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Because They Could: The Harvard Russia Scandal (and NATO Enlargement) after Twenty-Five Years

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The Harvard Russia scandal of the 1990s was a turning point in the years after the Cold War ended. But it never achieved a satisfying resolution, despite its extensive trail of litigation. When the US Justice Department charged a prominent Harvard professor, his wife, his deputy, and this deputy’s girlfriend with financial misconduct in Russia while leading a team of experts advising the government of Boris Yeltsin on behalf of the United States, Harvard defended itself and its professor to the hilt. The university lost – was all but laughed out of court by a jury. It returned to the government most of the money it had been paid.It turns out there was a second lawsuit, one whose resolution Harvard attorneys were able to settle and seal. They silenced the American businessman at the heart of the case with a non-disclosure agreement, insuring that what really happened in Moscow would be less well understood. The Harvard-Russia scandal was never about Russia. It was always a story about the United States, its ethical standards and everyday concepts of fair play.Alas, the Harvard venture was the least of the folly in those years. After 1992, the US built out its military alliance to the borders of Russia, over Moscow’s increasingly vehement objections. I have called my story Because They Could because that is the essence of both the Harvard scandal and the story of NATO enlargement. At every juncture, the principals took advantage of their privileged positions, and, when brought to account, employed the strategy summarized up by the famous adage, ascribed variously to Henry Ford II, Nellie McClung, and Benjamin “Never apologize, never explain, get the thing done and let them howl.” The Clinton team were pioneers in this strategy, and used it sparingly. With Donald Trump it has become the spirit of the age.

304 pages, Paperback

Published May 15, 2018

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David Warsh

7 books11 followers

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Profile Image for Athan Tolis.
313 reviews746 followers
November 14, 2018
Ambrose Evans-Pritchard, son of an illustrious father, was born brilliant and very talented with a pen, but famously lost his mind with the Vince Foster case and now makes a living from writing incendiary pieces for the Telegraph, the UK’s preeminent conservative newspaper.

David Warsh seems no less brilliant, but is decidedly less lucky and did not get a second break after banging on the “Harvard-Russia” scandal for long enough that he could not no longer find a berth in journalism. Moreover, and in contrast to Ambrose Evans-Pritchard, who seems to have come to peace with the fact that perhaps the Clintons did not kill Vince Foster after all, he continues to see the history of the West’s engagement with Russia through the prism of his dead-end investigation from 20 years ago.

This book is a (perforce, repetitive) 150 page compendium of the pieces the author has written on the topic in the twenty years since he set up on his own, followed up with (i) his investigation of how the “villains” in his book allegedly attempted to fleece entrepreneur John Keffer and (ii) a chapter on how the relationship between the US and Russia continues to be poisoned by the attitude we showed toward Russia during his favorite incident.

I will declare right here that I’m not a disinterested party. I know and love the Shleifers. I met Nancy Zimmerman in 1999 through my college roommate Gabe Sunshine, who at the time was her deputy (and gets a mention in page 180 of this opus), when she (and Gabe) invested in my first venture, book2eat.com, “the world’s first live, online restaurant reservation service.”

My venture was not a success. After some early wins (for example, we kicked OpenTable out of Paris around year 2000) our strategic partners and investors, Orange Ventures, arm of the phone company with the same name, got cold feet when we were faced with what author Eric Ries calls “the audacity of zero,” (namely the micro amounts you collect once you go live, in contrast to the billions that were part of the discourse when all you could talk about was the total size of the market) and became obstructive of our attempts to secure funding from other sources, lest they remain implicated in some type of drawn-out failure. They were, of course, 100% entitled to do so.

While this was happening, our ten angel investors had to go through infinite pain, signing and faxing documents willy nilly, spotting us money here and there, joining emergency phone calls etc., all in the knowledge that if some type of white knight were to appear they’d probably lose most of their investment anyway. Some grumbled, some complained openly, some refused to say if we’d get their signatures until the very last minute. On an occasion or two I had to threaten I’d use Tipp-Ex (or even perform the converse function…)

Which is where I think I bring some insight: I never, not for one millisecond thought that Nancy Zimmerman acted for herself throughout what still stands as the most painful year in my life (ok, I did not like kindergarten very much either, or my brief stint at Goldman Sachs). Not once did she set conditions, not once did she make a fuss, not once did she make a lunge for it. I could not possibly have asked for a better investor, period. Same goes for my college roommate, of course, but him I knew from before.

This is in very stark contrast with what is claimed in this book regarding the way she allegedly handled John Keffer. So I don’t buy it, basically. I’m not saying it’s 100% impossible that she could have behaved impeccably toward me and worse toward John Keffer, but my personal experience is at a 180 degree angle from how she is depicted here. She became a friend precisely because she was a stand-up investor.

If anything, reading this book brought back memories of the fact that I’d send any and all documentation over email to Nancy’s employee Jon Grenzke and it would arrive in London fully signed, on FedEx, a couple days later. Money she’d send even faster, beaten only by my craziest investor, Vassilis Dalakouras, who’d consistently wire over the maximum I’d take from him as he put down the phone, without having received anything resembling an agreement first.

So I finished the book and I felt a bit empty. And I decided I’d also read Andrei’s letter to Harvard that’s in the appendix, and then I understood everything:

Somebody, somewhere, was elbowing Andrei out of the past half-decade of his life, the pinnacle of his career and potentially even his triumphant return back to his country. Maybe it was Jeff Sachs, maybe it was someone else. “So be it,” I can see them thinking, “if they’re going to make it so difficult for us to make a difference, we can do what everybody else is doing: let's get out and let's make some money.”

The rest of the world (including the Russian government, the New York Times, the Financial Times and all the other sources the author keeps mentioning as despicable) chose to view Andrei’s exit from his Russian involvement as (i) externally forced and (ii) largely super-clean by local standards; the author of the book and sundry holier-than-thou enemies of Larry Summers of course decided to focus on what by the strictest standards you could interpret as a sloppy exit from advising, as Andrei presumably kept his seat warm for a successor and worked toward finding alternative projects for his deputies.

So actually, I’m very happy I read this. I’ve never brought this stuff up for discussion with my friends, as I see them rarely. This book has helped me understand they were caught in the maelstrom created when a justice system that targets easy marks picked up the baton from a politically motivated investigation of a highly principled (if often fallible) friend.

Larry Summers comes out of this smelling like roses, btw. What the author fails to mention is that the easiest thing for him to have done would have been to sell them down the river. He could have ended the whole issue for himself right there. That he didn’t both shows the quality of the man and proves that this is a Vince Foster type of wild goose chase.
Profile Image for Terry.
137 reviews8 followers
November 21, 2020
The first half of the book was his blogs for the Harvard Russia Scandal, which is very boring and unnecessary. No one wants to know the slow progress of one event and the law suits. But the second half of the book was interesting. It was a brief history of US/Russia relationship post 1991.
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