Caspian Watch # 10: Russia Makes Its Move In Yeltsin's 'Pipeline War'

(Washington, D.C.): With official Washington completely absorbed with the prospects for
renewed conflict with Iraq and President Clinton’s deepening personal problems, the
timing and
source of ominous developments in the Caspian Basin are not getting the U.S. attention
they require. It would appear, as the Communists were wont to say, that this is “no
accident,
comrade”: Russia is actively exploiting — if not actually abetting — the turmoil in
both the Persian
Gulf and the southern Caucasus regions.⁽¹⁾

Signposts for Moscow’s Bid to Control Caspian Oil

The most recent of these developments was the massive effort mounted for the purpose of
liquidating Georgian President Eduard Shevardnadze. Senator Sam
Brownback (R-KS),
chairman of the Foreign Relations Committee’s Near Eastern and South Asian Affairs
Subcommittee, described the attack in a speech delivered on the Senate floor on 10 February:
“According to Georgian authorities, the attempted assassination was well-planned and
well-executed by as many as thirty well-trained assailants. They were armed with
rocket-propelled
grenades and automatic weapons.”⁽²⁾

This second effort to murder Mr. Shevardnadze followed an earlier assassination attempt
against
Azerbaijan’s President, Heydar Aliyev, on 2 February. According to
Glen Howard, an analyst
for Eurasian Affairs with Science Applications International Corporation, the latter incident —
which has not been reported widely in the press — involved a bomb discovered in a sport hall just
before President Aliyev arrived to deliver a speech there. Of the planned attack on President
Aliyev, Sen. Brownback said: “Azerbaijan’s President Aliyev was also the object of an
assassination attempt in recent days, which Azerbaijani authorities believe was planned and
executed by outsiders.”

Sen. Brownback went on to make the critical strategic connection:

We should be mindful that these cowardly acts may be part of a plan to
destabilize the Caucasus with the intention of scaring off American and other
investors who seek to bring the Caspian’s great energy wealth west to
international markets.

“Who benefits from promoting instability in the Southern Caucasus at this
time? Russia is everyone’s leading candidate as the outside power with the
most to gain. Russia has long raged and conspired to thwart Caspian energy
from flowing any direction but north through Russia. Most parts of Russia’s
political elite still view Caspian wealth as their own. The suspected perpetrator of
an earlier assassination attempt on Shevardnadze remains under Russian care
despite vociferous demands from Georgia that he be extradited. Russia still has
bases in Georgia from which yesterday’s attack could be planned and staged.
None of this is proof of Russian complicity, but strong suspicion of Russian
involvement will not go away quickly. The U.S. government should make
every effort to learn the truth.“

We’re Not Making This Up

Sen. Brownback may be one of the few American political figures willing to speak out
truthfully
and forthrightly in an era of half-truths and appeasement of Moscow. That does not mean that his
concerns are unfounded, however. In the aftermath of Mr. Shevardnadze’s latest close-call, the
Georgian President himself declared that, “Very powerful forces are interested in a different
solution of the question linked to the transportation of oil through Georgia.” Precisely who
Shevardnadze thinks these “very powerful forces” were is made clear by actions reported by
Russia’s Interfax news service:

Interestingly, further evidence supporting the suspicion that Russia was behind both of
these
attacks comes from none other than Russian president Boris Yeltsin, himself. According to
Deutsche Presse Agentur of 10 February, “Tuesday’s Moscow Daily
Segodnya, typeset before
the attack and referring to a weekend interview in an Italian newspaper, wrote that Yeltsin
had ‘apparently realized that the use of Caspian riches is no longer a joking matter’ and
Russia’s interests must be defended.” (Emphasis added.) In another Italian press
interview
which appeared in the Corriere della Sera of 8 February — the day before the
Shevardnadze take-down attempt — Yeltsin used the term “pipeline war” to
warn against “the hullabaloo that some
Western countries are raising over problems of the energy resources of the Caspian Sea. Some of
the statements do not seek to conceal the goal of bypassing Russia and infringing
on its national
interests.” (Emphasis added.)

Why Russia Moved

Progress on a Non-Russian Pipeline: On 1 February, Washington
Post columnist Lally
Weymouth published interviews with both Azerbaijan’s Aliyev and Georgia’s Shevardnadze. In
the former interview, Weymouth posed the following key question: “The Clinton Administration
favors an oil pipeline running from Baku to the Turkish port of Ceyhan. Do you?”
President
Aliyev responded, “Yes, I favor it. I think most of the oil extracted from the Caspian Sea
should go to Ceyhan….It is true that this line is not favorable for Russia. They are trying to
make us export most of the oil through their territory.“ (Emphasis added.)

Ms. Weymouth asked President Shevardnadze a similar question: “Do you envision Georgia
having a part of the Main Export Pipeline (MEP) planned from Baku to Ceyhan?” Shevardnadze
responded, “I think we have every ground to believe that the MEP will go across
Georgia.”

Possible Armenian-Azerbaijani Entente: In recent months, the President of
Armenia, Levon
Ter-Petrossian, evinced increased willingness to embrace the so-called Lisbon Principles, an
initiative of the Organization for Security and Cooperation in Europe (OSCE) aimed at achieving
a resolution of the conflict in Nagorno-Karabakh in the interest of bringing peace and prosperity
back to the region. According to a distinguished Center Board Member and regional expert Paul
Goble: “Those [Lisbon] Principles read out by the Chairman at the OSCE Summit in 1996, call
for the restoration of Soviet-era borders, broad autonomy for ethnic Armenians in the disputed
region of Nagorno-Karabakh and international guarantees of such a settlement.”

If Armenia actually were to have embraced the Lisbon Principles, enormous momentum
would
have been imparted toward a regional settlement. This would have, in turn, created conditions for
construction of a secure Main Export Pipeline from Azerbaijan via Georgia to the Turkish port of
Ceyhan. The Russians, as members of the so-called Minsk Group (together with United States
and France), were intimately familiar with the progress being made under that Group’s auspices,
toward reconciliation between Armenia and Azerbaijan.⁽³⁾
They saw the warning signs arising
from the improving U.S.-Azerbaijani relations marked by President Aliyev’s successful visit to
Washington last summer and the arrival at the National Security Council of former U.S.
Ambassador to Georgia William Courtney, who is the Clinton Administration’s
designated point
man on Caspian matters.

As it happens, even before the Aliyev and Shevardnadze assassination attempts were
mounted,
another development of great strategic import took place in the region: President Ter-Petrossian
was forced to resign. He was induced to leave office under pressure from Prime Minister Robert
Kocharyan and his supporters committed to consolidating the fruits of Armenia’s aggression
against Azerbaijan over the disputed enclave of Nagorno-Karabakh. href=”#N_4_”>⁽⁴⁾

The prospect that Ter-Petrossian’s resignation will now lead to renewed conflict — with
crippling
effects for a non-Russian MEP — increased in its aftermath when Armenia’s Justice Ministry
removed a ban in effect since 1994 on the nation’s main opposition party, Nationalist Dashnak
Party (NDP). According to the Financial Times of 10 February, the NDP was linked
“with drug-trafficking and terrorism.” This contribution to the re-radicalization of Armenia could
reverberate
far and wide in the Caspian Basin.

The Bottom Line

While the Clinton Administration has, of late, begun to give greater attention to the enormous
strategic stakes (e.g., as much as 200 billion barrels of oil valued at some $4 trillion) in the
Caspian region, its present preoccupations — both domestic and foreign — have endangered such
progress as was being made to protect vital U.S. and Western interests there. Clearly
Yevgeny
Primakov and his ilk in the Kremlin have taken the measure of U.S. inaction and
distraction. They are indisputably moving to exploit and fill the resulting vacuum with
vintage Soviet-style brazenness and ruthlessness.⁽⁵⁾

It behooves the United States, therefore, to take a number of steps to prevent a debilitating
defeat
in the “pipeline war.” These include the following:

As the Center has argued since 1996,⁽⁶⁾ the
discriminatory Section 907 of the Freedom
Support Act should be repealed immediately. This would be accomplished by “The
Transcaucasus Peace, Stability and Democracy Act,” cosponsored by Reps. Peter King
(R-NY), Lee Hamilton (D-IN) and Dan Burton (R-IN).

A bill entitled “The Silk Road Strategy Act,” introduced last year on the
Senate side by Sen.
Brownback, deserves urgent support as well as it would advance regional stability. href=”#N_7_”>⁽⁷⁾

Congressional hearings should be urgently held in the foreign relations
and intelligence
committees aimed at exploring all of the elements of the emerging crisis in the southern
Caucasus and Caspian Basin — as well as the implications of Russian involvement there for
U.S. energy, financial and security concerns.

President Clinton should communicate with President Yeltsin for the
purpose of serving
notice that further official or unofficial Russian attempts to destabilize the region (including
actions attributed to “rogue” Russian elements, a favored and deniable Russian gambit) will
precipitate economic and political retribution.

The U.S. should announce that it plans to bolster substantially U.S.-related security
assistance to Azerbaijan and Georgia, including the shipment of surplus military
equipment
and anti-terrorist training.

Washington should call publicly for an expansion of joint exercises in the
region and the
strengthening of the so-called Eurasian battalion comprised of Ukrainian, Azerbaijani and
Georgian forces.

Finally, high-level executive branch and congressional delegations should be
dispatched
to the regional capitals forthwith to assert America’s keen interest in the Caspian Basin
and
its determination to stand with the nations of that region in their pursuit of economic and
political independence from Moscow.

– 30 –

1. For more on the connection between the Iraqi and Caspian
dimensions of the Primakov
Doctrine, see the Center’s Decision Brief entitled Caspian
Watch # 9: Emboldened By Iraq
‘Victory,’ Russia Intensifies Effort To Undermine Azerbaijan ( href=”index.jsp?section=papers&code=97-D_180″>No. 97-D 180, 26 November
1997).

2. Georgia’s Iprinda news agency reported that ten anti-tank grenades
had exploded and four
unexploded grenades had been found at the scene. The Financial Times added:
“After the
fifteen-minute gun battle between bodyguards and the attackers, the wreckage of Mr.
Shevardnadze’s armored black Mercedes was incinerated inside and had a huge hole in the
bonnet. The hulks of four other cars belonging to the security service lay some 100 meters behind
the president’s car.”

3. Russia’s use of its participation in multilateral organizations for
subversive purposes is much in
evidence in today’s Washington Post. An above-the-fold, front-page article entitled
“Did Russia
Sell Iraq Germ Warfare Equipment?” describes how Russian inspectors assigned to the UN
Special Commission on Iraq (UNSCOM) repeatedly tipped off Saddam Hussein’s government so
as to foil efforts to search suspect sites. Not content with sabotaging UNSCOM’s inspections,
the Kremlin apparently was involved in transactions in 1995 that actually provided the Iraqis with
prohibited biological weapons-related equipment and technology.

4. The prospect of leaving office feet first may have
concentrated Mr. Ter-Petrossian’s mind on
the wisdom of resigning. On 19 January the Chief of Security for the Armenian President was
fired upon in an ambush outside of Yerevan. The very next day, a bomb was discovered under an
Armenian Embassy vehicle in Moscow which was diffused.

5. For example, in addition to assassination and intimidation, a
favorite practice in the old Soviet
playbook was the use of energy embargoes to leverage political outcomes
(e.g., Ukraine, the
Baltic States, etc.). Interestingly, the BBC Summary of World Broadcasts for 13 February 1998
reported that: “Russian custom officials have stopped the Azerbaijan International Operating
Company (AIOC), the executive arm of the Western-led consortium developing three Azerbaijani
Caspian oilfields, from transporting oil along the Baku-Novorossiysk pipeline, Sharg news agency
reported on 7th February. It said the Russian officials had halted the operation on the grounds
that the AIOC had failed to prepare the required documentation and neglected the necessary
customs formalities for pumping contract oil across Russian territory. So far only 8,000 tonnes of
contract oil have crossed the border while more than 45,000 tonnes in all have been pumped into
the pipeline, the agency said.”

6. See, for example, the following: Caspian Watch # 3:
Center, Washington Post Agree —
Congress Must Do The Right Thing By U.S. Interests in the Caspian Basin ( href=”index.jsp?section=papers&code=96-D_76″>No. 96-D 76, 1
August 1996); Caspian Watch # 6: Weinberger Issues Timely Alert Against
Interest Group’s
Highjacking Of U.S. Caspian Policy (No. 97-D
66, 12 May 1997) and Caspian Watch # 7:
President Aliyev’s Visit Should Translate Into The ‘Beginning of a Beautiful
Friendship’
(No. 97-D 107, 29 July 1997).

7. See the Center’s Decision Brief entitled
Caspian Watch # 8: ‘Silk Road’ Legislation Opens
New Opportunities For U.S. Strategic, Commercial Interests In The Caspian
Basin (No. 97-D
157, 23 October 1997).