SOS Message To Lugano Conference: Not One Dollar, Euro, Pound, Yen For Ukraine Until First Russia Has Given Up Its US$340 Billion- And Then Some More. Stop March To Using Taxpayer Funds.
SOS Message To Lugano Conference: Not One Dollar, Euro, Pound, Yen For Ukraine Until First Russia Has Given Up Its US$340 Billion- And Then Some More. Stop The March To Using Taxpayer Funds.
President Putin’s Brilliant Strategy: Russia Attacks Ukraine. Russia Gets It’s Money Back. Supporters Of Ukraine Go Into Debt To Repair The Damage.
This Is Rich, Pun Intentional.
The Swiss Confederation (Switzerland), consistently among countries with the highest per capita income, and which has for decades served as a secretive depository for a known tens of billions of dollars- and a reported nearing two hundred billion dollars in assets controlled by individuals subject to Russian Federation jurisdiction, is hosting on 4/5 July 2022 at the Congress Centre in the city of Lugano, a two-day gathering to discuss… reconstructing Ukraine. The title is Ukraine Recovery Conference (URC022), which was scheduled as a similar event prior to 24 February 2022, but retitled subsequently. Is this gathering necessary? Is the gathering necessary now? No and no.
The irony: A conference which at its core must by definition be about embracing and requiring transparency and deterring corruption is held in a country which individuals subject to Russian Federation jurisdiction have used as an asset vault for what many of the political leadership attending the conference deems to have been illegally derived and unethically obtained and have criticized the host government for not being more helpful in identifying and seizing the assets.
NOTE: Prior to the conference in Lugano concluding its first day, the government of the United Kingdom (England, Scotland, Wales, and Northern Ireland) reported it would host a similar event in 2023. Will taxpayers in the United Kingdom welcome Boris Johnson, Prime Minister, creating further national debt (and probably higher taxes and fees) when defense, education, healthcare already are underfunded and his government wants to spend more on each sector?
Now would be opportune for Istanbul, Turkiye-based Turkish Airlines (“an airborne embassy”) and Turkish Cargo (“an airborne chamber of commerce) to re-establish their operations to Ukraine. As the airline has an effective monopoly on service to and from Moscow, Russian Federation, where it has doubled one-way airfares, the airline would be rewarded too by flights with capacity full-fare Business Class customers visiting Kyiv to scout for potential reconstruction projects.
The program pace in Lugano is anything but robust. The first day commenced at 10:00 am- with arrivals, family photographs, welcoming remarks. The work began at 1:30 pm and ended at 6:30 pm with a “free evening or cultural program.” The second day commences at 8:30 am and includes another family photograph, closing plenary, and press conference, concluding at 4:45 pm.
The participants will spend hundreds of thousands of dollars on air transportation (not including the carbon emissions for the dozens of general aviation aircraft), hotel suites (some of the most expensive hotels in the world), ground transportation (again a source of carbon emissions), security, restaurants (some of the most expensive in the world), and other services. So much for concerns about climate change… or taxpayer expenditures.
Nearing the entirety of the cabinet of the government of Ukraine, including Volodymyr Zelensky, President of Ukraine, and members of the cabinet of the government of Switzerland, including Ignazio Cassis, President of Switzerland, are participating. Thirty-eight countries are sending delegations- many including a prime minister and/or foreign minister; and the United States is represented by Brian McKeon, Deputy Secretary of State for Management and Resources.
According to the published program, Deputy Secretary McKeon is not a named participant in any session. So, why is he there if he does not have anything official to contribute? Would not Mrs. Samantha Power, Director of the United States Agency for International Development (USAID) have been a more appropriate participant? USAID directs the distribution of most United States taxpayer-funded assistance thus far delivered to Ukraine.
The conference in Lugano is organized by bureaucrats and technocrats, who are politicians by position, and who are not using their money- they are allocating the funds of taxpayers and are gestating towards preference for using first monies borrowed rather than focus singularly and with unanimity towards identifying, securing, confiscating, and then allocating funds of the Central Bank of the Russian Federation, estimated at approximately US$340 billion, currently frozen, to reconstruct Ukraine.
The government of the Russian Federation may not need retain law firms to seek the return of its frozen assets- the political leadership of those countries which are supporting Ukraine may do it for them.
From the conference- rows of elected and appointed officials elegantly attired, smiling, congratulating one another, clapping in unison when discussing spending money- other people’s money (OPM) in Ukraine. Like seals wanting a smelt.
In an unseemly, perverse way, the higher the level of destruction in Ukraine, the more taxpayer funds will be dedicated- and the more politicians will say “see the export opportunities, see the job opportunities, see how this taxpayer-led funding will benefit our economy…” What they won’t focus upon is having to repay these funds- that will come due decades after their term in office has expired- and they too have probably expired.
From Kyiv.
The first morning remarks by Denys Shmygal, Prime Minister of Ukraine, “We believe that the key source of recovery should be the confiscated assets (US$300 billion to US$500 billion) of Russia and Russian oligarchs. The Russian authorities unleashed this bloody war. They caused this massive destruction, and they should be held accountable for it.”
President Zelensky shared the reconstruction of Ukraine is the “common task of the whole democratic world. Reconstruction of Ukraine is the biggest contribution to the support of global peace.”
Tragically for taxpayers in the United States and other countries, the President and Prime Minister may receive what they seek.
What Messrs. Shmygal and Zelensky should be saying to those governments- and the taxpayers whom they represent, is not one penny of funds for the reconstruction of Ukraine should precede the expenditure in totality of funds obtained from the government of the Russian Federation. Not one penny.
As written previously, the government of Ukraine believes that there is a collective responsibility of “the West” for not doing more in 2008, 2014, and in 2022. From his perspective, all invoices are to be directed to “the West.”
This Is Madness And Hubris.
Participants describe an atmosphere of jubilance- rejoicing (salivating is more precise) in the potential of feasting upon what may be US$540 billion to US$1.1 trillion (May 2022 outlandish estimate of European Investment Bank- EIB) in infrastructure repair, revitalization, renovation, reconstruction, redevelopment, development, etc. projects… a trough of potential revenues so enticing that a conflict nowhere near an end, let alone an intermediate cessation of offensive and defensive activities is realistically in a forecast.
The proverbial table has been set for those governments who have frozen their respective portions of approximately US$340 billion in assets of the Central Bank of the Russian Federation to return all or some of those assets rather than use all of them to fund reconstruction of Ukraine and court judgements relating to civil and criminal lawsuits and findings against the government of the Russian Federation.
The government of Ukraine has no hesitation for promoting that they have no preference as to who pays for the damages inflicted upon the territory of Ukraine by the armed forces of the Russian Federation.
Funds from the Central Bank of the Russian Federation; funds from “oligarchs”; funds from the twenty-seven members of the Brussels, Belgium-based European Union (EU); funds from the thirty members of the Brussels, Belgium-based North Atlantic Treaty Organization (NATO); funds from the 193-member New York, New York, based United Nations (UN); funds from financial institutions including the EIB, European Central Bank, European Bank for Reconstruction and Development, International Monetary Fund, World Bank, International Finance Corporation; and particularly from the taxpayer coffers of Canada, Japan, State of Israel, United Kingdom, United States among others.
Critical to appreciate that the funding from each of the above-identified entities derive from taxpayers- and any funds focused or repositioned for use in Ukraine will be borrowed- not taken from a savings account or account surplus- taxpayers throughout the world will be asked to borrow, pay interest upon that borrowing, and the repayment duration will be in the decades.
The government of Ukraine and at least one of its “oligarchs” holds firmly that at the historical core, those governments whose decisions did not dissuade prior to 2008 the government of the Russian Federation from its invasion of Georgia (Abkhazia and Ossetia), did not dissuade again the government of the Russian Federation prior to its 2014 invasion of the Crimean Peninsula and Donbas Region (Donetsk and Luhansk) in Ukraine, and again by not acting proactively prior to the 2022 further invasion of the Donbas Region, and other areas of Ukraine, the receipts for the cumulative damages inflicted upon Ukraine are the responsibility of members of the EU, NATO, and primarily the United States- meaning their respective taxpayers.
What Is So Difficult?
Why is so challenging for the government of Ukraine, and political leadership of the EU and NATO and the United States and other countries to collectively accept: The armed forces of the Russian Federation inflicted the damage to Ukraine, so the government of the Russian Federation is responsible for 100% of the payment for that damage. All assets of the government of the Russian Federation are to be frozen, confiscated, liquidated if necessary, and serve as the currency to pay for damages inflicted upon Ukraine.
Where Is The Ukraine Utopia?
On 23 February 2022, the government of Ukraine and the commercial, economic, and political infrastructure of Ukraine was deemed by most governments and organizations and in reporting by journalists as among the most corrupt in the world.
On 24 February 2022, the armed forces of the Russian Federation invaded the territory of Ukraine- new incursions into Ukraine and further incursions from previously-controlled territory in Ukraine.
Why is there now a common thought that commencing on 25 February 2022 all corrupted DNA in Ukraine has been vanquished. That the devastation brought about directly by the government of the Russian Federation has created a New & Improved Ukraine? Where anti-corruption laws, regulations, and policies are sacrosanct. Where the legal system is walled-off from political interference. Where the financial system is transparent. Where “oligarchs” and yes, there are individuals subject to Ukraine jurisdiction who have accumulated wealth using many of the same tools as have “oligarchs” subject to Russian Federation jurisdiction, have accounted those assets. The truth is there has been no change to all the corrupted DNA in Ukraine. There has been no time for that to have happened. The government of Ukraine and the citizens of Ukraine continue to fight a war.
If Ukraine is so appealing after 24 February 2022, why were not the number of companies with Direct Foreign Investment (DFI) in Ukraine far greater prior to 24 February 2022? A war must not be the become a nectar; the resulting marketplace is the foundation. Ukraine as a member eventually of the EU will be rewarding for the approximately 44 million citizens of Ukraine and for companies who employ those citizens.
Why does the leadership of the EU, the Brussels, Belgium-based European Commission (EC), so very eager to ask its collective approximately 400 million taxpayers spread amongst its twenty-seven members to pay for the reconstruction of Ukraine- and seem willing to do so without staking a claim to any of the US$340 billion in funds of Central Bank of the Russian Federation frozen throughout the EU and in countries outside of the EU- the United States for example with approximately US$38 billion? The talk is tough, but the details scant.
Fear of the government of the Russian Federation seizing EU and other country assets? Fear of other countries relying less upon the Dollar, Euro, Pound, and Yen as a means to avoid sanctions? Fear of setting a precedent for future conflicts?
Reconfiguring The Priorities.
Before governments (and their funded financial institutions) begin to forage for what will be taxpayer funded resources they can disburse for the creation of a plan for a plan, the creation of a plan to implement the plan, the creation of a plan to implement, and then implement whatever it is the bureaucracy believes is deliverable, there needs to be mutually agreeable and recognizable landscape from which to contemplate the future.
For example, unknown will be the square footage of Ukraine that will be subject to control by the government of Ukraine. Is a justifiable expenditure of time and taxpayer resources today to craft a reconstruction model for the city of Mariupol, for areas within the Donbas Region (Donetsk and Luhansk), northern portions of the city of Kharkiv while the armed forces of the Russian Federation occupy these areas? Does now make sense to focus upon the process and costs of moving housing and commercial properties from areas in Ukraine which may remain under control of the government of the Russian Federation to areas in Ukraine which are, and likely will remain under control of the government of Ukraine. All discussions are academic and hypothetical absent to realities: cessation of conflict and creation of known boundaries.
One certainty will be advisories, brokerages, consultancies, and intermediaries (including legions of the most unsavory sort), are orgasmic about the potential multi-year, multi-decade revenue stream of fees in the service of reconstructing Ukraine.
Some, most of these enterprises will not actually do anything: Highly-compensated executives will not use a shovel to dig a hole. They will pay someone who will pay someone who will pay someone to dig the hole- and along the pathway to digging that hole, every intermediary will take a percentage- a percentage of taxpayer funds.
And there will be an extraordinary capacity for corruption- payoffs, handouts, bribes, excessive fees, hiring of relatives and friends… US$540 billion to US$1.1 trillion can bring about an altering of almost anyone’s DNA and make an already corrupted DNA superhuman.
How will those governments and financial institutions providing and distributing taxpayer funds in Ukraine account for how those funds are disbursed? Who will audit? Who will audit the auditors? How will corruption be prosecuted?
Not A Switch, A Rheostat.
There is no reason to panic. There is no reason to hurry. No one will awaken one morning and the war in Ukraine will have ended. What is happening in Lugano is about optics- an expensively-produced theatrical designed to reinforce interest toward Ukraine, commitment to Ukraine. Has not the nearing US$100 billion thus far targeted by governments (taxpayers) for expenditures relating to Ukraine enough of a demonstration? Certainly not for the government of Ukraine.
The phrase placing the cart (funding) before the horse (place to fund) is apt here, though in need of enhancement. While there is a cart (potential taxpayer funding), the horse (what do to with that potential taxpayer funding) has yet to be located, let alone lassoed and in the corral ready to be ridden- or broken.
Like children with a Christmas List- politicians, bureaucrats, and technocrats create it based upon desire rather than the ability (or interest) of parents (taxpayers) to pay for everything.