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WELCOME TO THE KREMLIN PLAYBOOK By Heather A. Conley and Ruslan Stefanov

russianflag14 Oct 16. Friday, October 8, will be a date that historians will note as the day the U.S. government formally acknowledged the existence of a Russian influence playbook designed to challenge America’s democratic processes, institutions, and international leadership.

The Joint Statement from the Department of Homeland Security and the Office of the Director of National Intelligence stated that “The U.S. Intelligence Community is confident that the Russian Government directed the recent compromises of e-mails from US persons and institutions, including from US political organizations. The recent disclosures…are consistent with the methods and motivations of Russian-directed efforts.… Such activity is not new to Moscow—the Russians have used similar tactics and techniques across Europe and Eurasia.… We believe, based on the scope and sensitivity of these efforts, that only Russia’s senior-most officials could have authorized these activities.”

Seven years ago U.S. policymakers were warned by Central and Eastern European leaders that Russia was using such a playbook of “overt and covert means of economic warfare, ranging from energy blockades and politically motivated investments to bribery and media manipulation in order to advance its interests and to challenge the transatlantic orientation of Central and Eastern Europe.” (See p. ix of our report, The Kremlin Playbook.) This prescient warning was not heeded.

For the past 16 months, we have studied how Russian-directed tactics and techniques, particularly the impact of Russian economic influence and the decline in democratic standards in five Central European countries from 2004 to 2014, have functioned. Unfortunately for Washington, Russian tactics have worked exceedingly well, and Central Europe is now more sympathetic to Russian policy approaches; the region’s democratic institutions have been diminished and illiberalism advanced.

Russia has cultivated an opaque network of patronage across Central Europe that it uses to influence and direct decisionmaking. Resembling a network-flow model, which we describe as an “unvirtuous circle of Russian influence,” influencing tactics can begin with either Russian political or economic penetration and, from there mutually reinforcing itself, substantially expand and evolve leading to “state capture” in some instances. Through these networks, Russia can gain influence over critical democratic institutions, state bodies, and the economy in order to subvert national policies and decisions.

These tactics constitute a critical element of Russian military doctrine, so-called New Generation Warfare, which “is primarily a strategy of influence, not of brute force,” and its primary goal is “breaking the internal coherence of the enemy system—and not about its integral annihilation.” (See pp. 3–4 of The Kremlin Playbook.)

This is the Kremlin playbook: A strategy designed to exploit governance deficits to weaken the internal cohesion of democratic societies and strengthen the perception of Western economic and political dysfunction by influencing and eroding democratic governance from within.

Our study found that countries in which Russia’s economic footprint was on average more than 12 percent of its GDP were generally more vulnerable to pressure via economic tools such as gas supply and transit, corporate raiding of key national companies, and capture of strategic sectors. For those countries with less than 12 percent of GDP, Russia has relied on high-level political patronage, visits, and support for foreign policy positions contrary to Euro-Atlantic values and objectives. In one case study country, Bulgaria, Russia’s economic footprint (e.g., Russian corporate presence, direct investment, trade relationship, private ownership, and investments) averaged over 22 percent of GDP, which places the country at high risk of Russian-influenced state capture.

The 2007–2008 period was a tipping point in Russia’s strategy of influence in Central Europe. Before the 2008 global financial crisis and Russian-Georgian conflict, Russia’s economic presence in Central Europe was largely opportunistic. But after the 2008 period through to the 2014 Ukraine crisis, Russia’s economic footprint was intentionally used to amplify political pressure, which both deepened Russia’s influence in Central and Eastern Europe and undermined the West’s credibility. In all cases, Russian influence has been directed at challenging national stability as well as democratic orientation.

The United States cannot afford to remain indifferent to events in Europe or at home, as Russian influence is not just a domestic governance challenge but a national security threat. It must be treated as such. Our study recommends significantly empowering the Treasury Department’s Office of Financial Crimes Enforcement Network (FinCen) to trace and prosecute illicit Russian-linked financial flows if they interact with the U.S. financial system. NATO should charge its newly created assistant secretary general for intelligence and warning to track malign Russian influence in NATO member states. The European Union must enhance its financial intelligence to track Russian transactions and final beneficiary owners and prevent EU funds from being misdirected to serve non-EU interests. Brussels should decisively use its antimonopoly policies both at the EU and regional levels to counter Russian monopoly power. U.S. government and European assistance funds should be focused on combatting Russian influence and strengthening governance practices in Central and Southeastern Europe. The State Department should produce an annual report listing NATO and EU countries at the greatest risk of Russian influence. The secretary of homeland secretary and director of national intelligence should develop a similar report reflecting the risks to U.S. interests as well.

It will take considerable public policy attention and financial resources to combat Russian influence and insulate our democracies from future Russian manipulation in both Europe and the United States. We must strengthen the health of our democracies, enhance the transparency and openness of our institutions, and develop a national and transatlantic conversation about how Russian influence works and how to work against it. If successful, the West will not only be less susceptible to Russian tactics, influence, and exploitation, but it will also improve the functioning of its democratic and market institutions.

Isn’t it ironic? Twenty-five years ago, the West demonstrated the superiority of its economic and political model, which led to the dissolution of the Soviet Union. By actively discrediting and undermining the Western liberal democratic system, the Kremlin playbook is seeking to demonstrate the superiority of its authoritarian and illiberal model, or perhaps its ultimate goal is to make the two systems morally equivalent and equally bankrupt. The national security stakes for this playbook are enormous.

Heather A. Conley is senior vice president for Europe, Eurasia, and the Arctic at the Center for Strategic and International Studies in Washington, D.C. Ruslan Stefanov is director of the Economics Program at the Center for the Study of Democracy in Sofia, Bulgaria.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2016 by the Center for Strategic and International Studies. All rights reserved.

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