An extraordinary new low in the annals of online journalism was plumbed by the Huffington Post on 12/27/13. It wasn’t just the fact that it was a commercial masquerading as an op-ed piece masquerading as a news story that was so shocking, but that the purpose of the commercial was to bilk Americans out of their hard-earned incomes in order to line the pockets of the corrupt, America-hating Russian Kremlin. Happy New Year’s from HuffPo, Mr. and Mrs. America!
The author of the piece in question was one Shai Baitel, identified on the HuffPo website as an expert on Middle Eastern politics. So, quite predictably, the topic of the article was the Russian economy.
Should you take the time to search for them, however, Baitel’s credentials turn out to be in fact neither in Middle Eastern politics nor in Russia nor in economics. His HuffPo bio reads:
He served at the United Nations and at the Israeli Ministry of Justice’s Department of International Agreements and International Litigation in legal positions. Mr. Baitel holds an LL.M in International Law and is a member of the International Law Journal. He graduated from Tel Aviv University with honors, earning a degree in Law and Modern History of the Middle East.
In other words, Baitel appears to be some kind of Israeli jurist who knows a bit about Middle Eastern history. How that qualifies him to advise Americans about Russian economics is anyone’s guess.
His article is essentially a commercial for the Russian investment bank VTB Capital, telling Americans how great it is and how underestimated the Russian economy is and urging them to plonk their money into VTB’s coffers. Those coffers, by the way, are in the Kremlin, because over 60% of VTB is owned by the Russian government (one of many facts Baitel chooses not to reveal to his readers). It’s the second-largest state-owned bank in the country. And Baitel’s article reads almost like he is working for them.
Ostensibly, he’s not. HuffPo says he’s a “Fellow in the Program on Applied Decision Analysis at the Lauder School of Government, Diplomacy and Strategy, at the Interdisciplinary Center” in Herzliya, outside of Tel Aviv in Israel.
But Ronald Lauder is hip-deep in Kremlin connections. As the Financial Times reported back in 2009, the “scion of the Estée Lauder cosmetics empire [was] to forge a $2bn venture with the Moscow city government to manage and revamp the capital’s hotel business in time for Russia’s hosting of the Winter Olympics in 2014.”
So who knows what type of influence VTB may have at Baitel’s employer, or what connections he personally may have to the bank?
Baitel begins his piece with an unsourced quote from Paul Swiggert, CEO of VTB, insisting that the world is missing the real truth about Russia by focusing on the fact that its economy and stock market showed almost no growth last year, that its currency is down one-third from 2008, and that the Kremlin itself admits things won’t change for the better for at least a decade.
Baitel then works feverishly to try to prove Swiggert is right and the world is wrong.
Claiming to have spoken “with sought-after experts” most of whom are employed by VTB, Baital begins by asserting that since many rich Russians are moving to New York, this proves Russians like Americans and can be trusted as investment partners. Never mind that Russia is buzzing the U.S. shores with nuclear bombers and inciting hatred of the USA throughout the globe, there are some rich Russians living in New York City! You think I’m kidding? Read it for yourself.
And when deciding to invest in Russia, Baitel make it clear there could be no better partner than VTB. This is what passes for “journalism” at HuffPo these days:
When a VTB manager such as Jyrki Talvitie, Senior Vice President and head of the bank’s Investor Relations Division shares his economic views people listen. Paul Swigart, CEO of VTB’s U.S. investment banking arm weighed in as well. After all, they have expertise in Russia and the CIS, as the No. 2 bank in Russia, uniting 15 banks in the Russia, the CIS, Europe, Africa, and Asia. They also have around 20 financial, investment and other companies offering services to customers in 20 countries.
Baitel goes on to tout a recent bond placement by VTB, deals which he says “successfully support VTB’s objectives in the United States, namely to be an important and profitable distribution hub that plays an key role in their capital markets activities, to reach U.S. clients, and, more fundamentally, to bring VTB closer to the Western investment community.” And he breathlessly announces: “the Russian banking sector — relatively small in relation to its GDP — is bound to continue its growth at a faster pace than the GDP, catching up to reflect its actually [sic] performance and role in the country’s economy.”
While delivering this shameless propaganda diatribe, Baitel chooses to completely ignore the wave of bank failures that swept across Russia in 2013, terrorizing investors and critically undermining his claims about the fundamental soundness of Russia’s financial sector. The problem was so pernicious that even the Kremlin’s own English-language propaganda mouthpiece Russia Beyond the Headlines reported it.
But just ignoring critical facts was far from enough for Baitel. Soon enough, the shameless disinformation started. Baital claimed that the World Bank was projecting economic growth for Russia of 3.1% next year, making this year’s miserable 1.4% growth (a figure down two-thirds from what was expected by the World bank at the start of the year) more palatable and asserting that his “experts” believed the Putin regime was taking “the right steps to spur growth long-term.”
But he was simply lying. Nearly two weeks before Baital went to press, the World Bank had already revised the 3.1% projection downward dramatically, to just 2.2%, a massive one-third cut before the year has even begun. Baital simply lied about the World Bank’s position in favor of pure propaganda, going on to call Russia’s economy “dynamic and robust.”
Baital then touts the fact that Russian “underlying” inflation is “only” around 5%, a figure that would be viewed as a crisis in the United States, and predicts “headline” inflation will drop from its current 6.5% to that same level next year. Amazingly, Baital completely ignores the news that Putin is so panicked over the prospect that inflation will skyrocket next year that he’s planning a draconian set of price controls that will further choke off economic growth.
Finally, recklessly ignoring the fact that Russia’s currency has lost one-third of its value since 2008, Baital laughably quotes his “experts” proclaiming that it may soon become a reserve currency, offering no credible evidence whatsoever to support his claim.
To cap things off, through its HuffPo mouthpiece VTB touts its sponsorship of the upcoming Winter Olympics in Sochi, boldly predicting that Russia would win more medals than the USA. Four years ago, Russia had one-third America’s gold medal count and less than half its total medals.
Baital chooses not to mention the humiliating fact that five of the seven G-7 presidents will boycott the Sochi games on human rights grounds, and chooses to ignore the incredible financial burden that funding the games, by far the most expensive and corrupt in history, is imposing on the Russian treasury.
One expects biased and misleading reporting from the Huffington Post. Given its affinity for Barack Obama and Obama’s affinity for Putin, it’s not even too surprising to see pro-Kremlin propaganda on HuffPo’s virtual pages. But isn’t the publication going a bit too far when it misleads hapless American investors with half-truths, distortions and outright lies about the Russian economy so that it can line the pockets of corrupt, malignant Russian rulers who are engaged in an all-out assault on basic American values?