From: MSN NicknameEagle_wng  (Original Message)    Sent: 7/23/2005 1:54 AM

Russia Will Always Be on His Radar Screen

Friday, July 22, 2005
By Lynn Berry
Staff Writer
    

Vladimir Filonov / MT

In an interview at the U.S. Embassy last Friday, Alexander Vershbow called Russia his first love and said he looked forward to someday coming back.

U.S. Ambassador Alexander Vershbow had been in the job only a couple of months when the terrorists struck on Sept. 11, 2001. The attacks brought an outpouring of sympathy in Russia for Americans, as evidenced by the flowers that piled up outside the U.S. Embassy, and ushered in a period of cooperation between Washington and Moscow that looked set to change the relationship forever.

It was an exciting time to be the new American ambassador.

Four years later, as he wraps up his tour, the outlook is much less bright. Anti-American sentiment is running high, with Ukraine and adoptions serving as some of the latest flash points. U.S.-Russia relations have taken on tinges of the Cold War, and the energy dialogue, started in 2002 with such fanfare, has stalled.

Yet in looking back, Vershbow, who leaves Moscow on Friday, said the balance sheet was still positive, despite the setbacks and U.S. concerns about the course Russia was taking under President Vladimir Putin.

"You can say it's been a successful period, but some of the old frictions that we thought were in the past have come back," he said in an interview. "Some of them are based on our reaction to internal trends here; some of them reflect a resurgence or the reappearance of the old mentality, which may be exacerbated by the prominence of siloviki in key leadership positions."

Vershbow was never shy about communicating U.S. concerns, whether over the conflict in Chechnya or the case against Yukos. He maintained a high public profile, giving many interviews to Russian newspapers and appearing on Russian television, speaking in Russian. But as his time here wound down, and the farewell interviews and speeches filled his schedule, he began to speak perhaps more candidly than before.

In a one-on-one interview last week, he shared his thoughts on a wide range of issues related to U.S.-Russia relations and developments in Russia itself.

He also talked about his life here as ambassador -- the personal joys and frustrations -- and his thoughts on what he might like to do once he eventually leaves the diplomatic service.

Throughout the interview, as throughout his four years here, his strong attachment to the country was evident. He called Russia his first love, since he started studying the language when he was 15, a year before he met his future wife, Lisa.

Vershbow, now 53, made his first trip to the Soviet Union when he was 17, coming for a language program in the summer of 1969. Ten years later, he returned as a young diplomat on his first foreign posting.

After serving as U.S. ambassador to NATO, he was sent back to Moscow as ambassador in July 2001. He soon made his voice heard. Vershbow said he made a conscious decision to "engage the Russian media, in trying to challenge some of the stereotypes that they have and the misperceptions about our policy, and also to talk up particular issues where we see problems that need to be addressed, whether it is sensitive issues like the independence of the media or social problems that they're not paying enough attention to, like HIV/AIDS."

A music lover, he also took on the role of cultural ambassador, assisted by his wife, an artist and jewelry designer. They invited hundreds of Russians to balls and musical evenings at their residence, Spaso House, and were regulars at the Conservatory.

The ambassador, a drummer, played with Igor Butman's jazz band on 15 occasions over the years. "He always chooses something relatively easy, since I play more rock than jazz," Vershbow said. At his final performance in Moscow last week he played "I Feel Good" by James Brown.

He said he also made guest appearances on the drums in Novosibirsk and Saratov, and even picked up a guitar for a rendition of "The House of the Rising Sun" at a Rotary Club meeting in Kamchatka in April.

"It's my secret diplomatic weapon," he said.

Politics vs. Economics

One of the priorities of the U.S. government from the start of Vershbow's tour was furthering economic ties, particularly in the energy sector. The United States wanted to see Russia expand its export capacity to become a bigger supplier of oil to the U.S. market, and to open up Russian fields to investment and exploration by U.S. companies. With the exception of ConocoPhillips' deal with LUKoil, none of this has happened.

"It seemed that a combination of their own internal problems and a spillover from our bilateral relationship -- some of the more difficult events, whether it's Iraq or the Yukos case -- has led the Russians, in my view, to put politics ahead of economic logic," Vershbow said.

What was not clear, he said, was whether Russians simply saw the energy dialogue differently from the beginning or whether developments caused them to change their strategy.

"Things have been changing so continuously. You just have to look at the state reasserting its dominance, literally taking control through its dismantling of Yukos, and now Gazprom may be buying Sibneft. So clearly the majority view among the powers that be is that it was a mistake to so thoroughly privatize the oil sector and they are restoring state control.

"It's their country, it's their natural resources. We don't deny them the right to make these decisions, though the way they've done some of the things has certainly raised eyebrows. But we do object when some specific decisions are taken to stymie development of their own energy resources, such as the cancellation of Sakhalin-3." ExxonMobil and Chevron won the tender to develop the field, but the results were abruptly annulled in January 2004.

The most promising area now for U.S. energy companies would be to work with Gazprom on producing liquefied natural gas, he said. Gazprom is in discussions with several U.S. companies on the development of the giant Shtokman field.

"We don't know yet if they are seriously looking for a U.S. partner or whether politics will again lead them to choose someone else," Vershbow said.

The other question was whether the Russians would be prepared to establish equal partnerships with U.S. companies, he said.

"This means equal division of the so-called value chain, giving our companies some equity in the reserves and the upstream development in return for Gazprom getting some equity in the downstream. ... If Gazprom wants the latter but isn't prepared to share the former, then our companies aren't going to come."

Would U.S. companies also be willing to work with the state oil company, Rosneft, after its takeover of Yukos' main production unit? "I think our companies are very adaptable," Vershbow said. "They were partners with Rosneft in Sakhalin-3."

The main problem in the oil sector, he said, was that the rules had not been defined. "They clearly have changed, but we're not sure where they're going to end up. And the constant message from [U.S. Energy Secretary Sam] Bodman, [U.S. Commerce Secretary Carlos] Gutierrez and everybody else who comes through here is, establish some clear rules, define what's strategic, what's not strategic, pass the necessary laws, implement them fairly and don't change them."

Talks With Khodorkovsky

Vershbow said the ultimate impact of the Yukos case on the investment climate was not yet known because it was still not clear whether it was an isolated case or whether it was a pattern that would repeat itself.

"But I think the bottom line is that international investors and particularly the energy companies do want to get into the Russian market," he said. "They are hoping it was a one-off and that stable rules are clarified and maintained."

Before former Yukos CEO Mikhail Khodorkovsky's arrest in October 2003, they used to see each other periodically, Vershbow said. They discussed energy issues -- disagreeing on production-sharing agreement legislation, which Yukos was lobbying against -- and broader themes. "He was interested in explaining his vision of Russia's future and why he had started his Open Russia foundation and why he was sponsoring so many different activities focused on developing the new, younger generation," Vershbow said.

"He would hint at his plans to become more politically involved when he retired from business. It was interesting hearing his views. But throughout the whole process he was very self-confident that he was virtually invulnerable."

As to why Khodorkovsky felt he would not be arrested, Vershbow said he thought "the common theories apply," including that Yukos was a major contributor to the federal treasury and that Khodorkovsky had become an international figure with connections in high places. But the ambassador said he thought the Yukos chief had been counting less on his friends in the West and more on his "internal strengths and allies," such as presidential chief of staff Alexander Voloshin, who later resigned over the Yukos affair.

NGOs, IPR and HIV

During his four years in Moscow, Vershbow dealt with a series of contentious issues that strained U.S.-Russia relations, from the Russian ban on U.S. poultry imports in 2002 to the ongoing furor over the deaths of adopted Russian children in the United States.

Perhaps the biggest cause of tension at the moment is the Russian perception that the political change in Ukraine and other former Soviet republics was funded by the West, in particular the United States, and aimed at undermining Russia.

Putin on Thursday warned Russian nongovernmental organizations that foreign money was not to be used for political activities in Russia.

The U.S. Congress is on track to allocate $85 million in assistance for Russian civil society next year, the same amount as in 2005. The money goes to a whole range of NGOS, including those that support the handicapped and orphans. Vershbow said some of this money supported Russian NGOs that do things like election monitoring and provided basic training for political parties, with the aim of helping create conditions for free and fair elections.

"We think that it's an investment in a stronger Russia that will become a more reliable partner and a more responsible international citizen," he said in the interview, which was before Putin spoke on the subject.

Vershbow said one reason the U.S. government considered it important to support NGOS in Russia was that they had few sources of domestic support. The arrest of Khodorkovsky sent a strong message to the private sector that funding NGOs and political parties would not be looked upon favorably.

"So if there were alternatives we would be delighted to shift some of our resources to other parts of the world," he said.

Yet despite the tensions and setbacks in U.S.-Russia relations over the past four years, Vershbow said the positive still outweighed the negative.

On the positive side, he pointed to cooperation during the campaign in Afghanistan, a convergence of positions on Iran's nuclear program, a shared agenda regarding North Korea and Russia's willingness to move forward on Iraq after opposing the U.S. decision to invade.

He also talked about the importance of joint work between U.S. and Russian government agencies in a variety of areas, such as law enforcement and space. On Thursday, the U.S. Energy Department and the Russian State Customs Committee opened a new command center in Moscow aimed at improving Russia's ability to prevent illegal trafficking in nuclear materials.

Vershbow said Russia had begun paying more attention to the problems of HIV/AIDS and protection of intellectual property rights, in large part as a result of U.S. efforts.

On the Radar Screen

There is a perception in Russia that the country no longer occupies an important place on Washington's radar screen, but Vershbow said there was plenty of high-level interest in Russia. It just takes different forms than it did during the Cold War, when the entire relationship revolved around the superpower confrontation.

"Often our engagement with Russia is in the context of dealing with some specific problem rather than revolving around the bilateral relationship itself," he said. "So we engage heavily with Russia on the Middle East, or postwar Iraq, or Afghanistan or terrorism, or financing of the global fund for AIDS, as opposed to having the classic 39-point agenda of bilateral questions that occupy the top leadership.

"I think that's healthy, though. I think it reflects the fact that the relationship has become more normal and that on most issues we are pulling in the same direction."

Russia also seems certain to stay on Vershbow's radar screen.

Vershbow said he was not yet ready to leave the diplomatic service, but he hoped that when he did he would find a position that would bring him back to Russia occasionally. He said he would want to be still involved in policymaking, rather than in business, perhaps with a think tank or an NGO.

"As ambassador, you meet lots of people but you don't have time to develop close friendships," he said. "I look forward to someday coming back."

Although Vershbow has not yet received his next posting, he was widely expected to be named ambassador to South Korea in the coming months.

On Thursday, his final day in the job, he was the first to formally announce that the new U.S. ambassador in Moscow would be William Burns, a career diplomat who until March had served as assistant secretary of state for Middle East affairs. Burns was a political officer in Moscow 10 years ago.

True to form, Vershbow made the announcement, in Russian, on Radio Mayak.

http://www.moscowtimes.ru/stories/2005/07/22/003.html