Russia Update: 2008

JACK F. MATLOCK JR.:  All right.  Welcome to today's Council on Foreign Relations meeting. 

Please remember to turn off all your cell phones, BlackBerrys and other wireless devices.  And I would like to remind members that this meeting is on the record and we are being joined by a number of our national members.  So what we're doing is being recorded, and eventually we will have national members participate in the discussion.

Today I'm very pleased to introduce Edward Lucas, who is the Central and East European correspondent for The Economist, and has just written a book:  "Putin" -- "The New Cold War:  Putin's Russia and the Threat to the West."  And we have with us also Steve Sestanovich, as you know, who is the George F. Kennan senior fellow for Russian and European Studies at the Council here.

I'd like to start out by asking Mr. Lucas how he views the current situation.  I would say, sort of briefly in Russia with the elections coming up, is this is a stable situation or is it one which perhaps is more friction under the surface than before? 

And then a second that he might address is:  Is this election having any effect on our relationship?

EDWARD LUCAS:  Well, thanks very much indeed, Mr. Ambassador, for your kind words of introduction.  Thank you also to the Council for inviting me here.  It's a great honor to be able to address both the people in the room and all the people who are taking part of the event and from far away.

I think that the -- I don't like to use the word "election" for what's coming up in -- (laughter) -- election is a very good term for the -- (background noise) -- the feast of democracy which we're seeing in America at the moment, which is something which I think anybody anywhere else in the world just looks at and wishes that they could take part in this array of choices and candidates. 

But in Russian, the word for election is vybory but that is -- (inaudible) -- choice and I would call this a golosovaniye -- a voting.  Just to tell you, votes will be cast, but in a way that would really, I think, befit the talents of a great Russian novelist like Bulgakov (ph), it's both totally predictable and completely mystifying.  It's totally predictable, because we know he's going to win -- Dmitri Medvedev -- and it's totally mystifying because we have almost no idea what it means.  Is he keeping the seat warm for Mr. Putin to come back -- maybe in years, maybe even in months?  Is he going to form some kind of team of soft cop/hard cop relationship with Mr. Putin?  Does it mark a defeat for the chekisti -- the siloviki in the Kremlin?  Does it mean that one clan is up -- the Gazprom lots are up and the Rosneft lost out?  We just don't know. 

And terminology, which some people in this room would have spent many decades practicing as a skill for analyzing the Soviet Union in the 1950s, '60s, '70s and '80s -- and then went out with the slide rule, carbon paper and the telex machine -- for those of you who remember, the telex was a hardwired, point-to-point low bandwidth messaging system that predated e-mail.  Terminology seemed as dead as learning how to sharpen a flint ax.  And now, we're back.  We're using terminology again.  We're trying to make sense of the Shvartsman interview -- this amazing interview in Kommersant, which gave us a little clue into how the theft and reprivatization of assets is going on.

So yes, I think if he's not stable there is huge fights going on behind the scene.  We don't know whether the guys fighting in the boat are actually going to capsize it or they're just fighting in the boat.

And in terms of the relations with America, my feeling is that all three candidates are going to be tougher on the chekisti -- the Kremlin -- the regime in the Kremlin than the Bush administration has been.  I think the people advising them, from the language they're using, I think that public opinion in America and other countries is spooked by what's happening in Russia and that sometimes the governing elites have got to catch up.

MATLOCK:  Steve, you?

STEPHEN R. SESTANOVICH:  Can I pick up on two points that Edward has made?

I agree "voting" is probably a better term than elections.  Elections do, however, create some new uncertainty and some internal political dynamics.  And in Russia, that uncertainty usually leads people to try to nail down everything that they can, find ways of consolidating their hold on assets and on influence that they've been able to amass.

Putin has presented Medvedev as a guarantee that this doesn't need to happen, that there doesn't have to be that much uncertainty.  You can count on predictability and stability in the future.  It has sort of taken -- I think that this unspoken watchword of the new -- of the political transition is going to be an old one.  That is the Brezhnevite phrase "stability of cadres."  The promise is everybody will be okay, but there is plainly a lot of competition that has been generated by the fact of an election.

I think the election has also had an impact on Russian foreign policy -- or at least -- I would say it has.  And not -- and I think we should notice that difference, as well as forecast what might be the different approaches taken by American leaders.  The parliamentary elections in the fall and the presidential voting this spring have provoked a kind of heating up of Russian political rhetoric toward the West, a desire to animate Russian nationalist feeling. 

You know, Russian political pollsters track attitudes toward the United States.  And what they discovered is that starting -- there was a big crash in Russian attitudes towards the United States.  It became much more negative during the Iraq war and then they bounced back.  And they kept bouncing back, until last spring when Putin gave his speech in Munich.  And since then, they've been on a downslide again and the Russian leadership has pretty much been on a tear of kind of anti-Western rhetoric, which Putin has led. 

But Medvedev -- even though he has softened it here and there -- has made clear he is pretty much constrained by the boss's line.  He says, just as Putin does, if you look weak, people will take advantage of you. 

And that's a kind of motto.  There's -- I'm sure there are Russian peasant folk sayings that corroborate this view -- but it is now the view of the elite.  It's the definition of Russian foreign policy.

MATLOCK:  You know, I was struck by the title of your book, "The New Cold War," and the reason it struck me is that I spent 11 years in Moscow between 1961 and '91, and most of them at the height of the Cold War.  And at that time we really felt that the Cold War was not about normal differences between great powers, but was fueled by an ideology, a new -- I would say an ideology which was universal in scope.  We felt that the Soviet Union was not a Russian empire writ large but a communist empire with values totally different from ours, whether they be moral values or economic values, and that there was an assumption at best that the system would spread throughout the world and at worst that they needed to help it do so and that that would increase their power. 

And from that we had an arms race of tremendous proportions.  We had geopolitical competition at a time when the Soviet -- and it was at its height when the Soviet Union was most closed.  When I went to Moscow in '87 as ambassador and my fourth time there, they were issuing I think about 1,300, 1,400 visitors visas a year and these almost all to officials or a few small certified delegations.  We maybe got 2,000 or 3,000 refugee visas for immigration.  Before I left -- in fact, while it was still the Soviet Union -- we were doing 125,000 visitors visas and we had a waiting list of half a million for immigration to the United States, and then the barrier was not getting out of the Soviet Union but getting in the United States.  I could go on and on but when I looked at the sort of problems we have today, and they are real, it seems to me that what we're seeing is more sort of a normal friction between sovereign states, particularly powerful ones, rather than something that is a replay of the Cold War. 

LUCAS:  Well, let me -- let me -- it's a very fair point and it's one I address at the very beginning of the book because I am not a veteran of the Cold War like you but I was actively involved in it in the 1980s, and I'm absolutely not saying that the old Cold War is coming back.  That had three dimensions.  You mentioned military, ideology -- and it was global confrontation -- this one isn't -- and the Soviet Union then was a closed society.  Russia is now very well integrated inter -- both world diplomatic structures and of course the economy and constant human contact.  I'm absolutely not making that argument nor am I saying that Putin is a new Stalin.  That would be grotesquely exaggerated. 

But what I am saying is that we have been much too complacent, for a start, about both where Russia is -- has already got to and what the trajectory is -- that it sort of creeps up on us and things that seemed unimaginable then became isolated exceptions, then become -- happening rather more often and then suddenly become part of everyday life in Putin's Russia, and this has really been extremely troubling and so one thing I want to do is just give a wakeup call. 

Secondly, I do think there is a tussle in central Eastern Europe.  These are countries which we thought had been won for the cause.  I don't use the word democracy in the book because democracy's such a slippery word.  And in the -- having lived in the Soviet-occupied zone of Germany which called itself the German Democratic Republic I don't -- I'm always cautious when I hear the word "democratic."  But countries that we thought had been won for political freedom, for the rule of law, for the Euro-Atlantic orientation we are now in severe danger of losing to sovereign democracy. 

Now, I argue very strongly in the book that sovereign democracy is a kind of ideology.  It's ideology that offers rich rewards for elites.  It frees them from the constraint and redress of our rather more bracing system, and if you are a politician in, say, Moldova that can look pretty attractive.  If you're a politician in Bulgaria, that can look pretty attractive.  If you're a politician in Latvia or Lithuania, that can look pretty attractive.  And I travel these countries all the time.  I do not think we are winning and I think in some cases we are losing under the onslaught of Russian money washing in to these countries still underdeveloped political economic systems.  And it goes further west.

And if I had sat here at the CFR six years ago and said that a German chancellor, the heir to Konrad Adenauer, Willy Brandt, Helmut Schmidt and Helmut Kohl, would in his final weeks in office sign off on an energy pipeline as controversial as the Nord Stream pipeline, then a few weeks later take a lucrative job as chairman of that consortium you'd have said that was preposterous.  You'd have called security and wondered who on earth is working for The Economist these days, and that's exactly what Gerhard Schroder did.  So, you know, if you go down to Washington and look at the money that's washing through K Street there and the people -- you know, the people who've got Russian clients and some of the other activities going on this is not just an away match.  This is a home match as well.  So in those ways I am not saying it's the old Cold War reprised but there is a severe conflict going on.  It's one that we are not winning at the moment.

SESTANOVICH:  Yeah, I agree with Edward and Jack that the old Cold War is not the right benchmark but we do have a new set of disagreements with the Russians, and understanding them is a challenge because they're not what we expected really.  The Russian definition of them is they're correcting for the humiliations and weakness that Russia experienced in the 1990s and the -- anything that was agreed starting after the death of Leonid Brezhnev, I would say, is sort of ipso facto suspect.  It was probably forced on the Soviet Union or Russia because of its weakness, and that means that there's a kind of across the board reexamination I think in a way that goes beyond really the interest at stake that is -- involves national pride, self-assertion.  There is some kind of weird combination in Russian foreign policy these days between a nostalgia for being taken seriously in the past in a way that they think they weren't in the 90s and a desire to reject the past and be a different kind of European Western power, and they haven't really sorted out which that is. 

But in the interim, the desire to overcome what was agreed in the 90s I think has led to a kind of bristly, even snarling style that isn't just style.  It has a kind of substance to it and I'll give you two recent examples.  One is just from the past couple of days -- the way the Russians have handled the Kosovo independence.  Their man at the -- at NATO has said, you know, this -- it tears up the entire system of international law.  It may require us to use force.  Putin has said it's immoral and illegal and the result has been, I think, you know, to stimulate violence that they said they were not going to try to stimulate.  And they -- and the result is, you know, the prime minister of Serbia, Kostunica, is telling the crowds in Belgrade yesterday, "Putin is with us."  Now, you know, that is not the kind of interaction that we expected. 

A second one I'd give you is the way Putin talks about an arms race in Europe.  I was at a conference last -- I'll get back to Putin in a second -- I was at a conference in St. Petersburg last summer where the first Russian speaker began by noting that NATO had more tanks now than Hitler did on the eve of Operation Barbarossa.  Well, what is your point?  (Laughter.)  But that's common now -- this sort of sense that, you know, we are really not in any way taking for granted good relations.  Putin talks about an arms race in Europe that as far as I can tell is about one thing.  It's about these N interceptors and 10 radars that are going to be located in the Polish and Czech Republics.  It -- there's hardly anything else to it.  They pulled out of the CFE treaty saying that the West is engaged in a massive buildup while Russia's constrained.  It's -- there's something going on that I think does take some new thought.  I resist calling it the new Cold War but I think it's something we didn't expect.

MATLOCK: Well, whatever we call it, I think if we are going to think about what we do about it, it might be well to step back and say, well, where are our interests?  Where are our interests in dealing with it? 

Now, I would submit that in the security area, which does tend to trump everything else, there is no threat to the United States that takes precedence over the nuclear threat, particularly the threat that proliferation could lead to terrorists having nuclear weapons. 

I'm also convinced that we're not going to be able to deal effectively without (sic) that threat until we get the nuclear relationship with Russia back where it was in -- at the end of the '80s, the beginning of the '90s.  We have seen the whole process of reducing these weapons -- which is an obligation under the Nonproliferation treaty, fall victim to politics on other, in other areas. 

We have now abandoned, at the United States' insistence, the whole verification procedures that took us years to work out, and which the Russians were willing to accept.   We walked away from the ABM treaty even when they were offering to amend it, and talking about a joint program -- which, in fact, is the only thing that makes any sense. 

If you look at our own defense posture, you find that words like "global dominance," and so on, are very common.  And it seems to me that somehow we need to get that relationship back; to get these weapons reduced -- their very existence is a threat.  And we're not going to be able to do it unless we cooperate with the Russians in some way. 

There are other, you know, concerns that I would have, but I do put that first of all.  And it seems to me that some of the things that we're doing, such as trying to build interceptors in Poland, against missiles that don't even exist yet; and pushing the button -- a psychological one which, you know, in Gorbachev's time we finally were able to work through, and that is the Russian conception that missile defense is a cover for an offensive strategy.  It isn't true, but it is felt very deeply there. 

So this is pushing a button that is going to cause all sorts of reactions.  And I just wonder if you agree that this is a priority, and if we don't need a different way to handle it? 

LUCAS:  Well, I'm aware that the nuclear issue is one that divides people  at the dais can't hear enough about it.  And those for who we -- the eyes glaze over quickly -- (laughter) -- so I'm trying to be both, sort of, brief and accurate and interesting, all at the same time. 

I think that your -- I absolutely -- I absolutely agree that we've mishandled the nuclear relationship, and I argue in the book for a different course.  I think that it's, you know, the Kremlin line is that Russia is a fortress besieged by malevolent hypocrites.  And everything -- and anything we do that encourages that is bad and gives comfort to the -- to the regime. 

I think that one should -- we need to separate out some of the issues a bit.  And I think you're absolutely right, -- is not -- it is not in America's favor -- to America's advantage to have a huge dominance in nuclear weapons because it may make the Russians go over to launch on warning.  And that increases, at the very minimum, the danger of a, of an accident.  And I think that's a rather basic point that perhaps this administration has not judged. 

So I argue very strongly in the book that we should engage with Russia on these big, strategic questions.  I think we always have to be careful that our list of priorities don't turn into their negotiating strategy.  And there's always the danger that we say what we really mind about is this, much more than these things at the bottom of the list.  And they immediately think, well, we'll give some promises on that thing up there, and then we get Georgia, you know, as a prize.  And there's always -- you know -- so I think we have to be quite careful about not giving away principles. 

And I am arguing in the book for some quite sharp measures on issues of democracy and human rights, to put some distance between the past and present.  But, broadly, I -- you know, I couldn't agree with you more. 

MATLOCK:  Steve, you know, I think we're all concerned --

SESTANOVICH:  Can I just say one word about -- 

MATLOCK:  Oh, Yeah. 

(Cross talk.)

SESTANOVICH:  I think the -- my prediction would be that the Russian-American relationship will be, kind of, renuclearized in a way that both of you have suggested.  And I think the administration has been kind of slow to take advantage of some real opportunities that might exist there. 

I mean, as far as I can tell, they don't even -- they have an, quote-unquote, "negotiation" underway about the expiration of the START I treaty next year, but they don't have a proposal on the table.  No proposal on the table means, to me, not much of a negotiation -- (laughs). 

However, I would just say I think there may be some instrumental value in restabilizing the relationship a little bit by reintroducing this dimension.  But I'm less confident about it than I used to be, because I think their receptivity to the idea that you can -- that you can introduce a, kind of, basic stability in the relationship by agreement on these -- on strategic nuclear issues.  I think that's eroded. 

LUCAS:  Yeah, I agree. 

SESTANOVICH:  At any rate, you -- I just wanted to get in a word. 

MATLOCK:  Very soon we should bring in the members in the dialogue, but I was going to ask -- I think all of us are disturbed by the increasing authoritarianism, and many of the problems we all see in Russia.  But is there anything, effectively, the United States, or for that matter, the West can do to affect this as long as Russians seem predominantly to be willing to accept it?  I guess that's one question. 

Or, are attempts to make this an issue, perhaps they even backfire given the current atmosphere.  What's your -- what's your feeling?  Is anything -- if we decide we should do something about it, is there anything we effectively can do? 

SESTANOVICH:  Yeah, it's a good question, and I'll be really brief on it because I do want to turn to the next phase of the discussion. 

I think the phase of, sort of, Western commentary on Russian democratic progress and human rights performance is, sort of, over.  The phase that we began at the end -- toward the end of the Cold War has, kind of, played out.  And the idea that there's a lot of influence, just in moral opprobrium, is -- that one is not going to work for us as it has.  And it -- you know, we might as well think of something, of something new. 

If we're going to think of something new, the one thought I would suggest, as this, sort of, starting point for anything, is that it can't be an American attack on, you know, Russia's -- you know, the degree of Russian democratic virtue.  It has to be something more broadly agreed among democratic states, and particularly the United States and Europe. 

I would say that the administration, in general, has been weak in trying to develop a consensus with Europe about how to deal with Russia -- across the board, whether it's security issues, economic issues, political issues, democracy.  And that is now, I think, recognized by the Europeans as something that really does need to be on the agenda of the -- for the U.S. and the Europeans if they want to have any influence in the future. 

MATLOCK:  I think it's time we should open up the discussion. 

To members, if you would wait for the microphone, and state your name and affiliation. 

Let's see, Dr. Desai.

QUESTIONER:  Thank you.  I'm Padma Desai.  I'm the Harriman professor at Columbia University.  Two questions:  You cited Bulgakov, one of my favorite authors.  The election, of course, is predictable, but mystifying. 

Predictable:  Dmitry Medvedev, the very personable protege of Vladimir Putin, with 80 percent popularity rating among Russians; you put up three, four more candidates, it would still be predictable, in my view.  How would you react to that? 

Mystifying?  Why would it be mystifying? 

Think in terms of Putin's legacy, which he's passing on to his young protege -- the legacy saying Russia -- Russian will determine which way, in what pace, in what manner Russia will evolve into a liberal system.  This is his legacy.  Would you agree with that?

My second question -- Cold War.  I do not like the title of your book, but that is your -- (laughter) --

LUCAS:  So long as you buy it, I don't mind.  (Laughter.) 

QUESTIONER:  -- your privilege.

I mean, of course the Cold War was -- between the two nuclear superpowers, there was a deterrent which was operative.  But the Cold War actually was fought in poor Third World countries -- in Vietnam, in Afghanistan, in Angola.  Do you think there will be a revival of that kind of a scenario when you say, "Think of a new Cold War"?  Or do you see some kind of a robust pragmatism which Putin has brought forward in his foreign policy, maneuvering -- which he's saying, "Have dialogue with us -- negotiate, negotiate, negotiate because we have common interests?"  Russia, the United States, Western Europe, nuclear nonproliferation, terrorism control, bilateral nuclear downgrading -- isn't that -- I mean, would you agree with -- what kind of Cold War scenario do you --

MATLOCK:  Thanks.  Thanks very much.

LUCAS:  Look, I -- let me repeat again. I'm not saying we've got the old Cold War back.  I mean, there is a little bit of what one might call Russian mischief-making around the world in places like Venezuela.  But it is a pale shadow of the Soviet Union's global reach and I'm absolutely not arguing on that.  So let me just put that out of the way.

I think for -- I would disagree, really, with the -- on this basis of predictability and the other candidates.  We don't have a real political contest because the only media that matters is only reporting one candidate and, you know, I think the opposition in Russia is extremely weak.  It's just the sort of opposition the Kremlin would like, of no-hopers, never-weres, has-beens, chancers, freaks.  You know, this is the sad truth of it.  And the media -- you know, derides them and -- but it also -- you know, it's not a system that permits a real political contest. 

And so -- you know -- I mean, I think with -- they could have put up, you know, the Kremlin gatekeeper as a candidate.  And he would have -- you know, with that kind of media coverage he would -- you could make him look pretty good.  You know, Medvedev's clearly smart.  I'm not saying he's a nobody.  But I think -- you know, one just has to be realistic about this.  It's not -- you know -- and it is predictable.  And I think the idea that Russia is on a path to liberalism -- I don't see it.  You know, we have a mixture of the red, the brown and the white.  We have Soviet nostalgia, Stalinist version of history, the kind of youth movements -- all that.  We have something that might be called facism, a bit of brown.  We have a bit of white, which is, you know, the czarist era nostalgia. 

Now is that going to go orange or is that going to black?  I don't know, but I wouldn't bet on it going orange.

MATLOCK:  Steve, do you want -- (off mike.)

QUESTIONER:  I'm Timothy Towell, a retired Foreign Service type.

Why are we surprised about what Russia is doing and saying, and what Putin is doing and saying?  The president of the United States looked in Putin's eyes and saw his soul or whatever it was.  John McCain sees KGB, according to the New York Times.  That's fun.  But we're talking about Russia, Mother Russia, that fought against the Teutonic Knights with Alexander Nevsky, Catherine the Great, Peter the Great, winning the Russo-Jap War, scaring the Brits by going into Afghanistan and --

MATLOCK:  Losing the Russo-Jap War.

QUESTIONER:  Yeah, Russo-Jap War.  (Laughter, cross talk.)

Trying to get -- yeah -- Mediterranean ports, expanding into Eastern Europe -- why are we surprised?  What did we do in 1917?  We did what we're doing now, bagging money to the good guys against the bad guys and we sent -- had encouraged troops to go in there.  It was called capitalist encirclement. Do we have a new capitalistic encirclement?  How frightening for Mother Russia to have Europeans go and take the Baltics -- move into Poland, move into the Ukraine.  What is Stalin doing in his grave -- we're diddling around in Georgia, where Stalin was born?  There's a new term called pushback.  Are we surprised that there is pushback by this guy that has KGB eyes?  Is there anything surprising about this?

(Cross talk.)

LUCAS:  I really -- I really find that a bit -- I mean, I find that almost outrageous to say that Europe is pushing into the Baltics.  I'm sorry.  The Baltics are European.  You know, this is just -- I mean, this is -- I mean -- and I think this whole idea that Russia is somehow entitled by its history to be an imperial power and act in malevolent and destructive ways is both untrue and very unfair on the Russians. 

And I just -- can I just do a very quick quiz?  I'm just going to read out some names and I want to see who's here, because that -- probably in a way, the most important names in Russian history.  And we see who -- the first person to put their hands up will maybe get a special inscription in their book, okay?  (Laughter.) 

Tatiana Baeva.  Konstantin Babtsky.  Larisa Bogoraz.  Vadim Dealunay.  Any hands going up yet?  Excellent.  Okay.

It carries on just to say -- complete list, it's Fainberg, Gorbanevskaya and Litvinov.  Those are the eight Russians who, with incredible bravery, demonstrated in Red Square in 1968 against the Soviet invasion of Czechoslovakia.  They founded -- is that Ken over there?  Yes.  They founded the modern human rights movement.  There should be streets named after them. There should squares named after them. There should be statues all over Russia.  And we should not allow Putin to get away with his disgusting revival of the Stalinist version of history, which says that Molotov-Ribbentrop Pact was legal and was okay.  And when mainstream Russian media repeats that the Katyn massacre was done by the Nazis and not by the NKVD -- a lie that we thought was buried in 1990 -- you know, I totally would resist this 100 percent. 

MATLOCK:  Over -- back over here -- (laughter.)

QUESTIONER:  Andy Nagorski, Newsweek.

Edward, I have the advantage of having your book already -- (laughter) -- and as you know, I have -- you have one statement in there which I think is indisputable.  It says -- you know, the G-8 is supposed to be a group of industrialized democracies.  How does Russia fit in there in terms of the definition of the latter word?  Maybe this will give you a chance to respond to the last question, which I think Jack asked before about what should the West's response be is the implication there -- is -- should Russia be disinvited?

LUCAS:  Well, let me say yet again, I'm not advocating a blockade of Russia or boycott or Russian's isolation.  Our best hope is the continued integration of Russians in their daily lives into the law-governed multilateral free world.  But we -- and I know the Council of Europe is probably a body which occupies about 0.1 percent of your attention.  But it is -- and it is --

QUESTIONER:  On a good day.  (Laughter.)

LUCAS:  -- in a year.  (Laughter.)

And it is very -- it is the body which epitomizes the post-Cold War democratic free law-governed order in Europe.  And we let Russia in in the mid-1990s, when we were in an optimistic frame of mind.  It was probably the right thing to do, to take that gamble.  We suspended Beneroff (sp) on what now seems like a technicality of a rigged election -- a bit of restriction media freedom.  We know the country, which has revived the practice of the psychiatric incarceration of dissidents -- it's not just the rigged elections.  It's not just the assault on media freedom and the venomous anti-western rhetoric -- Putin describing America as the Third Reich -- this explicit rejection of western norms as being somehow not suited to Russia.  So I think we have to make a moral stand on that and say that Russia can no longer be a member of the Council of Europe.

On the G7-G8 thing, what I would argue is that we need a G12-13-14 of big countries to talk about global problems and Russia absolutely belongs in there just as Brazil does, and perhaps even more so as India does because that's not only big, but democratic as well -- and China, all the rest of them.  So let's have a G13-14-15-16 -- whatever.  And if there's going to be a democratic -- a caucus of democratic countries which maybe meets the day before, that's fine, too and that can be five, six, seven, eight, nine countries.  Maybe India should be in it.  But Russia certainly shouldn't. 

MATLOCK:  Yes.  On this side, we'll try one.  We'll come back here.

(Inaudible.)

QUESTIONER:  Jim Dingman (sp), IMN World Report. 

I'd like your assessment of how you discern the differences and dissimilarities of the various presidential candidates in the race towards their policies towards Russia.  And what is your assessment of Putin's policies towards the Middle East at this point? 

LUCAS:  Golly -- why don't you take that?  (Laughter.)

SESTANOVICH:  Well, I haven't noticed that Russia has been very high on the agenda in any of the presidential debates, so it's been a little hard to smoke out what the different candidates think.  It's been more a matter of the competing one-liners -- you know, doing riffs on eyes and souls and that sort of thing.  Hillary Clinton has had her own version of that.  John McCain has.  I'm sure Obama will come up with one eventually. 

And I think broadly speaking they have the same kinds of concern about Russian -- about Russian policy, stated in more or less similar position-paper-sounding way, which gives you some indication as to what an early administration policy review would look like, but I don't think it really tells you in detail what a new American policy would be.  I think it won't be the same as the current policy.

Russia and the Middle East -- there's a kind of variety of Russian objectives that they want to serve in the Middle East.  And that involves developing some loose gas OPEC; preserving good relations with states that might be a source of Islamic agitation inside their borders; developing high-tech cooperation with Israel; retaining a kind of seat at the diplomatic high table when it comes to the roadmap for Israeli-Palestinian peace.

I don't think they're a particularly big player in any of those games, with one exception that matters a lot to the United States, and that has been the effort to deal with the Iranian nuclear program.  And there I think there's a kind of schizophrenia in the Russian policy, which isn't so different from their schizophrenia on some other issue.  And that is:  Do they want to align themselves with the Europeans and the United States to add to outside pressure on Iran to take a different course; or do they want to be a separate diplomatic entity which can broker deals between the Iranians and the West -- at the expense of possibly reducing pressure on Iran?  And they just haven't really sorted that out.  You know, they said, well, we're dealing -- we're sending fuel to the Iranians to start up their reactor.  Doesn't sound good, but then they say, and we're managing -- we have arrangements to perpetuate or preserve that Russian presence there under joint venture.  Sounds like it could be good.

I think they are uncertain as to whether they want to be part of the West on this issue, or separate so as to maximize their role.

MATLOCK:  Yes.

QUESTIONER:  Bob Lifton, Medis Technologies.

There's a huge difference between the Cold War and today is Russia's economic position -- particularly with respect to energy and the energy they control and gas and the leverage they have with that energy and that gas. 

Would you comment on that in relationship to your view of the Cold War today?

LUCAS:  Yes.  Well, it's a very interesting contrast.  In a way, Russia is a sort of shrunken husk of the Soviet Union in terms of its part.  But on the other hand, they have used one of the remaining Soviet assets -- the monopoly on east-west gas pipelines -- rather effectively.

Now, in a way that's very odd, because Europe is so much bigger, freer, stronger, more attractive, richer than Russia.  Why is the Gazprom tail wagging the European dog?  And the answer is that European collective bargaining, collective security on energy lacks credibility and it's therefore very tempting for countries to go and do their own bilateral deals with Gazprom, allowing Gazprom to buy downstream assets in Western Europe and entrenching the vertically integrated energy monopolies there.

In a way that's really quite alarming.  And you know, I list in the book -- I think, you know, I mean just in Western Europe you've got Italy, Austria, the Netherlands, Germany all doing, you know, doing deals with Gazprom.  And what's left of the European energy promise of building the Nabucco pipeline looking, you know, it's turning into just a kind of a pencil line on a map.  And it's a big -- you know, it's one of the big recommendations that I'm making is that we have to get our act together on that, because if we don't we just -- it's -- (speaking in foreign language).

SESTANOVICH:  Can I have one thing on this?

I do think that the Europeans' inability to actually develop coordinated policies that they can enforce in the area of energy is a very revealing weakness of how little the Europeans have actually advanced toward being the kind -- you know, a nation state style player in international affairs.

But I do think that U.S. policy has been very negligent here in not trying to play a role to add to -- to increase coordination among the Europeans.  It basically treated energy as a European problem and that seems to me to have had predictable consequences.

QUESTIONER:  Bruce Gelb, Council of American Ambassadors.

Mr. Sestanovich, I think you characterized Russian policy as having to do with you have to look strong, otherwise no one takes you seriously.

Yesterday I took somebody seriously when I looked in the papers and saw the picture of the American embassy in Belgrade in flames.  And the comment that you made coming out of Belgrade that Mr. Putin, in effect, is on our side leads me to the question:  How much involvement do you believe Russia is going to have in the next week, two -- or month or two -- in terms of dealing with the Kosovo problem and Russia's position relative to Serbia?

SESTANOVICH:  I'm afraid it looks as though it's going to be larger than they had said -- made us think in advance.  They've gotten a little carried away by the sort of drama of the moment.  You know, there's famous phrase of the prince of Montenegro in the 19th century:  We and the great Russian people are 150 million strong.  (Laughter.)

I mean, in the end I don't think it's going to help Serbia very much that Russia is on their side, but the Russians are certainly stoking the situation up rather seriously.

LUCAS:  If I could add a bit very briefly on that. 

I don't think Russia really cares about Serbia at all, but it's a wonderful way for them to -- sorry -- to do things that they like.  It's a bit like missile defense.  They don't really care about missile defense, but it's a good way of dividing Europe and separating Europe from America, and that's exactly what they've got over Kosovo -- some European countries recognizing, others not and quite a lot of Europeans -- quite wrongly, in my view -- blaming the whole thing on American intervention to support Kosovo in the first place. 

So Russia's policy is very opportunistic.  It's not -- this is not principled Slavic solidarity, but it is proving quite effective -- at least in the short term.

MATLOCK:  Yes, the gentleman here.

QUESTIONER:  David Phillips from Columbia University.

No speeches here, just a quick question about Russian-Georgian relations.

The Russian government was threatening to draw a parallel between the West's recognition of Kosovo and its potential recognition of Abkhazia and South Ossetia.  Given its full-throated support for international law, it doesn't look like that's going to be the case.  Do you agree?

LUCAS:  Yeah.

QUESTIONER:  And how do you think that Russian and Georgian relations are going to go forward, given the continuing nuisance of the Georgian president in Moscow?

LUCAS:  Well, I think it's -- first of all, Russia -- I think Russia will not recognize any of the three puppet states, because it's too dangerous for Russia.  Russia has far more -- (background noise) -- more, as they put it, separatism.  It's the principle of ethnic self-determination.  It's very threatening to them.

What they are doing quite effectively is using South Ossetia and Abkhazia to try and provoke the Georgians into doing something stupid.  Now, I would like to say that the Georgian president is a very levelheaded man with a wide circle of advisors who ponders deeply before taking decisions and very rarely puts a foot wrong, so therefore this track is not going to succeed.  Unfortunately, I can't say that with as much confidence as I would like.  (Laughter.)

MATLOCK:  Yes.  The lady here.

QUESTIONER:  Thank you.

Joanna Weschler, Security Council Report.  Like my neighbor here I haven't read, unfortunately, your book yet but I spend a lot of  time watching the Security Council of the U.N. as my organization's name indicates and I wanted to ask you -- and I don't know whether this is addressed in the book -- whether or not you are also worrying about the new Cold War taking place in security issues and specifically in the Security Council because my own observations would indicate that we are perhaps going back -- we are not there yet but going back towards something resembling the Cold War dynamic in the Council, and some members canceling themselves out and just being stalled.

LUCAS:  I hope you're -- I fear you're right.  I hope you're wrong.  Steve maybe would answer in more detail.

SESTANOVICH:  Well, I think there's definitely a trend in that direction but I wouldn't exaggerate the contrast between this decade and the 90s, for example.  In the 90s, it was because the Russians were clearly going to veto any resolution on Kosovo or before that on other Yugoslav issues that you ended up having NATO take decisions on its own without a -- without any U.N. -- without any agreement within the Security Council, and the same pattern was more or less evident on issues involving Iraq.  You were not able to get Russian support, and some of those cases -- some of those stalemates involved rather similar motives from ones that you have today -- commercial or nationalist. 

We had -- we had that kind of -- we've seen that deadlock before.  What's different now is the -- is the desire not merely to, you know, stand their ground in disagreement with Western positions in the Council but to -- I mean, the case of Kosovo I think take a much more inflammatory line than they did in the past.  Remember, the Russians participated in diplomacy to try to end the war.  Right now I would say the approach seems somewhat different.

QUESTIONER:  Thank you.  Tony Holmes, the Cyrus Vance Fellow here at the Council.  With regard to what Dr. Sestanovich said a few minutes ago about Russia's role as a nuclear supplier to Iran and harking back to what you said earlier about the lack of present engagement between the United States and Russia in terms if its own denuclearization, do you think it's possible to marry the two issues and to try to get a creative new avenue to engage with the Europeans and Russia on the denuclearization or the dismantlement of Iran's nuclear program by starting off with a considerable denuclearization on part of both Russia and the United States and doing what the rest of the world believes we've already committed to do in terms of the nonproliferation treaty, and use that as a means to attack the Iran issue?

SESTANOVICH:  It sounds good but I wouldn't hold out too much hope for it.  It seems to me it puts a lot of weight on the idea that the Iranians will play ball when they see the other major powers united against them.  There might be some greater inclination on the part of the Iranians to feel under pressure but they -- you know, a couple years ago when Putin floated his proposal to handle enrichment for the Iranians outside of Iran, the Iranians, you know, played him along and eventually convinced the Russians that they were just dealing totally in bad faith on this and so the Russian initiative kind of collapsed.  There are a lot of elements of this that one could try to put together.  I would be inclined to think there might be more hope of using nuclear issues to kind of stabilize the rest of the relationship although as I said earlier I think they're -- I have less confidence in that than I used to.  But I wouldn't expect a big payoff in the case of Iran.

MATLOCK:  I have one over here.  This is probably going to be the last question.

QUESTIONER:  Jeff Laurenti with the Century Foundation.  I wonder if you could tell us to what degree there has been pushback from within Russian society at this gray reversion to Stalin-era fairy tales, if I may use that term, about cutin (ph), about -- and about the whole history of the Soviet era, and to what extent is the West -- Europe, much less the U.S. -- in any position to try to steer back to an emphasis on human rights and facts in the face of what appears to be a concerted effort -- is it from the top or from the old nationalist sector, so-called grass roots in Russian society, that has been pushing the reversion to the fictitious history of the mid-20th century?

LUCAS:  Yes.  Nice cheerful note to end on.  (Laughter.)  I think in a way this is one of the front lines of the new Cold War is the fight over history and to try and rebut this, and there are things we can do and a lot of it's on the Internet.  You know, in the old Cold War, we used short-wave radio to try and get our message across and they could block that.  It's much harder to block the Internet.  And if you read Russian, even more so if you can write in Russian, I do recommend you to go onto the Russian language Wikipedia, for example, and look at the talk page on things like cutin, Molotov, Ribbentrop, Stalin, Estonia -- you know, every bit of contested -- because the arguments are happening right there and I think we can -- and we can both get in and make our point.  And I also think there's more we can do to get all the historical documents that are available online.  PDF them -- make them available so that enquiring minds in Russia can just reach out and see that there is an alternative version. 

And also, if you do read Russian I do recommend that you try and get hold of the some of the modern history textbooks.  It is really alarming and this is as if you had, you know, German textbooks saying that the Anschluss and the Munich Treaty were legal and leaving out the Holocaust.  You know, this is really, really dangerous stuff and I -- as a final note, I mean, I -- when I'm feeling optimistic I think they -- the people in the Kremlin are just corrupt and they've just invented this whole nationalist hooey in order to justify stealing tens of billions.  When I'm feeling more -- when I'm feeling more pessimistic I think they actually believe it.  But either way, it is leaching into the Russian mindset and it's going to be some time before it works itself out.

SESTANOVICH:  One sentence to add to that that's separate from the issue of historical truth -- it's just do -- are there Russian criticisms of the foreign policy which raises doubt as to whether this has been productive or successful.  There are not very many but there are some, and you can read them in the Russian media, by the way.  The -- you know, Russian newspapers are full of criticisms of -- which are allowed because not very many people can read them -- criticisms cautious but nevertheless firm about the tone and style and content of Russian foreign policy, particularly on some of the European issues that we've talked about, raising a question as to whether they really advance Russian interest.  But these are very much at the margin.

MATLOCK:  I think we have maybe time for one more if it's very short.  (Laughter.)

QUESTIONER:  Vill Vannon (sp), Roosevelt Institute.  Do you accept that the missile threat from Iran justifies our proposed action in Czechoslovakia and Poland?

LUCAS:  Well, it's an interesting question.  I'm reminded a little bit of the cruise missile argument in the 1980s -- that there was this feeling that there was a -- it would -- this would kind of emphasize America's commitment to Europe by putting medium range missiles in.  It actually came with Helmut Schmidt's request in a way with the best of intentions.  It ended up with dividing Europe and stoking anti-Americanism.  And I feel a bit the same about missile defense.  I mean, obviously the threat is a long way away.  One can argue that some of the lobbying for this is done by companies that will make money out of it and my own feeling if I was American I'd be more worried about Iran sending a war -- a nuclear device by FedEx than I would by sending it through a missile.  But leave that aside -- clearly the Russian hysteria about this, I think, is actually preposterous.  They're far more worried about China and they're far more worried about, you know, Muslim demographics than they're actually worried about NATO.  It's a great issue for them because as I said before it allows them to divide Europe and stoke anti-Americanism.

QUESTIONER:  But is it preposterous -- excuse me -- is it preposterous for the Russians to react by saying that it -- since there is no threat, there must be another purpose?

LUCAS:  Well, with a new --

SESTANOVICH:  Yes.  Yes.  I'll just give you a simple answer to that.  Yes, because it's -- it is so fragmentary.  It has no ability to, as the Russians constantly say, neutralize their deterrent.  We're talking about 10 interceptors.  The idea that because of that you're going to be targeting which, you know, I really can't -- cannot see the military significance of vis-a-vis the Russian's strategic nuclear deterrent.  It's tiny.  It is -- I mean, I'm not -- it really might not be adequate even for a future Iranian threat but it surely has no relationship to a Russian threat which is, you know, which involves missiles --

MATLOCK:  Well, what they worry about is the foot in the door and also as I've said it was very clear when we were discussing SDI the Russian conception of it is quite different.  They really do see it as a cover for something offensive.  This happens not to be true but we should be dealing with perceptions.

LUCAS:  But unlike --

MATLOCK:  And when there is no need for it -- and there is no need for it -- it can only be seen as essentially a provocation by the Russians.  And I think, you know, I think that's why they're --

SESTANOVICH:  It's not that that can only be seen this way.  It's that they have to make a decision about how they're going to see it --

MATLOCK:  Oh, sure.

SESTANOVICH:  -- and they've decided to see it in a different way and to really exaggerate the threat in a way that I think they -- they understand the choice.

MATLOCK:  Yeah.  Well, that's right.  Other people never exaggerate threats. 

I think we better -- (laughter) -- I think we better close with this.  Thank you very much.  It's been great. (Laughter, applause.)

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JACK F. MATLOCK JR.:  All right.  Welcome to today's Council on Foreign Relations meeting. 

Please remember to turn off all your cell phones, BlackBerrys and other wireless devices.  And I would like to remind members that this meeting is on the record and we are being joined by a number of our national members.  So what we're doing is being recorded, and eventually we will have national members participate in the discussion.

Today I'm very pleased to introduce Edward Lucas, who is the Central and East European correspondent for The Economist, and has just written a book:  "Putin" -- "The New Cold War:  Putin's Russia and the Threat to the West."  And we have with us also Steve Sestanovich, as you know, who is the George F. Kennan senior fellow for Russian and European Studies at the Council here.

I'd like to start out by asking Mr. Lucas how he views the current situation.  I would say, sort of briefly in Russia with the elections coming up, is this is a stable situation or is it one which perhaps is more friction under the surface than before? 

And then a second that he might address is:  Is this election having any effect on our relationship?

EDWARD LUCAS:  Well, thanks very much indeed, Mr. Ambassador, for your kind words of introduction.  Thank you also to the Council for inviting me here.  It's a great honor to be able to address both the people in the room and all the people who are taking part of the event and from far away.

I think that the -- I don't like to use the word "election" for what's coming up in -- (laughter) -- election is a very good term for the -- (background noise) -- the feast of democracy which we're seeing in America at the moment, which is something which I think anybody anywhere else in the world just looks at and wishes that they could take part in this array of choices and candidates. 

But in Russian, the word for election is vybory but that is -- (inaudible) -- choice and I would call this a golosovaniye -- a voting.  Just to tell you, votes will be cast, but in a way that would really, I think, befit the talents of a great Russian novelist like Bulgakov (ph), it's both totally predictable and completely mystifying.  It's totally predictable, because we know he's going to win -- Dmitri Medvedev -- and it's totally mystifying because we have almost no idea what it means.  Is he keeping the seat warm for Mr. Putin to come back -- maybe in years, maybe even in months?  Is he going to form some kind of team of soft cop/hard cop relationship with Mr. Putin?  Does it mark a defeat for the chekisti -- the siloviki in the Kremlin?  Does it mean that one clan is up -- the Gazprom lots are up and the Rosneft lost out?  We just don't know. 

And terminology, which some people in this room would have spent many decades practicing as a skill for analyzing the Soviet Union in the 1950s, '60s, '70s and '80s -- and then went out with the slide rule, carbon paper and the telex machine -- for those of you who remember, the telex was a hardwired, point-to-point low bandwidth messaging system that predated e-mail.  Terminology seemed as dead as learning how to sharpen a flint ax.  And now, we're back.  We're using terminology again.  We're trying to make sense of the Shvartsman interview -- this amazing interview in Kommersant, which gave us a little clue into how the theft and reprivatization of assets is going on.

So yes, I think if he's not stable there is huge fights going on behind the scene.  We don't know whether the guys fighting in the boat are actually going to capsize it or they're just fighting in the boat.

And in terms of the relations with America, my feeling is that all three candidates are going to be tougher on the chekisti -- the Kremlin -- the regime in the Kremlin than the Bush administration has been.  I think the people advising them, from the language they're using, I think that public opinion in America and other countries is spooked by what's happening in Russia and that sometimes the governing elites have got to catch up.

MATLOCK:  Steve, you?

STEPHEN R. SESTANOVICH:  Can I pick up on two points that Edward has made?

I agree "voting" is probably a better term than elections.  Elections do, however, create some new uncertainty and some internal political dynamics.  And in Russia, that uncertainty usually leads people to try to nail down everything that they can, find ways of consolidating their hold on assets and on influence that they've been able to amass.

Putin has presented Medvedev as a guarantee that this doesn't need to happen, that there doesn't have to be that much uncertainty.  You can count on predictability and stability in the future.  It has sort of taken -- I think that this unspoken watchword of the new -- of the political transition is going to be an old one.  That is the Brezhnevite phrase "stability of cadres."  The promise is everybody will be okay, but there is plainly a lot of competition that has been generated by the fact of an election.

I think the election has also had an impact on Russian foreign policy -- or at least -- I would say it has.  And not -- and I think we should notice that difference, as well as forecast what might be the different approaches taken by American leaders.  The parliamentary elections in the fall and the presidential voting this spring have provoked a kind of heating up of Russian political rhetoric toward the West, a desire to animate Russian nationalist feeling. 

You know, Russian political pollsters track attitudes toward the United States.  And what they discovered is that starting -- there was a big crash in Russian attitudes towards the United States.  It became much more negative during the Iraq war and then they bounced back.  And they kept bouncing back, until last spring when Putin gave his speech in Munich.  And since then, they've been on a downslide again and the Russian leadership has pretty much been on a tear of kind of anti-Western rhetoric, which Putin has led. 

But Medvedev -- even though he has softened it here and there -- has made clear he is pretty much constrained by the boss's line.  He says, just as Putin does, if you look weak, people will take advantage of you. 

And that's a kind of motto.  There's -- I'm sure there are Russian peasant folk sayings that corroborate this view -- but it is now the view of the elite.  It's the definition of Russian foreign policy.

MATLOCK:  You know, I was struck by the title of your book, "The New Cold War," and the reason it struck me is that I spent 11 years in Moscow between 1961 and '91, and most of them at the height of the Cold War.  And at that time we really felt that the Cold War was not about normal differences between great powers, but was fueled by an ideology, a new -- I would say an ideology which was universal in scope.  We felt that the Soviet Union was not a Russian empire writ large but a communist empire with values totally different from ours, whether they be moral values or economic values, and that there was an assumption at best that the system would spread throughout the world and at worst that they needed to help it do so and that that would increase their power. 

And from that we had an arms race of tremendous proportions.  We had geopolitical competition at a time when the Soviet -- and it was at its height when the Soviet Union was most closed.  When I went to Moscow in '87 as ambassador and my fourth time there, they were issuing I think about 1,300, 1,400 visitors visas a year and these almost all to officials or a few small certified delegations.  We maybe got 2,000 or 3,000 refugee visas for immigration.  Before I left -- in fact, while it was still the Soviet Union -- we were doing 125,000 visitors visas and we had a waiting list of half a million for immigration to the United States, and then the barrier was not getting out of the Soviet Union but getting in the United States.  I could go on and on but when I looked at the sort of problems we have today, and they are real, it seems to me that what we're seeing is more sort of a normal friction between sovereign states, particularly powerful ones, rather than something that is a replay of the Cold War. 

LUCAS:  Well, let me -- let me -- it's a very fair point and it's one I address at the very beginning of the book because I am not a veteran of the Cold War like you but I was actively involved in it in the 1980s, and I'm absolutely not saying that the old Cold War is coming back.  That had three dimensions.  You mentioned military, ideology -- and it was global confrontation -- this one isn't -- and the Soviet Union then was a closed society.  Russia is now very well integrated inter -- both world diplomatic structures and of course the economy and constant human contact.  I'm absolutely not making that argument nor am I saying that Putin is a new Stalin.  That would be grotesquely exaggerated. 

But what I am saying is that we have been much too complacent, for a start, about both where Russia is -- has already got to and what the trajectory is -- that it sort of creeps up on us and things that seemed unimaginable then became isolated exceptions, then become -- happening rather more often and then suddenly become part of everyday life in Putin's Russia, and this has really been extremely troubling and so one thing I want to do is just give a wakeup call. 

Secondly, I do think there is a tussle in central Eastern Europe.  These are countries which we thought had been won for the cause.  I don't use the word democracy in the book because democracy's such a slippery word.  And in the -- having lived in the Soviet-occupied zone of Germany which called itself the German Democratic Republic I don't -- I'm always cautious when I hear the word "democratic."  But countries that we thought had been won for political freedom, for the rule of law, for the Euro-Atlantic orientation we are now in severe danger of losing to sovereign democracy. 

Now, I argue very strongly in the book that sovereign democracy is a kind of ideology.  It's ideology that offers rich rewards for elites.  It frees them from the constraint and redress of our rather more bracing system, and if you are a politician in, say, Moldova that can look pretty attractive.  If you're a politician in Bulgaria, that can look pretty attractive.  If you're a politician in Latvia or Lithuania, that can look pretty attractive.  And I travel these countries all the time.  I do not think we are winning and I think in some cases we are losing under the onslaught of Russian money washing in to these countries still underdeveloped political economic systems.  And it goes further west.

And if I had sat here at the CFR six years ago and said that a German chancellor, the heir to Konrad Adenauer, Willy Brandt, Helmut Schmidt and Helmut Kohl, would in his final weeks in office sign off on an energy pipeline as controversial as the Nord Stream pipeline, then a few weeks later take a lucrative job as chairman of that consortium you'd have said that was preposterous.  You'd have called security and wondered who on earth is working for The Economist these days, and that's exactly what Gerhard Schroder did.  So, you know, if you go down to Washington and look at the money that's washing through K Street there and the people -- you know, the people who've got Russian clients and some of the other activities going on this is not just an away match.  This is a home match as well.  So in those ways I am not saying it's the old Cold War reprised but there is a severe conflict going on.  It's one that we are not winning at the moment.

SESTANOVICH:  Yeah, I agree with Edward and Jack that the old Cold War is not the right benchmark but we do have a new set of disagreements with the Russians, and understanding them is a challenge because they're not what we expected really.  The Russian definition of them is they're correcting for the humiliations and weakness that Russia experienced in the 1990s and the -- anything that was agreed starting after the death of Leonid Brezhnev, I would say, is sort of ipso facto suspect.  It was probably forced on the Soviet Union or Russia because of its weakness, and that means that there's a kind of across the board reexamination I think in a way that goes beyond really the interest at stake that is -- involves national pride, self-assertion.  There is some kind of weird combination in Russian foreign policy these days between a nostalgia for being taken seriously in the past in a way that they think they weren't in the 90s and a desire to reject the past and be a different kind of European Western power, and they haven't really sorted out which that is. 

But in the interim, the desire to overcome what was agreed in the 90s I think has led to a kind of bristly, even snarling style that isn't just style.  It has a kind of substance to it and I'll give you two recent examples.  One is just from the past couple of days -- the way the Russians have handled the Kosovo independence.  Their man at the -- at NATO has said, you know, this -- it tears up the entire system of international law.  It may require us to use force.  Putin has said it's immoral and illegal and the result has been, I think, you know, to stimulate violence that they said they were not going to try to stimulate.  And they -- and the result is, you know, the prime minister of Serbia, Kostunica, is telling the crowds in Belgrade yesterday, "Putin is with us."  Now, you know, that is not the kind of interaction that we expected. 

A second one I'd give you is the way Putin talks about an arms race in Europe.  I was at a conference last -- I'll get back to Putin in a second -- I was at a conference in St. Petersburg last summer where the first Russian speaker began by noting that NATO had more tanks now than Hitler did on the eve of Operation Barbarossa.  Well, what is your point?  (Laughter.)  But that's common now -- this sort of sense that, you know, we are really not in any way taking for granted good relations.  Putin talks about an arms race in Europe that as far as I can tell is about one thing.  It's about these N interceptors and 10 radars that are going to be located in the Polish and Czech Republics.  It -- there's hardly anything else to it.  They pulled out of the CFE treaty saying that the West is engaged in a massive buildup while Russia's constrained.  It's -- there's something going on that I think does take some new thought.  I resist calling it the new Cold War but I think it's something we didn't expect.

MATLOCK: Well, whatever we call it, I think if we are going to think about what we do about it, it might be well to step back and say, well, where are our interests?  Where are our interests in dealing with it? 

Now, I would submit that in the security area, which does tend to trump everything else, there is no threat to the United States that takes precedence over the nuclear threat, particularly the threat that proliferation could lead to terrorists having nuclear weapons. 

I'm also convinced that we're not going to be able to deal effectively without (sic) that threat until we get the nuclear relationship with Russia back where it was in -- at the end of the '80s, the beginning of the '90s.  We have seen the whole process of reducing these weapons -- which is an obligation under the Nonproliferation treaty, fall victim to politics on other, in other areas. 

We have now abandoned, at the United States' insistence, the whole verification procedures that took us years to work out, and which the Russians were willing to accept.   We walked away from the ABM treaty even when they were offering to amend it, and talking about a joint program -- which, in fact, is the only thing that makes any sense. 

If you look at our own defense posture, you find that words like "global dominance," and so on, are very common.  And it seems to me that somehow we need to get that relationship back; to get these weapons reduced -- their very existence is a threat.  And we're not going to be able to do it unless we cooperate with the Russians in some way. 

There are other, you know, concerns that I would have, but I do put that first of all.  And it seems to me that some of the things that we're doing, such as trying to build interceptors in Poland, against missiles that don't even exist yet; and pushing the button -- a psychological one which, you know, in Gorbachev's time we finally were able to work through, and that is the Russian conception that missile defense is a cover for an offensive strategy.  It isn't true, but it is felt very deeply there. 

So this is pushing a button that is going to cause all sorts of reactions.  And I just wonder if you agree that this is a priority, and if we don't need a different way to handle it? 

LUCAS:  Well, I'm aware that the nuclear issue is one that divides people  at the dais can't hear enough about it.  And those for who we -- the eyes glaze over quickly -- (laughter) -- so I'm trying to be both, sort of, brief and accurate and interesting, all at the same time. 

I think that your -- I absolutely -- I absolutely agree that we've mishandled the nuclear relationship, and I argue in the book for a different course.  I think that it's, you know, the Kremlin line is that Russia is a fortress besieged by malevolent hypocrites.  And everything -- and anything we do that encourages that is bad and gives comfort to the -- to the regime. 

I think that one should -- we need to separate out some of the issues a bit.  And I think you're absolutely right, -- is not -- it is not in America's favor -- to America's advantage to have a huge dominance in nuclear weapons because it may make the Russians go over to launch on warning.  And that increases, at the very minimum, the danger of a, of an accident.  And I think that's a rather basic point that perhaps this administration has not judged. 

So I argue very strongly in the book that we should engage with Russia on these big, strategic questions.  I think we always have to be careful that our list of priorities don't turn into their negotiating strategy.  And there's always the danger that we say what we really mind about is this, much more than these things at the bottom of the list.  And they immediately think, well, we'll give some promises on that thing up there, and then we get Georgia, you know, as a prize.  And there's always -- you know -- so I think we have to be quite careful about not giving away principles. 

And I am arguing in the book for some quite sharp measures on issues of democracy and human rights, to put some distance between the past and present.  But, broadly, I -- you know, I couldn't agree with you more. 

MATLOCK:  Steve, you know, I think we're all concerned --

SESTANOVICH:  Can I just say one word about -- 

MATLOCK:  Oh, Yeah. 

(Cross talk.)

SESTANOVICH:  I think the -- my prediction would be that the Russian-American relationship will be, kind of, renuclearized in a way that both of you have suggested.  And I think the administration has been kind of slow to take advantage of some real opportunities that might exist there. 

I mean, as far as I can tell, they don't even -- they have an, quote-unquote, "negotiation" underway about the expiration of the START I treaty next year, but they don't have a proposal on the table.  No proposal on the table means, to me, not much of a negotiation -- (laughs). 

However, I would just say I think there may be some instrumental value in restabilizing the relationship a little bit by reintroducing this dimension.  But I'm less confident about it than I used to be, because I think their receptivity to the idea that you can -- that you can introduce a, kind of, basic stability in the relationship by agreement on these -- on strategic nuclear issues.  I think that's eroded. 

LUCAS:  Yeah, I agree. 

SESTANOVICH:  At any rate, you -- I just wanted to get in a word. 

MATLOCK:  Very soon we should bring in the members in the dialogue, but I was going to ask -- I think all of us are disturbed by the increasing authoritarianism, and many of the problems we all see in Russia.  But is there anything, effectively, the United States, or for that matter, the West can do to affect this as long as Russians seem predominantly to be willing to accept it?  I guess that's one question. 

Or, are attempts to make this an issue, perhaps they even backfire given the current atmosphere.  What's your -- what's your feeling?  Is anything -- if we decide we should do something about it, is there anything we effectively can do? 

SESTANOVICH:  Yeah, it's a good question, and I'll be really brief on it because I do want to turn to the next phase of the discussion. 

I think the phase of, sort of, Western commentary on Russian democratic progress and human rights performance is, sort of, over.  The phase that we began at the end -- toward the end of the Cold War has, kind of, played out.  And the idea that there's a lot of influence, just in moral opprobrium, is -- that one is not going to work for us as it has.  And it -- you know, we might as well think of something, of something new. 

If we're going to think of something new, the one thought I would suggest, as this, sort of, starting point for anything, is that it can't be an American attack on, you know, Russia's -- you know, the degree of Russian democratic virtue.  It has to be something more broadly agreed among democratic states, and particularly the United States and Europe. 

I would say that the administration, in general, has been weak in trying to develop a consensus with Europe about how to deal with Russia -- across the board, whether it's security issues, economic issues, political issues, democracy.  And that is now, I think, recognized by the Europeans as something that really does need to be on the agenda of the -- for the U.S. and the Europeans if they want to have any influence in the future. 

MATLOCK:  I think it's time we should open up the discussion. 

To members, if you would wait for the microphone, and state your name and affiliation. 

Let's see, Dr. Desai.

QUESTIONER:  Thank you.  I'm Padma Desai.  I'm the Harriman professor at Columbia University.  Two questions:  You cited Bulgakov, one of my favorite authors.  The election, of course, is predictable, but mystifying. 

Predictable:  Dmitry Medvedev, the very personable protege of Vladimir Putin, with 80 percent popularity rating among Russians; you put up three, four more candidates, it would still be predictable, in my view.  How would you react to that? 

Mystifying?  Why would it be mystifying? 

Think in terms of Putin's legacy, which he's passing on to his young protege -- the legacy saying Russia -- Russian will determine which way, in what pace, in what manner Russia will evolve into a liberal system.  This is his legacy.  Would you agree with that?

My second question -- Cold War.  I do not like the title of your book, but that is your -- (laughter) --

LUCAS:  So long as you buy it, I don't mind.  (Laughter.) 

QUESTIONER:  -- your privilege.

I mean, of course the Cold War was -- between the two nuclear superpowers, there was a deterrent which was operative.  But the Cold War actually was fought in poor Third World countries -- in Vietnam, in Afghanistan, in Angola.  Do you think there will be a revival of that kind of a scenario when you say, "Think of a new Cold War"?  Or do you see some kind of a robust pragmatism which Putin has brought forward in his foreign policy, maneuvering -- which he's saying, "Have dialogue with us -- negotiate, negotiate, negotiate because we have common interests?"  Russia, the United States, Western Europe, nuclear nonproliferation, terrorism control, bilateral nuclear downgrading -- isn't that -- I mean, would you agree with -- what kind of Cold War scenario do you --

MATLOCK:  Thanks.  Thanks very much.

LUCAS:  Look, I -- let me repeat again. I'm not saying we've got the old Cold War back.  I mean, there is a little bit of what one might call Russian mischief-making around the world in places like Venezuela.  But it is a pale shadow of the Soviet Union's global reach and I'm absolutely not arguing on that.  So let me just put that out of the way.

I think for -- I would disagree, really, with the -- on this basis of predictability and the other candidates.  We don't have a real political contest because the only media that matters is only reporting one candidate and, you know, I think the opposition in Russia is extremely weak.  It's just the sort of opposition the Kremlin would like, of no-hopers, never-weres, has-beens, chancers, freaks.  You know, this is the sad truth of it.  And the media -- you know, derides them and -- but it also -- you know, it's not a system that permits a real political contest. 

And so -- you know -- I mean, I think with -- they could have put up, you know, the Kremlin gatekeeper as a candidate.  And he would have -- you know, with that kind of media coverage he would -- you could make him look pretty good.  You know, Medvedev's clearly smart.  I'm not saying he's a nobody.  But I think -- you know, one just has to be realistic about this.  It's not -- you know -- and it is predictable.  And I think the idea that Russia is on a path to liberalism -- I don't see it.  You know, we have a mixture of the red, the brown and the white.  We have Soviet nostalgia, Stalinist version of history, the kind of youth movements -- all that.  We have something that might be called facism, a bit of brown.  We have a bit of white, which is, you know, the czarist era nostalgia. 

Now is that going to go orange or is that going to black?  I don't know, but I wouldn't bet on it going orange.

MATLOCK:  Steve, do you want -- (off mike.)

QUESTIONER:  I'm Timothy Towell, a retired Foreign Service type.

Why are we surprised about what Russia is doing and saying, and what Putin is doing and saying?  The president of the United States looked in Putin's eyes and saw his soul or whatever it was.  John McCain sees KGB, according to the New York Times.  That's fun.  But we're talking about Russia, Mother Russia, that fought against the Teutonic Knights with Alexander Nevsky, Catherine the Great, Peter the Great, winning the Russo-Jap War, scaring the Brits by going into Afghanistan and --

MATLOCK:  Losing the Russo-Jap War.

QUESTIONER:  Yeah, Russo-Jap War.  (Laughter, cross talk.)

Trying to get -- yeah -- Mediterranean ports, expanding into Eastern Europe -- why are we surprised?  What did we do in 1917?  We did what we're doing now, bagging money to the good guys against the bad guys and we sent -- had encouraged troops to go in there.  It was called capitalist encirclement. Do we have a new capitalistic encirclement?  How frightening for Mother Russia to have Europeans go and take the Baltics -- move into Poland, move into the Ukraine.  What is Stalin doing in his grave -- we're diddling around in Georgia, where Stalin was born?  There's a new term called pushback.  Are we surprised that there is pushback by this guy that has KGB eyes?  Is there anything surprising about this?

(Cross talk.)

LUCAS:  I really -- I really find that a bit -- I mean, I find that almost outrageous to say that Europe is pushing into the Baltics.  I'm sorry.  The Baltics are European.  You know, this is just -- I mean, this is -- I mean -- and I think this whole idea that Russia is somehow entitled by its history to be an imperial power and act in malevolent and destructive ways is both untrue and very unfair on the Russians. 

And I just -- can I just do a very quick quiz?  I'm just going to read out some names and I want to see who's here, because that -- probably in a way, the most important names in Russian history.  And we see who -- the first person to put their hands up will maybe get a special inscription in their book, okay?  (Laughter.) 

Tatiana Baeva.  Konstantin Babtsky.  Larisa Bogoraz.  Vadim Dealunay.  Any hands going up yet?  Excellent.  Okay.

It carries on just to say -- complete list, it's Fainberg, Gorbanevskaya and Litvinov.  Those are the eight Russians who, with incredible bravery, demonstrated in Red Square in 1968 against the Soviet invasion of Czechoslovakia.  They founded -- is that Ken over there?  Yes.  They founded the modern human rights movement.  There should be streets named after them. There should squares named after them. There should be statues all over Russia.  And we should not allow Putin to get away with his disgusting revival of the Stalinist version of history, which says that Molotov-Ribbentrop Pact was legal and was okay.  And when mainstream Russian media repeats that the Katyn massacre was done by the Nazis and not by the NKVD -- a lie that we thought was buried in 1990 -- you know, I totally would resist this 100 percent. 

MATLOCK:  Over -- back over here -- (laughter.)

QUESTIONER:  Andy Nagorski, Newsweek.

Edward, I have the advantage of having your book already -- (laughter) -- and as you know, I have -- you have one statement in there which I think is indisputable.  It says -- you know, the G-8 is supposed to be a group of industrialized democracies.  How does Russia fit in there in terms of the definition of the latter word?  Maybe this will give you a chance to respond to the last question, which I think Jack asked before about what should the West's response be is the implication there -- is -- should Russia be disinvited?

LUCAS:  Well, let me say yet again, I'm not advocating a blockade of Russia or boycott or Russian's isolation.  Our best hope is the continued integration of Russians in their daily lives into the law-governed multilateral free world.  But we -- and I know the Council of Europe is probably a body which occupies about 0.1 percent of your attention.  But it is -- and it is --

QUESTIONER:  On a good day.  (Laughter.)

LUCAS:  -- in a year.  (Laughter.)

And it is very -- it is the body which epitomizes the post-Cold War democratic free law-governed order in Europe.  And we let Russia in in the mid-1990s, when we were in an optimistic frame of mind.  It was probably the right thing to do, to take that gamble.  We suspended Beneroff (sp) on what now seems like a technicality of a rigged election -- a bit of restriction media freedom.  We know the country, which has revived the practice of the psychiatric incarceration of dissidents -- it's not just the rigged elections.  It's not just the assault on media freedom and the venomous anti-western rhetoric -- Putin describing America as the Third Reich -- this explicit rejection of western norms as being somehow not suited to Russia.  So I think we have to make a moral stand on that and say that Russia can no longer be a member of the Council of Europe.

On the G7-G8 thing, what I would argue is that we need a G12-13-14 of big countries to talk about global problems and Russia absolutely belongs in there just as Brazil does, and perhaps even more so as India does because that's not only big, but democratic as well -- and China, all the rest of them.  So let's have a G13-14-15-16 -- whatever.  And if there's going to be a democratic -- a caucus of democratic countries which maybe meets the day before, that's fine, too and that can be five, six, seven, eight, nine countries.  Maybe India should be in it.  But Russia certainly shouldn't. 

MATLOCK:  Yes.  On this side, we'll try one.  We'll come back here.

(Inaudible.)

QUESTIONER:  Jim Dingman (sp), IMN World Report. 

I'd like your assessment of how you discern the differences and dissimilarities of the various presidential candidates in the race towards their policies towards Russia.  And what is your assessment of Putin's policies towards the Middle East at this point? 

LUCAS:  Golly -- why don't you take that?  (Laughter.)

SESTANOVICH:  Well, I haven't noticed that Russia has been very high on the agenda in any of the presidential debates, so it's been a little hard to smoke out what the different candidates think.  It's been more a matter of the competing one-liners -- you know, doing riffs on eyes and souls and that sort of thing.  Hillary Clinton has had her own version of that.  John McCain has.  I'm sure Obama will come up with one eventually. 

And I think broadly speaking they have the same kinds of concern about Russian -- about Russian policy, stated in more or less similar position-paper-sounding way, which gives you some indication as to what an early administration policy review would look like, but I don't think it really tells you in detail what a new American policy would be.  I think it won't be the same as the current policy.

Russia and the Middle East -- there's a kind of variety of Russian objectives that they want to serve in the Middle East.  And that involves developing some loose gas OPEC; preserving good relations with states that might be a source of Islamic agitation inside their borders; developing high-tech cooperation with Israel; retaining a kind of seat at the diplomatic high table when it comes to the roadmap for Israeli-Palestinian peace.

I don't think they're a particularly big player in any of those games, with one exception that matters a lot to the United States, and that has been the effort to deal with the Iranian nuclear program.  And there I think there's a kind of schizophrenia in the Russian policy, which isn't so different from their schizophrenia on some other issue.  And that is:  Do they want to align themselves with the Europeans and the United States to add to outside pressure on Iran to take a different course; or do they want to be a separate diplomatic entity which can broker deals between the Iranians and the West -- at the expense of possibly reducing pressure on Iran?  And they just haven't really sorted that out.  You know, they said, well, we're dealing -- we're sending fuel to the Iranians to start up their reactor.  Doesn't sound good, but then they say, and we're managing -- we have arrangements to perpetuate or preserve that Russian presence there under joint venture.  Sounds like it could be good.

I think they are uncertain as to whether they want to be part of the West on this issue, or separate so as to maximize their role.

MATLOCK:  Yes.

QUESTIONER:  Bob Lifton, Medis Technologies.

There's a huge difference between the Cold War and today is Russia's economic position -- particularly with respect to energy and the energy they control and gas and the leverage they have with that energy and that gas. 

Would you comment on that in relationship to your view of the Cold War today?

LUCAS:  Yes.  Well, it's a very interesting contrast.  In a way, Russia is a sort of shrunken husk of the Soviet Union in terms of its part.  But on the other hand, they have used one of the remaining Soviet assets -- the monopoly on east-west gas pipelines -- rather effectively.

Now, in a way that's very odd, because Europe is so much bigger, freer, stronger, more attractive, richer than Russia.  Why is the Gazprom tail wagging the European dog?  And the answer is that European collective bargaining, collective security on energy lacks credibility and it's therefore very tempting for countries to go and do their own bilateral deals with Gazprom, allowing Gazprom to buy downstream assets in Western Europe and entrenching the vertically integrated energy monopolies there.

In a way that's really quite alarming.  And you know, I list in the book -- I think, you know, I mean just in Western Europe you've got Italy, Austria, the Netherlands, Germany all doing, you know, doing deals with Gazprom.  And what's left of the European energy promise of building the Nabucco pipeline looking, you know, it's turning into just a kind of a pencil line on a map.  And it's a big -- you know, it's one of the big recommendations that I'm making is that we have to get our act together on that, because if we don't we just -- it's -- (speaking in foreign language).

SESTANOVICH:  Can I have one thing on this?

I do think that the Europeans' inability to actually develop coordinated policies that they can enforce in the area of energy is a very revealing weakness of how little the Europeans have actually advanced toward being the kind -- you know, a nation state style player in international affairs.

But I do think that U.S. policy has been very negligent here in not trying to play a role to add to -- to increase coordination among the Europeans.  It basically treated energy as a European problem and that seems to me to have had predictable consequences.

QUESTIONER:  Bruce Gelb, Council of American Ambassadors.

Mr. Sestanovich, I think you characterized Russian policy as having to do with you have to look strong, otherwise no one takes you seriously.

Yesterday I took somebody seriously when I looked in the papers and saw the picture of the American embassy in Belgrade in flames.  And the comment that you made coming out of Belgrade that Mr. Putin, in effect, is on our side leads me to the question:  How much involvement do you believe Russia is going to have in the next week, two -- or month or two -- in terms of dealing with the Kosovo problem and Russia's position relative to Serbia?

SESTANOVICH:  I'm afraid it looks as though it's going to be larger than they had said -- made us think in advance.  They've gotten a little carried away by the sort of drama of the moment.  You know, there's famous phrase of the prince of Montenegro in the 19th century:  We and the great Russian people are 150 million strong.  (Laughter.)

I mean, in the end I don't think it's going to help Serbia very much that Russia is on their side, but the Russians are certainly stoking the situation up rather seriously.

LUCAS:  If I could add a bit very briefly on that. 

I don't think Russia really cares about Serbia at all, but it's a wonderful way for them to -- sorry -- to do things that they like.  It's a bit like missile defense.  They don't really care about missile defense, but it's a good way of dividing Europe and separating Europe from America, and that's exactly what they've got over Kosovo -- some European countries recognizing, others not and quite a lot of Europeans -- quite wrongly, in my view -- blaming the whole thing on American intervention to support Kosovo in the first place. 

So Russia's policy is very opportunistic.  It's not -- this is not principled Slavic solidarity, but it is proving quite effective -- at least in the short term.

MATLOCK:  Yes, the gentleman here.

QUESTIONER:  David Phillips from Columbia University.

No speeches here, just a quick question about Russian-Georgian relations.

The Russian government was threatening to draw a parallel between the West's recognition of Kosovo and its potential recognition of Abkhazia and South Ossetia.  Given its full-throated support for international law, it doesn't look like that's going to be the case.  Do you agree?

LUCAS:  Yeah.

QUESTIONER:  And how do you think that Russian and Georgian relations are going to go forward, given the continuing nuisance of the Georgian president in Moscow?

LUCAS:  Well, I think it's -- first of all, Russia -- I think Russia will not recognize any of the three puppet states, because it's too dangerous for Russia.  Russia has far more -- (background noise) -- more, as they put it, separatism.  It's the principle of ethnic self-determination.  It's very threatening to them.

What they are doing quite effectively is using South Ossetia and Abkhazia to try and provoke the Georgians into doing something stupid.  Now, I would like to say that the Georgian president is a very levelheaded man with a wide circle of advisors who ponders deeply before taking decisions and very rarely puts a foot wrong, so therefore this track is not going to succeed.  Unfortunately, I can't say that with as much confidence as I would like.  (Laughter.)

MATLOCK:  Yes.  The lady here.

QUESTIONER:  Thank you.

Joanna Weschler, Security Council Report.  Like my neighbor here I haven't read, unfortunately, your book yet but I spend a lot of  time watching the Security Council of the U.N. as my organization's name indicates and I wanted to ask you -- and I don't know whether this is addressed in the book -- whether or not you are also worrying about the new Cold War taking place in security issues and specifically in the Security Council because my own observations would indicate that we are perhaps going back -- we are not there yet but going back towards something resembling the Cold War dynamic in the Council, and some members canceling themselves out and just being stalled.

LUCAS:  I hope you're -- I fear you're right.  I hope you're wrong.  Steve maybe would answer in more detail.

SESTANOVICH:  Well, I think there's definitely a trend in that direction but I wouldn't exaggerate the contrast between this decade and the 90s, for example.  In the 90s, it was because the Russians were clearly going to veto any resolution on Kosovo or before that on other Yugoslav issues that you ended up having NATO take decisions on its own without a -- without any U.N. -- without any agreement within the Security Council, and the same pattern was more or less evident on issues involving Iraq.  You were not able to get Russian support, and some of those cases -- some of those stalemates involved rather similar motives from ones that you have today -- commercial or nationalist. 

We had -- we had that kind of -- we've seen that deadlock before.  What's different now is the -- is the desire not merely to, you know, stand their ground in disagreement with Western positions in the Council but to -- I mean, the case of Kosovo I think take a much more inflammatory line than they did in the past.  Remember, the Russians participated in diplomacy to try to end the war.  Right now I would say the approach seems somewhat different.

QUESTIONER:  Thank you.  Tony Holmes, the Cyrus Vance Fellow here at the Council.  With regard to what Dr. Sestanovich said a few minutes ago about Russia's role as a nuclear supplier to Iran and harking back to what you said earlier about the lack of present engagement between the United States and Russia in terms if its own denuclearization, do you think it's possible to marry the two issues and to try to get a creative new avenue to engage with the Europeans and Russia on the denuclearization or the dismantlement of Iran's nuclear program by starting off with a considerable denuclearization on part of both Russia and the United States and doing what the rest of the world believes we've already committed to do in terms of the nonproliferation treaty, and use that as a means to attack the Iran issue?

SESTANOVICH:  It sounds good but I wouldn't hold out too much hope for it.  It seems to me it puts a lot of weight on the idea that the Iranians will play ball when they see the other major powers united against them.  There might be some greater inclination on the part of the Iranians to feel under pressure but they -- you know, a couple years ago when Putin floated his proposal to handle enrichment for the Iranians outside of Iran, the Iranians, you know, played him along and eventually convinced the Russians that they were just dealing totally in bad faith on this and so the Russian initiative kind of collapsed.  There are a lot of elements of this that one could try to put together.  I would be inclined to think there might be more hope of using nuclear issues to kind of stabilize the rest of the relationship although as I said earlier I think they're -- I have less confidence in that than I used to.  But I wouldn't expect a big payoff in the case of Iran.

MATLOCK:  I have one over here.  This is probably going to be the last question.

QUESTIONER:  Jeff Laurenti with the Century Foundation.  I wonder if you could tell us to what degree there has been pushback from within Russian society at this gray reversion to Stalin-era fairy tales, if I may use that term, about cutin (ph), about -- and about the whole history of the Soviet era, and to what extent is the West -- Europe, much less the U.S. -- in any position to try to steer back to an emphasis on human rights and facts in the face of what appears to be a concerted effort -- is it from the top or from the old nationalist sector, so-called grass roots in Russian society, that has been pushing the reversion to the fictitious history of the mid-20th century?

LUCAS:  Yes.  Nice cheerful note to end on.  (Laughter.)  I think in a way this is one of the front lines of the new Cold War is the fight over history and to try and rebut this, and there are things we can do and a lot of it's on the Internet.  You know, in the old Cold War, we used short-wave radio to try and get our message across and they could block that.  It's much harder to block the Internet.  And if you read Russian, even more so if you can write in Russian, I do recommend you to go onto the Russian language Wikipedia, for example, and look at the talk page on things like cutin, Molotov, Ribbentrop, Stalin, Estonia -- you know, every bit of contested -- because the arguments are happening right there and I think we can -- and we can both get in and make our point.  And I also think there's more we can do to get all the historical documents that are available online.  PDF them -- make them available so that enquiring minds in Russia can just reach out and see that there is an alternative version. 

And also, if you do read Russian I do recommend that you try and get hold of the some of the modern history textbooks.  It is really alarming and this is as if you had, you know, German textbooks saying that the Anschluss and the Munich Treaty were legal and leaving out the Holocaust.  You know, this is really, really dangerous stuff and I -- as a final note, I mean, I -- when I'm feeling optimistic I think they -- the people in the Kremlin are just corrupt and they've just invented this whole nationalist hooey in order to justify stealing tens of billions.  When I'm feeling more -- when I'm feeling more pessimistic I think they actually believe it.  But either way, it is leaching into the Russian mindset and it's going to be some time before it works itself out.

SESTANOVICH:  One sentence to add to that that's separate from the issue of historical truth -- it's just do -- are there Russian criticisms of the foreign policy which raises doubt as to whether this has been productive or successful.  There are not very many but there are some, and you can read them in the Russian media, by the way.  The -- you know, Russian newspapers are full of criticisms of -- which are allowed because not very many people can read them -- criticisms cautious but nevertheless firm about the tone and style and content of Russian foreign policy, particularly on some of the European issues that we've talked about, raising a question as to whether they really advance Russian interest.  But these are very much at the margin.

MATLOCK:  I think we have maybe time for one more if it's very short.  (Laughter.)

QUESTIONER:  Vill Vannon (sp), Roosevelt Institute.  Do you accept that the missile threat from Iran justifies our proposed action in Czechoslovakia and Poland?

LUCAS:  Well, it's an interesting question.  I'm reminded a little bit of the cruise missile argument in the 1980s -- that there was this feeling that there was a -- it would -- this would kind of emphasize America's commitment to Europe by putting medium range missiles in.  It actually came with Helmut Schmidt's request in a way with the best of intentions.  It ended up with dividing Europe and stoking anti-Americanism.  And I feel a bit the same about missile defense.  I mean, obviously the threat is a long way away.  One can argue that some of the lobbying for this is done by companies that will make money out of it and my own feeling if I was American I'd be more worried about Iran sending a war -- a nuclear device by FedEx than I would by sending it through a missile.  But leave that aside -- clearly the Russian hysteria about this, I think, is actually preposterous.  They're far more worried about China and they're far more worried about, you know, Muslim demographics than they're actually worried about NATO.  It's a great issue for them because as I said before it allows them to divide Europe and stoke anti-Americanism.

QUESTIONER:  But is it preposterous -- excuse me -- is it preposterous for the Russians to react by saying that it -- since there is no threat, there must be another purpose?

LUCAS:  Well, with a new --

SESTANOVICH:  Yes.  Yes.  I'll just give you a simple answer to that.  Yes, because it's -- it is so fragmentary.  It has no ability to, as the Russians constantly say, neutralize their deterrent.  We're talking about 10 interceptors.  The idea that because of that you're going to be targeting which, you know, I really can't -- cannot see the military significance of vis-a-vis the Russian's strategic nuclear deterrent.  It's tiny.  It is -- I mean, I'm not -- it really might not be adequate even for a future Iranian threat but it surely has no relationship to a Russian threat which is, you know, which involves missiles --

MATLOCK:  Well, what they worry about is the foot in the door and also as I've said it was very clear when we were discussing SDI the Russian conception of it is quite different.  They really do see it as a cover for something offensive.  This happens not to be true but we should be dealing with perceptions.

LUCAS:  But unlike --

MATLOCK:  And when there is no need for it -- and there is no need for it -- it can only be seen as essentially a provocation by the Russians.  And I think, you know, I think that's why they're --

SESTANOVICH:  It's not that that can only be seen this way.  It's that they have to make a decision about how they're going to see it --

MATLOCK:  Oh, sure.

SESTANOVICH:  -- and they've decided to see it in a different way and to really exaggerate the threat in a way that I think they -- they understand the choice.

MATLOCK:  Yeah.  Well, that's right.  Other people never exaggerate threats. 

I think we better -- (laughter) -- I think we better close with this.  Thank you very much.  It's been great. (Laughter, applause.)

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JACK F. MATLOCK JR.:  All right.  Welcome to today's Council on Foreign Relations meeting. 

Please remember to turn off all your cell phones, BlackBerrys and other wireless devices.  And I would like to remind members that this meeting is on the record and we are being joined by a number of our national members.  So what we're doing is being recorded, and eventually we will have national members participate in the discussion.

Today I'm very pleased to introduce Edward Lucas, who is the Central and East European correspondent for The Economist, and has just written a book:  "Putin" -- "The New Cold War:  Putin's Russia and the Threat to the West."  And we have with us also Steve Sestanovich, as you know, who is the George F. Kennan senior fellow for Russian and European Studies at the Council here.

I'd like to start out by asking Mr. Lucas how he views the current situation.  I would say, sort of briefly in Russia with the elections coming up, is this is a stable situation or is it one which perhaps is more friction under the surface than before? 

And then a second that he might address is:  Is this election having any effect on our relationship?

EDWARD LUCAS:  Well, thanks very much indeed, Mr. Ambassador, for your kind words of introduction.  Thank you also to the Council for inviting me here.  It's a great honor to be able to address both the people in the room and all the people who are taking part of the event and from far away.

I think that the -- I don't like to use the word "election" for what's coming up in -- (laughter) -- election is a very good term for the -- (background noise) -- the feast of democracy which we're seeing in America at the moment, which is something which I think anybody anywhere else in the world just looks at and wishes that they could take part in this array of choices and candidates. 

But in Russian, the word for election is vybory but that is -- (inaudible) -- choice and I would call this a golosovaniye -- a voting.  Just to tell you, votes will be cast, but in a way that would really, I think, befit the talents of a great Russian novelist like Bulgakov (ph), it's both totally predictable and completely mystifying.  It's totally predictable, because we know he's going to win -- Dmitri Medvedev -- and it's totally mystifying because we have almost no idea what it means.  Is he keeping the seat warm for Mr. Putin to come back -- maybe in years, maybe even in months?  Is he going to form some kind of team of soft cop/hard cop relationship with Mr. Putin?  Does it mark a defeat for the chekisti -- the siloviki in the Kremlin?  Does it mean that one clan is up -- the Gazprom lots are up and the Rosneft lost out?  We just don't know. 

And terminology, which some people in this room would have spent many decades practicing as a skill for analyzing the Soviet Union in the 1950s, '60s, '70s and '80s -- and then went out with the slide rule, carbon paper and the telex machine -- for those of you who remember, the telex was a hardwired, point-to-point low bandwidth messaging system that predated e-mail.  Terminology seemed as dead as learning how to sharpen a flint ax.  And now, we're back.  We're using terminology again.  We're trying to make sense of the Shvartsman interview -- this amazing interview in Kommersant, which gave us a little clue into how the theft and reprivatization of assets is going on.

So yes, I think if he's not stable there is huge fights going on behind the scene.  We don't know whether the guys fighting in the boat are actually going to capsize it or they're just fighting in the boat.

And in terms of the relations with America, my feeling is that all three candidates are going to be tougher on the chekisti -- the Kremlin -- the regime in the Kremlin than the Bush administration has been.  I think the people advising them, from the language they're using, I think that public opinion in America and other countries is spooked by what's happening in Russia and that sometimes the governing elites have got to catch up.

MATLOCK:  Steve, you?

STEPHEN R. SESTANOVICH:  Can I pick up on two points that Edward has made?

I agree "voting" is probably a better term than elections.  Elections do, however, create some new uncertainty and some internal political dynamics.  And in Russia, that uncertainty usually leads people to try to nail down everything that they can, find ways of consolidating their hold on assets and on influence that they've been able to amass.

Putin has presented Medvedev as a guarantee that this doesn't need to happen, that there doesn't have to be that much uncertainty.  You can count on predictability and stability in the future.  It has sort of taken -- I think that this unspoken watchword of the new -- of the political transition is going to be an old one.  That is the Brezhnevite phrase "stability of cadres."  The promise is everybody will be okay, but there is plainly a lot of competition that has been generated by the fact of an election.

I think the election has also had an impact on Russian foreign policy -- or at least -- I would say it has.  And not -- and I think we should notice that difference, as well as forecast what might be the different approaches taken by American leaders.  The parliamentary elections in the fall and the presidential voting this spring have provoked a kind of heating up of Russian political rhetoric toward the West, a desire to animate Russian nationalist feeling. 

You know, Russian political pollsters track attitudes toward the United States.  And what they discovered is that starting -- there was a big crash in Russian attitudes towards the United States.  It became much more negative during the Iraq war and then they bounced back.  And they kept bouncing back, until last spring when Putin gave his speech in Munich.  And since then, they've been on a downslide again and the Russian leadership has pretty much been on a tear of kind of anti-Western rhetoric, which Putin has led. 

But Medvedev -- even though he has softened it here and there -- has made clear he is pretty much constrained by the boss's line.  He says, just as Putin does, if you look weak, people will take advantage of you. 

And that's a kind of motto.  There's -- I'm sure there are Russian peasant folk sayings that corroborate this view -- but it is now the view of the elite.  It's the definition of Russian foreign policy.

MATLOCK:  You know, I was struck by the title of your book, "The New Cold War," and the reason it struck me is that I spent 11 years in Moscow between 1961 and '91, and most of them at the height of the Cold War.  And at that time we really felt that the Cold War was not about normal differences between great powers, but was fueled by an ideology, a new -- I would say an ideology which was universal in scope.  We felt that the Soviet Union was not a Russian empire writ large but a communist empire with values totally different from ours, whether they be moral values or economic values, and that there was an assumption at best that the system would spread throughout the world and at worst that they needed to help it do so and that that would increase their power. 

And from that we had an arms race of tremendous proportions.  We had geopolitical competition at a time when the Soviet -- and it was at its height when the Soviet Union was most closed.  When I went to Moscow in '87 as ambassador and my fourth time there, they were issuing I think about 1,300, 1,400 visitors visas a year and these almost all to officials or a few small certified delegations.  We maybe got 2,000 or 3,000 refugee visas for immigration.  Before I left -- in fact, while it was still the Soviet Union -- we were doing 125,000 visitors visas and we had a waiting list of half a million for immigration to the United States, and then the barrier was not getting out of the Soviet Union but getting in the United States.  I could go on and on but when I looked at the sort of problems we have today, and they are real, it seems to me that what we're seeing is more sort of a normal friction between sovereign states, particularly powerful ones, rather than something that is a replay of the Cold War. 

LUCAS:  Well, let me -- let me -- it's a very fair point and it's one I address at the very beginning of the book because I am not a veteran of the Cold War like you but I was actively involved in it in the 1980s, and I'm absolutely not saying that the old Cold War is coming back.  That had three dimensions.  You mentioned military, ideology -- and it was global confrontation -- this one isn't -- and the Soviet Union then was a closed society.  Russia is now very well integrated inter -- both world diplomatic structures and of course the economy and constant human contact.  I'm absolutely not making that argument nor am I saying that Putin is a new Stalin.  That would be grotesquely exaggerated. 

But what I am saying is that we have been much too complacent, for a start, about both where Russia is -- has already got to and what the trajectory is -- that it sort of creeps up on us and things that seemed unimaginable then became isolated exceptions, then become -- happening rather more often and then suddenly become part of everyday life in Putin's Russia, and this has really been extremely troubling and so one thing I want to do is just give a wakeup call. 

Secondly, I do think there is a tussle in central Eastern Europe.  These are countries which we thought had been won for the cause.  I don't use the word democracy in the book because democracy's such a slippery word.  And in the -- having lived in the Soviet-occupied zone of Germany which called itself the German Democratic Republic I don't -- I'm always cautious when I hear the word "democratic."  But countries that we thought had been won for political freedom, for the rule of law, for the Euro-Atlantic orientation we are now in severe danger of losing to sovereign democracy. 

Now, I argue very strongly in the book that sovereign democracy is a kind of ideology.  It's ideology that offers rich rewards for elites.  It frees them from the constraint and redress of our rather more bracing system, and if you are a politician in, say, Moldova that can look pretty attractive.  If you're a politician in Bulgaria, that can look pretty attractive.  If you're a politician in Latvia or Lithuania, that can look pretty attractive.  And I travel these countries all the time.  I do not think we are winning and I think in some cases we are losing under the onslaught of Russian money washing in to these countries still underdeveloped political economic systems.  And it goes further west.

And if I had sat here at the CFR six years ago and said that a German chancellor, the heir to Konrad Adenauer, Willy Brandt, Helmut Schmidt and Helmut Kohl, would in his final weeks in office sign off on an energy pipeline as controversial as the Nord Stream pipeline, then a few weeks later take a lucrative job as chairman of that consortium you'd have said that was preposterous.  You'd have called security and wondered who on earth is working for The Economist these days, and that's exactly what Gerhard Schroder did.  So, you know, if you go down to Washington and look at the money that's washing through K Street there and the people -- you know, the people who've got Russian clients and some of the other activities going on this is not just an away match.  This is a home match as well.  So in those ways I am not saying it's the old Cold War reprised but there is a severe conflict going on.  It's one that we are not winning at the moment.

SESTANOVICH:  Yeah, I agree with Edward and Jack that the old Cold War is not the right benchmark but we do have a new set of disagreements with the Russians, and understanding them is a challenge because they're not what we expected really.  The Russian definition of them is they're correcting for the humiliations and weakness that Russia experienced in the 1990s and the -- anything that was agreed starting after the death of Leonid Brezhnev, I would say, is sort of ipso facto suspect.  It was probably forced on the Soviet Union or Russia because of its weakness, and that means that there's a kind of across the board reexamination I think in a way that goes beyond really the interest at stake that is -- involves national pride, self-assertion.  There is some kind of weird combination in Russian foreign policy these days between a nostalgia for being taken seriously in the past in a way that they think they weren't in the 90s and a desire to reject the past and be a different kind of European Western power, and they haven't really sorted out which that is. 

But in the interim, the desire to overcome what was agreed in the 90s I think has led to a kind of bristly, even snarling style that isn't just style.  It has a kind of substance to it and I'll give you two recent examples.  One is just from the past couple of days -- the way the Russians have handled the Kosovo independence.  Their man at the -- at NATO has said, you know, this -- it tears up the entire system of international law.  It may require us to use force.  Putin has said it's immoral and illegal and the result has been, I think, you know, to stimulate violence that they said they were not going to try to stimulate.  And they -- and the result is, you know, the prime minister of Serbia, Kostunica, is telling the crowds in Belgrade yesterday, "Putin is with us."  Now, you know, that is not the kind of interaction that we expected. 

A second one I'd give you is the way Putin talks about an arms race in Europe.  I was at a conference last -- I'll get back to Putin in a second -- I was at a conference in St. Petersburg last summer where the first Russian speaker began by noting that NATO had more tanks now than Hitler did on the eve of Operation Barbarossa.  Well, what is your point?  (Laughter.)  But that's common now -- this sort of sense that, you know, we are really not in any way taking for granted good relations.  Putin talks about an arms race in Europe that as far as I can tell is about one thing.  It's about these N interceptors and 10 radars that are going to be located in the Polish and Czech Republics.  It -- there's hardly anything else to it.  They pulled out of the CFE treaty saying that the West is engaged in a massive buildup while Russia's constrained.  It's -- there's something going on that I think does take some new thought.  I resist calling it the new Cold War but I think it's something we didn't expect.

MATLOCK: Well, whatever we call it, I think if we are going to think about what we do about it, it might be well to step back and say, well, where are our interests?  Where are our interests in dealing with it? 

Now, I would submit that in the security area, which does tend to trump everything else, there is no threat to the United States that takes precedence over the nuclear threat, particularly the threat that proliferation could lead to terrorists having nuclear weapons. 

I'm also convinced that we're not going to be able to deal effectively without (sic) that threat until we get the nuclear relationship with Russia back where it was in -- at the end of the '80s, the beginning of the '90s.  We have seen the whole process of reducing these weapons -- which is an obligation under the Nonproliferation treaty, fall victim to politics on other, in other areas. 

We have now abandoned, at the United States' insistence, the whole verification procedures that took us years to work out, and which the Russians were willing to accept.   We walked away from the ABM treaty even when they were offering to amend it, and talking about a joint program -- which, in fact, is the only thing that makes any sense. 

If you look at our own defense posture, you find that words like "global dominance," and so on, are very common.  And it seems to me that somehow we need to get that relationship back; to get these weapons reduced -- their very existence is a threat.  And we're not going to be able to do it unless we cooperate with the Russians in some way. 

There are other, you know, concerns that I would have, but I do put that first of all.  And it seems to me that some of the things that we're doing, such as trying to build interceptors in Poland, against missiles that don't even exist yet; and pushing the button -- a psychological one which, you know, in Gorbachev's time we finally were able to work through, and that is the Russian conception that missile defense is a cover for an offensive strategy.  It isn't true, but it is felt very deeply there. 

So this is pushing a button that is going to cause all sorts of reactions.  And I just wonder if you agree that this is a priority, and if we don't need a different way to handle it? 

LUCAS:  Well, I'm aware that the nuclear issue is one that divides people  at the dais can't hear enough about it.  And those for who we -- the eyes glaze over quickly -- (laughter) -- so I'm trying to be both, sort of, brief and accurate and interesting, all at the same time. 

I think that your -- I absolutely -- I absolutely agree that we've mishandled the nuclear relationship, and I argue in the book for a different course.  I think that it's, you know, the Kremlin line is that Russia is a fortress besieged by malevolent hypocrites.  And everything -- and anything we do that encourages that is bad and gives comfort to the -- to the regime. 

I think that one should -- we need to separate out some of the issues a bit.  And I think you're absolutely right, -- is not -- it is not in America's favor -- to America's advantage to have a huge dominance in nuclear weapons because it may make the Russians go over to launch on warning.  And that increases, at the very minimum, the danger of a, of an accident.  And I think that's a rather basic point that perhaps this administration has not judged. 

So I argue very strongly in the book that we should engage with Russia on these big, strategic questions.  I think we always have to be careful that our list of priorities don't turn into their negotiating strategy.  And there's always the danger that we say what we really mind about is this, much more than these things at the bottom of the list.  And they immediately think, well, we'll give some promises on that thing up there, and then we get Georgia, you know, as a prize.  And there's always -- you know -- so I think we have to be quite careful about not giving away principles. 

And I am arguing in the book for some quite sharp measures on issues of democracy and human rights, to put some distance between the past and present.  But, broadly, I -- you know, I couldn't agree with you more. 

MATLOCK:  Steve, you know, I think we're all concerned --

SESTANOVICH:  Can I just say one word about -- 

MATLOCK:  Oh, Yeah. 

(Cross talk.)

SESTANOVICH:  I think the -- my prediction would be that the Russian-American relationship will be, kind of, renuclearized in a way that both of you have suggested.  And I think the administration has been kind of slow to take advantage of some real opportunities that might exist there. 

I mean, as far as I can tell, they don't even -- they have an, quote-unquote, "negotiation" underway about the expiration of the START I treaty next year, but they don't have a proposal on the table.  No proposal on the table means, to me, not much of a negotiation -- (laughs). 

However, I would just say I think there may be some instrumental value in restabilizing the relationship a little bit by reintroducing this dimension.  But I'm less confident about it than I used to be, because I think their receptivity to the idea that you can -- that you can introduce a, kind of, basic stability in the relationship by agreement on these -- on strategic nuclear issues.  I think that's eroded. 

LUCAS:  Yeah, I agree. 

SESTANOVICH:  At any rate, you -- I just wanted to get in a word. 

MATLOCK:  Very soon we should bring in the members in the dialogue, but I was going to ask -- I think all of us are disturbed by the increasing authoritarianism, and many of the problems we all see in Russia.  But is there anything, effectively, the United States, or for that matter, the West can do to affect this as long as Russians seem predominantly to be willing to accept it?  I guess that's one question. 

Or, are attempts to make this an issue, perhaps they even backfire given the current atmosphere.  What's your -- what's your feeling?  Is anything -- if we decide we should do something about it, is there anything we effectively can do? 

SESTANOVICH:  Yeah, it's a good question, and I'll be really brief on it because I do want to turn to the next phase of the discussion. 

I think the phase of, sort of, Western commentary on Russian democratic progress and human rights performance is, sort of, over.  The phase that we began at the end -- toward the end of the Cold War has, kind of, played out.  And the idea that there's a lot of influence, just in moral opprobrium, is -- that one is not going to work for us as it has.  And it -- you know, we might as well think of something, of something new. 

If we're going to think of something new, the one thought I would suggest, as this, sort of, starting point for anything, is that it can't be an American attack on, you know, Russia's -- you know, the degree of Russian democratic virtue.  It has to be something more broadly agreed among democratic states, and particularly the United States and Europe. 

I would say that the administration, in general, has been weak in trying to develop a consensus with Europe about how to deal with Russia -- across the board, whether it's security issues, economic issues, political issues, democracy.  And that is now, I think, recognized by the Europeans as something that really does need to be on the agenda of the -- for the U.S. and the Europeans if they want to have any influence in the future. 

MATLOCK:  I think it's time we should open up the discussion. 

To members, if you would wait for the microphone, and state your name and affiliation. 

Let's see, Dr. Desai.

QUESTIONER:  Thank you.  I'm Padma Desai.  I'm the Harriman professor at Columbia University.  Two questions:  You cited Bulgakov, one of my favorite authors.  The election, of course, is predictable, but mystifying. 

Predictable:  Dmitry Medvedev, the very personable protege of Vladimir Putin, with 80 percent popularity rating among Russians; you put up three, four more candidates, it would still be predictable, in my view.  How would you react to that? 

Mystifying?  Why would it be mystifying? 

Think in terms of Putin's legacy, which he's passing on to his young protege -- the legacy saying Russia -- Russian will determine which way, in what pace, in what manner Russia will evolve into a liberal system.  This is his legacy.  Would you agree with that?

My second question -- Cold War.  I do not like the title of your book, but that is your -- (laughter) --

LUCAS:  So long as you buy it, I don't mind.  (Laughter.) 

QUESTIONER:  -- your privilege.

I mean, of course the Cold War was -- between the two nuclear superpowers, there was a deterrent which was operative.  But the Cold War actually was fought in poor Third World countries -- in Vietnam, in Afghanistan, in Angola.  Do you think there will be a revival of that kind of a scenario when you say, "Think of a new Cold War"?  Or do you see some kind of a robust pragmatism which Putin has brought forward in his foreign policy, maneuvering -- which he's saying, "Have dialogue with us -- negotiate, negotiate, negotiate because we have common interests?"  Russia, the United States, Western Europe, nuclear nonproliferation, terrorism control, bilateral nuclear downgrading -- isn't that -- I mean, would you agree with -- what kind of Cold War scenario do you --

MATLOCK:  Thanks.  Thanks very much.

LUCAS:  Look, I -- let me repeat again. I'm not saying we've got the old Cold War back.  I mean, there is a little bit of what one might call Russian mischief-making around the world in places like Venezuela.  But it is a pale shadow of the Soviet Union's global reach and I'm absolutely not arguing on that.  So let me just put that out of the way.

I think for -- I would disagree, really, with the -- on this basis of predictability and the other candidates.  We don't have a real political contest because the only media that matters is only reporting one candidate and, you know, I think the opposition in Russia is extremely weak.  It's just the sort of opposition the Kremlin would like, of no-hopers, never-weres, has-beens, chancers, freaks.  You know, this is the sad truth of it.  And the media -- you know, derides them and -- but it also -- you know, it's not a system that permits a real political contest. 

And so -- you know -- I mean, I think with -- they could have put up, you know, the Kremlin gatekeeper as a candidate.  And he would have -- you know, with that kind of media coverage he would -- you could make him look pretty good.  You know, Medvedev's clearly smart.  I'm not saying he's a nobody.  But I think -- you know, one just has to be realistic about this.  It's not -- you know -- and it is predictable.  And I think the idea that Russia is on a path to liberalism -- I don't see it.  You know, we have a mixture of the red, the brown and the white.  We have Soviet nostalgia, Stalinist version of history, the kind of youth movements -- all that.  We have something that might be called facism, a bit of brown.  We have a bit of white, which is, you know, the czarist era nostalgia. 

Now is that going to go orange or is that going to black?  I don't know, but I wouldn't bet on it going orange.

MATLOCK:  Steve, do you want -- (off mike.)

QUESTIONER:  I'm Timothy Towell, a retired Foreign Service type.

Why are we surprised about what Russia is doing and saying, and what Putin is doing and saying?  The president of the United States looked in Putin's eyes and saw his soul or whatever it was.  John McCain sees KGB, according to the New York Times.  That's fun.  But we're talking about Russia, Mother Russia, that fought against the Teutonic Knights with Alexander Nevsky, Catherine the Great, Peter the Great, winning the Russo-Jap War, scaring the Brits by going into Afghanistan and --

MATLOCK:  Losing the Russo-Jap War.

QUESTIONER:  Yeah, Russo-Jap War.  (Laughter, cross talk.)

Trying to get -- yeah -- Mediterranean ports, expanding into Eastern Europe -- why are we surprised?  What did we do in 1917?  We did what we're doing now, bagging money to the good guys against the bad guys and we sent -- had encouraged troops to go in there.  It was called capitalist encirclement. Do we have a new capitalistic encirclement?  How frightening for Mother Russia to have Europeans go and take the Baltics -- move into Poland, move into the Ukraine.  What is Stalin doing in his grave -- we're diddling around in Georgia, where Stalin was born?  There's a new term called pushback.  Are we surprised that there is pushback by this guy that has KGB eyes?  Is there anything surprising about this?

(Cross talk.)

LUCAS:  I really -- I really find that a bit -- I mean, I find that almost outrageous to say that Europe is pushing into the Baltics.  I'm sorry.  The Baltics are European.  You know, this is just -- I mean, this is -- I mean -- and I think this whole idea that Russia is somehow entitled by its history to be an imperial power and act in malevolent and destructive ways is both untrue and very unfair on the Russians. 

And I just -- can I just do a very quick quiz?  I'm just going to read out some names and I want to see who's here, because that -- probably in a way, the most important names in Russian history.  And we see who -- the first person to put their hands up will maybe get a special inscription in their book, okay?  (Laughter.) 

Tatiana Baeva.  Konstantin Babtsky.  Larisa Bogoraz.  Vadim Dealunay.  Any hands going up yet?  Excellent.  Okay.

It carries on just to say -- complete list, it's Fainberg, Gorbanevskaya and Litvinov.  Those are the eight Russians who, with incredible bravery, demonstrated in Red Square in 1968 against the Soviet invasion of Czechoslovakia.  They founded -- is that Ken over there?  Yes.  They founded the modern human rights movement.  There should be streets named after them. There should squares named after them. There should be statues all over Russia.  And we should not allow Putin to get away with his disgusting revival of the Stalinist version of history, which says that Molotov-Ribbentrop Pact was legal and was okay.  And when mainstream Russian media repeats that the Katyn massacre was done by the Nazis and not by the NKVD -- a lie that we thought was buried in 1990 -- you know, I totally would resist this 100 percent. 

MATLOCK:  Over -- back over here -- (laughter.)

QUESTIONER:  Andy Nagorski, Newsweek.

Edward, I have the advantage of having your book already -- (laughter) -- and as you know, I have -- you have one statement in there which I think is indisputable.  It says -- you know, the G-8 is supposed to be a group of industrialized democracies.  How does Russia fit in there in terms of the definition of the latter word?  Maybe this will give you a chance to respond to the last question, which I think Jack asked before about what should the West's response be is the implication there -- is -- should Russia be disinvited?

LUCAS:  Well, let me say yet again, I'm not advocating a blockade of Russia or boycott or Russian's isolation.  Our best hope is the continued integration of Russians in their daily lives into the law-governed multilateral free world.  But we -- and I know the Council of Europe is probably a body which occupies about 0.1 percent of your attention.  But it is -- and it is --

QUESTIONER:  On a good day.  (Laughter.)

LUCAS:  -- in a year.  (Laughter.)

And it is very -- it is the body which epitomizes the post-Cold War democratic free law-governed order in Europe.  And we let Russia in in the mid-1990s, when we were in an optimistic frame of mind.  It was probably the right thing to do, to take that gamble.  We suspended Beneroff (sp) on what now seems like a technicality of a rigged election -- a bit of restriction media freedom.  We know the country, which has revived the practice of the psychiatric incarceration of dissidents -- it's not just the rigged elections.  It's not just the assault on media freedom and the venomous anti-western rhetoric -- Putin describing America as the Third Reich -- this explicit rejection of western norms as being somehow not suited to Russia.  So I think we have to make a moral stand on that and say that Russia can no longer be a member of the Council of Europe.

On the G7-G8 thing, what I would argue is that we need a G12-13-14 of big countries to talk about global problems and Russia absolutely belongs in there just as Brazil does, and perhaps even more so as India does because that's not only big, but democratic as well -- and China, all the rest of them.  So let's have a G13-14-15-16 -- whatever.  And if there's going to be a democratic -- a caucus of democratic countries which maybe meets the day before, that's fine, too and that can be five, six, seven, eight, nine countries.  Maybe India should be in it.  But Russia certainly shouldn't. 

MATLOCK:  Yes.  On this side, we'll try one.  We'll come back here.

(Inaudible.)

QUESTIONER:  Jim Dingman (sp), IMN World Report. 

I'd like your assessment of how you discern the differences and dissimilarities of the various presidential candidates in the race towards their policies towards Russia.  And what is your assessment of Putin's policies towards the Middle East at this point? 

LUCAS:  Golly -- why don't you take that?  (Laughter.)

SESTANOVICH:  Well, I haven't noticed that Russia has been very high on the agenda in any of the presidential debates, so it's been a little hard to smoke out what the different candidates think.  It's been more a matter of the competing one-liners -- you know, doing riffs on eyes and souls and that sort of thing.  Hillary Clinton has had her own version of that.  John McCain has.  I'm sure Obama will come up with one eventually. 

And I think broadly speaking they have the same kinds of concern about Russian -- about Russian policy, stated in more or less similar position-paper-sounding way, which gives you some indication as to what an early administration policy review would look like, but I don't think it really tells you in detail what a new American policy would be.  I think it won't be the same as the current policy.

Russia and the Middle East -- there's a kind of variety of Russian objectives that they want to serve in the Middle East.  And that involves developing some loose gas OPEC; preserving good relations with states that might be a source of Islamic agitation inside their borders; developing high-tech cooperation with Israel; retaining a kind of seat at the diplomatic high table when it comes to the roadmap for Israeli-Palestinian peace.

I don't think they're a particularly big player in any of those games, with one exception that matters a lot to the United States, and that has been the effort to deal with the Iranian nuclear program.  And there I think there's a kind of schizophrenia in the Russian policy, which isn't so different from their schizophrenia on some other issue.  And that is:  Do they want to align themselves with the Europeans and the United States to add to outside pressure on Iran to take a different course; or do they want to be a separate diplomatic entity which can broker deals between the Iranians and the West -- at the expense of possibly reducing pressure on Iran?  And they just haven't really sorted that out.  You know, they said, well, we're dealing -- we're sending fuel to the Iranians to start up their reactor.  Doesn't sound good, but then they say, and we're managing -- we have arrangements to perpetuate or preserve that Russian presence there under joint venture.  Sounds like it could be good.

I think they are uncertain as to whether they want to be part of the West on this issue, or separate so as to maximize their role.

MATLOCK:  Yes.

QUESTIONER:  Bob Lifton, Medis Technologies.

There's a huge difference between the Cold War and today is Russia's economic position -- particularly with respect to energy and the energy they control and gas and the leverage they have with that energy and that gas. 

Would you comment on that in relationship to your view of the Cold War today?

LUCAS:  Yes.  Well, it's a very interesting contrast.  In a way, Russia is a sort of shrunken husk of the Soviet Union in terms of its part.  But on the other hand, they have used one of the remaining Soviet assets -- the monopoly on east-west gas pipelines -- rather effectively.

Now, in a way that's very odd, because Europe is so much bigger, freer, stronger, more attractive, richer than Russia.  Why is the Gazprom tail wagging the European dog?  And the answer is that European collective bargaining, collective security on energy lacks credibility and it's therefore very tempting for countries to go and do their own bilateral deals with Gazprom, allowing Gazprom to buy downstream assets in Western Europe and entrenching the vertically integrated energy monopolies there.

In a way that's really quite alarming.  And you know, I list in the book -- I think, you know, I mean just in Western Europe you've got Italy, Austria, the Netherlands, Germany all doing, you know, doing deals with Gazprom.  And what's left of the European energy promise of building the Nabucco pipeline looking, you know, it's turning into just a kind of a pencil line on a map.  And it's a big -- you know, it's one of the big recommendations that I'm making is that we have to get our act together on that, because if we don't we just -- it's -- (speaking in foreign language).

SESTANOVICH:  Can I have one thing on this?

I do think that the Europeans' inability to actually develop coordinated policies that they can enforce in the area of energy is a very revealing weakness of how little the Europeans have actually advanced toward being the kind -- you know, a nation state style player in international affairs.

But I do think that U.S. policy has been very negligent here in not trying to play a role to add to -- to increase coordination among the Europeans.  It basically treated energy as a European problem and that seems to me to have had predictable consequences.

QUESTIONER:  Bruce Gelb, Council of American Ambassadors.

Mr. Sestanovich, I think you characterized Russian policy as having to do with you have to look strong, otherwise no one takes you seriously.

Yesterday I took somebody seriously when I looked in the papers and saw the picture of the American embassy in Belgrade in flames.  And the comment that you made coming out of Belgrade that Mr. Putin, in effect, is on our side leads me to the question:  How much involvement do you believe Russia is going to have in the next week, two -- or month or two -- in terms of dealing with the Kosovo problem and Russia's position relative to Serbia?

SESTANOVICH:  I'm afraid it looks as though it's going to be larger than they had said -- made us think in advance.  They've gotten a little carried away by the sort of drama of the moment.  You know, there's famous phrase of the prince of Montenegro in the 19th century:  We and the great Russian people are 150 million strong.  (Laughter.)

I mean, in the end I don't think it's going to help Serbia very much that Russia is on their side, but the Russians are certainly stoking the situation up rather seriously.

LUCAS:  If I could add a bit very briefly on that. 

I don't think Russia really cares about Serbia at all, but it's a wonderful way for them to -- sorry -- to do things that they like.  It's a bit like missile defense.  They don't really care about missile defense, but it's a good way of dividing Europe and separating Europe from America, and that's exactly what they've got over Kosovo -- some European countries recognizing, others not and quite a lot of Europeans -- quite wrongly, in my view -- blaming the whole thing on American intervention to support Kosovo in the first place. 

So Russia's policy is very opportunistic.  It's not -- this is not principled Slavic solidarity, but it is proving quite effective -- at least in the short term.

MATLOCK:  Yes, the gentleman here.

QUESTIONER:  David Phillips from Columbia University.

No speeches here, just a quick question about Russian-Georgian relations.

The Russian government was threatening to draw a parallel between the West's recognition of Kosovo and its potential recognition of Abkhazia and South Ossetia.  Given its full-throated support for international law, it doesn't look like that's going to be the case.  Do you agree?

LUCAS:  Yeah.

QUESTIONER:  And how do you think that Russian and Georgian relations are going to go forward, given the continuing nuisance of the Georgian president in Moscow?

LUCAS:  Well, I think it's -- first of all, Russia -- I think Russia will not recognize any of the three puppet states, because it's too dangerous for Russia.  Russia has far more -- (background noise) -- more, as they put it, separatism.  It's the principle of ethnic self-determination.  It's very threatening to them.

What they are doing quite effectively is using South Ossetia and Abkhazia to try and provoke the Georgians into doing something stupid.  Now, I would like to say that the Georgian president is a very levelheaded man with a wide circle of advisors who ponders deeply before taking decisions and very rarely puts a foot wrong, so therefore this track is not going to succeed.  Unfortunately, I can't say that with as much confidence as I would like.  (Laughter.)

MATLOCK:  Yes.  The lady here.

QUESTIONER:  Thank you.

Joanna Weschler, Security Council Report.  Like my neighbor here I haven't read, unfortunately, your book yet but I spend a lot of  time watching the Security Council of the U.N. as my organization's name indicates and I wanted to ask you -- and I don't know whether this is addressed in the book -- whether or not you are also worrying about the new Cold War taking place in security issues and specifically in the Security Council because my own observations would indicate that we are perhaps going back -- we are not there yet but going back towards something resembling the Cold War dynamic in the Council, and some members canceling themselves out and just being stalled.

LUCAS:  I hope you're -- I fear you're right.  I hope you're wrong.  Steve maybe would answer in more detail.

SESTANOVICH:  Well, I think there's definitely a trend in that direction but I wouldn't exaggerate the contrast between this decade and the 90s, for example.  In the 90s, it was because the Russians were clearly going to veto any resolution on Kosovo or before that on other Yugoslav issues that you ended up having NATO take decisions on its own without a -- without any U.N. -- without any agreement within the Security Council, and the same pattern was more or less evident on issues involving Iraq.  You were not able to get Russian support, and some of those cases -- some of those stalemates involved rather similar motives from ones that you have today -- commercial or nationalist. 

We had -- we had that kind of -- we've seen that deadlock before.  What's different now is the -- is the desire not merely to, you know, stand their ground in disagreement with Western positions in the Council but to -- I mean, the case of Kosovo I think take a much more inflammatory line than they did in the past.  Remember, the Russians participated in diplomacy to try to end the war.  Right now I would say the approach seems somewhat different.

QUESTIONER:  Thank you.  Tony Holmes, the Cyrus Vance Fellow here at the Council.  With regard to what Dr. Sestanovich said a few minutes ago about Russia's role as a nuclear supplier to Iran and harking back to what you said earlier about the lack of present engagement between the United States and Russia in terms if its own denuclearization, do you think it's possible to marry the two issues and to try to get a creative new avenue to engage with the Europeans and Russia on the denuclearization or the dismantlement of Iran's nuclear program by starting off with a considerable denuclearization on part of both Russia and the United States and doing what the rest of the world believes we've already committed to do in terms of the nonproliferation treaty, and use that as a means to attack the Iran issue?

SESTANOVICH:  It sounds good but I wouldn't hold out too much hope for it.  It seems to me it puts a lot of weight on the idea that the Iranians will play ball when they see the other major powers united against them.  There might be some greater inclination on the part of the Iranians to feel under pressure but they -- you know, a couple years ago when Putin floated his proposal to handle enrichment for the Iranians outside of Iran, the Iranians, you know, played him along and eventually convinced the Russians that they were just dealing totally in bad faith on this and so the Russian initiative kind of collapsed.  There are a lot of elements of this that one could try to put together.  I would be inclined to think there might be more hope of using nuclear issues to kind of stabilize the rest of the relationship although as I said earlier I think they're -- I have less confidence in that than I used to.  But I wouldn't expect a big payoff in the case of Iran.

MATLOCK:  I have one over here.  This is probably going to be the last question.

QUESTIONER:  Jeff Laurenti with the Century Foundation.  I wonder if you could tell us to what degree there has been pushback from within Russian society at this gray reversion to Stalin-era fairy tales, if I may use that term, about cutin (ph), about -- and about the whole history of the Soviet era, and to what extent is the West -- Europe, much less the U.S. -- in any position to try to steer back to an emphasis on human rights and facts in the face of what appears to be a concerted effort -- is it from the top or from the old nationalist sector, so-called grass roots in Russian society, that has been pushing the reversion to the fictitious history of the mid-20th century?

LUCAS:  Yes.  Nice cheerful note to end on.  (Laughter.)  I think in a way this is one of the front lines of the new Cold War is the fight over history and to try and rebut this, and there are things we can do and a lot of it's on the Internet.  You know, in the old Cold War, we used short-wave radio to try and get our message across and they could block that.  It's much harder to block the Internet.  And if you read Russian, even more so if you can write in Russian, I do recommend you to go onto the Russian language Wikipedia, for example, and look at the talk page on things like cutin, Molotov, Ribbentrop, Stalin, Estonia -- you know, every bit of contested -- because the arguments are happening right there and I think we can -- and we can both get in and make our point.  And I also think there's more we can do to get all the historical documents that are available online.  PDF them -- make them available so that enquiring minds in Russia can just reach out and see that there is an alternative version. 

And also, if you do read Russian I do recommend that you try and get hold of the some of the modern history textbooks.  It is really alarming and this is as if you had, you know, German textbooks saying that the Anschluss and the Munich Treaty were legal and leaving out the Holocaust.  You know, this is really, really dangerous stuff and I -- as a final note, I mean, I -- when I'm feeling optimistic I think they -- the people in the Kremlin are just corrupt and they've just invented this whole nationalist hooey in order to justify stealing tens of billions.  When I'm feeling more -- when I'm feeling more pessimistic I think they actually believe it.  But either way, it is leaching into the Russian mindset and it's going to be some time before it works itself out.

SESTANOVICH:  One sentence to add to that that's separate from the issue of historical truth -- it's just do -- are there Russian criticisms of the foreign policy which raises doubt as to whether this has been productive or successful.  There are not very many but there are some, and you can read them in the Russian media, by the way.  The -- you know, Russian newspapers are full of criticisms of -- which are allowed because not very many people can read them -- criticisms cautious but nevertheless firm about the tone and style and content of Russian foreign policy, particularly on some of the European issues that we've talked about, raising a question as to whether they really advance Russian interest.  But these are very much at the margin.

MATLOCK:  I think we have maybe time for one more if it's very short.  (Laughter.)

QUESTIONER:  Vill Vannon (sp), Roosevelt Institute.  Do you accept that the missile threat from Iran justifies our proposed action in Czechoslovakia and Poland?

LUCAS:  Well, it's an interesting question.  I'm reminded a little bit of the cruise missile argument in the 1980s -- that there was this feeling that there was a -- it would -- this would kind of emphasize America's commitment to Europe by putting medium range missiles in.  It actually came with Helmut Schmidt's request in a way with the best of intentions.  It ended up with dividing Europe and stoking anti-Americanism.  And I feel a bit the same about missile defense.  I mean, obviously the threat is a long way away.  One can argue that some of the lobbying for this is done by companies that will make money out of it and my own feeling if I was American I'd be more worried about Iran sending a war -- a nuclear device by FedEx than I would by sending it through a missile.  But leave that aside -- clearly the Russian hysteria about this, I think, is actually preposterous.  They're far more worried about China and they're far more worried about, you know, Muslim demographics than they're actually worried about NATO.  It's a great issue for them because as I said before it allows them to divide Europe and stoke anti-Americanism.

QUESTIONER:  But is it preposterous -- excuse me -- is it preposterous for the Russians to react by saying that it -- since there is no threat, there must be another purpose?

LUCAS:  Well, with a new --

SESTANOVICH:  Yes.  Yes.  I'll just give you a simple answer to that.  Yes, because it's -- it is so fragmentary.  It has no ability to, as the Russians constantly say, neutralize their deterrent.  We're talking about 10 interceptors.  The idea that because of that you're going to be targeting which, you know, I really can't -- cannot see the military significance of vis-a-vis the Russian's strategic nuclear deterrent.  It's tiny.  It is -- I mean, I'm not -- it really might not be adequate even for a future Iranian threat but it surely has no relationship to a Russian threat which is, you know, which involves missiles --

MATLOCK:  Well, what they worry about is the foot in the door and also as I've said it was very clear when we were discussing SDI the Russian conception of it is quite different.  They really do see it as a cover for something offensive.  This happens not to be true but we should be dealing with perceptions.

LUCAS:  But unlike --

MATLOCK:  And when there is no need for it -- and there is no need for it -- it can only be seen as essentially a provocation by the Russians.  And I think, you know, I think that's why they're --

SESTANOVICH:  It's not that that can only be seen this way.  It's that they have to make a decision about how they're going to see it --

MATLOCK:  Oh, sure.

SESTANOVICH:  -- and they've decided to see it in a different way and to really exaggerate the threat in a way that I think they -- they understand the choice.

MATLOCK:  Yeah.  Well, that's right.  Other people never exaggerate threats. 

I think we better -- (laughter) -- I think we better close with this.  Thank you very much.  It's been great. (Laughter, applause.)

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