U.S. Rejects New European Dirty-Money Blacklist

List of 23 jurisdictions also includes Panama and Puerto Rico

The EU list includes Saudi Arabia and Panama, but it also U.S. territories such as the U.S. Virgin Islands and Puerto Rico, placing them alongside the likes of Iran, Syria and North Korea.

Banks in the EU will be required to use increased due diligence on financial operations involving customers and financial institutions from the blacklisted countries.

.. The U.S. Treasury Department said it “has significant concerns about the substance of the list,” saying its development was flawed. It said it didn’t expect U.S financial institutions to take the European Commission’s list into account as they carry out anti-money-laundering compliance.

.. The U.S. Treasury said the European Commission didn’t include sufficiently in-depth reviews, only gave affected jurisdictions a cursory basis for the determination, told the jurisdictions they were going to be included only days before the announcement and didn’t give them meaningful opportunity to challenge their inclusion.

.. Policy makers on both sides of the Atlantic need to acknowledge that nobody is doing enough to combat money laundering, said Clark Gascoigne, the deputy director of the Financial Accountability and Corporate Transparency Coalition, a consortium of research and advocacy groups.

The Trump-Russia Investigation and the Mafia State

many of us who write about Russia professionally, or who are Russian, have struggled to square what we know with the emerging narrative. In this story, Russia waged a sophisticated and audacious operation to subvert American elections and install a President of its choice—it pulled off a coup. Tell that to your average American liberal, and you’ll get a nod of recognition. Tell it to your average Russian liberal (admittedly a much smaller category), and you’ll get uproarious laughter. Russians know that their state lacks the competence to mount a sophisticated sabotage effort, that the Kremlin was even more surprised by Trump’s election than was the candidate himself, and that Russian-American relations are at their most dysfunctional since the height of the Cold War. And yet the indictments keep coming.

.. I mean that I’ve figured out how to think about what we know and not go crazy. The answer lies in the concept of the Mafia state. (And, no, I’m not invoking the Mob because Stone encouraged an associate to behave like a character from “The Godfather Part II,” as detailed in his indictment.)

As journalists who usually cover American politics have connected the dots of the story of Russian interference, those of us who normally write about Russia have cringed. Early on, it was common to point out that Paul Manafort, Trump’s former campaign manager, who is now under arrest, worked for Viktor Yanukovych, who is often characterized as the “pro-Russian President of Ukraine.” In fact, there was no love lost between Putin and Yanukovych. After he was run out of town, during the 2014 Ukrainian revolution, Yanukovych did seek refuge in Russia, but during his tenure as President he was an unreliable partner for Putin at best. Perhaps more to the point, he’s a crook and a brute. He served time for robbery and assault before he became a politician, and he is wanted in Ukraine for treason, mass murder, and embezzlement. A visitor to Ukraine can take a tour of Yanukovych’s palace, famous for its marble, crystal, immense scale, and a life-size solid-gold sculpture of a loaf of bread. Manafort made a career of working for the corrupt and the crooked. That in itself tells us little about Russia or its role in the 2016 campaign.

.. In media coverage, her e-mailing with a lawyer in the Russian prosecutor’s office was portrayed as evidence of a direct line to Putin, suggesting that she met with Trump’s campaign officials as his emissary. To me, it read as a lot of bluster on the part of a minor operator. From all the available evidence, and contrary to her sales pitch, Veselnitskaya did not have any dirt to offer on Hillary Clinton. To the extent that Veselnitskaya had established connections to high-level Russian officials, they were the kind that are necessary for a lawyer to be at all effective in a corrupt system.

.. We cringed at the characterization of the Russian online influence campaign as “sophisticated” and “vast”: Russian reporting on the matter—the best available—convincingly portrayed the troll operation as small-time and ridiculous. It was, it seems, fraudulent in every way imaginable: it perpetrated fraud on American social networks, creating fake accounts and events and spreading falsehoods, but it was also fraudulent in its relationship to whoever was funding it, because surely crudely designed pictures depicting Hillary Clinton as Satan could not deliver anyone’s money’s worth.

What we are observing is not most accurately described as the subversion of American democracy by a hostile power. Instead, it is an attempt at state capture by an international crime syndicate. What unites Yanukovych, Veselnitskaya, Manafort, Stone, WikiLeaks’s Julian Assange, the Russian troll factory, the Trump campaign staffer George Papadopoulos and his partners in crime, the “Professor” (whose academic credentials are in doubt), and the “Female Russian National” (who appears to have fraudulently presented herself as Putin’s niece) is that they are all crooks and frauds. This is not a moral assessment, or an attempt to downplay their importance. It is an attempt to stop talking in terms of states and geopolitics and begin looking at Mafias and profits.

The Hungarian sociologist Bálint Magyar, who created the concept of the “post-Communist mafia state,” has just finished editing a new collection of articles called “Stubborn Structures: Reconceptualizing Post-Communist Regimes” (to be published by C.E.U. Press early this year). In one of his own pieces in the collection, using Russia as an example, Magyar describes the Mafia state as one run by a “patron” and his “court”—put another way, the boss and his clan—who appropriate public resources and the institutions of the state for their private use and profit. When I talked to Magyar on the phone on Monday, he told me that Trump is “like a Mafia boss without a Mafia. Trump cannot transform the United States into a Mafia state, of course, but he still acts like a Mafia boss.” Putin, on the other hand, “is a Mafia boss with a real Mafia, which has turned the whole state into a criminal state.” Still, he said, “the behavior at the top is the same.”

The Mafia state is efficient in its own way. It does not take over all state institutions, but absorbs only the ones necessary for extracting profit. Some structures therefore continue to work as though they were part of a normal state. This may explain why we saw the official Russian foreign-policy establishment preparing, in the lead-up to the 2016 election, for a working relationship with the presumed Hillary Clinton Administration.

When we think about a normal state, Magyar told me, “the assumption is that the state acts in the public interest, and if that doesn’t happen, that’s a deviation.” That is true of how we think about democracies but also, to a large extent, of how we think about dictatorships as well: the dictator positions himself as the arbiter and sole representative of the national interest. A Mafia state, on the other hand, acts only in the personal profit-seeking interests of the clan. “That’s not a deviation,” Magyar said. “It’s a substantive, structural characteristic of the state. The state itself, at the top, works as a criminal organization.”

By the metrics of a Mafia state, though, the Trump Presidency has yielded great results for Russia. A Mafia boss craves respect, loyalty, and perceived power. Trump’s deference to Putin and the widespread public perception of Putin’s influence over Trump have lifted Putin’s stature beyond what I suspect could have been his wildest dreams. As happens in a Mafia state, most of the benefit accrues to the patron personally. But some of the profit goes to the clan. Over the weekend, we learned that the Treasury Department has lifted sanctions on companies that belong to Oleg Deripaska, a member of Putin’s “court” who once lent millions of dollars to Manafort. If a ragtag team employed by or otherwise connected to the Russian Mafia state tried to aid a similar collection of crooks and frauds to elect Trump—as it increasingly looks like they did—then the Deripaska news helps explain their motivations. The story is not that Putin is masterminding a vast and brilliant attack on Western democracy. The story, it appears, is that the Russian Mafia state is cultivating profit-yielding relationships with the aspiring Mafia boss of the U.S. and his band of crooks, subverting democratic institutions in the process.

John Bolton’s Wars

It falls to the national security adviser to defend the incomprehensible.

It’s tempting to pity John Bolton, President Trump’s national security adviser.

Tempting because it falls to the irascible but experienced Mr. Bolton to try to explain, or even undo, the president’s more impulsive and erratic foreign policy decisions. Pity because of the mortifying contortions required.

This past week Mr. Bolton journeyed to Ankara to discuss the American role in the Syrian civil war with Turkish government officials, only to run smack into another autocrat with a short fuse, President Recep Tayyip Erdogan. The Turkish leader canceled a planned meeting with Mr. Bolton and then publicly excoriated him.

Such humiliations pale, however, when one considers the Gordian knot that Mr. Bolton went to Ankara to untangle. That is, how to stop Mr. Erdogan from slaughtering Syrian Kurdish forces, who have been essential in fighting the Islamic State, after the Americans leave northern Syria. Mr. Erdogan considers the Syrian Kurds to be terrorists aligned with those in Turkey who have been in a separatist battle with the state for about 40 years.

Mr. Bolton’s diplomatic mission was unusually tough because both Turkey and the Kurds are partners of the United States. The Syrian Kurds are formidable fighters, and the progress against ISIS that Mr. Trump touts would have been impossible without them.

The Turks, meanwhile, are NATO allies, bound to Washington in a formal defense pact. Incirlik Air Base, a major staging point for American military operations throughout the Middle East, is in southern Turkey.

Mr. Bolton, a conservative hard-liner with considerable self-regard, can be a hard person to feel sympathy toward. He has made his own serious errors, not least his aggressive support for the 2003 Iraq War, which destabilized the Middle East, and, more recently, his creation of a White House decision-making system that limits robust discussion.

He certainly knew before taking the position as Mr. Trump’s national security adviser that he would be serving a chaos-driven and temperamental master. Still, Mr. Bolton faces the unenviable challenge of regularly having to defend the indefensible or make corrections after the fact. In October, he flew to Moscow to explain to President Vladimir Putin Mr. Trump’s sudden and ill-advised decision to begin pulling out of the 1987 Intermediate-Range Nuclear Forces Treaty, negotiated by Ronald Reagan and Mikhail Gorbachev.

Mr. Bolton’s latest Middle East visit was intended to reassure anxious regional leaders that the American withdrawal from Syria would be orderly. But the mission ran aground after Mr. Bolton demanded that Turkey protect Washington’s Kurdish allies and pledged that American forces would remain in Syria until the Islamic State was defeated, which could take months or years. That seemed to contradict Mr. Trump’s pronouncement in December that the Islamic State had been defeated and all 2,000 American troops would be out of Syria within 30 days.

Cue Mr. Erdogan, who dismissed Mr. Bolton’s remarks as a “grave mistake” and said, “It is not possible for us to swallow the message Bolton gave from Israel.” A pro-government newspaper went so far as to accuse Mr. Bolton of being part of a “soft coup against Trump.”

The Man Who Humbled Qassim Suleimani

An interview with Lt. Gen. Gadi Eisenkot, Israel’s chief of staff.

“We struck thousands of targets without claiming responsibility or asking for credit.”

So says Gadi Eisenkot about the Jewish state’s undeclared and unfinished military campaign against Iran and its proxies in Syria and Lebanon. For his final interview as chief of staff of the Israel Defense Forces before he retires next week, the general has decided to claim responsibility and take at least some of the credit.

Eisenkot’s central intellectual contribution in fighting that campaign is the concept of “the campaign between wars” — the idea that continuous, kinetic efforts to degrade the enemy’s capabilities both lengthens the time between wars and improves the chances of winning them when they come. He also believes that Israel needed to focus its efforts on its deadliest enemy, Iran, as opposed to secondary foes such as Hamas in Gaza.

“When you fight for many years against a weak enemy,” he says, “it also weakens you.”

This thinking is what led Eisenkot to become the first Israeli general to take Iran head on, in addition to fighting its proxies in Lebanon and elsewhere. And it’s how he succeeded in humbling, at least for the now, Qassim Suleimani, the wily commander of Iran’s elite Quds Force, which has spearheaded Tehran’s ambitions to make itself a regional hegemon.

.. “We operated under a certain threshold until two-and-a-half years ago,” Eisenkot explains, referring to Israel’s initial policy of mainly striking weapons shipments destined for Hezbollah in Lebanon. “And then we noticed a significant change in Iran’s strategy. Their vision was to have significant influence in Syria by building a force of up to 100,000 Shiite fighters from Pakistan, Afghanistan and Iraq. They built intelligence bases and an air force base within each Syrian air base. And they brought civilians in order to indoctrinate them.”

By 2016, Eisenkot estimates, Suleimani had deployed 3,000 of his men in Syria, along with 8,000 Hezbollah fighters and another 11,000 foreign Shiite troops. The Iranian funds flowing toward the effort amounted to $16 billion over seven years. Israel had long said it would not tolerate an Iranian presence on its border, but at that point Syria had become a place in which other countries’ declaratory red lines seemed easily erased.

In January 2017 Eisenkot obtained the government’s unanimous consent for a change in the rules of the game. Israeli attacks became near-daily events. In 2018 alone, the air force dropped a staggering 2,000 bombs. That May, Suleimani attempted to retaliate by launching “more than 30 rockets toward Israel” (at least 10 more than what has been previously reported). None reached its target. Israeli responded with a furious assault that hit 80 separate Iranian military and Assad regime targets in Syria.

Why did Suleimani — the subtle, determined architect of Iran’s largely successful efforts to entrench itself in Iraq, Yemen, Gaza and Lebanon — miscalculate? Eisenkot suggests a combination of overconfidence, based on Iran’s success in rescuing Assad’s regime from collapse, and underestimation of Israel’s determination to stop him, based on the West’s history of shrinking in the face of Tehran’s provocations.

“His error was choosing a playground where he is relatively weak,” he says. “We have complete intelligence superiority in this area. We enjoy complete aerial superiority. We have strong deterrence and we have the justification to act.”

“The force we faced over the last two years was a determined force,” he adds a little scornfully, “but not very impressive in its capabilities.”

Eisenkot seems to feel similarly about Hezbollah and its longtime leader, Hassan Nasrallah. The group had devised a three-pronged strategy to invade and conquer (even if briefly) at least a part of Israel’s northern Galilee: building factories in Lebanon that could produce precision-guided missiles, excavating attack tunnels under the Israeli border and setting up a second front on the Syrian side of the Golan Heights.

So far, the plan has failed. The factories were publicly exposed and the tunnels destroyed. Israel continues to attack Hezbollah positions on the Golan, most recently last month against an intelligence position in the village of Tel el Qudne (also previously unreported).

“I can say with confidence that as we speak Hezbollah does not possess accurate [missile] capabilities except for small and negligible ones,” he says. “They were hoping to have hundreds of missiles in the mid- and long-range.”

That means Hezbollah is unlikely to soon start another war with Israel. Suleimani has pulled his forces back from the border with Israel and withdrawn some altogether. The resumption of U.S. sanctions has also put a squeeze on Iran’s ability to finance its regional adventures. Israel also thought it had won a reprieve of sorts when John Bolton indicated the U.S. would not quickly withdraw from Syria, thereby obstructing Iran’s efforts to build a land bridge to Damascus, though that reversal seems to have been reversed yet again.

Iran may now turn elsewhere. “As we push them in Syria,” Eisenkot says, “they transfer their efforts to Iraq,” where the U.S. still has thousands of troops. Thanks to Gadi Eisenkot, at least we know the Iranians aren’t invincible.