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DE RUEHMO #1780/01 1911036
ZNR UUUUU ZZH
P 101036Z JUL 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 4206
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 MOSCOW 001780 
 
 
SENSITIVE 
SIPDIS 
 
E.O.  12958: N/A 
TAGS: PREL PGOV ECON RS
SUBJECT:  CODEL BERMAN MEETS WITH CARNEGIE CENTER AND AMCHAM 
 
¶1. (SBU) Summary:  In separate meetings June 30, Codel Berman met 
with Carnegie Center experts and AmCham members.  Carnegie's Trenin 
told the Codel that missile defense was the "make-or-break" issue 
for Russia's post-START treaty posture.  Russia benefited from U.S. 
tensions with Iran, although it had little influence over that 
country.  Masha Lipman and Nikolay Petrov described the GOR's 
internal structure as "clannish" with competing visions, while 
Putin's job was to maintain the public image of the government as a 
cohesive whole.  Russia's recent WTO membership decision was proof 
that the liberal clan was in the minority.  AmCham members told the 
Codel that business corruption was decreasing in Russia, but still 
amounted to 5-10 percent of operating expenses.  U.S. companies 
operating in Russia were positively affecting Russians' views of 
corruption.  End summary. 
 
--------------------------- 
Carnegie on START, MD, Iran 
--------------------------- 
 
¶2.  (SBU) In a June 30 meeting, Carnegie Center Director Dmitriy 
Trenin told House Foreign Affairs Committee Howard Berman (D-CA), 
Representatives Howard Coble (R-NC), Bill Delahunt (D-MA), Brad 
Miller (D-NC), Dana Rohrabacher (R-CA), David Scott (D-GA), and 
Albio Sires (D-NJ) that Russia did not want a START treaty renewal 
at any price, although it understood it was bargaining from a 
position of global military weakness.  For Russia the negotiating 
process was more important than concluding a post-START treaty, as 
the process put Russia on the same level as the U.S.  Russia 
considered missile defense (MD) to be the "make-or-break" issue in 
this context, as Moscow believed the U.S. was striving through MD to 
acquire invulnerability against Russian missiles.  Trenin held out 
that this central tenet of Russian strategic thinking could be 
weakened if the U.S. and Russia were to agree to a joint effort 
study on MD, leading to a breakthrough in the U.S.-Russian 
relationship.  However, Russia had nothing it could offer the U.S. 
to make cooperation on MD worthwhile. 
 
¶3.  (SBU) Trenin said that Russia's influence on Iran was limited, 
although Moscow considered President Obama's January letter 
purportedly asking for Medvedev's assistance on Iran to be an 
implicit acknowledgement of Russian interests in the region.  While 
Russia considered sanctions to be ineffective, it was waiting for 
the U.S. policy on Iran to prove itself.  Trenin stated that Russia 
benefited from tense U.S.-Iran relations, which allowed Russia to 
maintain closer ties with the "rising power" in the Middle East. 
 
----------------------------- 
Carnegie on internal politics 
----------------------------- 
 
¶4.  (SBU) Carnegie's Masha Lipman told the congressmen that the 
Russian government was not split into factions, rather there were 
different "visions" amongst members, as evidenced by recent 
contradictory statements by 1st Deputy PM Shuvalov and Deputy PM 
Sechin on the value of low oil prices for Russia.  Putin ensured 
that such differences of opinion did not spill out to the public, 
maintaining the image of a cohesive and loyal government.  Lipman 
did not judge the current economic crisis to be dire enough to 
threaten Putin's position, or even cause him to change his economic 
policies. 
 
¶5.  (SBU) Carnegie's Nikolay Petrov said the Center had a working 
group to figure out the "clan structure" in the Russian government. 
He said the clans were not stable, changing according to the issue 
at hand.  Putin played the clans by favoring one on one day, and 
another on the next.  That the liberal clan was in the minority was 
illustrated by Putin's unexpected decision to pursue WTO membership 
from within a customs union with Kazakhstan and Belarus. 
 
-------------------- 
AmCham on Corruption 
-------------------- 
 
¶6.  (SBU) In a June 30 meeting with American Chamber of Commerce 
members in Russia, AmCham members told Codel Berman that the 
situation on corruption in Russia, while still a concern, had 
improved somewhat for U.S. companies doing business there.  Overall, 
one member estimated that corruption in Russia caused U.S. 
businesses an average of 5-10 percent of operating expenses. 
Although the level of government corruption was perceived as 
unchanged, instances of corrupt business practice had declined. 
AmCham members attributed this to the realization that corruption 
slowed down doing business, siphoned off profits and subsidies, and 
increased expenses to cover the higher risk that working in a 
corrupt environment entailed.  All agreed that larger companies were 
more able than smaller and medium sized companies to fend off 
attempts by Russian officials and business partners to engage in 
corrupt practices.  AmCham president Somers highlighted the positive 
influence of U.S. business in Russia, with 95 percent of Russian 
 
MOSCOW 00001780  002 OF 002 
 
 
employees in American companies believing their company "conducted 
business in a transparent manner," compared to 66 percent in Russian 
companies. 
 
BEYRLE