From thefp.com
Seve Witkoff, Donald Trump’s first friend and super-secretary of state, has a theory on how to end the war Russia started in Ukraine more than 11 years ago: Make everyone business partners.
That is the guiding principle behind Witkoff’s quiet diplomacy over recent months with Kirill Dmitriev, the chief of Russia’s sovereign wealth fund and President Vladimir Putin’s top negotiator on the war. In a revealing Wall Street Journal interview, Witkoff noted that “Russia has so many vast resources, vast expanses of land.”
If only the Ukrainians and Russians would stop fighting and get down to making money, then peace would follow. Or so Witkoff seems to think. “If we do all that, and everybody’s prospering and they’re all a part of it, and there’s upside for everybody, that’s going to naturally be a bulwark against future conflicts there. Because everybody’s thriving.”
Witkoff, who met with Putin in Moscow on Tuesday, is following a similar playbook to the one that delivered a ceasefire and the release of hostages in Gaza in October. Free Press columnist and historian Niall Ferguson dubbed this approach “real estate-ism” in a recent column. In that case, Witkoff and his fellow negotiators ignored the methods preferred by the United Nations and international legal experts and instead struck business deals with Middle Eastern countries. The goodwill from those deals then helped Israel convince the Gulf states to put pressure on Hamas.
It worked for Gaza because Hamas is the much weaker party in the conflict. In that case, real estate-ism did not rely on the good offices of a terrorist organization to attract foreign investment after the war. Rather, it persuaded the main backers of Hamas—Turkey and Qatar—to threaten to cut off patronage if the hostage takers did not return the Israelis they kidnapped on October 7.
In the case of Russia, the man responsible for making good on future investments is Russia’s boss of bosses, Vladimir Putin. He presides over a mafia state and the mob doesn’t share its profits—it bleeds its “partners” dry.
“The Russians will defraud, steal, imprison, and possibly even murder the people involved to make sure no foreign company makes any money in Russia,” Sir William Browder, an activist and financier, told The Free Press. “It’s not as if some people do and some people don’t; nobody does.”
Browder is in a position to know. Twenty years ago his firm Hermitage Capital was the largest foreign investor in Russia. But the Russian state expelled him from the country and then tried to steal the business he built after the Soviet Union collapsed.
Browder’s experience was particularly nasty. Two years after Browder left Russia in 2005, a group of Russian officials stole $230 million in taxes Hermitage had paid. When Browder’s lawyer, Sergei Magnitsky, discovered the scheme and testified against the thieves in 2008, he was arrested, tortured, and eventually died in Russian custody in 2009. Magnitsky’s death radicalized Browder, who then pressed the U.S. and other Western governments to impose sanctions on Russian officials engaged in gross human rights abuses.
Browder was not an exception. The business climate in Russia is abysmal. Transparency International, which tracks international corruption, ranked Russia 154 out of 180 countries in 2024. The Congo, Honduras, Lebanon, and Iran are considered less corrupt according to their index.
“All these big businesses in Russia are criminals,” Oleksiy Goncharenko, a Ukrainian member of parliament, told The Free Press. “You can’t do business with criminals. Everyone knows the consequences of that.”
The Russian economy is so corrupt, and its political climate so violent, that sooner or later the cost of doing business in Russia gets too high—not to mention the moral compromises necessary for such a venture.
And yet many American businesses seem eager to take advantage of a peace deal. The Journal reported a meeting between Exxon senior vice president Neil Chapman and Rosneft chief Igor Sechin in Doha this year to discuss Exxon’s return to a Russian project abandoned after Putin renewed his war on Ukraine in 2022. Other U.S. companies have eyed investments in Russian state-owned Lukoil.
Moscow is certainly sending the signal that there is money to be made after the war in Ukraine ends. Dmitriev himself told the Journal: “We believe that the U.S. and Russia can cooperate basically on everything in the Arctic. If a solution is found in Ukraine, U.S. economic cooperation can be a foundation for our relationship going forward.”
The question is why any U.S. investor would believe Dmitriev. Americans have gone down this road before. It was not just Browder who nearly lost everything in Russia 20 years ago. The Russian economy is so corrupt, and its political climate so violent, that sooner or later the cost of doing business in Russia gets too high—not to mention the moral compromises necessary for such a venture.
“Steve Witkoff and his friends are not going to leave Russia with a single penny,” Browder said. He added that “There are no stories of people leaving Russia with a happy ending. It’s a total delusion.”
So what’s Dmitriev and Putin’s real strategy? For now it appears to be a kind of feint. After Putin failed to agree to even a ceasefire in August when he met with Trump in Alaska, European countries began to press the U.S. to finally impose secondary sanctions on the countries that buy Russian oil. That might not persuade Putin to give up his dream of conquering Ukraine, but it would grind down his war machine. Oil exports are the only way Putin can pay for his war.
So instead of saying nyet, Putin has dispatched Dmitriev to say “perhaps.” If Ukraine agrees to relinquish territory Russia has yet to conquer, if Ukraine agrees to limit the size of its military, then the war will end and everyone can make a lot of money. For Trump, this all sounds like a chance for peace. For Ukraine, it sounds like submission. And for Putin, it’s another way to save the war he started 11 years ago.