The Dissolution of The Soviet Union
In late 1989, the communist regime in East Germany collapsed. Etched in my memory is the image of its citizens tearing down the Berlin Wall. In August 1991, a Soviet Coup failed to seize control of the country from the Soviet leader, Mikhail Gorbachev. The coup was unsuccessful but became the catalyst for the collapse of the Communist Party of the Soviet Union.

In September 1991, the Soviet Government recognized the independence of the Baltic states. (Lithuania, Estonia, and Latvia) In early December, Russia, Ukraine, and Belarus withdrew from the Soviet Union. Kazakhstan would soon join the egress. The dissolution of the USSR followed. Boris Yeltsin became the head of a new Russian government.

US President at the time, President George H.W. Bush, lent his support to Gorbachev and pushed for the preservation of the Soviet Union. In January 1992, he delivered his “Chicken Kyiv” speech questioning the Ukrainian path to independence. Instead of supporting Ukrainian independence, he promoted staying in the Soviet Union under Gorbachev reforms. It was not popular and not well received. A US President endorsing Soviet rule in Ukraine? How things have changed.

New Russia
George H.W. Bush resisted the temptation to exert American influence. His approach helped carry the world safely through this tumultuous time. Bush then sought the support of opposition leader and Russian President Boris Yeltsin. Bush provided Yeltsin with intelligence and advice, enough for Yeltsin to emerge from the Soviet breakup as a hero.

Russia had an opportunity to build the foundation of a free enterprise system. During these years, the Bush presidency had treated Russia fairly and respectfully. There was no gloating or condescending attitude. Bush had successfully navigated the end of the Cold War and built a good relationship with Russia. However, the voting public believed his focus on Russia had distracted him from domestic responsibility.

Bush paid a high price for his attention to the Soviet/Russian transition. His political fortunes at home suffered. A US recession and a Republican Party primary challenge from Patrick Buchanan contributed to his 1992 reelection defeat. Bill Clinton, a governor from Arkansas with limited foreign affairs experience, defeated Bush in the November presidential election. Things were about to change!

Clinton and The Making of an Oligarchy
The Clinton administration squandered the idealism and goodwill of the Russian people. When President Clinton took office, 70% of Russians looked favorably at the United States. By 2000, only 37% held such a view.

The Russian people emerged from 70 years of Communist rule only to be robbed by the Russian oligarchs. The compliant Clinton Administration enabled a corrupt regime to nurture an Oligarchy. The Bill Clinton presidency presided over the greatest robbery of the 20th Century.

In December 1991, President Yeltsin lifted price controls. At the end of 1992, Yeltsin launched a three-month long, nationwide program to distribute investment vouchers to every Russia. (150 million people) They could sell the vouchers to speculators or use them to buy shares in the 5,000 state-owned industries. Most Russians, struggling with hyperinflation, were eager to sell them for below market value.

Come-up-from-nothing hustlers and former Soviet government insiders provided cash for vouchers. In turn, the speculator used them to buy shares in the state-owned industries. It was the world’s largest garage sale with the vouchers as the ticket.

By 1994, when the voucher program ended, 70 percent of the Russian infrastucture had been privatized in control of these savory characters. The economy had collapsed, and consumer prices increased almost 2000 times. The hyperinflation devastated the Russian people.

In 1995, the Yeltsin administration unleashed another scheme called Loans For Shares. The richest oligarchs loaned the government billions of dollars in exchange for massive shares in valuable Russian state enterprises. The plan was to allow the government to buy back the shares at market value. It did not happen. Instead, the oligarchs walked away with the most profitable Russian corporations for pennies on the dollar.

By December 1995, the last of the most profitable industrial enterprises went to auction. The list included a mining company, two steel companies, two shipping companies, and five oil companies. The Yeltsin regime predetermined the auction winners. The prices the oligarchs paid for these corporations were a steal.

By early 1996, Yeltsin was one of the most despised figures in Russia. The GDP had declined by 50 percent, hyperinflation, rampant corruption, skyrocketing violent crime, the collapse of medical services, food and fuel shortages, nonpayment of wages and pensions, and a plunge in life expectancy.

1996 Yeltsin Reelection
Polls showed Russians favoring Gennadi Zyuganov, a return to Communism candidate. Yeltsin held a single-digit approval rating but had the oligarchs and Bill Clinton as backers. The Russian oligarchs were flush with money from Yeltsin programs. Beholden to his administration, in the spirit of one hand washing the other, the oligarchs repaid their debt to Yeltsin by contributing enormous amounts of money and effort towards his election.

The US did its part to ensure Yeltsin won the first Russian “free and fair “ election. The Clinton administration would have been embarrassed to let Russia return the communists to power. Clinton deployed a team of American political consultants to Moscow to ensure a Yeltsin reelection.

The political consultants would often use Dick Morris, a Bill Clinton principal political aide, as a liaison to the President. In a 2016 interview, Morris described his role. “Clinton would meet with me every week. We would review the polling that was being done for Yeltsin by a colleague of mine, who was sending it to me every week. He, Clinton, and I would go through it and Bill would pick up the hotline and talk to Yeltsin and tell him what commercials to run, where to campaign, and what positions to take. He basically became Yeltsin’s political consultant.”

The Clinton Administration boosted the Russian economy by lobbying the International Monetary Fund (IMF) to infuse billions of dollars into Russia. They lobbied for Russian loans under false pretenses. According to political economist Nicholas Eberstadt, American Enterprise Institute, the marketing was “so implausible and absurd that only a Western government official, or an international civil servant, could possibly believe them.” The IMF money, not stolen or traded for favors, propped up the Russian bond market. This money leads to a profitable bubble for those in the Yeltsin circle.

Ex-Deputy Secretary of State Strobe Talbot recalled that the US actions enabled Russian corruption. He concludes that “the United States used its resources in a genuine belief that it was saving Russia from backsliding into Communism. What emerged was an oligarchy, a humiliating decrease in living standards for the vast majority of Russians, and a rapid decrease in Russian life-spans. Our interventions in 1996 made us a party to all of it.”

John Lloyd, former Moscow bureau chief for the Financial Times, explained that by allowing the oligarchs, in the name of the free market, to grab Russian resources and siphon anything of value into their own offshore bank accounts, the United States poisoned the Russian transition to a market economy. In the minds of ordinary Russians, Lloyd concludes, in Russia, capitalism became equated with theft.

Putin – A New Sheriff in Town
In August 1999, Boris Yeltsin appointed Vladimir Putin as prime minister. In 1991, Putin, an officer with the KGB, was so displeased with their role in the coup he resigned from his position. For the eight years between his resignation from the KGB and his appointment as Prime Minister, Putin watched his country destroyed by the corruption of the Yeltsin administration and the oligarchs he created.

By the time Putin took control in 1999, his mission was to destroy the Russian oligarchy and return political power back to the state. He accomplished his goal. Ordinary Russians applauded Putin’s pursuit of the oligarchs. After all, they believed the oligarchs were to blame for the nightmare of the Yeltsin years.

Russians regard Putin as the man who saved post-communist Russia. They admire his loyalty, have confidence in his leadership and support his more autocratic style.

Washington does not understand why Putin remains so popular – go figure! The Clintons blames Russian interference on her 2016 presidential election defeat – how ironic. History reveals a lot, it did not begin with the 2022 Russian invasion of Ukraine.