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Calling a Spade a Shovel

There's little doubt that pro-Russian rebels, using Russian weapons, shot down MH17. Why won't the White House say so?

In his most expansive remarks so far about the downing of Malaysia Airlines Flight 17 on Thursday, U.S. President Barack Obama laid out compelling evidence that pro-Russian separatists probably fired the missile that destroyed the airliner and killed all 298 people aboard. But he stopped short of definitively laying the blame on Moscow-backed rebels, a decision that may leave the White House open to criticism that it isn't responding forcefully enough to an attack that the president himself called an "outrage of unspeakable proportions."

The president's remarks were more measured and cautious than the word coming from inside the U.S. intelligence community, where there is little doubt that the airliner was brought down by separatists firing a Russian-made, and Russian-provided, SA-11 missile launcher, more commonly known as a Buk. Two U.S. officials, who asked to remain anonymous, said that military intelligence had pinned the attack on the separatists, but that the Pentagon may have conveyed that assessment to reporters before the White House was ready to give a definitive public conclusion.

Military officials have been warning since before the downing of the Malaysia Airlines flight that Moscow-backed separatists in Ukraine have been building up an arsenal of the very kinds of weapons used to shoot down the plane. "What we see in training on the east side of the border [of Ukraine and Russia] is big equipment, tanks, [armored personnel carriers], anti-aircraft capability, and now we see those capabilities being used on the west side of the border," Gen. Philip Breedlove, the supreme commander of NATO in Europe, said at a Pentagon news conference on June 30, more than two weeks before the Malaysia Airlines shoot-down. Breedlove said that the U.S. military had seen Russians training the separatists to use "vehicle-borne" missile systems like the Buk missile, which is mounted on a truck along with a small radar system for tracking airborne targets.

But the Obama administration has been burned before by preliminary intelligence that turned out to be flawed -- most famously in the flubbed public explanation for the 2012 attack on the U.S. diplomatic compound in Benghazi, Libya. "I think it's very important for folks to sift through what is factually based and what is simply speculation," Obama said. He also refused to be dragged into a discussion about further punitive actions against Russia, and he didn't commit to a new round of sanctions when pressed on the question by reporters. As far as the White House is concerned, the onus is now on the Kremlin to "de-escalate the situation," as Obama put it. But avoiding a forceful response will be much harder if conclusive proof emerges that separatists using weapons given to them by Russia brought down the airliner.

The president came as close as he could to directly blaming Russia for the shoot-down, but stopped just short. "We know that [the separatists] are heavily armed and that they are trained. And we know that that's not an accident. That is happening because of Russian support," Obama said.

Still, with evidence mounting that the plane was brought down with a Russian weapon that Moscow knowingly provided to the separatists, Obama will soon have to decide how much longer to wait before pinning direct responsibility for the attack on Russian President Vladimir Putin. That could be a turning point in the long shadow war in eastern Ukraine because Obama would come under tremendous pressure to hit Putin hard enough that the Russian strongman brings his meddling in Ukraine to a stop.

Obama made clear that day might still be a ways off when he said that an investigation into the crash, which could prove definitively who shot down the plane, wouldn't be finished quickly. "The investigation is going to be ongoing, and I think what we'll see is additional information surfacing over the next 24 hours, 72 hours, the next week, the next month," Obama said. It wasn't a rallying cry, but it gave the president breathing room to consider a range of responses, which could include new economic sanctions or even military aid to Ukraine.

But in Obama's hesitation, some saw an opportunity to form a better strategy for countering Putin than anything the administration has devised to date.

Adrian Karatnycky, a senior fellow with the Transatlantic Relations Program at the Atlantic Council, said it "enhances the credibility of the United States" to say that the preliminary evidence points strongly to Russian involvement but then call for an international investigation to ascertain all the facts. (Obama said that he'd dispatched aviation crash scene experts from the FBI and the National Transportation Safety Board to Ukraine and that they were standing by to lend assistance at the Ukrainian government's request.)

"I don't think this is a concession or a walking back or a sign of weakness," Karatnycky said in a conference call Friday afternoon, July 18, shortly after Obama's speech.

John Herbst, who served as the U.S. ambassador to Ukraine during George W. Bush's administration, agreed that Obama shouldn't be held to a timetable or rush to make an accusation that he might have to amend later. He noted that Bush officials waited for days after the 9/11 attacks to conclusively identify al Qaeda as the culprit.

Obama may have also bought Putin some time to change course in eastern Ukraine. Obama made clear that he expects Putin to decide the fate of the conflict, but he posed no ultimatums or set any "red lines," as he did last year in Syria with arguably disastrous political consequences.

"If Mr. Putin makes a decision that we are not going to allow heavy armaments and the flow of fighters into Ukraine across the Ukrainian-Russian border, then it [the fighting] will stop," Obama said. "And if it stops, then the separatists will still have the capacity to enter into negotiations and try to arrive at the sort of political accommodations that Mr. Putin himself says he wants to see. He has the most control over that situation, and so far, at least, he has not exercised it."

Karatnycky said Putin has to make "a fateful choice" between continuing to supply the rebels with weapons and training and telling them to stand down while reducing his aid to the fighters. In recent weeks, new weapons have been spotted flowing into eastern Ukraine from Russia. But at the same time, Putin has been "preparing his people for a possible retreat," said Herbst, the former U.S. ambassador to Ukraine, who noted that leading public figures in Moscow are now calling on Russia to stop supporting the rebel forces, criticism that Putin hasn't tried to refute or silence.

Still, the analysts said that it would be dangerous for Europe and the United States to hold off on hammering Putin for what appears to be his clear responsibility, even if indirect, for the shoot-down. "A clear line needs to be drawn now so Putin realizes what he's doing in Ukraine is not acceptable. And if the Europeans won't do it, the United States can," said Herbst. "We don't want revisionist powers to think that they can take territories … without punishment."

Photo by Nicholas Kamm / AFP

Report

U.S. Sanctions Russian Banks and Energy Companies

Obama issues his strongest sanctions yet to pressure Moscow out of the Ukraine conflict.

Barack Obama's administration on Wednesday made good on threats to sanction Moscow for continuing to support pro-Russian separatists in Ukraine, imposing tough new restrictions on major Russian energy companies, banks, and weapons-makers.

Charting a middle course between full-scale sanctions that would go after whole sectors of the Russian economy and the surgical sanctions used so far, the Obama administration's latest steps are its strongest effort to date to dissuade Russia from continuing to back armed separatists who are trying to undermine the new Ukrainian government.

On Monday, July 14, the U.S. State Department released a list of evidence it says proves Moscow is still supplying Ukrainian militants with weapons, financing, and Russian fighters. On Tuesday, Russian-backed rebels destroyed a Ukrainian apartment building close to the border with Russia. Videos released Wednesday appeared to show Russian-made rockets being fired at Ukrainian targets from inside Russian territory.

However, in the absence of full-throated cooperation with key European countries, it is unclear just how effective the latest U.S. measures will be. Capital markets in Europe, for example, remain open for Russian firms. And Gazprom, the main source of Russian energy exports to Europe via Ukraine, has yet to be targeted directly by any U.S. sanctions. What's more, Russia and China, among other developing economies, announced the creation this week of a new international development bank precisely to allow them to start sidestepping Western dominance of the international financial system.

Speaking at the White House, President Obama said he had repeatedly told Russian President Vladimir Putin to stop sending weapons and fighters into Ukraine and pursue internationally mediated talks with Kiev. At least so far, Obama said, "Russia has failed to take any of the steps that I mentioned."

"Russia's support for the separatists and violations of Ukraine's sovereignty have continued," Obama said, adding that the United States and its allies would continue to pursue measures designed to further weaken Russia's economy and increase its isolation on the world stage unless Putin relented.

Despite the tough talk, the United States didn't cut off whole sectors of the Russian economy, but it went after four big energy and finance firms. The Treasury Department banned a pair of big Russian banks -- Gazprombank and VEB, Russia's state-owned development bank -- from issuing any new debt or equity in U.S. markets. It also banned two energy giants, Novatek and Rosneft, from tapping U.S. debt markets. But the United States did not target Gazprom, Russia's mammoth oil and gas firm, directly.

The United States also blacklisted eight Russian arms firms and a list of senior Russian officials.

The sanctions announced Wednesday will essentially close U.S. capital markets to those big firms. That limits those big firms' abilities to roll over or refinance their debts, making it more expensive for them to borrow new money. Officials said those firms would likely have to turn to Russia's Central Bank to try to fill their financing needs.

The Obama administration left the door open to further sanctions if Russia continues its destabilization activities in eastern Ukraine. The administration can "expand the scope of the prohibitions and the list of the entities affected if the situation warrants," a senior administration official said.

The new U.S. sanctions come as European leaders are considering going after Russian companies too, but the European Union's measures are not expected to go as far as Washington's new prohibitions.

The United States coordinated the latest sanctions with top European leaders, including British Prime Minister David Cameron, German Chancellor Angela Merkel, and French President François Hollande, officials said. Even though the European Union has not embraced sanctions as tough as what the United States has urged, the importance of the dollar as the principal global reserve currency means the closure of the U.S. capital markets will have an outsized impact on the Russian companies, officials said.

Before the announcement Wednesday, many U.S. businesses were leery of the prospect of unilateral sanctions on Russia. The Obama administration had floated the idea of barring trade in advanced energy technology between U.S. and Russian firms, for example. Many U.S. firms feared that they would pay the price for unilateral actions because European firms would be able to step into the breach.

In recent weeks, major trade groups have publicly opposed the idea of imposing economic restrictions without broad participation from the rest of the world. The U.S. Chamber of Commerce and the National Association of Manufacturers have been campaigning, in newspaper ads and blog posts, against U.S.-only sanctions against Russia.

"U.S. unilateral economic sanctions have been shown to impose little, if any, cost on the targeted country, while disproportionately harming U.S. industry and workers," Linda Dempsey, the National Association of Manufacturers' vice president for international economic affairs, wrote in a blog post last week.

Even top administration officials warned Congress in recent days that such unilateral sanctions could be ineffective in the absence of full cooperation from Europe. By targeting Russian firms' ability to tap U.S. capital markets rather than U.S. exporters, the administration has sidestepped for now that potential boomerang.

Additionally, the latest U.S. steps take aim at key individuals involved in the annexation of the Crimean peninsula, the Russian military, and the Russian defense establishment.

The defense sanctions include U.S. asset freezes on big Russian arms firms, including the country's largest, Kalashnikov Concern, as well as a tank manufacturer and companies that make missiles and other projectiles.

Americans are also banned from buying new guns from Kalashnikov, famous for producing ubiquitous, cheap automatic rifles like the AK-47. That could sting because the company, despite its reputation for making guns used in armed conflicts the world over, has come to rely more and more on the U.S. consumer market to make up for flagging demand in Russia. The company signed a five-year contract in January to sell up to 200,000 guns a year in North America, according to state-owned news company RT. And in 2012, demand from U.S. customers made up 40 percent of civilian sales from one factory, according to a New York Times report.

Individuals added to the sanctions list, which includes a U.S. asset freeze, are Alexander Borodai, the self-proclaimed prime minister of the Donetsk People's Republic and a prime mover behind the annexation of Crimea. Other individuals named include Sergey Beseda, a top official in the Russian security service FSB, and Russia's minister for Crimean affairs, Oleg Savelyev.

Photo by VIKTOR DRACHEV/ AFP/ GETTY