The Belgravia Dispatch: Schroder's New Gazprom Gig: "Despicable But Predictable"

January 03, 2006

Schroder's New Gazprom Gig: "Despicable But Predictable"

Do not miss this damning John Vinocur article about Gerhard Schroder's latest career moves. A must read (note it's Times Select).

Teaser:

The manager in charge of the company Schrˆder will chair is Matthias Warnig, a former major in the East German secret police, or Stasi, who currently serves as chairman of Dresdner Bank ZAO, a Russia-based unit of the German bank. A Wall Street Journal article, published 10 months ago, quoting former colleagues of Putin and Warnig, said Warnig helped Putin recruit spies in the West when the Russian president served as a KGB man in East Germany in the 1980s. The same article reported a Kremlin spokesman's denial that the two men knew each other as Stasi and KGB agents.
More: The new pipeline company itself is headquartered in Zug, Switzerland, a town known as a tax paradise sometimes associated with companies run by the "capitalist locusts" Schrˆder's Social Democrats love to denounce.

Reporting from Zug, the Neue Z¸rcher Zeitung, the leading Swiss newspaper, has investigated a Swiss lawyer who is the lone administrative board member of Schrˆder's pipeline corporation. It said he was previously an officer of a Swiss firm shown in Stasi documents to have furnished East Germany with strategically sensitive electronics from Western embargo lists during the 1980s.

Talk of an accumulating sense of discomfort! Just days before the German elections in September that propelled him from power, Schrˆder signed the pipeline deal that will carry Russian gas under the Baltic Sea directly to Germany, bypassing American allies like Ukraine and Poland. Announcement of his new Gazprom job followed weeks later.

All this has been described by Siim Kallas, EU commissioner for audits and fraud prevention, as Schrˆder damaging Germany's integrity. Had EU Commission standards been applied, he said, Schrˆder could not have accepted the job.

In Washington, where Schrˆder has few admirers, an administration official, who asked not to be identified, trashed his choice for a career retread. "Despicable but predictable," was the phrase.

Couldn't have said it better myself...

Posted by Gregory at January 3, 2006 06:00 AM | TrackBack (0)

Comments

gotta love the timing on that article.

Posted by: praktike at January 3, 2006 06:26 AM | Permalink to this comment

I agree that the revolving door aspect is decidedly unattractive and Schroeder should be condemned on that score.

But the pipeline as policy is a good one for Russia and Western Europe and was in the works, at the geopolitical level, for a long time. It's ridiculous to be insinuating that it's all due to some plot worked up between some ex-Commie buddies.

Posted by: nadehzda at January 3, 2006 08:08 AM | Permalink to this comment

But the pipeline as policy is a good one...

Indeed.

We are currently witnessing just what it is good for, and we (not just eastern, or for that matter, western Europe) are being given a (valuable?) taste of the future benefits it portends.

Posted by: Barry Meislin at January 3, 2006 08:25 AM | Permalink to this comment

Schroeder signing up with that company isn't much different than out politics here in the USA.

Don't remember the guys name but after Bush signed the drug benefit bill the committee that wrote it's head guy signed up with the drug companies.

just typical politics

Posted by: eeff at January 3, 2006 10:40 AM | Permalink to this comment

In Washington, where Schrˆder has few admirers, an administration official, who asked not to be identified, trashed his choice for a career retread. "Despicable but predictable," was the phrase.

This is a joke, right? I mean, Cheney/Halliburton? GHW Bush and the Carlyle group?

The people in this administration should be gratified that Schoeder is finally following their lead on something....

(and Greg, doesn't this anti-Schroeder campaign come off as just a bit orchestrated and one-sided? And doesn't the fact that Schroeder signed the Gazprom agreement with the intention of remaining in office to supervise its implementation count for anything? )

Posted by: lukasiak at January 3, 2006 02:53 PM | Permalink to this comment

Since there are already existing pipelines, with right-of-way, grading, etc. already in place that more capacity could be laid beside at a small fraction of the cost, the only reason to follow this route is to be able to intimidate/exercise leverage over those countries that missed their opportunity to shut up during the runup to the war.

Where is Greenpeace or the environmentalists on this issue? I can't imagine how laying a pipeline on the seafloor could be done without extensive damage. Once again, the nature of our "allies" shows itself. I truly believe a more detailed review of the perfidity of the French, German or Russian govts during the prewar period would be more profitable than another flogging of the torture meme. And as for your proposal for all the intelligence agencies to join hands and sing Kumbaya I think this kind of incident should make you reconsider.

Posted by: wks at January 3, 2006 03:25 PM | Permalink to this comment

Leaving aside as we safely can the Reuben James liberals who will apologize for anything done by anyone with a record of hostility to the United States, the clear implication of this story is that the leader of an important allied government was bought by a foreign power pursuing objectives directly contrary to American interests while still in office.

This represents a huge issue of the United States, and ought to represent a huge issue for Germany.

Posted by: JEB at January 3, 2006 04:38 PM | Permalink to this comment

JEB,

A true cynic might offer Bill Clinton's dealings with Loral Corp and the Chinese military as a retort.

Posted by: wks at January 3, 2006 06:10 PM | Permalink to this comment

Lukasiak:

This is a joke, right? I mean, Cheney/Halliburton? GHW Bush and the Carlyle group?

In classic Leftist style, you substitute the incantation of a few magic words (Cheney/Halliburton) for real argumentation. Very clever.

Posted by: Noah Nehm at January 3, 2006 08:11 PM | Permalink to this comment

Schroeder signing up with that company isn't much different than out politics here in the USA.

Don't remember the guys name but after Bush signed the drug benefit bill the committee that wrote it's head guy signed up with the drug companies.

Thanks for making such a crystal clear allegation, naming names and all that.

Sorry, but to borrow a phrase from Judge Cardozo, "Corruption in the air, so to speak, will not do."

Got anything more specific? Eh?

Then please shut up.

Posted by: SWLiP at January 3, 2006 08:12 PM | Permalink to this comment

I'm compelled to ask what impact you think this implies to the growth of Lukoil in the US?

Posted by: Frank H at January 3, 2006 08:12 PM | Permalink to this comment

Alles quatsch.

Posted by: California Conservative at January 3, 2006 08:43 PM | Permalink to this comment

"This is a joke, right? I mean, Cheney/Halliburton? GHW Bush and the Carlyle group?"

Cheney: Businessman sacrifices millions in pay to serve as vice-president

Schroeder: Career Beauracrat who spends his last months in office brokering a deal with a foreign country that will make him rich with kickbacks (in the form of salary) when he retires.

There's a bit of difference between the two, eh?

While it's quite normal (and preferred) for politicians to continue to work after they leave office (except in Mexico where "a poor politician is a poor politician!") there is a reason they are expected, sometimes required, to avoid conflicts of interests.

Posted by: GFK at January 3, 2006 09:00 PM | Permalink to this comment

some plot worked up between some ex-Commie buddies

Nobody's talking about any plot here. What we are talking about is appeasement of the Kremlin regime by the prostitue Shroeder.

the pipeline as policy is a good one for Russia

It's good for the Kremlin, because it will give them a tool to blackmail Ukraine or whatever neighbor steps out of line.

But for ordinary Russians, there is nothing good in this pipeline policy, because with this policy, Russia positions herself as a bully, and her government - as a bunch of thugs who can't be trusted.

Posted by: Ivan Lenin at January 3, 2006 09:10 PM | Permalink to this comment

There is a difference between a democracy which wants social justice and elitist governments that believe only the choosen or self appointed can know what is best for the unwashed masses.

For a leader of a political organization that esposses the belief in social justice to show his own selfish behaviour, just goes to show that no matter how altrustic the rhetoric, we all ultimately take care of number one...

Posted by: Spuds at January 3, 2006 09:43 PM | Permalink to this comment

Gazprom has every right to ask Ukraine and others to pay market prices for gas. The problem is that because it is a state company Gazprom's heavy-handed cut off in the middle of winter is seen as political, and properly so. The deal that Schroeder cut before he left office is to build a pipeline that will supply western Europe directly and bypass eastern Europe. Russia is one of the largest gas producers and understandably wants to get a good price. Although the left's "Cheney-Halliburton" chant is idiotic and childish, western countries are participating in a world-wide scramble for energy resources that are controlled by odious regimes. Russia is just the latest member of a club that includes the Wahabi regime in Suadi Arabia, Iran, Chavez, and formerly included Saddam and Qadafi.

Posted by: jimbo at January 3, 2006 10:13 PM | Permalink to this comment

@Greg,

I don't know if the NY Times piece mentions it, but there's more to Warnig's Dresdner Bank connection.

According to sources Warnig when deployed as a Stasi agent was tasked with spying on the Dresdner Bank in the 70's - the very same bank that later employed him although he had no credentials in the banking business. Charges brought against Warnig in the 90's by the BKA (German equivalent of FBI) were later dropped for no official reason.

Also, the investment branch of Dresdner Bank, Dresdner Kleinwort Wasserstein, helped secure the illegal acquisition of former gas giant Yukos by ... Gazprom. And who was tasked at Dresdner Kleinwort Wasserstein with cutting the deal? Exactly - Mr Matthias Warnig.

Posted by: Niko at January 3, 2006 11:22 PM | Permalink to this comment

@jimbo,

your remark might make sense ... if Gazprom didn't continue to supply gas to Belarus at a price even below that of pre-2006 Ukraine. How come? Market forces, or perhaps political will?

Posted by: Niko at January 3, 2006 11:24 PM | Permalink to this comment

@jimbo,

your remark might make sense ... if Gazprom didn't continue to supply gas to Belarus at a price even below that of pre-2006 Ukraine. How come? Market forces, or perhaps political will?

Posted by: Niko at January 3, 2006 11:25 PM | Permalink to this comment

Liberals in America who pooh-pooh these nakedly hypocritical actions by Mr. Schroeder (a Socialist) can do so comfortably because, while they themselves preach of socialism's ideological virtues, they can still privately enjoy the freedoms and largess of their enemy's evil and piggish capitalist system - see 'Do As I Say (Not As I Do) : Profiles in Liberal Hypocrisy' by Peter Schweizer - a free market, capitalist system which has been nurtured, defended and proven superior to both communist and fascist socialism throughout the 20th century.

But for German liberals, who seem to comprise almost the entirety of that nation, Mr. Schroeder's hypocritical actions must come as a terribly damaging blow. In order for socialism to truly appear to succeed, all socialists must stay in line and be miserable together. For Mr. Schroeder to leave the collective farm in pursuit of his own happiness highlights the vicious fact that socialism only benefits those who don't adhere to it, specifically its leaders.

Posted by: Brian at January 3, 2006 11:28 PM | Permalink to this comment

By the way Gregory, I had the opportunity to visit Houston in September of 2004 and an even greater opportunity to dialogue with your father in his office at the Baker Institute (a meeting established by my brother-in-law who works for Conoco Phillips.)

I can see where you get your NYC sensibility to decipher the world and all of its machinations!

Posted by: Brian at January 3, 2006 11:52 PM | Permalink to this comment

"Schroeder signing up with that company isn't much different than out politics here in the USA.

Don't remember the guys name but after Bush signed the drug benefit bill the committee that wrote it's head guy signed up with the drug companies."

It was Billy Tauzin, and he had also accepted his offer (to join an industry lobbying group) while working on the Medicare bill. Not that I'm much of a defender of Schroeder, but Tauzin does provide an appropriate analogy. SWLiP's Cardozo clubbing is unfair. Yet I don't think too many of us on the right are lining up to defend Tauzin, nor the Medicare bill. So there's no inconsistency in our pointing out that Schroeder's deal, like Tauzin's, smacks of sleaze. And Schroeder pulls ahead when you realize that he just gave an increasingly authoritarian Russia extra leverage over the justifiably paranoid Baltic states and the Ukraine. Tauzin - what? - gives some extra leverage to Pfizer and Merck, if even?

As for the environmentalists, supposedly they are lining up against, which makes having Schroeder in your pocket all the more valuable (at least superficially) for whatever influence he has left with Europe's Greens.

Posted by: King Kraken at January 4, 2006 12:16 AM | Permalink to this comment

Lukasiak:

What makes Schroeder's shennanigans so perfidious is that he(and everyone else) expected a loss of 7 or 8 points in the election, as opposed to his one-point loss. His deal was a clear quid pro quo with the Kremlin to provide for his imminent retirement.

It was also a cynical attempt to usurp some of the far-left's anti-Polish rhetoric and votes without being too obvious about it. Schroeder was and is a despicable demagogue and opportunist.

New Year's prediction: emboldened by rising poll numbers, Angie Merkel forces showdown with Socialist coalition partners and allows own government to fall before Christmas, allowing new elections in January where she finally gets the coalition partner she wants--the free-market FDP. Bavarians, faced with a female chancellor and a gay foreign minister, ponder secession and return of royal family--but do not lose taste for 1 liter beers.

Posted by: Munichmann at January 4, 2006 10:18 AM | Permalink to this comment

Halliburton is trying to sell off the subsidiary that manages the "no-bid" contracts it has to support the military in Iraq. The reason it got the "no-bid" contracts was because nobody else bid. Nobody else put in bids because you don't really make money on the contaracts. The profit margins on these contracts are almost non-existant. The ROI is horrid. A 9th grader in personal finance class could figure that out. Why is it so hard for you people to?

I find it irritating that people can throw this Cheney/Hallibuton meme out so easily and have no idea what they are talking about. It is also irritating that it is used to defend such an obvious scumbag like Schroeder.

Posted by: John at January 5, 2006 12:28 AM | Permalink to this comment

John,

If your interpretation of these no bid contracts is accurate, why didn't Halliburton try to publicise their patriotic sacrifice rather than allow their name to become synonomous with war profiteering? I recall during WWII DuPont and other large companies gained tremendous goodwill by taking contracts, including, believe the Manhattan Project, on a cost plus $1 basis. Yet another example of the ham-fist melding with the tin-ear of this administration and its supporters.

Posted by: wks at January 5, 2006 04:32 AM | Permalink to this comment