Fortnightly Review & Analysis - USA, Russia & EU (Vol 1 Issue XIII)

December 1-15 and December 16-31, 2016


Trump’s Business Interests

On December 1, Donald Trump announced that he will be "leaving" his business interests "in total" when he assumes office on 20 January 2017.The president-elect said he would hold a "major news conference" in New York with his children to "discuss the fact that I will be leaving my great business in total in order to fully focus on running the country". He tweeted: "While I am not mandated to do this under the law, I feel it is visually important, as president, to in no way have a conflict of interest with my various businesses. Hence, legal documents are being crafted which take me completely out of business operations. The presidency is a far more important task!"

An op-ed in The Washington Post says that despite Trump’s assurance, "it remained unclear whether the new arrangement would include a full sale of Trump's stake or, as he has offered before, a ceding of company management to his children." Previous presidential candidates have pledged to place their assets into a blind trust should they enter the White House. "Trump's plan to hand control to his children would fall short of that. Conservative opinion has suggested Trump liquidate all his assets and place them in a genuine blind trust, arguing it would benefit both him and the country. According to The Wall Street Journal, "One reason 60 million voters elected Donald Trump is because he promised to change Washington's culture of self-dealing, and if he wants to succeed he's going to have to make a sacrifice and lead by example."

Richard Painter, the chief White House ethics lawyer under George W Bush, said ceding company management would not resolve worries that the business could still influence his decisions in the Oval Office."Even if he does not operate the businesses, you're going to have lots of people working for the business running around the world trying to cut deals," Painter said. He further added, "It's critical that none of those people discuss US business in a way that could be interpreted as soliciting a bribe on the part of the president."

In an interview with the New York Times, Trump expressed some reluctance to remove himself completely from an ownership and management position at the Trump Organization and his other companies, noting that the law was on his side. This still remains a tricky question and it remains to be seen whether Trump would truly sever ties to his business or whether he would simply leave the day-to-day operations to his children. It is certainly not the easiest of things to work out.

Trump’s Key Appointments

As Donald Trump starts the process of finalizing key positions in his administration, critics from the two main US parties are asking whether the billionaires and corporate executives he is appointing will really clean up Washington, or stand up for America's working class. Or would their policies further continue to protect the privileged classes?

So far the president-elect has chosen several billionaires, three Goldman Sachs executives and the head of the world's largest oil firms. Trump's cabinet has a combined worth of around $14 bn, making it the richest White House Cabinet ever assembled. It will be 50 times wealthier than George W Bush's first cabinet, which was dubbed at the time "the team of millionaires". For Trump, "those figures are simply a confirmation of competence.” The Observer reports that according to Trump’s brand of politics, “the richer you are, the better you would be at cutting a deal, and 'deal-making' is what the next White House will be all about.”

US president-elect Donald Trump has chosen climate change skeptic Scott Pruitt to head the Environmental Protection Agency (EPA), to the alarm of environmental activists. A vocal critic of President Barack Obama's climate change policies, the Oklahoma Attorney General is seen as an ally of the fossil fuel industry and has been a key player in legal challenges against EPA regulations on greenhouse gas emissions. The appointment is being seen as a move away from current green policies. "For too long, the Environmental Protection Agency has spent taxpayer dollars on an out-of-control anti-energy agenda that has destroyed millions of jobs," said Trump.

President-elect Donald Trump refrained from reacting personally to the unabated furore in US political and media circles about alleged Russian efforts to influence the course of the recent US Presidential elections. The announcement of Exxon Mobil CEO Tillerson’s appointment as Secretary of State generated indignant protests that he is “Putin’s friend”. Trump however went ahead and confirmed his choice.

US – Russia Relations

A significant hint about Trump’s perspectives came in a communication from his transition team to the Pentagon (December 1) which listed out the top five defence priorities of the President-elect. Developing a strategy to defeat/destroy ISIS was first on the list. Russia, which is routinely described by every top defence official in the Obama Administration as an “existential” threat to USA, did not figure in the list.

Meanwhile, the outgoing Administration – and personally President Obama – proceeded to stoke the controversy, making a number of statements about Russian involvement in the US elections, suggesting that President Putin may have personally authorized the hacking into the DNC mails and promising an investigation into it. He added in his farewell press conference that former President Reagan would be turning over in his grave since a recent poll had shown that over a third of Republicans support President Putin. Besides the questionable ethics of an outgoing President seeking to muddy the waters for a victorious Presidential candidate, such actions and remarks illustrate the depth of opposition that Donald Trump is likely to encounter to his stated Russia policy.

For his part, President Putin reiterated in a speech to the Russian Federal Assembly (December 1) that Russia can work with the incoming US Administration “to put bilateral relations back on track….on an equal and mutually beneficial basis”, adding that the two countries “have a shared responsibility to ensure international security and stability, to strengthen non-proliferation regimes”.

2016 ended on a bitter note for US-Russia relations. The United States expelled 35 Russian diplomats and closed two Russian compounds in a response that Barack Obama says was "necessary and appropriate" against "efforts to harm US interests in violation of established international norms of behaviour". The move against the diplomats from the Russian embassy in Washington and consulate in San Francisco is part of a series of actions announced by the outgoing US administration to punish Russia for what a US official said was “a campaign of intimidation of American diplomats in Moscow and interference in the US election.” Obama said a report by his administration about Russia's efforts to interfere in the 2016 election would be delivered to Congress in the coming days. He further elaborated, "The Department of Homeland Security and Federal Bureau of Investigation are releasing declassified technical information on Russian civilian and military intelligence service cyber activity." This action comes two weeks after the president said he would respond to cyber-attacks by Moscow “at a time and place of our choosing”, Obama said Americans should “be alarmed by Russia’s actions” and had pledged further action.

Earlier in December, while vacationing with his family in Hawaii, Obama said: “I have issued an executive order that provides additional authority for responding to certain cyber activity that seeks to interfere with or undermine our election processes and institutions, or those of our allies or partners ….Using this new authority, I have sanctioned nine entities and individuals: the GRU and the FSB, two Russian intelligence services; four individual officers of the GRU; and three companies that provided material support to the GRU’s cyber operations. Trump, who had previously dismissed reports of Russian interference in the election, said in a statement: “It’s time for our country to move on to bigger and better things.” He added, however, that “in the interest of our country and its great people, I will meet with leaders of the intelligence community next week in order to be updated on the facts of this situation.”

In a conference call with reporters, senior White House officials said the president-elect’s transition team was informed of the sanctions before they were announced and made public. The officials added that the actions were a necessary response to “very disturbing Russian threats to US national security”.“There has to be a cost and a consequence for what Russia has done,” a senior administration official said. “It is in a extraordinary step for them to interfere in the democratic process here in the United States of America. There needs to be a price for that.”

In Moscow, a Putin spokesman said Russia regretted the new sanctions and would consider retaliatory measures. While Moscow has so far not retaliated by expelling American diplomats, according to CNN, Russian authorities however ordered the Anglo-American School of Moscow closed. The school serves children of US, British and Canadian embassy personnel, and would effectively make a Russian posting difficult for US diplomats with families.

On the White House call, officials were asked about the prospect of Trump overturning the sanctions. They acknowledged that a future president could reverse course but cautioned against such an “inadvisable” step.“We have no reason to believe that Russia’s activities will cease,” a senior official said. “One reason why I think it is necessary to sustain these actions is because there’s every reason to believe Russia will interfere with future US elections.” On Capitol Hill, Democrats applauded the president’s action, called for further measures and emphasized bipartisan support for a thorough investigation into Russian hacking.“I hope the incoming Trump administration, which has been far too close to Russia throughout the campaign and transition, won’t think for one second about weakening these new sanctions or our existing regime,” incoming Senate minority leader Chuck Schumer said in a statement.

GOP leaders were quick to call the new sanctions as too little, too late. House speaker Paul Ryan said in a statement, “while today’s action by the administration is overdue, it is an appropriate way to end eight years of failed policy with Russia. And it serves as a prime example of this administration’s ineffective foreign policy that has left America weaker in the eyes of the world.” Republican senators John McCain and Lindsey Graham, two of Russia’s fiercest critics, echoed Ryan but also called for tough Congressional sanctions.“Ultimately, [the sanctions] are a small price for Russia to pay for its brazen attack on American democracy,” the two men said in a joint statement. “We intend to lead the effort in the new Congress to impose stronger sanctions on Russia.”


Russia – India Relations

In his address to the Russian Federal Assembly on December 1 (the traditional Presidential “State of the Federation” Address), President Putin reiterated the importance of Russia-India relations: “Developing a special privileged strategic partnership with India is another major foreign policy priority for Russia. In October 2016, Goa hosted Russian-Indian top-level talks, confirming that our countries have great potential for strengthening cooperation in a number of areas.” Besides USA, China, India and (significantly) Japan were the only bilateral relations mentioned.

A similar commitment was expressed in Russia’s “Foreign Policy Concept”, approved by Presidential Executive Order of December 1, 2016: “Russia is committed to further strengthening its special privileged partnership with the Republic of India based on shared foreign policy priorities, historical friendship and deep mutual trust, as well as strengthening cooperation on urgent international issues and enhancing mutually beneficial bilateral ties in all areas, primarily in trade and economy, with a focus on implementing long-term cooperation programmes approved by the two countries.”

Russia’s Overtures to the Taliban

According to reports, while there appears to be satisfactory progress on the range of bilateral initiatives discussed at the Goa Summit, Russia’s overtures to the Taliban in Afghanistan could create bilateral dissonance in an area of core importance to India. The recent Russia-China-Pakistan dialogue (Moscow, 27 December) on Afghanistan "expressed particular concern about the rising activity in the country of extremist groups including the Afghan branch of Islamic State (IS)” and even more significantly, recommended a "flexible approach to remove certain figures from sanctions lists as part of efforts to foster a peaceful dialogue between Kabul and the Taliban movement." In response to strong Afghan criticism at being left out of this dialogue, a Russian Foreign Ministry spokeswoman indicated that Afghanistan would be invited to the next meeting. Though Iran was also not at the Moscow meeting, it has expressed similar concern at the prospect of an IS build-up in Afghanistan. India has not commented officially as yet on the outcome of the Moscow meeting.


Berlin Attack

An attack on a Christmas market in Berlin killing twelve and wounding almost 50 persons is being seen as a serious challenge to Germany’s migration and refugee policy. It could well deepen the rift between conservative factions and fuel the rise of populism and support for the far-right ‘Alternative for Germany’ (AfD) party. However, the initial reaction from the public, locally as well as nationally, was relatively calm, marked by collective grief but not calls for revenge.

In Germany, terrorism is not seen as a military issue, but as a domestic security challenge to be dealt with by law enforcement and intelligence services. And here the German Government showed its resolve and effectiveness. Within two days of the incident, the Cabinet passed a draft legislation to expand video surveillance in public places – a symbolically important demonstration of a rapid response, but one which will make little difference in practice. Berlin’s railways, subways, trams and buses are already CCTV monitored, as is the case in many other metropolitan area across the country. Equally, police and intelligence services have been on high alert since the Islamist terror attacks this summer, and information exchange and coordination of services have been continually upgraded.

The media and public will no doubt follow closely how the case is solved and whether there were shortfalls on the part of security or migration agencies. There are some indications that these services struggled to properly verify the identity and monitor the movements of all arrivals during the peak months of immigration, suggesting that there may yet be radicalized individuals hiding in the refugee communities across the country.

In close cooperation with the federal states, which maintain most of the police and all of the social services, the government will therefore have to demonstrate a re-establishment of order. It will have to address these security concerns at the same time as speeding up the processing of asylum applications as well as the return of those not qualifying to stay, and improving the integration of migrants in local communities.