‘CHICKEN DIPLOMACY’ AND OTHER CLINTON-YELTSIN CAMPAIGN SCAMS ARE BAD FOR DEMOCRACY, BAD FOR U.S. TAXPAYERS

(Washington, D.C.): The front-page of yesterday’s Washington
Times led with a six-column article entitled “Clinton
Vows Help for Yeltsin Campaign: Arkansas’ Interest in Poultry
Dispute Discussed at Anti-Terrorism Summit.” This
article provided a stunning insight into Administration policies
that are blatantly interfering in Russia’s democratic processes
at enormous expense to U.S. taxpayers.

To be sure, President Clinton’s efforts (and those of other
allied leaders) to “help” Russian President Boris
Yeltsin’s reelection bid by providing on an accelerated basis
otherwise unwarranted Western aid and credits to the Kremlin have
not exactly been a secret. As the Center for Security Policy has
documented in recent weeks,⁽¹⁾
Mr. Clinton has encouraged the infusion of tens of billions of
dollars worth of direct and indirect Western assistance to
“help” Yeltsin. His transparent calculation is that, by
giving Yeltsin massive, largely unconditional assistance, the
Russian president will be able to buy reelection in
June, snatching victory from the communist jaws of the
front-runner, Gennady Zyuganov.

Somewhat less obvious is the manifestly
self-serving political purpose to which Mr. Clinton is
putting such taxpayer-underwritten campaign contributions to Mr.
Yeltsin: Even though the differences between the two
Russians’ agendas are becoming increasingly blurred, the White
House recognizes that Yeltsin’s defeat would constitute a serious
problem for the Clinton-Gore reelection effort. After all, the
Clinton campaign is manfully trying to claim foreign policy
successes to justify a new mandate. It will, accordingly, spare
no public expense to maintain the appearance of such successes,
at least through November 1996.

Enter ‘Chicken Diplomacy’

If the American people have not yet awakened to the fiscal
implications of this linkage, there is plenty of reason to
believe that Boris Yeltsin and his KGB operative-turned-foreign
minister, Yevgeny Primakov, have. In fact, yesterday’s article —
authored by the Times’ highly regarded Pentagon
correspondent, Bill Gertz — provides a smoking gun: a classified
memorandum of conversation (known in the bureaucracy as a
“memcon”) describing an exchange between Presidents
Clinton and Yeltsin on the margins of the recent, so-called
anti-terrorism summit in Sharm el-Sheik.⁽²⁾

As is usually the case, the memcon paraphrases the
two Presidents’ remarks. According to Mr. Gertz, its highlights
included the following points:

Mr. Yeltsin: “A leader of
international stature such as President Clinton should
support Russia and that meant supporting Boris Yeltsin.
Thought should be given to how to do that wisely.”

Mr. Clinton: “There was not much
time [before the Russian elections and] he wanted to make
sure that everything the United States did would have
a positive impact and nothing should have a negative impact.
The main thing is that the two sides not do anything that
would harm the other.”

While Mr. Clinton’s press spokesman, Michael McCurry, has
tried to portray the President’s comment as referring to
“positive impact” in the context of relations between
the two countries — as opposed to the two leaders’
respective political campaigns, a statement
attributed in the memcon to President Clinton appears manifestly
at odds with that characterization. It concerns Russia’s
effort to prohibit the import of U.S. chicken.

Mr. Clinton: “This is a big issue,
expecially since about 40 percent of U.S. poultry is produced
in Arkansas. An effort should be made to keep such things
from getting out of hand.”

That effort has already been a personal priority for
President Clinton and Vice President Al Gore. After all, roughly
one-third of all U.S. exports to Russia are poultry products,
having a value of some $700 million. If the President’s figures
are correct, over $300 million of that amount would go to one of
his biggest political supporters — Don Tyson, the owner of Tyson
Foods, Inc. — and other Arkansas agribusinesses. Hence, his
instruction to his staff late last month to the effect that they
should “solve the [Russian chicken import] problem
right away” and the subsequent interest taken in
this matter by Mr. Gore and his National Security Advisor, Leon
Feurth, can be seen as having a direct and unseemly political
dimension. ⁽³⁾

Indeed, it is — as the Communists are fond of saying
— “no accident, comrade” that the Yeltsin government
decided to go after U.S. chicken imports. If the Kremlin
needed leverage to ensure that Mr. Clinton would support dubious
International Monetary Fund loans and guarantees, Ex-Im Bank
export promotions initiatives, OPIC coverages, Nunn-Lugar grants,
etc., squeezing Don Tyson could be predicted to afford it. Such
linkage was implied by a report that appeared in the New York
Times on 26 March 1996 which mentioned the following in the
context of a story about changes in Russia’s tariff policy
clearing the way for a $10.2 billion loan from the IMF:

“The European Union sharply criticized Russia’s talk
of protectionism, a move that also worried the United States.
The Clinton Administration was also distressed over
the protectionist measures that blocked American exports of
frozen chicken. In an effort to boost Mr. Yeltsin’s standing
with the voters, Mr. Clinton had endorsed the fund loan before
negotiations were even complete.” (Emphasis
added.)

Politicizing the IMF

Thanks in part to President Clinton’s stance, the IMF has been
obliged to depart from the disciplined approach to international
lending that has generally been its hallmark. As the Washington
Times noted today, “The United States, with $37.8
billion in annual donations to the IMF is the largest shareholder
in the Fund [i.e., roughly one dollar out of every five is from
the U.S. Treasury] and therefore has significant sway on [its]
executive board.”

As a result, the IMF has approved the second-largest
loan in its history (only the no less politicized Mexican
bail-out was larger), even though former senior Russian officials
privately acknowledge that Moscow has complied with virtually none
of the IMF’s preconditions. Even in those areas where
Russia appears to have taken steps demanded by the IMF —
notably, by abandoning a planned across-the-board 20% increase in
tariffs — it has failed to do so fully. Notably, as the
New York Times reported on 26 March, the Kremlin
has increased tariffs by 5-10% “but the Monetary Fund says
it does not believe that the politically important loan should be
held up because of those increases.”

If such an attitude has been adopted at the outset of
the disbursement of the Russian loan — a disbursement which is,
interestingly, front-loaded so as to put $1 billion in
Yeltsin’s hands before the election — it seems unlikely
that Moscow will give greater weight to IMF assertions that it
will make future progress payments contingent upon more
disciplined, reform-minded Russian economic behavior in the
future.

The Nunn-Lugar Scam

A similarly undisciplined misuse of U.S. taxpayer resources
has characterized the so-called Cooperative Threat Reduction
(CTR) — more commonly known as the Nunn-Lugar — program. A
study issued on 18 March 1996 by the CATO Institute, entitled The
Nunn-Lugar Act: A Wasteful and Dangerous Illusion, offers a
damning indictment of the $1 billion-plus that has been
squandered through this program. Among the more gripping
conclusions of this study by Rich Kelley are the following:

“…The evidence suggests that CTR may in the long
run threaten, rather than enhance, American
security. CTR funds have eased the Russian military’s
budgetary woes, freeing resources for such initiatives as the
war in Chechnya and defense modernization….Any claim that
CTR has encouraged good behavior in the former Soviet Union
is an overstatement, if not an irony. In fact, the
program has created a series of perverse incentives that may
have hindered, rather than advanced, the stabilization of
nuclear weapons in the former Soviet Union….

“Why…did the Pentagon request and Congress
authorize $400 million each year for four years? That
figure appears to have been chosen arbitrarily without an
assessment of need….Thereafter, Congress became
accustomed to requesting $400 million regardless of the
changed circumstances each year…..U.S. officials
[apparently] do not know if the funding level is too low, too
high, or about right.

“Without a plan and a budget, the CTR program
has become little more than a list of more than 35 ‘bright
ideas’ for spending U.S. funds in the former Soviet Union —
none of which directly addresses the core objective of
destroying nuclear warheads.

“…About 20 percent of proposed CTR funding
would…make work for former Soviet weapons-industry
employees by converting defense-industry facilities to
science centers….Essentially, CTR-funded projects
are a U.S. subsidy for the Russian arms industry —
weapons-makers may continue to manufacture weapons…while
using CTR to ‘convert’ other parts of their companies to
civilian activities.” (Emphasis added.)

Ex-Im Bank as a Foreign Aid Slush Fund?

Lest anyone think that only conservatives are alarmed at the
wasteful and politically motivated abuses of U.S. taxpayer
resources to advance the Clinton-Yeltsin marriage of convenience,
think again. On 21 March 1996, two individuals from blue-ribbon
liberal institutions — David Kramer of the Carnegie Endowment
for International Peace and Heidi Kroll, a Moscow-based economist
employed by Harvard University — published href=”index.jsp?section=papers&code=96-D_32at”>a chilling article in the Wall Street
Journal entitled, “The Ex-Im Bank’s Russian
Disaster.” This article, which is attached,
describes two recent initiatives undertaken by Vice President
Gore that will involve lending well over $1 billion in
taxpayer-underwritten U.S. Export-Import Bank resources. The
authors correctly contend that these transactions and
others like them are having the effect of undermining
privatization and discouraging productive foreign
investment in Russia.

The Bottom Line

President Yeltsin’s reelection bid is increasingly
characterized by: 1) an effort to minimize politically
significant differences between his program and that of
Zyuganov’s “restoration”-minded Communists and 2)
attempts to complete the brutal subjugation of Chechnya through
genocidal violence. It should be alarming to American and
other Western taxpayers that, even as he pursues these
objectives, Yeltsin is promoting himself to his electorate as the
man who can best secure funds and concessions from the
industrialized powers. No less alarming should be the fact that
he is succeeding in doing so! In this regard, consider
not only the billions of dollars flowing to Moscow but also,
according to today’s Washington Times, an agreement by
Mr. Clinton “not to oppose the closer integration of the 12
former Soviet republics in the Russian led Commonwealth of
Independent States”!

President Clinton professes to be a champion of campaign
finance reform. He could do worse than by halting his
Administration’s wanton misuse of tax dollars blatantly to
interfere in Russia’s nascent democratic process. Such behavior
is altogether improper for fellow democracies. It is also highly
untoward insofar as successive conversations between the two
Presidents make clear that Mr. Clinton regards his own
campaign as the ultimate beneficiary a Yeltsin victory. If
President Clinton will not refrain from such self-dealing at
taxpayer expense, Congress should sharply restrict his ability to
engage in this nefarious practice.

– 30-

1. See the Center’s recent Decision
Briefs entitled Clinton’s Political
Fundraising for Yeltsin Will Entail High Costs for U.S. Taxpayers
— and Interests (No. 96-D 12,
9 February 1996) and Of Delusions and ‘the Deluge’:
Genesis of the ‘Summit With Terrorists,’ Roots of a Failed
Foreign Policy (No. 96-D 25,
11 March 1996).

2. It is fitting that this document,
offering such a distasteful insight into the Clinton policy
toward Russia, was contained in a cable dispatched over the
signature of the Administration’s senior Russian apologist,
Deputy Secretary of State Strobe Talbott.

3. Informed government sources have told
the Center that Mr. Feurth in recent days has been scouring the
interagency bureaucracy for concessions on arms control and other
fronts that might be made to Russia to induce Moscow to relent on
its chicken import ban. According to the 26 March New York
Times this “chicken diplomacy” has resulted in the
lifting of the ban, but Russia is still threatening to double
tariffs on imported chicken.