[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                       UNDERSTANDING AUTHORITARIANISM AND 
                              KLEPTOCRACY IN RUSSIA

=======================================================================

                                HEARING

                               BEFORE THE

       SUBCOMMITTEE ON EUROPE, ENERGY, THE ENVIRONMENT AND CYBER

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              May 27, 2021

                               __________

                           Serial No. 117-43

                               __________

        Printed for the use of the Committee on Foreign Affairs
        
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                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
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-----------------------------------------------------------------------------------                          
COMMITTEE ON FOREIGN AFFAIRS

                  GREGORY W. MEEKS, New York, Chairman
                  
BRAD SHERMAN, California              MICHAEL T. McCAUL, Texas, Ranking 
ALBIO SIRES, New Jersey                  Member
GERALD E. CONNOLLY, Virginia	      CHRISTOPHER H. SMITH, New Jersey
THEODORE E. DEUTCH, Florida	      STEVE CHABOT, Ohio
KAREN BASS, California		      SCOTT PERRY, Pennsylvania
WILLIAM KEATING, Massachusetts	      DARRELL ISSA, California
DAVID CICILLINE, Rhode Island	      ADAM KINZINGER, Illinois
AMI BERA, California		      LEE ZELDIN, New York
JOAQUIN CASTRO, Texas	              ANN WAGNER, Missouri
DINA TITUS, Nevada		      BRIAN MAST, Florida
TED LIEU, California		      BRIAN FITZPATRICK, Pennsylvania
SUSAN WILD, Pennsylvania	      KEN BUCK, Colorado
DEAN PHILLIPS, Minnesota	      TIM BURCHETT, Tennessee
ILHAN OMAR, Minnesota		      MARK GREEN, Tennessee
COLIN ALLRED, Texas		      ANDY BARR, Kentucky
ANDY LEVIN, Michigan		      GREG STEUBE, Florida
ABIGAIL SPANBERGER, Virginia	      DAN MEUSER, Pennsylvania
CHRISSY HOULAHAN, Pennsylvania	      AUGUST PFLUGER, Texas
TOM MALINOWSKI, New Jersey	      PETER MEIJER, Michigan
ANDY KIM, New Jersey	              NICOLE MALLIOTAKIS, New York
SARA JACOBS, California		      RONNY JACKSON, Texas
KATHY MANNING, North Carolina	      YOUNG KIM, California
JIM COSTA, California		      MARIA ELVIRA SALAZAR, Florida
JUAN VARGAS, California		      JOE WILSON, South Carolina
VICENTE GONZALEZ, Texas		      RON WRIGHT, Texas
BRAD SCHNEIDER, Illinois              

                    Jason Steinbaum, Staff Director
               Brendan Shields, Republican Staff Director
                                
                                ------                                

        Subcommittee on Europe, Energy,the Environment and Cyber

              WILLIAM R. KEATING, Massachusetts, Chairman

SUSAN WILD, Pennsylvania             BRIAN FITZPATRICK, 
ABIGAIL SPANBERGER, Virginia             Pennsylvania,Ranking Member
ALBIO SIRES, New Jersey		     ANN WAGNER, Missouri
THEODORE DEUTCH, Florida	     ADAM KINZINGER, Illinois,
DAVID CICILLINE, Rhode Island	     BRIAN MAST, Florida
DINA TITUS, Nevada		     DAN MEUSER, Pennsylvania
DEAN PHILLIPS, Minnesota	     AUGUST PFLUGER, Texas
JIM COSTA, California		     NICOLE MALLIOTAKIS, New York
VICENTE GONZALEZ, Texas	             PETER MEIJER, Michigan
BRAD SCHNEIDER, Illinois

                      Leah Nodvin, Staff Director
                            
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

Gessen, Masha, Author, Staff Writer, The New Yorker..............     8
Information referred.............................................    16
Weber, Dr. Yuval, Research Assistant Professor, Texas A&M's Bush 
  School of Government and Public Service........................    22
Grozev, Christo, Lead Russia Investigator, Bellingcat............    32
Lucas, Edward, Nonresident Senior Fellow, Center for European 
  Policy Analysis (Cepa), Former Senior Editor at the Economist..    38

                                APPENDIX

Hearing Notice...................................................    65
Hearing Minutes..................................................    66
Hearing Attendance...............................................    67

            RESPONSES TO QUESTIONS SUBMITTED FOR THE RECORD

Responses to questions submitted for the record..................    68

 
        UNDERSTANDING AUTHORITARIANISM AND KLEPTOCRACY IN RUSSIA

                         Thursday, May 27, 2021

                          House of Representatives,
Subcommittee on Europe, Energy, the Environment and 
                                             Cyber,
                      Committee on Foreign Affairs,
                                                    Washington, DC.

    The subcommittee met, pursuant to notice, at 1:03 p.m., via 
Webex, Hon. William Keating (chairman of the subcommittee) 
presiding.
    Mr. Keating. The House Foreign Affairs Subcommittee will 
come to order.
    Without objection, the chair is authorized to declare a 
recess of the committee at any point and all members will have 
5 days to submit statements, extraneous material, and questions 
for the record, subject to the length limitation of the rules.
    To insert something into the record, please have your staff 
email the previously mentioned address or contact full 
committee staff.
    Please keep your video function on at all times even when 
you're not recognized by the chair. Members are responsible for 
muting and unmuting themselves, and please remember to mute 
yourself after you finish speaking.
    Consistent with House Res. 965 and the accompanying 
regulation, staff will only mute members and questioning 
witnesses as appropriate when they're not under recognition to 
eliminate background noise.
    I see that we have a quorum. I'll now recognize myself for 
opening remarks.
    Pursuant to notice, we're holding a hearing today entitled 
``Understanding Authoritarianism and Kleptocracy in Russia.''
    For more than two decades, Vladimir Putin has ruled Russia 
with an iron fist. He seized control of the Russian economy, 
co-opted and controlled Russia's political and security 
institutions in a brazen attempt to spread Russia's malign 
influence far beyond the near abroad to Western Europe to 
Africa, and to right here in the United States.
    Putin, supported by a close group of elite oligarchs, 
personal connections, and mutually dependent relationships, has 
threatened democratic movements around the world and stifled 
dissent within Russia's borders.
    Opposition leader and politician Alexei Navalny represents 
the most recent and most visible member of--example of Putin's 
crushing reaction to any inkling of dissent.
    Today, Mr. Navalny remains in prison on bogus charges after 
having suffered from an assassination attempt, the evidence of 
which was largely released from the work of one of our 
witnesses here today, Mr. Christo Grozev.
    Despite the treatment he's endured, Mr. Navalny continues 
to show bravery in the face of such malicious and malign regime 
activities. But Mr. Navalny is not alone as a target and victim 
of the Kremlin's assassination squads.
    Sergei and Yulia Skripal were the target of an attempted 
poisoning in 2018. Vladimir Kara-Murza was the target of an 
attempted poisoning in 2015 and 2017, and Boris Nemtsov was 
tragically assassinated within walking distance of the Kremlin 
in 2015.
    Unfortunately, hundreds more political prisoners, including 
Paul Whelan, exist in Russia today. This is a higher number 
than at the height of the Soviet Union.
    Yet, what we miss in these discussions about political 
repression are the daily realities that everyday Russians have 
to face. Russia is fraught with economic hardship, decreased 
standards of living, and limited opportunities for young 
people.
    Environmental disasters are now affecting the health and 
safety of Russians around the country. This includes just last 
year, when during the height of the pandemic, 21,000 tons of 
oil spilled directly into the Arctic from a Russian refinery.
    In addition, Russians continue to face treacherous housing 
conditions with most people continuing to live in crumbling 
Soviet-era concrete blocks and Soviet-era landfills face 
catastrophic overflows directly affecting the health and safety 
of nearby residents.
    But it's just not the environment and environmental and 
economic problems that Putin wants us and, most importantly, 
the Russian people to forget. It's the widespread and 
outrageous corruption that he and his government fosters at 
home.
    Russian oligarchs and Putin himself have stolen billions if 
not trillions off the backs of hardworking Russians. That 
stolen money has since been laundered through Western financial 
systems, tax havens abroad, and hard-to-trace assets like art 
and real eState.
    In short, under the corrupt leadership of Vladimir Putin, 
Russian authoritarianism and kleptocracy know no bounds. In 
order to fill the gap in public knowledge and perception 
created by the brutal crackdown on independent media in Russia, 
Radio Free Europe and a few of the remaining independent 
outlets like Meduza have been on a mission to cover the stories 
of everyday Russians.
    Their work has gained widespread recognition and 
following--throughout the world and in Russia, and in response, 
the Russian government has enacted undemocratic legal 
frameworks in a clear attempt to force them out of business.
    Radio Free Europe, under the skillful leadership of Jamie 
Fly, has been forced to relocate their offices and employees, 
and Meduza has had to call upon their own readership for 
resources to pay exorbitant fines.
    We have seen similar crackdowns on free speech in Belarus 
and just this past weekend the world witnessed the first ever 
illegal forced landing of a civilian plane, resulting in an 
unlawful imprisonment of Nexta founder Roman Protasevich. He 
was taken hostage as well as his girlfriend, Sonia Sapega.
    These acts just simply cannot be tolerated. They are 
unprecedented and free speech must be maintained throughout the 
post-Soviet space.
    So how does Putin maintain control with such bleak 
circumstances facing Russians at home and chaos surrounding 
their international exploits abroad?
    To answer this question, Ranking Member Fitzpatrick and I 
have invited four outstanding witnesses to help us better 
understand the ways in which Vladimir Putin has wielded his 
power in the political, economic, and security spheres.
    Through this hearing we'll be able to assess the seemingly 
ever-increasing status of Russian authoritarianism and its 
mission to threaten democracy both at home and abroad, and 
we'll explore the proportional and appropriate steps that the 
Biden administration and we, as members of the U.S. Congress, 
can take to confront and prevent Russian malign influence.
    In the face of increasing Russian aggression and with 
Russia's upcoming parliamentary election set to take place in 
the fall in an environment which many predict will lack 
democratic oversight, this conversation is more important right 
now than ever.
    And I look forward to our discussion and now welcome the 
ranking member to give his opening remarks.
    Mr. Fitzpatrick. Good afternoon, and thank you, Chairman 
Keating, and I would also like to thank this panel for joining 
us.
    Today we gather to acknowledge the system of corruption 
established by the Putin regime to consolidate power and 
resources amongst his closest circles at the expense, by the 
way, of the people of Russia.
    We will also discuss how Putin and his regime use their 
ill-gotten gains to advance the Kremlin's malign agenda. 
Congress has the ability and the obligation to inspire whole of 
government strategies to counter kleptocracy and 
authoritarianism abroad.
    The damage caused by kleptocracy is not simply contained 
within Russia's borders but takes advantage of all nations 
engaged in free enterprise, and since around 2000, Putin has 
cemented his authoritarian rule by enriching his closest 
colleagues and confidants and placing them in positions of 
power.
    In doing so, Putin has fused government, business, 
organized crime, and covert operations together into one 
kleptocratic system that threatens Western interests.
    This cohort has gone on to wield their enormous ill-gotten 
wealth abroad to purchase real assets and influence for their 
own benefit.
    A report by the Atlantic Council on Russian dark money 
estimates that up to $1 trillion dollars in dark money is 
invested globally, which stands in stark contrast to the 
stagnant economy of Russia itself.
    Last summer, at the height of the pandemic, Vladimir Putin 
held an illegal referendum on constitutional changes that would 
allow him to remain in power until the year 2036. This 
phenomenon, therefore, cannot be ignored.
    Instead, it must be addressed with decisive diplomatic 
action, cooperation amongst our allies, and by building our 
collective resilience against this threat.
    Earlier this year, Chairman Keating and I introduced a bill 
to slow the creep of kleptocracy. H.R. 402, known as the 
Countering Russian and Other Overseas Kleptocracy Act, passed 
through our committee markup with bipartisan support.
    Anti-corruption measures must be at the forefront of our 
foreign policy strategy, as dirty money impoverishes everyday 
citizens from its origin and it stains its destination.
    Russian kleptocrats abuse democratic societies' freedoms to 
infiltrate their own financial systems, their own institutions, 
and their own markets. The Russians have developed a powerful 
set of tools to undermine democracies around the world and have 
shown their willingness to use it.
    And, sadly, there are too many enablers who allow dirty 
money to enter Western financial systems and influence our 
domestic policies. A very clear example of this is Nord Stream 
2, which not only exports a dependency on Russian natural gas 
to Europe, but it's also the largest symbol of Kremlin 
strategic corruption and elite capture in all of Europe.
    This project has been condemned by Congress literally since 
the pipeline's inception through targeted mandatory sanctions 
that I and many others in this room have supported to stop this 
project once and for all.
    It must be the policy of the United States to continue 
opposing this geopolitical weapon and I urge this 
administration to immediately remove the waivers that spared 
Nord Stream 2 AG, the company, its CEO, and its corporate 
officers from sanctions.
    And it's my hope that Mr. Edward Lucas can further explain 
how Nord Stream 2 will be used by the Kremlin as a mechanism to 
export corruption throughout Europe.
    Finally, it's critical to note how this crony government 
enriches itself while oppressing the everyday citizens of 
Russia. The U.S. Department of State's Human Rights Report for 
2020 on Russia details a litany of human rights issues.
    Under Putin's authoritarian play book, extrajudicial 
killings, torture, arbitrary and unjust arrests are--and 
imprisonments are commonplace.
    Russia also actively suppresses independent media, peaceful 
assembly, associations, religious freedom, and the ability to 
participate in the political process.
    This ongoing attack by the Putin regime on Radio Free 
Europe, Radio Liberty's operation in Russia, is an example of 
how the autocrat in the Kremlin will use any means necessary to 
silence voices he cannot control.
    Addressing global kleptocracy must not be a partisan issue, 
and I believe every member of this committee would agree that 
the Putin regime is a destabilizing malign actor that poses a 
serious threat to our shared democratic values.
    And it's, therefore, my hope that with the information 
gleaned today, we can continue working together to raise our 
resilience and combat Putin's kleptocric system.
    I yield back the balance of my time, Mr. Chairman.
    Mr. Keating. I'd like to thank the ranking member.
    And as I introduce our witnesses, I think we'll all realize 
what an extraordinary panel we have in front of us here today.
    I want to thank all of you for taking the time to be part 
of this important hearing, one that, clearly, has great 
significance in terms of current ongoing events.
    Professor Masha Gessen is a staff writer at the New Yorker 
Magazine, an author on issues related to authoritarianism, 
democracy, and human rights and a distinguished writer in 
residence at Bard College.
    Professor Gessen's best-selling books on Vladimir Putin and 
totalitarianism in Russia have moved the needle in examining 
Russia's malign activities.
    Dr. Yuval Weber is a research assistant professor at Texas 
A&M's Bush School of Government and Public Service, and 
currently serving as the Bren Chair of Russian military and 
political strategy at the Brut Krulak Center for Innovation and 
Creativity at the Marine Corps University.
    Mr. Christo Grozev is the lead Russian investigator with 
Bellingcat, an independent research organization which 
specializes in open-source intelligence investigations.
    Mr. Grozev received the 2019 European Press Prize for 
Investigative Reporting award for his reporting on the 
poisoning of Sergei Skripal in the U.K., and Bellingcat as an 
organization has received numerous awards for it's reporting.
    Mr. Edward Lucas is a nonresident senior fellow at the 
Center for European Policy Analysis, also known as CEPA. He was 
formerly a senior editor at The Economist.
    I'll now recognize the witnesses for 5 minutes each, and 
without objection, your prepared written statement will be made 
a part of the record.
    Professor Gessen, you're now recognized for your opening 
statements.
    Professor Gessen.

STATEMENT OF MASHA GESSEN, AUTHOR, STAFF WRITER, THE NEW YORKER

    Mx. Gessen. Apologies.
    Thank you, Mr. Chairman. My name is Masha Gessen. I have 
spent most of my life trying to describe political and social 
transformations in Russia.
    In 2011-2012, I was also an activist in the protests 
against Putin's regime. I had to leave in 2013 when, like many 
opposition journalists and organizers, I was threatened by the 
government.
    In my case, the threat was that my adopted son would be 
removed from the family because he was being raised by a same-
sex couple.
    Vladimir Putin has been in power for almost 22 years and 
appears to plan to stay in power forever. His power and his 
longevity rests on three pillars: fear, domination over the 
information sphere, and perceived legitimacy.
    So I will go through those in turn. One, fear--it is 
impossible to compile a full list of deaths and assassination 
attempts in which the Kremlin is implicated. The attempt to 
kill opposition politician Alexei Navalny with the nerve agent 
Novichok is the best known and best documented example.
    The violent or sudden death of a high-profile activist 
sends a message to anyone who is considering speaking out: 
you're risking your life. The reminders keep coming.
    For members of Navalny's organization, including junior 
behind-the-scenes staff in their 20's, police visits in the 
middle of the night, violence searches, and arbitrary 
detentions have become routine.
    And you never know when one of those detentions will turn 
into a criminal case that will send you to prison--to a prison 
colony for several years.
    According to the human rights organization Memorial, Russia 
currently has 80 political prisoners and more than 400 people 
who are facing politically motivated charges but are not in 
prison. This is more political prisoners than Russia held at 
the height of the cold war, and the tally is likely far from 
complete.
    To create an atmosphere of terror, the Kremlin goes not 
only after prominent national and local activists but after 
ordinary protesters.
    In the winter and spring of 2021, Moscow police made a 
point of detaining at least three different well-known and 
much-loved retired school teachers, women in their 60's and 
70's.
    In each case, police officers came to the woman's home, 
told her that she had been identified by facial recognition 
software, and took her to the precinct for as long as 24 hours.
    All together this year, police have made more than 10,000 
arrests as a result of protests against Navalny's arrest. About 
a hundred people are facing likely prison sentences. Some of 
these people stand accused of violating pandemic regulations.
    Anti-pandemic measures have become merely the tools of a 
punitive bureaucracy. Russia is the first country to have 
started distributing a vaccine. Yet, vaccination rates are 
negligibly low and death rates are strikingly high.
    The regime kills its enemies and lets ordinary people die. 
Not only acting politically, but simply living in Russia is 
scary.
    Domination over the information sphere--Putin's kind of 
autocracy does not need to control every media outlet. What it 
has to do is dominate. This year, law enforcement has 
specifically targeted for arrests, detentions, and apartment 
raids journalists who have covered protests for opposition 
media.
    Last month, the leading Russian language independent media 
outlet Meduza was declared a foreign agent, a scarlet letter. 
Meduza lost its entire advertising base overnight. In the last 
few weeks, they have had to forfeit their office space, cut 
salaries, and ask their readers for help. Any media outlet can 
be effectively silenced with the stroke of a bureaucrat's pen.
    Perceived legitimacy--you often hear that Putin is very 
popular. It's easy to be popular in the absence of an 
alternative. Putin's domination over the information sphere 
ensures that no one is allowed to appear to challenge him. We 
often talk about rigged elections when we talk about Russia, 
but even that is an understatement. It suggests the existence 
of a contest.
    But arcane regulations and doctoring of the numbers ensure 
that results are virtually always predictable. Navalny and his 
organization refuse to act out of fear. They have challenged 
Putin's monopoly on the media. They have also campaigned to 
consolidate the protest vote.
    The Kremlin has responded by attempting to murder and often 
jailing Navalny by bringing charges against his closest allies, 
forcing many of them into exile, and most recently, by starting 
the process of designating all Navalny--affiliated groups as 
extremist.
    This disqualifies members of these organizations from 
trying to get on the ballot and also threatens them with prison 
terms up to 6 years, 10 years for the leaders. Often, 
descriptions such as this end with the conclusion that Putin's 
regime is weak.
    I do not want you to come away with that impression. Yes, 
Navalny personally, his supporters, mass protests, and 
independent media scare Putin. But this fear does not mean that 
the regime is vulnerable.
    It means, rather, that crackdown is the regime's animating 
force, its lifeblood.
    Thank you.
    [The prepared statement of Mr. Gessen follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Keating. Thank you, Professor Gessen, and certainly, 
much of what we're concerned about is happening in the 
journalistic field and thank you for your work in that regard.
    I'll now turn to Dr. Weber. You're now recognized for your 
opening statement.

  STATEMENT OF DR. YUVAL WEBER, RESEARCH ASSISTANT PROFESSOR, 
    TEXAS A&M'S BUSH SCHOOL OF GOVERNMENT AND PUBLIC SERVICE

    Dr. Weber. Mr. Chair, I would like to submit a visual aid 
for the record.
    Mr. Keating. Without objection.
    We can display that as you begin your testimony.
    [The information referred to follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Dr. Weber. Thank you.
    Thank you, Chairman Fitzpatrick, Ranking Member Keating, 
members of the subcommittee. Thank you for the opportunity to 
appear before you today.
    I'm excited to be with you because I've devoted my entire 
professional career to the study of Russia and to finding 
peaceful understanding between our country and theirs.
    From 2012 to 2016, I lived in Russia and there are many 
wonderful things to say about its culture, people, language, 
and nature.
    But I also experienced firsthand the grinding effects of 
authoritarianism and kleptocracy, people facing jail for trying 
to exercise their constitutional rights, and the best and 
brightest striking their fortunes abroad rather than having 
their businesses expropriated or limiting their ambitions.
    My testimony today is to describe the nature of power and 
politics in Russia, about which my room testimony goes into 
much greater detail.
    I'll conclude by describing avenues for U.S. policies to 
support peaceful, democratic, and economic change in Russia 
that are consistent with American values without putting 
individuals at risk, a serious concern in the current 
repressive environment.
    The picture there on the right side of your screen is from 
Vladimir Putin's latest inauguration in 2018. Unlike the joyous 
public events here in Washington or many world capitals, the 
general public in Moscow is kept far away from such an event.
    Instead, the very top echelon of Russia's elite, its 
political, military, economic, and cultural leaders, all fit 
into one very ornate room.
    Now, keep this picture in mind as I describe Putin the 
politician. Beyond the numerous malign acts ordered or 
sanctioned by Putin with which we're all familiar, I'd like to 
answer a seemingly simple question. How has he held on to power 
for so long and why does he seem to be in power for so much 
longer?
    The short answer is that practicing politics and 
representation in Russia means making sure there's enough 
authoritarianism and kleptocracy to keep the people in that 
room happy.
    The longer answer is in three parts. First, 
authoritarianism and kleptocracy are important tools for Putin 
because limiting the ability of regular Russians to participate 
in their country's political and economic life is the very 
mechanism by which Putin has held on to power for all this 
time.
    Second, Putin's hold on power is based on optimizing for 
stability and not growth. Those elites value Putin because he 
performs a critical service. He resolves their disputes so that 
they do not have to.
    Whenever those people have a problem with each other, they 
can go to him instead of fighting it out in Parliament, in 
court, or with guns.
    Too much democracy or economic openness would limit Putin's 
ability to be useful because that would mean more 
constituencies to please and being less able to pick and choose 
winners in the economy.
    After all, according to Forbes magazine, Russia's 117 
billionaires, the fifth highest in the world, control more than 
a third of Russia's entire GDP, the highest such percentage in 
the world. So Putin knows exactly whom to please.
    But it's not a one-way street. Those billionaires keep 
their positions because they're loyal, and they're called upon 
to repay the Russian State, to funding military research and 
development, private military companies, social programs, and 
cultural endeavors.
    Finally, Putin wins, so to speak, when the Russian 
population and the outside world think he's so strong that 
change is impossible. He relies on the perception of 
inevitability that keeps everyone believing that no change is 
forthcoming. Good if you're in that room and bad if you're not.
    Now, my written testimony goes into further detail. The 
power in Russia is practiced through two very different tasks: 
seizing and consolidating the formal levers of governance, and 
then keeping all the factions balanced so that no group can 
dominate others.
    Putin can continue indefinitely if his supporters believe 
that life without him is worse than life with him. In essence, 
if both supporters and opponents believe that the future looks 
like the present, then why bother changing anything?
    In the pictures on your screen you see, in that sense, two 
great stereotypical images of Russia. On the bottom, nesting 
dolls, evoking Winston Churchill's famous description of the 
country, ``It is a riddle wrapped in a mystery inside an 
enigma.''
    And on the right probably my favorite picture about Russia 
because it has a bear in the snow in front of the Kremlin with 
a fur hat, felt boots, and a flag around its shoulders while 
holding an AK-47 with a couple of fighter jets above.
    These two pictures have everything you need to know about 
Putin's success as a politician. Balancing all the elite 
factions, enforcing order upon the State through violence or 
the threat thereof, and defining a clear grand strategy, making 
Russia a great power by any means necessary or else it'll all 
come crashing down without him.
    So what can the U.S. Congress do? A lot, actually. First, 
in terms of authoritarianism, when I asked friends and 
colleagues in Russia for their advice on my testimony, the most 
pressing requests were not to forget about them because 
international attention is one of their primary defenses.
    To keep the names and individuals of individuals and 
organizations receiving U.S. Government assistance private 
because the government there uses that to target people, and to 
help, honestly, with small-bore stuff like subscriptions to pay 
walled media, professional tools, and professional development 
courses.
    In a broader sense, the surest long-term inoculation to 
authoritarianism is education. I would call upon the U.S. 
Congress to fund online educational services for students in 
Russia such as spoken English lessons and preparation for 
standardized and college entrance exams such as SAT, GRE, 
TOEFL, LAST, AP tests.
    It would create positive interest in the United States, and 
given what we've experienced over the pandemic, we all now have 
the online learning figured out. Such a program would export 
education, one of our greatest assets, without having to send 
any money abroad.
    The other issue is kleptocracy. There are numerous acts 
that will be discussed later today. But the reason these 
measures are important is that the elites Putin needs to govern 
at home also want to take their money out of the country.
    As long as they can engage in all the capital flight they 
want, they have no incentive to change anything at home. That 
matters to them even more than sanctions, because Putin can 
compensate them for being sanctioned but not for being unable 
to enjoy their money abroad.
    And with that, I thank you for your attention.
    [The prepared statement of Dr. Weber follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Keating. Thank you, Dr. Weber, and thanks for 
underscoring the point, too, that today's hearing and much of 
what we talk about is not about the Russian people themselves.
    We have an affinity for the Russian people themselves and 
their aspirational hopes, and part of the hearing is to try and 
bring some of that forth so that they are aware of the 
difference. So I really appreciate your underscoring that 
point.
    And I now recognize Mr. Grozev for your opening statement.
    Mr. Grozev, are you on mute? I think you have to unmute 
yourself.

    STATEMENT OF CHRISTO GROZEV, LEAD RUSSIA INVESTIGATOR, 
                           BELLINGCAT

    Mr. Grozev. I hope I'm unmuted now.
    Mr. Keating. We can hear you. Thank you, Doctor. Thank you.
    Mr. Grozev. In the last 7 years, Bellingcat has 
investigated more than 15 previously unresolved crimes 
involving Russian suspects for Russian victims. In all of these 
cases, our analysis has shown that the crimes were 
commissioned, planned, and perpetrated by Russian security 
services.
    Many of the criminal incidents took place outside of 
Russian territory involving either attempted assassinations or 
acts of sabotage, sometimes with collateral fatalities. Most of 
these unlawful extraterritorial operations were conducted by 
Russia's military intelligence known as the GRU.
    They included the blowing up of ammunition depots in 
Czechia in late 2014 that left two Czech civilians dead, 
assassination attempts on the Bulgarian arms manufacturer 
Emilian Gebrev and two other Bulgarian citizens in fall of 
2015, explosions at a range of Bulgarian weapons depots storing 
weapons earmarked for export to Georgia and Ukraine, and the 
Novichok poisoning of Sergei and Yulia Skripal as well as the 
Dawn Sturgess in the U.K. in 2018.
    All of these assassinations and terrorist acts were the 
actions of a secretive subunit of the GRU's unit 29155 that 
reports directly to the director of the GRU and to the Kremlin.
    The operatives of this unit received Russia's highest 
military award, the Hero of Russia in the immediate wake of 
these explosions and assassination attempts.
    We have identified more than 30 members of this black ops 
operation, who, in the past decade, have traveled hundreds--on 
hundreds of trips across Europe and the world under government-
issued fictitious identities.
    However, our investigations have shown that the GRU by far 
does not have a monopoly on Russian extrajudicial 
assassinations abroad.
    In 2019, Bellingcat and our investigative partners 
discovered evidence that linked Russia's other security agency, 
the FSB, to the murder of a Georgian citizen, Zelimkhan 
Khangoshvili, in Berlin in August 2019.
    This investigation allowed us to solve a string of other 
cold cases involving assassinations of other victims, all 
Russian or ex-Soviet nationals whom the Russian authorities had 
labeled terrorists or separatists.
    In the course of these investigations, we uncovered also a 
sprawling proxy structure conducting overseas operations on 
behalf of the FSB, the Second Service of the FSB, which is 
called, non-ironically, the Service for Fight Against Terrorism 
and Extremism.
    This proxy structure is hidden within the so-called Vympel 
group of companies, which masquerades as a private security 
group owned by former FSB officers but, in fact, serves as a 
deniable assassination squad doing the FSB's bidding.
    Like with the GRU black ops operatives, members of this 
assassination squad got the highest military awards from Russia 
and travel on government-issued identities around the world.
    Apart from these extraterritorial sabotage and 
assassination programs, we've uncovered the existence of a 
domestic assassination program run by the same Second Service 
of the FSB, often in collaboration with another FSB entity, the 
Technical and Scientific Service, which provides assistance in 
deploying chemical weapons and masking the traces of their use.
    It was these two FSB units which, based on multiple and 
mutually cooperating data points, appear to have planned and 
perpetrated the Novichok poisonings of Alexei Navalny in August 
2020.
    Our followup investigation found that members of the same 
cross-functional FSB team that poisoned Navalny had been 
systematically tailing other--at least five other Russian 
nationals who were ultimately poisoned with unidentified 
chemicals, at least three of whom died.
    Members of this FSB unit were always in the vicinity of the 
victim in the hours or days before they fell into a coma or 
died from multiple organ failure in unexplained circumstances.
    The victims included political opposition figures like 
Vladimir Kara-Murza, who was targeted and poisoned at least 
twice, as well as other outspoken Russian journalists and human 
rights activists.
    Our investigation also uncovered the existence of a 
clandestine Russian program of development and synthesis of 
banned toxins and nerve agents carefully designed to circumvent 
and disguise Russia's noncompliance with its obligation to 
terminate this chemical weapons program under the Chemical 
Weapons Conventions.
    This program, which we believe is centered around the 
government-run Signal Institute in Moscow, provides cover 
employment for Russia's leading military scientists who 
previously worked for Russia's military chemical weapons 
program.
    Dozens of these scientists continue working in a 
distributed manner under the guise of civilian research in a 
cluster of State-owned private labs. Telephone metadata 
obtained by us established persistent communication patterns 
between these labs and members of the GRU and the FSB poison 
squads, which peaked just before known poisoning operations.
    Last, I would like to end with the fact that there seems to 
be a gap and a gaping hole in law enforcement internationally, 
we have discovered, because none of these terrorist and 
extrajudicial operations we have identified have been 
prosecuted properly simply because of the current system of the 
law enforcement that requires the cooperation of nation States 
in providing legal assistance.
    This system simply does not work when one of the countries 
that is supposed to provide legal aid is the perpetrator.
    [The prepared statement of Mr. Grozev follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Keating. Well, thank you, Mr. Grozev, for the rather 
chilling remarks.
    I'll now turn to Mr. Lucas. You're now recognized for your 
opening statement.

 STATEMENT OF EDWARD LUCAS, NONRESIDENT SENIOR FELLOW, CENTER 
 FOR EUROPEAN POLICY ANALYSIS (CEPA), FORMER SENIOR EDITOR AT 
                         THE ECONOMIST

    Mr. Lucas. Thank you.
    Chairman Keating, Ranking Member Fitzpatrick, distinguished 
members, it's an honor to be able to share my thoughts with the 
committee on this vitally important topic. I'm going to 
summarize my written testimony and then look forward to your 
questions.
    I've spent all my adult life dealing with this region. I 
lived behind the Iron Curtain, I lived in post-communist Russia 
and other places, and I yearn for the time when the Russian 
people will live in freedom and prosperity and the peace of 
their neighbors.
    But that day is a long way off. I strongly endorse my 
friend and colleague, Masha Gessen's, testimony and that of my 
fellow witnesses.
    I am going to concentrate for my--in my remarks on the 
external picture, the interaction of the Kremlin kleptocracy 
with the West, and I have to tell you now we're losing and 
we're losing because our adversaries understand something about 
our society less than we do.
    They understand that they can attack us using money and by 
abusing the freedoms that are inherent in our system, and Nord 
Stream is a great example of that. Sell cheap gas, buy 
political influence, and it's not against the law.
    And because of the greed and complacency not just in 
Germany but also in my country, the United Kingdom, and 
elsewhere, we are not willing to defend ourselves.
    We could defend ourselves, and I give details in my written 
testimony about what we could do with different legal and 
normative instruments, but we do not.
    And there's a real paradox here because it was the free 
market capitalist system enabled us to beat communism. It 
brought us prosperity and dynamism. Democracy works better than 
dictatorship.
    The same economic system that triumphed over communism is 
losing to kleptocracy. It allows our enemies to buy political 
influence and uses that to attack our decisionmaking when 
they're inside our system. They also use the rights and 
freedoms given by our political system and the courts to 
intimidate their critics.
    We have to understand the threat and then make the changes 
necessary to put secure alliances first.
    Now, Russia is not the only problem here but it's a great 
place to start because it combines both a technocratic system 
and a geopolitical threat.
    Russia uses its money and its influence far beyond what 
just what a rich person has. They have access to State 
resources. They can run disinformation campaigns to demoralize 
and distract Western societies.
    They can use cyber and intelligence means to surveille and 
harass whistleblowers and anti-corruption campaigners and 
investigative journalists. They can apply diplomatic pressure 
to protect their wealth, conduct physical intimidation 
campaigns including abductions like the one we just saw in 
Belarus, assaults and assassinations.
    Now, many people say, well, hang on, isn't China the big 
threat. One hears that a lot these days. And it's true that 
China is far more important than Russia when it comes to global 
economic governance.
    But it's still the case the Kremlin is the biggest source 
of instability on Europe's borders. It's the biggest source of 
interference inside democratic societies. It funds extremist 
parties for spreading disinformation and, as you mentioned in 
your opening remarks, Russian pipelines do not just export 
natural gas. They export corruption.
    Germany is a weak country because of its energy dependence 
on Russia. It's also a weaker member of NATO, and that means 
that the United States has to bear a bigger burden.
    How we deal with Russia's kleptocracy sends an important 
signal to China's leaders. If we cannot deal with Russia, a 
stagnant country with an Italy sized economy, then what chance 
have we of dealing with the biggest country in the world, 
China, and China takes advantage of the economic, legal, 
political, and social vulnerabilities that are created and 
exploited by the Kremlin.
    Now, what do we do about this? We need a whole of 
government approach, we need to have a societal approach, and 
we need an international approach. The tentacles of kleptocracy 
are global and our responses, as Christo mentioned, are 
national.
    Now, we can do this. No tanks crunched down Wall Street, 
forcing us to open our financial system to our enemies. We did 
that to ourselves because we are complacent, naive, and greedy.
    Well, we can undo that. It's kryptonite for kleptocrats and 
we have it in our hands.
    And just, finally, I want to say, speaking from outside the 
United States, we really appreciate the lead you're taking.
    The Caucus Against Foreign Corruption, the CROOK Act, the 
Foreign Extortion Prevention Act, the REPEL Act, the TRAP Act, 
these are templates for us and the rest of the world and I 
yearn for the day when my country will not be seen as the 
global headquarters of money laundering.
    We are--it's a source of great shame to me that the city of 
London is the kleptocrats' best friend.
    I look forward to your questions. Thank you again for the 
opportunity to testify.
    [The prepared statement of Mr. Lucas follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Keating. Thank you, Mr. Lucas.
    And I want to recognize members for 5 minutes each, and 
pursuant to House rules all time yielded is for the purposes of 
questioning our witnesses.
    Because of the virtual format of the hearing, I'll 
recognize members by committee seniority, alternating between 
Democrats and Republicans. If you missed your turn, please let 
our staff know and we'll circle back to you. If you seek 
recognition, you must unmute your microphone and address the 
chair verbally.
    I'll now start by recognizing myself for 5 minutes.
    You know, there have been numerous public reports regarding 
microwave attacks on Americans working for the government, both 
overseas here and abroad.
    Mr. Grozev, with your background and experience, can you 
give any details about any specific threats posed by the GRU 
and SVR to the United States and to individuals working for our 
government?
    What research have you conducted on event--on these type of 
microwave attacks and their potential usage by Russian security 
services, and any history that Russia had in using these type 
of tactics?
    Mr. Grozev, you can lead and then anyone else that wants to 
comment after that.
    Mr. Grozev, you're muted, I believe.
    Mr. Grozev. Yes, now I'm unmuted.
    So I would like to answer by saying that we are currently 
investigating, together with our investigative partners from 
other media, the series of sonic or microwave attacks that took 
place across several consular sections around the world, 
including the United States.
    We're not--we have not completed our investigation. So I 
would not like to provide a final judgment on that. However, I 
would say that in our investigation of the activities of the 
GRU and, in particular, their medical and scientific unit, 
which part of it is based in--it's in Petersburg at the--at a 
institute called the Institute for Experimental Biology, we see 
that the GRU had a particular interest in a particular type of 
a technology that impacts--that can impact the human capacity 
to operate--the brain's capacity to operate under the duress of 
particular sound waves.
    And we have seen this--we have seen that there is a 
communication between the GRU and a particular institute called 
the Applied Acoustics Institute, which is in the domain of the 
Ministry of Defense. Whether that exactly is the program that 
has resulted in these sonic attacks we are not at this point 
ready to opine.
    However, what is clear is that the GRU have looked at that 
and that also the GRU have a tendency to look into innovative, 
from their point of view, weapons that can affect the human 
brain, and this may be one of them.
    Mr. Keating. Do any of our other witnesses want to comment 
on that?
    If not, I would just like to ask, something that's been 
broached upon in all your opening remarks and your written 
testimony that we have to take a broader view of how we deal 
with these Russian threats and malign activities, looking at 
it, and I think the opening statements our witnesses have made 
really covered a lot of ground in that respect.
    One of them in particular, however, draws the U.S.--and Mr. 
Lucas mentioned this in particular--but draws the U.S. to 
really reflect on its own ability to control what occurs 
throughout our own country and our institutions here, and 
that's the idea that in order for Putin to maintain his 
authority, as has been referenced in the opening testimony of 
our witnesses, he has to appease and please oligarchs and 
elites.
    That's who his audience is that keeps him in power. And 
it's important, as was mentioned in the testimony, that they--
from their perspective, that they have the ability globally to 
use their wealth and resources.
    And so when you look at Western countries, U.K., and you 
look at the U.S., we, in fact, are facilitating some of this 
money laundering and covering up of assets.
    You really stressed what we can do about that here. You 
mentioned some of the legislation, but some of your own 
opinions how vital that is in terms of U.S. response.
    Mr. Lucas?
    Mr. Lucas. Thank you, sir.
    There's a theory that one can destabilize the Putin regime 
by putting pressure on the oligarchs. I have to say that we 
have tested that. It does not seem to work, and the oligarchs 
close to Putin, you know, clustered around him rather than 
trying to do anything against him.
    But in a way, that's not the point. The point is, this is 
important for our system. We need to keep dirty money out of 
our politics, out of our decisionmaking, and it's good for us 
whether or not it has an effect on Putin.
    I think that the key thing is corporate anonymity and it's 
really important. This register of beneficial ownership is an 
absolute master stroke by the United States.
    It's really important that it's implemented properly, and I 
hope that members of your committee will be really holding the 
U.S. Treasury and FinCEN's feet to the fire, making sure this 
is implemented in a broad and effective way.
    And then you put pressure on other countries and say, hey, 
you do the same, because sunlight is the best disinfectant. 
When we see who owns stuff, then we can start asking 
questions--other questions about it.
    Mr. Keating. I agree. I think it's important to work with 
our allies in this regard, but not to wait for our allies to 
move on this. We have the ability ourselves to move on that. So 
I thank you.
    My time has expired. I now recognize the ranking member, 
Mr. Fitzpatrick, for 5 minutes.
    Mr. Fitzpatrick. Thank you, Mr. Chairman.
    First question for Mr. Lucas. In your testimony, you note 
that Russian pipelines do not just export energy dependence on 
Russia but also export corruption.
    Can you elaborate, sir, on how the Nord Stream 2 pipeline 
will enable the Kremlin to export corruption into Europe and 
the consequences of this to both the United States and our 
European interests?
    Mr. Lucas. Thank you, sir. It's a great question, and I 
would commend the work of Ilya Zaslavsky, who's written two 
excellent reports on the politics of Nord Stream, and I'll be 
happy to send those to your staff after the--after the hearing 
so you can look at more detail.
    There are many elements to this. One is that pipeline gas 
creates a monopoly. Once the pipeline is built, the gas that 
comes through the pipeline will be cheaper than, for example, 
bringing it in from--by liquefied--in liquefied natural gas 
form from tankers.
    So the pipelines are inherently monopolistic and one needs 
a legal framework in order to prevent that.
    And the Kremlin is guilty in court of abusing its gas 
pipelines, which are legacy of the Soviet Union, to try and 
distort the gas market in Western Europe, and the EU did a 
pretty good job of pushing back against that. But the job's not 
done.
    Particularly with regards to Germany, Nord Stream 2 makes 
Germany a weaker ally for the United States and that means the 
United States have to carry even more of the water in European 
security, and that's a big issue. It's something that every 
U.S. administration has complained about. Nord Stream makes 
that worse.
    But it also, as you said in your question, it exports 
corruption and the best example of that is the role of the 
former German Chancellor, Gerhard Schroder, who is the chairman 
of the consortium that is in charge of the Nord Stream 1 
pipeline and is building the Nord Stream 2 pipeline.
    But it's not just. That's the kind of conspicuous tip of 
the iceberg. Once you have this bastion of economic influence 
in the German system, then you have all the jobs and sinecures 
and contracts that go with it, and we see the way in which 
German politicians, friends, relatives were put onto the 
payroll of Russia-related energy companies.
    It creates a sort of web of interests and obligation, which 
pumps a sort of pro-Kremlin mind set and pro--Kremlin views and 
pro-Kremlin actions into the heart of the German system.
    It's amazing, commendable to me, that so many Germans are 
now fed up with this, and perhaps the disquiet in Germany about 
fossil fuel dependency and worries about human rights in Russia 
and elsewhere is helping this.
    But I think that the Gazprom lobby in Germany is to some 
extent on the--on the back foot. Boy, they had a good run over 
the last 20 years. Germans have benefited from this cheap gas.
    Everyone else has paid a price for it in terms of security, 
not least in Ukraine, which, of course, would be the great 
loser if Nord Stream 2 is built and gas transit through Ukraine 
finishes.
    And there's a real paradox here that American taxpayers and 
American servicemen are trying to defend Europe, and greedy 
German--the greedy German energy lobby is working on the 
other--in the other direction, and I'm really sorry that 
sanctions are being dropped on Nord Stream and I hope it's not 
too late to reimpose them and to try and put a stake through 
the heart of this project.
    Mr. Fitzpatrick. Thank you, Mr. Lucas.
    I want to shift briefly to China. In your testimony, you 
assess that China's taking advantage of the economic, legal, 
political, and social vulnerabilities that have long been 
created and exploited by the Kremlin?
    Sir, can you go into more detail and provide some concrete 
examples? And what can we do on this committee and in Congress 
to address these vulnerabilities of the Russia-China issue?
    Mr. Lucas. Well, it's really interesting to compare and 
contrast Chinese and Russian tactics, and I worry that the 
Chinese are learning from the Russians, particularly in the 
realm of law fare where we see, for example, supply chain 
dependency, the use of access to the market, the access to the 
Chinese markets far more important than access to the Russian 
market, but Russia pioneered this targeted use of sanctions 
against countries it did not like and now China's doing the 
same against the great U.S. ally of Australia.
    We also see a much more powerful Chinese presence on 
campus. This is something the Russians tried. It did not get 
very far. But the attempt to try and intimidate academic 
discussion, China is very effective on that.
    Russia has pioneered the use of intimidatory lawsuits, 
these so-called SLAPPs, but I think China's going to be moving 
in the same direction.
    So it's almost like a hole in the roof. You've got a hole 
in the roof, rain will get through 1 day, wind will get through 
the next. The key thing is to, first of all, fix the hole in 
the roof.
    And we can do this. What is so frustrating nobody made us 
do this. We chose to open our system up in a way that the 
Russian and Chinese adversaries can attack us.
    Mr. Fitzpatrick. Thank you, sir.
    My time has expired. Mr. Chairman, I yield back.
    Mr. Keating. Thank you. The chair now recognizes the vice 
chair of the committee, Representative Spanberger, for 5 
minutes.
    Ms. Spanberger. Thank you very much, Mr. Chairman, and to 
the witnesses thank you so much for joining us today.
    It's unfortunate that we have seen for too many examples in 
recent years of the negative consequences of the 
authoritarianism and corruption in Russia, consequences that, 
of course, deeply impact the Russian people but also the 
security, the democracy, and human rights internationally.
    And this disruptive behavior of the Kremlin has, in fact, 
directly affected Americans, whether it be the safety of our 
troops abroad, the security of our elections, or our 
cybersecurity and government infrastructure.
    And so I'd like to begin by question--by providing 
questions that relate to some of the motivating factors here, 
and that's the proliferation of illicit finance and the 
corruption that really fuels some of this malign influence and 
malign efforts.
    Like so many other members of this committee, I am 
concerned about how Putin and his collaborators do utilize 
illicit financing corruption to advance their own aims while 
repressing their people, weakening human rights and security 
internationally.
    And so along these lines, I did lead an effort with nearly 
40 of my colleagues calling for a significant increase to the 
U.S. Financial Crimes Enforcement Network, FinCEN, so that we, 
the United States, can better go after money-laundering illicit 
transactions that underlie some of these criminal, corrupt, or 
dangerous behaviors that we see from States like Russia and 
nonState actors who take refuge in the country.
    And so, Mr. Grozev, I would like to begin with you and ask, 
very generally, you know, what is known about the role of 
Russian oligarchs in financing illicit activities and 
operations, and can you speak to the strategy of how they 
finance some of these activities, including the links between 
the oligarchs, the actual government, and perhaps transnational 
actors?
    And then what loopholes the oligarchs might exploit in 
international financial systems to carry out these activities 
or to secure their own wealth?
    Mr. Grozev. Thank you. It's a very good question, and I 
have to say that it's something that I always caution against, 
this seeing Russia, the Russian autocracy, as a centralized 
planned economy.
    The equivalent is much more closer to an actual marketplace 
of both--of operations that are disruptive, and in that 
marketplace a lot of oligarchs offer their services, and they 
offer their innovation as well in exchange for funding or for 
solutions or solving other problems that they have. We can take 
a couple of examples just to make it more vivid.
    At the start of the war in Ukraine, there was a particular 
oligarch, a Russian oligarch--his name is Konstantin Malofeev--
who took the initial risk of sending some of his proxies, a 
mini army financed by him on his own account and delivered what 
turned out to be a pretty successful operation for the Kremlin 
whereby he solved a lot of legal issues that they had. There 
was a criminal case pending against him.
    There was a large debt that he had accumulated toward one 
of the State banks. All of that debt vanished, disappeared, 
after he delivered the result.
    This is an example of interplay between an oligarch and the 
Kremlin. The Kremlin has only a limited number of assets that 
they can share with the oligarchs. But that includes solving 
legal problems.
    That includes giving them access to new resources and 
resources, such as when Crimea was in--was a large resource 
that was a part--was stolen by Russia, but a lot of licenses, 
concessions, access to mineral resources were given to some of 
the oligarchs as part of a trading deal.
    Another oligarch who has been in a similar position 
offering such deniable services of international disruption is 
Yevgeny Prigozhin.
    I mean, you know him because he did take part in disrupting 
your elections in 2018, at least, and he is funding a private 
army and he's being funded himself for that operation through 
large State contracts that are awarded to his catering 
companies that provide services--food and beverage services--
and other logistical services to the army.
    So it's a vicious circle. In this particular case, it's not 
legal solutions that are offered by the Kremlin, but actually 
they have a sort of symbiotic relationship where they're giving 
him--they're allowing him to overcharge for the logistical 
services in order for him to deliver this deniable proxy 
arrangement.
    So these are just two examples, and there are many more 
that I'm sure my colleagues can also speak to.
    Ms. Spanberger. And do you and anyone else on the call--do 
you have recommendations for what we, Congress, or the Biden 
administration could do that could potentially--you know, much 
of what you just described is occurring domestically within 
Russia.
    But are there any things that we could do to close 
loopholes or cutoff some of the tools that they use in this 
illicit finance or movement of money?
    Mr. Grozev. Well, I think we--you have to be inventive and 
you have to sort of come to the challenge, and one of the ways 
to be inventive is to actually make it difficult for people 
with whom these oligarchs trade and trade also privately, not 
necessarily commercially.
    I mean, Yevgeny Prigozhin and his family are very avid. 
They have racing horses in several countries around Europe, and 
but this is an example of continued operation and commercial 
transactions between the family and people in Europe or people 
in the United States.
    So, essentially, there has to be very good intelligence 
work trying to find out what are the spheres of private lives 
that these people will feel affected by if they lose them. But 
that will be about the only way that I can think at this point.
    Ms. Spanberger. Thank you very much, sir.
    And, Mr. Chairman, I yield back. Thank you.
    Mr. Keating. Thank you, Representative.
    The chair now recognizes Representative Wagner for 5 
minutes.
    Mrs. Wagner. I thank you, Mr. Chairman, for organizing this 
important hearing, and I thank the witnesses for their tireless 
work to shed light on Russia's corrupt and illicit practices, 
especially its egregious human rights abuses.
    As the State Department documented in its 2020 Human Rights 
Report, Putin's Russia has engaged in extrajudicial killings, 
disappearances, torture, wrongful arrest, attempted 
assassinations, and persecution of religious minorities.
    The United States should honor the many victims of the 
autocratic Putin regime, including the unjustly imprisoned 
opposition leader Alexei Navalny, by holding Putin and his 
cronies accountable for the crimes that they have committed 
against their own people.
    Dr. Weber, what has been the effect of Alexei Navalny's 
poisoning and imprisonment on civil society, and to what extent 
has it changed the way the Russian public views the Russian 
government?
    Also, how can the United States best support those who are 
continuing to stand up to Putin?
    Dr. Weber?
    Dr. Weber. Thank you. That's a--that's an excellent 
question. So, you know, for many years, the Russian leadership 
did not say Alexei Navalny's name in public. They would use 
such constructions as a blogger that nobody needs, the Berlin 
patient, so on and so forth.
    So what we can see in the past couple of months is that 
they've taken a lot of money and, essentially, raised the 
amount of repression over the entire society just to illustrate 
the fact that they're not terribly bothered by him.
    And it's clear that in--that what Alexei Navalny represents 
to them that is such a threat is that he's a political 
alternative.
    He may be a good alternative for president, a viable 
alternative for president. The fact that the people can think 
of him as an alternative to Putin, that's the main threat that 
he poses.
    And so that's why they've taken him, you know, in and out 
of prison, poisoned him, and what they've done right now is, as 
has been mentioned earlier, they have labeled his entire 
organization or gone through the political steps to or the 
legal steps to call his organization an extremist one, so at 
the same level as ISIS within Russia. That's how much of a 
threat the idea of political alternatives are.
    And, you know, there was a previous question from 
Representative Spanberger that touches upon an aspect of this, 
that what Putin wants is all of these different, you know, 
oligarchs or security services or whatever else, all of these 
different groups to think that Putin is going to, basically, 
keep increasing their funding, their money, indefinitely into 
the future. That's why they support him. That's why he supports 
them.
    But it's a relationship that's, in fact, kind of futile. He 
also expected----
    Mrs. Wagner. Thank you, Dr. Weber. I appreciate it.
    Dr. Weber. Thank you.
    Mrs. Wagner. I need to move on.
    For decades, the American media service Radio Free Europe 
and Radio Liberty, or RFE/RL, has been a key part of U.S. 
efforts to share stories of freedom and democracy with millions 
of people around the world.
    Today, the Kremlin is working to compromise RFE/RL's 
ability to expose the truth of dangerous propaganda and 
disinformation campaigns propagated by totalitarian--pardon 
me--regimes like Russia.
    Mr. Lucas, how can RFE/RL fight the Russian government's 
efforts to limit and control its operations, and what more, 
again, can the United States do to assist both in maintaining 
Radio Free Europe and Radio Liberty's presence on the ground in 
Russia and to support freelancers facing the consequences of 
Putin's assault on freedom of the press?
    Mr. Lucas. Well, thank you, ma'am. It's a great question, 
and if there was an easy answer, we'd have it. This is a point 
of vulnerability for us. We want to do things inside Russia, 
and when we're inside Russia we are vulnerable to pressure from 
the Russian authorities.
    I think, you know, so long as Russians can still travel 
abroad we can do stuff there. We can support these 
organizations that trade abroad. We can support people coming 
abroad. We can support organizations like Meduza.
    In this, they put up a great firewall of Russia, like we 
have a great firewall of China. We can operate on a pool model 
where Russians are finding stuff on the internet. It won't be 
broadcast in the conventional sense.
    I still have a hankering for shortwave radio. But that, 
perhaps, is my--says something about my generation. Some of us 
on this call may remember the joys of shortwave radio.
    But the key thing, ma'am, is we have got to want to do it. 
We have got to believe that we have a story to tell, and we 
have got----
    Mrs. Wagner. Absolutely.
    Mr. Lucas [continuing]. To feel that it matters to get that 
story across because when we stop believing in our values and 
our message, then what chance is there of anyone else believing 
it either?
    Mrs. Wagner. I couldn't agree more. I thank you for your 
answer.
    I yield back, Mr. Chairman, and thank you again for the 
hearing.
    Mr. Keating. Thank you, Representative.
    The chair now recognizes Representative Cicilline for 5 
minutes.
    Mr. Cicilline. Thank you, Mr. Chairman, and thank you to 
the ranking member for calling this important hearing and thank 
you to our witnesses.
    The influence of Russia and its leadership under the long 
rule of Vladimir Putin on global democratic backsliding and 
corrupt governance cannot be overStated.
    For over two decades, Putin has enriched himself and has 
enriched a tiny circle of elites through global money 
laundering schemes that harm democracy in the West, compromise 
critical markets around the world, and ensures that Putin is 
isolated from criticism and political opposition.
    And, unfortunately, in America and in places around the 
world a cottage industry has arisen to service the needs of 
Russia's corrupt elite that seek to hide and launder dark 
money.
    And so my first question is for you, Mr. Lucas. You know, 
as we think about what Congress can do, you reference in your 
written testimony--you use the term enablers, bankers, lawyers, 
accountants, real eState agents, and other members of the 
professional class in North America and Europe and beyond that 
are all too happy to service the needs of Russia through 
corrupt financial practices.
    And what can we do here in the United States and along with 
our partners to ensure that that does not continue?
    Mr. Lucas. Well, it's a very broad problem and but you've 
got to start somewhere, and the United States, as the most 
important foremost democracy in the world with the biggest 
capitalist economy, is a great place to start.
    And this legislation before Congress and the legislation 
that was already passed is a good jumping off point, because 
one of the great things about the United States is people are 
scared of doing things that will get them into trouble in the 
United States.
    It was very interesting, just now on social media someone 
pointed out that there may have been some American citizens on 
board that flight that was brought--forced to land in Belarus, 
and that's just a game changer.
    If it uses a single U.S. cent or single U.S. person 
involved, then suddenly it's different from if you're just 
mucking around in Cyprus or Luxembourg or one of these other 
jurisdictions that the Russians also exploit.
    So it's really important for the United States to 
confidently take the lead, and I think there's two big things 
here. One is to go after corporate anonymity. Insist that you 
know where the money comes from.
    Don't just say--a lobby will say, this is a shell company 
and its buying business real eState. It's only residential real 
eState that's caught by FinCEN. So FinCEN's rules on real 
eState have got to go.
    Mr. Cicilline. Mr. Lucas, I'm just--I'm going to try to get 
in a couple more questions. So I just----
    Mr. Lucas. Sure.
    Mr. Cicilline. Yes. No, I get your point, and I guess--and 
I think we have some legislation before the committee that I 
hope we'll move forward in a bipartisan way.
    I want to now turn to Professor Gessen. I would like, if 
you would, just speak for a moment about the impact of this 
autocratic rule in Russia and, particularly, during COVID-19 
and how it has impacted human rights, particularly for women, 
girls, and members of the LGBTQI community and kind of what's 
happening on the ground.
    Mx. Gessen. Well, as I mentioned--thank you. As I mentioned 
in my testimony, Russia is a country that is uniquely 
positioned to vaccinate its population and this hasn't happened 
and, in fact, we're seeing--you know, we have lost count. It's, 
like, the second or third wave of COVID deaths in Russia and 
that's sort of vastly underestimated.
    To answer your question about women, girls, and the LGBT 
community, I think one of the things that have--that has 
impacted people a lot is the isolation--the de facto isolation 
of Russia.
    Russians have, effectively, lost the ability to travel 
abroad and to leave the country. This, for LGBT people, for 
women and girls facing abuse, means cutting off a lifeline, 
right?
    We have seen so many refugees and asylum seekers coming out 
of Russia, especially as a result of sort of the so-called 
traditional values anti-LGBT campaign, and that has effectively 
stopped in the last year and a half.
    Mr. Cicilline. Thank you. And finally, Dr. Weber, you spoke 
about the importance of partnering with Russian pro-democracy 
and pro-reform forces and, of course, the challenge is how we 
do that in a way that does not endanger the very lives of the 
people engaged in this work.
    And so you talked about some online courses, but are there 
other things we can do to sort of get the story out about the 
way that this Russian kleptocracy is destroying the lives for 
ordinary Russians and that, you know, Vladimir Putin and his 
cronies are, you know, robbing the treasures of this great 
country at the--to the detriment of the Russian people? And it 
feels like that's a big part of the untold story, and how do we 
effectively do that?
    Dr. Weber. So great. I mean, one of the things that, you 
know, these sorts of organizations when I was reaching out to 
them, they said, things like, you know, a subscription to Adobe 
Photoshop or other editing software, really small things like 
that, because what the Russian government has gone after is the 
investigative news journalists inside of Russia.
    So these are Russian journalists and activists who want to 
talk about their own country in their own language, and so 
that's the support that they need. They, basically, need the 
spotlight from abroad and the tools to actually do their jobs. 
That's their core desires, and, you know, an evacuation plan if 
it really goes pear shaped.
    Mr. Cicilline. Got it. Thank you. My time is expired. Thank 
you, Mr. Chairman.
    Mr. Keating. Thank you, Representative.
    The chair recognizes Representative Meijer for 5 minutes.
    Mr. Meijer. Thank you, Mr. Chairman, and thank you to our 
witnesses who are here today. You know, obviously, we have been 
watching over the past two decades, and I think we have this 
kind of nagging feeling of a window slowly starting to close 
that had been opened after the fall of the Berlin Wall.
    But, you know, I guess there's a number of reasons to be 
pessimistic, and I think Dr. Lucas, you mentioned, some room 
for optimism in terms of greater transparency on property 
purchases, right, or other areas where beneficial ownership can 
be achieved.
    And then there are still those green shoots on the activist 
front, Alexei Navalny being one but, obviously, as we all know, 
that whole path has really just gotten beaten down.
    Professor Gessen, I wanted to turn to you. In your 
testimony, you mentioned the kind of dark joke of modern Russia 
being two crayfish turning to one another and saying, you know, 
10 degrees ago it wasn't so bad in that, you know, slowly 
boiling pot of water.
    If you were a pro-democracy activist or an anti-Putin 
activist today that isn't already associated with Alexei 
Navalny or an existing movement, I mean, is there--is there any 
room for that to grow that hasn't--any soil that hasn't been 
kind of salted by the regime?
    Mx. Gessen. That's a great question and I think--I think if 
you're looking for reasons for optimism, I'm not going to give 
you any. I think it's a scorched earth situation.
    I mean, we--the vector of the regime is to kill everything 
in--on sight and the scale and brutality of the crackdown that 
we have seen just in the last few weeks is unprecedented.
    We have said this before, but this just shows that yes, 
there's room for this to get much, much worse, and it's getting 
exponentially worse just in the last few weeks.
    The extremists designation, which a couple of us have 
mentioned, that has--that has been--is going to be applied to 
Navalny's organizations opens up room for a scale of arrests 
and the kind of prison terms that we simply have not seen 
before.
    Mr. Meijer. And that--yes, I guess, looking for optimism 
may be an overly optimistic assessment. I know we saw some mass 
protests or at least a decline--I shouldn't say mass protests. 
We saw some isolated ones, but a decline in Putin's popularity 
when he was implementing some retirement reforms a few years 
ago.
    I mean, is there still room outside of the pro-democracy--
you know, kind of pro-Putin outside of that dynamic? Are there 
other areas where there may be simmering discontent that could 
undermine that hold?
    You know, we talked about the oligarchs earlier and then 
that targeting. You know, they kind of, you know, circle the 
horses or circle the wagons, if you will, you know, when it 
comes to other elements of the civil society that aren't 
necessarily engaged in the democracy advocacy front. You know, 
where is the--Putin standing at the moment?
    Mx. Gessen. I think, Representative Meijer, you're asking 
me if there's a way for the Russian people to bring down the 
Putin regime, and I think the answer is no.
    Not because there's no discontent. There's a lot of 
discontent. But because all the levers that could possibly be 
set in motion by mass discontent, by mass protests, have long 
since been destroyed. There's no independent judiciary. There's 
no possibility of independent political action by any people 
who have official power.
    There's nothing for protests--you know, there's nothing 
for--there's no way to express the discontent publicly, except 
by going out into the streets and going out into the streets 
with a more and more brutal crackdown every time it happens.
    Mr. Meijer. Thank you, Professor.
    Dr. Lucas, real quick before my time expires, you know, 
obviously, we touched upon earlier the Ryanair flight that was 
kind of air piracy, you know, and forced to land in Belarus, 
and then just today we had an Air France flight from Paris to 
Moscow that was told if it wasn't going to transit Belarusian 
airspace, it wouldn't be allowed to land in Moscow.
    Any insight into how you view this escalating tension with 
Minsk getting closer to Moscow and forming kind of that 
authoritarian alliance? How does that play out for the rest of 
the EU?
    Mr. Lucas. I think that Moscow is pretty surprised about 
what Minsk did. I do not think it was part of a plan. I wonder 
if Putin will tell Lukashenko to back down and then present 
that as a gift-wrapped something for the table at the summit 
with Biden. But if I knew the answer, I would be running some 
intelligence organization. I wouldn't be here.
    Mr. Meijer. Fair enough. Fair enough.
    Mr. Chairman, I yield back.
    Mr. Keating. Thank you, Representative.
    The chair recognizes Representative Titus for 5 minutes.
    Ms. Titus. Thank you, Mr. Chairman, and thank you to these 
witnesses.
    You know, we have heard a lot this morning about how Putin 
and the oligarchs of Russia have used their wealth to kind of 
control or maintain a stranglehold on the internal economy and 
politics of Russia itself.
    But we also know they've used these funds in turn to 
influence politics around them. They've supported separatist 
movements in Georgia, Ukraine, and Moldova.
    They've tried to influence elections in some of their--the 
countries that are near their sphere of influence. They 
interfered in the referendum in Macedonia even.
    I wonder if the panel would discuss what the United States 
can do to try to stop that extended influence without playing 
into the hands of Putin who actually needs the U.S. to be an 
enemy to buildup his position internally.
    Dr. Weber. So, ma'am, if I may, I would suggest better 
enforcement of secondary sanctions. So a lot of these oligarchs 
and different sorts of people they provide some service to 
Putin and the Russian State, but they also have totally normal 
business dealings.
    And so there isn't any real reputational risk of dealing 
with those people because they can say, you know, this is my 
one State business but I have all my other business that's 
totally normal.
    So to increase the risk--the reputational risk of working 
with them on other people, that would be the sort of thing that 
could raise the costs to, basically, business as normal within 
Russia and would then essentially create these, these long-
term, you know, doubts within the elite, do I want to 
participate in trying to influence a referendum in Montenegro 
or wherever else if I cannot also have my normal, you know, 
stock listing in, you know, New York or London or Hong Kong or 
wherever else.
    So that would be a core thing to raise the costs on the 
elites from inside of Russia through secondary sanctions.
    Ms. Titus. You may.
    Mx. Gessen. Can I jump in?
    If I may be so bold as to suggest that we think about 
sanctions a little bit differently. I think the traditional way 
of thinking about sanctions is to try to measure their 
effectiveness and see if they've actually changed the behavior 
of somebody like Putin.
    I think that's unrealistic. Putin's behavior is not going 
to change nor is the propaganda machine going to stop 
positioning the United States, no matter what the United States 
does, as the enemy.
    As you rightly pointed out, that is what Putin needs for 
the survival of his propaganda machine. I think if we could 
reframe it as doing the right thing, as not--as the right thing 
being not doing business with a regime that kills its own 
citizens, that throws people in jail for thought crimes, that 
has assassination squads roaming the world, that interferes in 
other countries and works to undermine other democracies, then 
I think that question becomes a little bit simpler, right.
    It's not a question of effectiveness. It's a question of 
maintaining the integrity of the West, maintaining the 
integrity of U.S. actors and not getting in bed with that 
regime. Thank you.
    Ms. Titus. Thank you.
    Mr. Lucas. If I could just jump in.
    Mr. Keating. Yes, go right ahead.
    Mr. Lucas. Yes. It's absolutely right, maintain--the best 
defense we have is the integrity of our system. The greatest 
weakness we have is problems in our system, which enemies can 
exploit.
    As I already said, we have already done this with terrorist 
finance. If I'd said to you 30 years ago we are going to worry 
about how Islamic extremists handle money, people would have 
said why is that a problem.
    9/11 taught us that's a big problem. And we have dealt with 
it. We have very sophisticated extensive measures for dealing 
with threat finance. We just need to refocus that a bit and 
start thinking not just about terrorists but about 
kleptocracies.
    Ms. Titus. Thank you.
    Just really quickly, something that hasn't been mentioned 
is environmental progress in Russia. Now, often the way 
oligarchs or leaders get away with things is a lack of rule of 
law or a lack of regulation.
    Is that occurring in Russia too where Putin says one thing 
and, yet, we do not have any way to hold him accountable for 
anything that's improving the environment like the Paris 
Accords?
    Professor, I guess----
    Dr. Weber. The law of Russia is very flexible. So it's--
there are many laws and regulations that are in conflict with 
each other and they get interpreted as is necessary.
    So the way the Russians view climate change writ large, 
just quickly enough, is they look at, basically, China saying, 
you know, President Xi said we'll reach maximum coal usage in 
2035 but we'll be carbon neutral in 2060.
    The U.S. is sort of in and out. They look at that as the 
other two major players of the system aren't taking this very 
consistently and very seriously. They look at climate change as 
actually good for them. It's better growing seasons inside of 
Russia, which is a cold country.
    It's greater access to the mineral resources in the Arctic 
itself, and if the Arctic becomes a navigable zone, well, then 
they can militarize it and make it something in which they are 
a founding member of the Arctic as something to negotiate with 
the United States and others akin to nuclear weapons.
    So they're actually all in on climate change as being a 
good thing.
    Ms. Titus. Very interesting.
    Well, thank you, Mr. Chairman.
    Mr. Keating. Thank you, Representative.
    We'll just take a few moments to do some followup or some 
areas that weren't covered for the members that want to 
participate. At least, I have a few.
    We really touched on Crimea. Just yesterday, I had 
conversation with several of the reform leaders in the Ukraine.
    As they move forward and they realize their challenges, but 
they are moving forward, I believe, working on areas of 
judicial reform, dealing with corruption issues in Ukraine, you 
know, their aspirational goal is to move toward, you know, the 
EU, maybe NATO, as Russia masses anywhere between 80,000, maybe 
more, troops just for a show of force.
    As they go along this, what do you anticipate Putin's move 
will be? We know what happened the last time in the Maidan 
after, you know, they were moving toward, you know, application 
toward the EU and Russia's response.
    What do you anticipate the problems there for Ukraine, 
moving forward? What intervention do you think Putin is capable 
of, going forward now?
    Go ahead, Mr. Lucas.
    Mr. Lucas. Yes. I think the key thing for Russia is that 
Ukraine has become a much stronger country now. This is not the 
Ukraine of 2014, which was, basically, unable to defend itself, 
and the thought of an all-out war with Ukraine, even if it did 
not have Western help, is a really serious prospect for Russia.
    So I think that we are in an era of bluff and intimidation 
rather than outright conflict, and Russia looking for pressure 
points, and I would particularly point to the Sea of Azov and 
attempts to try and cut the Kerch Straits and put pressure on 
the east of Ukraine there and, of course, the continued 
attempts to destabilize Ukraine through its economic system and 
corruption and so on.
    I think it's really the number-one priority for us is to 
help the Ukrainians deal with corruption and strengthen 
themselves because a successful Ukraine, a politically strong, 
economically vibrant Ukraine, is like--is a terrible thing for 
Russia because it shows that this can work. Putin's approach, 
fundamentally, is nihilistic. He says there is no other way. 
This is never going to get any better. You just got to stay 
with me.
    And if people look across the board in Ukraine and say, 
hey, there's an alternative that's better, that's terribly--
that's really destabilizing for him?
    Mr. Keating. Anyone else? Other prospects there?
    I know, you know, Mr. Grozev, you know, did they act in 
ways where it's deniable, and that's where you concentrate a 
lot of your efforts in reporting. They can continue to use the 
Wagner Group or--to destabilize things. What are their options?
    Mr. Grozev. Well, first of all, I would like to say that an 
escalation at this point in Ukraine will be most likely a 
function of internal domestic issues in Russia of dropping of 
popularity just before elections, for example, or, as we had a 
lot of discontent on the ground in Crimea because of the lack 
of--a shortage of water.
    So whenever we see such symptoms of sort of a downward 
spiral of popularity of the Kremlin, we see an escalation of 
rhetoric, at least toward Ukraine.
    So this is one of the risks for Ukraine, that actually 
something happens inside Russia and Putin needs a sort of a wag 
the dog situation.
    And the second one is, as we just discussed, an 
improvement--a significant improvement in the economic position 
or in sort of the happiness in Ukraine because that will be a 
nightmare for the Kremlin.
    So I think that if we see signs of escalation, this might 
not be a thing, and I agree completely with Edward that it's 
very unlikely that today's Kremlin will risk an all-out war, 
even a war via proxy, just because the Ukrainian army and the 
Ukrainian secret services are much better than they were 5 
years ago.
    Mr. Keating. Thank you.
    Representative Vice Chair Spanberger, would you like a 
followup question?
    Ms. Spanberger. Thank you very much, Mr. Chairman, and to 
our witnesses, thank you for spending a little bit more time 
with us.
    I was just wondering if we could--just any general answers 
or perceptions, observations you all want to share related to 
the Russian intelligence operation. So I've previously served 
as a case officer with CIA and this is always an area of 
interest.
    So, just generally speaking, if you could speak to how 
intelligence operations really fit into Putin's larger aim of 
consolidating power, either domestically or expanding influence 
internationally, I would be interested in your thoughts on 
that.
    Mr. Lucas. If I might just jump in very briefly because I'm 
sure Christo has also got some thoughts on this. But I think 
it's one of the weaknesses in the preconception. As a former 
intelligence officer, you may recognize this from your past 
life.
    He tends to overestimate the importance of things that are 
called secret and he has a slightly distorted world view. He's, 
I think, sees the secret world in very sharp colors and perhaps 
sharper--sharper than they should be.
    He's got tremendous--and I think another thing that's worth 
looking at is the competition between the intelligence 
branches. So they're not all playing on the same team. 
Obviously, that would never happen in a Western country the 
intelligence organizations would be rivals.
    But that's, certainly, another element and what to take 
certain, we saw in the attack on the United States political 
system, the SVR was conducting one cyber operation and the GRU 
was conducting another and they were on the same network.
    Ms. Spanberger. And when you talk about the differences 
there, are there also significant differences in terms of how 
they're funded, how they're prioritized, and how does that 
impact us? And I think one of the other witnesses wanted to add 
something. So I'll just open that back up.
    Dr. Weber. So if I may just sort of jump in on that exact 
point. So one thing to think about, there are many intelligence 
services.
    The FSB, the successor to the KGB, can also be thought of 
as perhaps the largest economic organization in all of Russia, 
having a little slice of just about everything in the entire 
country.
    So part of the reason that Putin is so afraid of what 
happens after Putin is his belief and everyone's belief that 
if, basically, a new group comes in, they're all going to 
whatever is the modern version of the guillotine and they'll 
all be expropriated.
    So in that sense, their life is a day-to-day existential 
struggle to keep that future from happening, and so that's part 
of their fear. The success will be reversed in a very awful 
way.
    Thank you.
    Ms. Spanberger. Thank you. Mr. Chairman, I yield back. 
Thank you.
    Mr. Keating. Thank you.
    The chair recognizes Representative Costa--Representative 
Costa is the chair of the Transatlantic Dialogue--for 5 
minutes.
    Mr. Costa. Thank you very much, Mr. Chairman, and I think 
this morning's hearing is very important to our collective will 
to coming together with a strategy with our European partners 
on the flexing problem of Russia that we have discussed this 
morning.
    I have a different version of how I describe Russia today 
that I suspect does not--I hope many of you would agree with. I 
think modern-day Russia is their version of ``The Sopranos,'' 
and ``The Sopranos,'' of course, a--the situation in Russia 
with the oligarchs, I think, dependent upon one another and 
Putin.
    You touched upon a key to destabilizing this partnership as 
their common interest in their financing and whether it's 
laundering money in London or their Swiss bank accounts.
    Why do you believe that the West there's just a lack of 
leadership has been--discounting the last 4 years where there 
was something else going on, in my view--a strategy to really 
undermine the financial underpinnings of how this underworld 
system, this corrupt Soprano group continues to function?
    Mr. Lucas. Well, if I may, Congressman, just jump in 
quickly on that. It's incredibly lucrative, and if you are a 
lawyer, a banker, an accountant, a PR guy, selling real eState, 
you can make a fortune.
    You can make life-changing amounts of money working for 
these people, and it does not feel that bad. We do not yet 
have--I think always the first thing we need is normative 
pressure. People should feel bad about taking these people on 
as clients.
    They should feel that people aren't going to talk to their 
kids at school, that no one's going to want to talk to them at 
parties, they won't get into golf clubs, whatever. We need 
normative pressure this is bad. We do not have that at the 
moment.
    In many countries, it seems completely respectable, normal, 
understandably even creditable to be building bridges with 
Russia and doing business with these people. And until that 
changes, it's going to be very difficult to get some--get some 
traction.
    Mr. Costa. But isn't there, basically, just a lack of a 
strategy that the West can agree on to implement?
    Mr. Lucas. Well, we need--we need to stick--I mean, 
someone's got to lead, and I think if we sit around waiting for 
a united Western strategy we're going to be waiting a long time 
and we'll----
    Mr. Costa. But I think the strategy has to come from us.
    Mr. Lucas. Absolutely. As I said in my testimony, the U.S. 
has to lead on this You're the biggest and the strongest 
element in this.
    Mr. Costa. And what would be involved in that strategy 
between our European allies and ourselves?
    Mr. Weber?
    Dr. Weber. Oh, sure. So, I mean, the--I think part of your 
question is to understand what are the limitations of 
sanctions, as mentioned by Professor Gessen.
    We think that sanctions are there's a bad thing, stop it, 
we'll put this pain on you and we'll take it away when it 
leaves--when you stop doing it.
    But because we sanction so many different things of Russian 
foreign policy that, basically, if Putin were to acknowledge 
any one part of it he would, in effect, create a market for 
sanctions and for Russian foreign policy, and we'd know exactly 
what to do in order to get him out of Crimea or whatever else.
    And so that's it, in essence. So what we can do in terms of 
sanctions is just the thing, what are, basically, the secondary 
ones and to--and one of the other things that Putin is able to 
do is that the secretary--so in the State Department's Office 
of Chief Economist, they've published research that showed that 
Putin was able to compensate every single sanctioned 
individual, private company, and State-owned enterprise in 
Russia, either directly from the State budget or through 
increased State orders.
    Because what happens in these authoritarian countries is 
that these sanctions on, basically, like, the oligarchs for the 
big companies is just an opportunity to be compensated by 
Putin. It becomes this loyalty test.
    So I think what Mr. Lucas and others have been describing 
is what are the second and third order effects that we can 
think of, whether it's basically normative pressure or to think 
about what are the sanctions' effects on people who are not 
directly that oligarch and not directly working with the 
Russian State.
    That's the sort of stuff that I think is being suggested 
here.
    Mr. Costa. Thank you. My time has expired. But this is a 
conversation, Mr. Chairman, that I think the subcommittee needs 
to continue to pursue to try to see if we can, on the 
congressional side, put in place a framework that would allow 
us to move forward on a bipartisan strategy. I think we have to 
do this.
    Mr. Keating. Thank you, Representative, and we do have 
legislation that's been moved and others that will moved 
together. So I appreciate that, and this committee will 
continue to look at this issue. It's so integral to the area of 
responsibility we have on the Foreign Affairs Committee.
    Mr. Costa. We need to get our European help to work with us 
on this, I think.
    Mr. Keating. I agree. And thank you for your work in that 
regard.
    Just as some closing remarks I might have where I'll give 
you an opportunity to--if you'd like, to comment on may not be 
necessary. We touched on one of my concerns with Vice Chair 
Spanberger's questioning about succession.
    You know, one of the alternatives in how Putin maintains 
his control in an authoritarian way is the argument, well, no 
one else can do it. Well, no one else could do it in his 
narrative because no one else is there.
    You know, several years ago, people like--people like 
Rogozin as the possible successor, you know, those things 
disappear quickly, politically. And I know that we even have 
people that in--that are concerned privately that if he leaves, 
there could be, as Dr. Weber had said, the guillotines and 
violence and unrest, maybe even civil discord of major 
proportions in that country.
    If you want to comment on those concerns as the closing 
remarks that you may have.
    And No. 2, if Russia does have a setback, if the people--if 
there is a chance for reform there, what effect might that 
have? It seems like in this world authoritarianism breeds more 
authoritarianism, and if we start to see some of these 
countries like Russia continue to fail--I say continue because 
in terms of fulfilling their obligations and responsibilities 
to their own people they are failing. What could that be 
effect--what could be the effect of that?
    So, yes, I'll give you a chance, just closing remarks if 
you want to just touch on either of those two issues or 
something we have not touched on, very briefly.
    I'll start, perhaps, you know, with Professor Gessen first.
    Mx. Gessen. Thank you. So I actually think that the 
question of succession and the--and the question of--and the 
fears of unrest and the question of whether authoritarianism 
breeds more authoritarianism are one question.
    And the answer is, yes. The longer the Putin regime 
survives, the less possibility there is for anything positive 
to grow on that scorched earth. As to whether----
    Mr. Keating. Go ahead, Professor. I thought you were done.
    Mx. Gessen. As for whether things will get worse when Putin 
leaves office, I would just like to remind you that those same 
fears were expressed by intelligence services in the United 
States when Stalin was getting older and weaker. And this 
country is already gripped by violence.
    It is already a dying place where people are dying from 
violence, where people are dying from despair, where just 
living there is a terrible, frightening experience.
    It is a nonzero possibility that it will get worse. But 
it'll also be a moment of great opportunity, and the sooner 
that moment comes, the better our prospects.
    Mr. Keating. Thank you.
    Dr. Weber?
    Dr. Weber. So thank you all for your attention and for your 
excellent questions.
    As you said in your--in your remarks, Putin does not have 
any other reasonable political opponents. So he's been running 
against this idea of the 1990's, that after me it's the flood.
    And that is, in essence--you know, one of the things that, 
you know, I'd like to leave the subcommittee with is Russia, 
the country, is great. The Russian people are totally great.
    The people who are afraid of democracy and the people who 
are afraid of political change in Russia itself is Putin, the 
circle around him, and that larger political elite who are 
afraid of the exact sort of payback that they've done to their 
predecessors, and it's that fear which is making sure that they 
are trying to hold the country, basically, in this arrested 
development, you know, for on and on.
    So it's not that the Russian people do not want democracy. 
It's that they look at the elite and then thinking if Putin 
isn't there what are those elite going to do to each other, and 
that might be the war of all against all that the Russian 
people are actually afraid of.
    And so that's, in essence, you know, the very delicate line 
that we need to thread. Thank you.
    Mr. Keating. Thank you.
    Mr. Grozev?
    Mr. Grozev. Couldn't agree more. I have to say that until I 
saw and until we identified this domestic assassination program 
that is so pervasive that culminated in the attempt on Navalny, 
I did not realize how unlikely it is for this government to 
ever allow a change through peaceful means.
    Having this program, which is completely out of any 
domestic law and anti-constitutional, have run--having run it 
for so many years makes it very, very unlikely that there will 
be a mechanism that would allow for a peaceful change.
    So coming back to some of the mechanisms to encourage a 
possible desire by the oligarchs or the elite to enforce a 
change on its own, I cannot agree more, that secondary and 
tertiary sanctions--put sanctions where they cannot be 
substituted and offset by gifts by the Kremlin.
    Yes, the Kremlin can offer money to offset the loss of 
revenue for oligarchs. What the Kremlin cannot often in 
exchange for Western sanctions is replace, for example, visas 
or residence permits for the wives and for the families of the 
oligarchs who definitely want to live and study outside of 
Russia.
    So just do this. It's a sovereign right of the Western 
world to decide who gets visas and who does not. But look for 
things that cannot be substituted by the Kremlin in order for 
it to hurt.
    Mr. Keating. Thank you.
    Mr. Lucas?
    Mr. Lucas. Thanks. I endorse what my colleagues have said.
    There are two things we are really bad at. One is 
predicting what's going to happen in Russia and the other is--
the other is influencing it. If you put those two together, 
you're bound to get it wrong.
    So I think that we should--analytically, we can see 
succession is a real problem and the system is highly unstable. 
Its personalized institutions have been hollowed out. Regimes 
tend to split at the top or crumble at the bottom, but how and 
when and where we do not know.
    So in the meantime, let's just concentrate on what we can 
do and that's cleaning up our system. That's not just does it 
make it safer in terms of attacks from outside. It boosts 
confidence inside if people see that the system is running in 
the interests of the voters and the taxpayers and not by 
mysterious dark money behind the scenes.
    So that's super important, live by--live by our own values. 
And if we do that, we are--at least have a fighting chance of 
influencing things in Russia in the--in the right direction.
    And also defending ourselves against other threats, such as 
China, which we have touched on. So all these tools are in our 
hands.
    We are not weak because we were outgunned in some great 
war. We are weak because we unilaterally disarmed some 
protections we have. We can put them back again.
    Mr. Keating. Great. Well, thank you.
    I want to thank all our witnesses, our members. As 
Representative Costa had said, I think this is a subject that 
we just touched the surface of, that we will continue to find 
more information on.
    This panel has been extraordinary. I thank you for your 
time and your insight.
    Members of the committee will have 5 days to submit 
statements, extraneous material, and questions for the record, 
subject to the length and limitations of the rules.
    With that being said, this hearing is adjourned.
    Thank you.
    [Whereupon, at 2:40 p.m., the committee was adjourned.]

                                APPENDIX
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            RESPONSES TO QUESTIONS SUBMITTED FOR THE RECORD
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