or why not attack him direct?"