Cold War II: Gazprom v. Monsanto. By Noah Abbott and Stevin Azo Michels

In looking at the current crisis in the Ukraine, it is impossible not to see the connection to gas and oil. Gazprom, Russia’s national gas company, is not only the Russian oligarch du jour, but seems to benefit whenever any smaller company dares to speak ill of the ‘Putin machine’. An illustrative case of Gazprom’s consolidation of power is the Yukos Oil Fraud scandal in 2003. Yukos, one of the largest companies that emerged from the privatization of Soviet state assets, was owned by Mikhail Khodorkovsky, at one time Russia’s richest citizen and perennial Forbes billionaire list-topper. Despite profiting immensely from the shift in political and economic structure after the dissolution of the Soviet Union, Khodorkovsky’s (and Yukos’) fortunes shifted in the blink of an eye, as they were forced into the maw of the hungry, government-fed, giant Gazprom.

As punishment for supporting opposition candidates, Khodorkovsky was taken into custody by police to act as a witness, and then subsequently charged with fraud. This raised the ire of many domestic and international bodies, including the European Court of Human Rights, which alleged that Khodorkovsky’s arrest was in violation of the European Convention for Human Rights as it was arranged under false pretense. Yukos was then served an astronomically high tax bill and given one day to pay it. They were refused any sort of deferred payment option or alternative arrangement, and after a failure to pay, the company was seized by the government and sold at auction to, of course, Gazprom. Although the company has recently lost some ground, as recently as 2008 Gazprom accounted for roughly . At first glance one may see this as a simple reminder of the corruption rampant in Russia, but it is also indicative of the undue influence that power and money have on one another.

So what happens when the lens is focused on America and the power structure there? It isn’t hard to show direct links of influence between many industries and the political establishment. One example is the pharmaceutical industry and its influence on medical industry and government regulation. Big Pharma spends more annually on advertising than research. Laws allow these companies to pay settlement fines without admitting wrongdoing, in one case alone $301 million. This allows them to continue these dangerous practices and reap billions in profits. Those profits pay taxes and those tax dollars and settlements grease the Washington machine. Like Moscow and its relationship with Gazprom, no one in Washington will be killing the golden goose anytime soon.

Beyond the drug industry (and even the banking industry), another company comes up in conversation, polite or otherwise, more often than any other when focusing on the power influences at the highest levels: Monsanto. Monsanto has spent almost $60 million over the last 10 years on lobbying. In 2012 alone, they spent $8.1 million opposing the disclosure of genetically modified foods in California. Many government officials are later hired by Monsanto and high-level Monsanto employees, e.g. Donald Rumsfeld and Clarence Thomas, later serve in government. The case has been particularly vitriolic where Barack Obama is concerned as there has been an ever-expanding dossier of new GMO crops being ‘allowed’ to enter the US food pool on his watch.

In the discourse regarding Monsanto’s governmental influence, one can codify two central arguments. One holds that the confluence of former Monsanto employees and government officials leads to undue influence by current employees and a lack of care being taken to protect the public. The other suggests that having former high-ranking employees as officials is necessary to fully comprehend and develop legislation. These arguments are not dissimilar to those used to question the former banking industry officials now part of the Federal Regulatory commissions. In efforts to win in the court of public opinion, Monsanto even has a web page devoted to their take on the argument.

In the case of Monsanto, could it be simply be the timetables of history and science colliding? In other words, as this is fairly new technology, perhaps this would be happening regardless of who is president. Could then the confluence of Gazprom influence in Russian politics also be a feature of newly found resources in Russian territory? How do the systemic and political cultural differences in the US and Russia influence the operations of large corporate entities?

One main difference is that Russia actually owns 50% of Gazprom whereas the US government is merely reliant on profits from its major corporations. In the US, Monsanto has a larger and more developed web of regulations and legal frameworks to navigate. At times, these regulatory apparatuses have forced Monsanto to perform some corporate gymnastics. For instance, as Monsanto pivoted its corporate structure towards biochemically produced seeds in the early 21st century, it was forced by the Department of Justice to divest itself of its cotton and swine businesses before receiving approval to absorb a large seed manufacturer into its sprawling corporate structure. Monsanto has also used America’s legal system to their advantage, aggressively pursuing farmers and businesses for infringement of seed patents and “bio-piracy.” Gazprom on the other hand, operates in a much “younger” regulatory climate, and a political culture that tends to follow the mantra that “it’s better to ask for forgiveness than permission.”

In a sense, Monsanto and Gazprom are two corporate entities that give great insight into the political machinations and culture of their respective countries. In America, the land of virtually unchecked corporate power, the case could be made that Monsanto is a power player that uses (or at least engages) politicians and governmental and legal frameworks to serve their goals. In Russia, the land of virtually unchallenged government dominance, the opposite is true – Gazprom is a tool used to further the agenda of Putin’s powerful government. In both cases however, it illustrates the ultimate power of the ruble and the dollar.


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