By John Helmer, Moscow

Two Russian steelmaking oligarchs, Alexei Mordashov (above, left) of Severstal, and Igor Zyuzin (right) of Mechel, went to court early this month over a debt of $4 million. The debt stems from a contract for delivery of Mechel-made metallurgical coke to Severstal’s steelmill in Dearborn, Michigan. The court is the US District Court for the Northern District of Illinois, Eastern Division, in Chicago. The claim was filed by Severstal’s local lawyers on May 5.

Russian reporting of the case this week noted the irony in the situation that both Mordashov and Zyuzin are trying to sell the companies which are now facing each other in court as plaintiff and defendant. As yet unreported is the Kremlin directive, informally but directly from President Vladimir Putin to the control shareholders of Russia’s large metals and minerals companies, not to take their business disputes to foreign courts. The order, confirmed by insiders at a well-known metal company, has been put in the context of the threat the Russian economy is now facing from US sanctions over the conflict in Ukraine.
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by John Helmer - Tuesday, May 20th, 2014
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By John Helmer, Moscow

Hercules can thank the lucky stars on Mount Olympus that his name isn’t used these days for the clinical condition of megalomania turning homicidal, accompanied by manic-depressive swings, transvestism, sadism, etc. A number of generals in the last world war – George Patton, Curtis LeMay – thought they were herculean in one sense, and were herculean in the other.*
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by John Helmer - Tuesday, May 20th, 2014
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By John Helmer, Moscow

If the programme of US sanctions cuts Russian military industries off from imports from the Ukraine, the new costs imposed on the Russian side may turn out to be less than the price of the sacrifice on the Ukrainian side. According to Russian military sources, that’s because, starting last year the Kremlin ordered the transfer to Russia of as much Ukrainian military design and production capacity as can be bought with hard currency across the frontier. The immediate priority, the sources say, are Ukrainian companies producing engines for aircraft, ships and submarines; turbines for power plants; and electronic components and control systems for guided munitions.

Vaycheslav Boguslayev, chairman of the board of Motor Sich, the principal supplier of engines for Russian combat helicopters, has confirmed a plan to establish a “joint engineering centre” with Russian aircraft engine manufacturers. Motor Sich will not comment in detail on what this centre will do, and how far it may go to substitute for manufacture of the engines on Ukrainian territory. According to a recent statement by Boguslayev provided by his Moscow spokesman, 51% of the new enterprise will be owned by the Russian side, 49% by Motor Sich.
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by John Helmer - Sunday, May 18th, 2014
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By John Helmer, Moscow

The USS Vella Gulf is the latest US Navy warship to be deployed in what Washington is calling its “mission to reassure NATO allies and Black Sea partners of America’s commitment to strengthen and improve interoperability while working towards mutual goals in the region… It demonstrates our commitment to our … allies to enhance security, readiness and capabilities.”
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by John Helmer - Sunday, May 18th, 2014
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By John Helmer, Moscow

The oligarchs of Ukraine, who control the eastern regions’ principal assets, employment, tax base, and income, are at risk of being politically and financially squeezed to death. Unless they can quickly become Maoists — at least according to Mao Zedong’s Red Book saying: 枪杆子里面出政权 (“Every Communist must grasp the truth: Political power grows out of the barrel of a gun.”)

In short, the oligarchs must take power from barrels of guns they disclaimed having at their disposal until now. The first of the new Ukro-Maoists has been Igor Kolomoisky (left), acting governor of Dniepropetrovsk region since March 2. The second, according to his announcement of May 10, is Rinat Akhmetov (right).
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by John Helmer - Wednesday, May 14th, 2014
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By John Helmer, Moscow

The latest but one in the US Navy deployments to the Black Sea ended on Monday when the frigate, USS Taylor, sailed south through the Bosphorus Straits. Three days before on May 9 the cruiser, USS Vella Gulf, had been reported as due to steam north through the straits and into the Black Sea. According to the US Navy spokesman in Washington on May 13, it is now under way in the eastern Mediterranean, destination undisclosed.

For its return voyage to the Mediterranean the Taylor had stopped at the Georgian port of Batumi, and was refuelled there. According to the bunker supplier, Marine Supply & Service, “generally, physical bunker supply by tankers is not available in Georgian ports since beginning of 2013. Vessels arriving to Georgian ports are supplied with MGO (Marine Gasoil) by tank trucks, while IFO (Fuel oil) delivery still does not exist.”
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by John Helmer - Tuesday, May 13th, 2014
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By John Helmer, Moscow

The disclosure that Severstal is planning to sell its remaining two US steelmills has taken the Russian steel industry by surprise, triggering speculation the Kremlin has asked for the move as part of the ongoing conflict between the US and Russia in Ukraine.

For the time being, Severstal’s owner and chief executive Alexei Mordashov is making no official statement. Assessments in Moscow are divided over whether Mordashov has discussed the US asset sale plan with President Vladimir Putin as part of Russia’s reaction to the threat of US sanctions against the energy and metals sectors of the Russian economy. Russian steel industry sources believe Mordashov has authorized the press leak to advertise his asset sale in an attempt to lift the price.
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by John Helmer - Monday, May 12th, 2014
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By John Helmer, Moscow

If the presidential election goes ahead on May 25, half the voters of eastern Ukraine will not vote. Of the half who do, half will vote for the frontrunner and US-backed candidate, Petro Poroshenko. The other half will divide between three or four candidates, including the Communist Party’s Petro Simonenko, the former Kharkov governor Mikhail Dobkin, and the wealthy banker Sergei Tigipko. Among the half who don’t like the choice of candidates and don’t want to vote at all, less than half of them support the building takeovers and other semi-military displays of resistance to Kiev.

For eastern Ukraine, this is an outcome of no peace, no war. Except for the fighters on either side of the barricades, it’s also an outcome of no work, no money.
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by John Helmer - Friday, May 9th, 2014
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By John Helmer, Moscow

When Alexander Shokhin was a junior official in the international economic department of the Soviet Ministry of Foreign Affairs in the 1980s, it was plain he was short-sighted. That was because of the glasses he wore – the old Soviet type, super-thick. He’s come a long way since then, and so has sight-correction technology. When Shokhin met President Vladimir Putin at the Kremlin on February 14, his eyewear was much improved. His short-sightedness wasn’t.

Now president of the Russian Union of Industrialists and Entrepreneurs (RUIE), the principal business lobby in Moscow, Shokhin tried telling Putin his clients would agree to paying more Russian tax on their corporate, and maybe personal incomes, if Putin agreed to let them keep legal title of their assets abroad, under the jurisdiction of foreign courts, not Russian. Putin rejected the offer. It was one week before the Ukrainian President Victor Yanukovich was ousted from office in Kiev, and the international position of Russian capital was to be exposed to unprecedented restrictions and risks – from a US Government attack on offshorization, not from the Kremlin’s.
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by John Helmer - Wednesday, May 7th, 2014
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By John Helmer, Moscow

In the wake of the lethal Odessa fire on May 2, President Vladimir Putin and Chancellor Angela Merkel agreed by telephone on Sunday afternoon “to take effective measures, including through the OSCE in the first place, aimed at easing tensions in Ukraine. In this connection, Swiss Federal President and OSCE Chairperson-in-Office Didier Burkhalter will arrive in Moscow on May 7.”

This amounts to an invitation for the Swiss to exercise their longstanding neutrality in European conflicts to keep the warring sides apart in eastern and southern Ukraine; prevent the violence; and create the conditions in which a durable settlement between the Ukrainian regions may be negotiated on a new constitutional basis. In short, an international police force.
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by John Helmer - Monday, May 5th, 2014
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