Identifier
Created
Classification
Origin
09MOSCOW1780
2009-07-10 10:36:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Moscow
Cable title:  

CODEL BERMAN MEETS WITH CARNEGIE CENTER AND AMCHAM

Tags:  PREL PGOV ECON RS 
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RUEHLN RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSL RUEHSR RUEHVK
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DE RUEHMO #1780/01 1911036
ZNR UUUUU ZZH
P 101036Z JUL 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 4206
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
UNCLAS SECTION 01 OF 02 MOSCOW 001780 


SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PREL PGOV ECON RS
SUBJECT: CODEL BERMAN MEETS WITH CARNEGIE CENTER AND AMCHAM

UNCLAS SECTION 01 OF 02 MOSCOW 001780


SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PREL PGOV ECON RS
SUBJECT: CODEL BERMAN MEETS WITH CARNEGIE CENTER AND AMCHAM


1. (SBU) Summary: In separate meetings June 30, Codel Berman met
with Carnegie Center experts and AmCham members. Carnegie's Trenin
told the Codel that missile defense was the "make-or-break" issue
for Russia's post-START treaty posture. Russia benefited from U.S.
tensions with Iran, although it had little influence over that
country. Masha Lipman and Nikolay Petrov described the GOR's
internal structure as "clannish" with competing visions, while
Putin's job was to maintain the public image of the government as a
cohesive whole. Russia's recent WTO membership decision was proof
that the liberal clan was in the minority. AmCham members told the
Codel that business corruption was decreasing in Russia, but still
amounted to 5-10 percent of operating expenses. U.S. companies
operating in Russia were positively affecting Russians' views of
corruption. End summary.

--------------
Carnegie on START, MD, Iran
--------------


2. (SBU) In a June 30 meeting, Carnegie Center Director Dmitriy
Trenin told House Foreign Affairs Committee Howard Berman (D-CA),
Representatives Howard Coble (R-NC),Bill Delahunt (D-MA),Brad
Miller (D-NC),Dana Rohrabacher (R-CA),David Scott (D-GA),and
Albio Sires (D-NJ) that Russia did not want a START treaty renewal
at any price, although it understood it was bargaining from a
position of global military weakness. For Russia the negotiating
process was more important than concluding a post-START treaty, as
the process put Russia on the same level as the U.S. Russia
considered missile defense (MD) to be the "make-or-break" issue in
this context, as Moscow believed the U.S. was striving through MD to
acquire invulnerability against Russian missiles. Trenin held out
that this central tenet of Russian strategic thinking could be
weakened if the U.S. and Russia were to agree to a joint effort
study on MD, leading to a breakthrough in the U.S.-Russian
relationship. However, Russia had nothing it could offer the U.S.
to make cooperation on MD worthwhile.


3. (SBU) Trenin said that Russia's influence on Iran was limited,
although Moscow considered President Obama's January letter
purportedly asking for Medvedev's assistance on Iran to be an
implicit acknowledgement of Russian interests in the region. While
Russia considered sanctions to be ineffective, it was waiting for
the U.S. policy on Iran to prove itself. Trenin stated that Russia
benefited from tense U.S.-Iran relations, which allowed Russia to
maintain closer ties with the "rising power" in the Middle East.

--------------
Carnegie on internal politics
--------------


4. (SBU) Carnegie's Masha Lipman told the congressmen that the
Russian government was not split into factions, rather there were
different "visions" amongst members, as evidenced by recent
contradictory statements by 1st Deputy PM Shuvalov and Deputy PM
Sechin on the value of low oil prices for Russia. Putin ensured
that such differences of opinion did not spill out to the public,
maintaining the image of a cohesive and loyal government. Lipman
did not judge the current economic crisis to be dire enough to
threaten Putin's position, or even cause him to change his economic
policies.


5. (SBU) Carnegie's Nikolay Petrov said the Center had a working
group to figure out the "clan structure" in the Russian government.
He said the clans were not stable, changing according to the issue
at hand. Putin played the clans by favoring one on one day, and
another on the next. That the liberal clan was in the minority was
illustrated by Putin's unexpected decision to pursue WTO membership
from within a customs union with Kazakhstan and Belarus.

--------------
AmCham on Corruption
--------------


6. (SBU) In a June 30 meeting with American Chamber of Commerce
members in Russia, AmCham members told Codel Berman that the
situation on corruption in Russia, while still a concern, had
improved somewhat for U.S. companies doing business there. Overall,
one member estimated that corruption in Russia caused U.S.
businesses an average of 5-10 percent of operating expenses.
Although the level of government corruption was perceived as
unchanged, instances of corrupt business practice had declined.
AmCham members attributed this to the realization that corruption
slowed down doing business, siphoned off profits and subsidies, and
increased expenses to cover the higher risk that working in a
corrupt environment entailed. All agreed that larger companies were
more able than smaller and medium sized companies to fend off
attempts by Russian officials and business partners to engage in
corrupt practices. AmCham president Somers highlighted the positive
influence of U.S. business in Russia, with 95 percent of Russian

MOSCOW 00001780 002 OF 002


employees in American companies believing their company "conducted
business in a transparent manner," compared to 66 percent in Russian
companies.

BEYRLE