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Turning Italy into Absurdistan

prodi042808.jpgEnergy corruption and Gazprom’s job offer to Prodi Ladies and gentlemen, we now have the official beginning of an ignominious trend in EU-Russia energy relations: the hiring of former heads of state to manage Russian gas and oil mega-projects they helped push through while in office. If only U.S. Rep. Tom Lantos were still around to put things into perspective.

Our first example was of course Germany’s former Chancellor Gerhard Schröder, who accepted a well paid position on the board of the Nord Stream pipeline project – a controversial initiative he helped to vigorously push through government under his tenure. Not surprisingly, the response in Germany and across Europe was outrage and disbelief. Beyond the fact that the Nord Stream has shattered Europe’s potential for a common energy policy and multilateral negotiations with Russia, it was seen as a craven and corrupt abuse of office for Schröder to seek to benefit personally from his policy decisions.Now we are seeing the process of disaggregation and energy corruption repeat itself as Gazprom offers a post to former Italian Prime Minister Romano Prodi – a gesture of gratitude for having helped Russia land the South Stream pipeline deal, which has significantly weakened competing non-Russian controlled pipeline alternatives from Central Asia, further driving a wedge between EU members. Prodi promptly declined the offer for the moment (I assume with some embarrassment) – but the damage has been done: in terms of energy relations, Russia is quickly turning Italy into Absurdistan – a comedy of serious policy, a joke of the EU, a surreal environment where heads of state no longer feel bound to hide their personal financial interest behind any veil of public duty.The offer came earlier today as Alexei Miller, CEO of Gazprom, visited Rome to have lunch with Prodi and Paolo Scaroni, carrying the big offer from President Vladimir Putin himself to hire the former Italian premier to head up the South Stream project. This 10 billion euro pipeline project, a joint venture between Eni and Gazprom which seeks to cross under the Black Sea to bring natural gas to high demand markets in Southeastern Europe, is seen as a political masterstroke to obstruct alternative supply routes from the Black Sea region.The announcement may have come as a surprise to some (If I had dared to predict this job offer beforehand, I expect I would’ve received a deluge of critical emails complaining of my cynicism…), but Scaroni seemed to have been expecting it. He told Reuters that he thought Prodi would make a great South Stream chairman: “Normally we don’t comment on media reports but this would be an excellent choice. Putting a man who’s been president of the European Union in charge of the infrastructure that will secure Europe’s energy supply is really a great idea.“For now, we are still in the rumors stage, and it is difficult to tell whether the job offer is just another case of “premature contractualization” from Gazprom (the South Stream itself could be a bluff, given that all countries on the Black Sea have veto rights). The Financial Times has quoted a Prodi aid who says that the former premier’s answer to Gazprom’s offer “is not final” and that although he may want to avoid the “opprobrium” which greeted Gerhard Schröder after he sold himself to Gazprom, Prodi may still yet reconsider what we imagine is a very generous offer.I’ve blogged numerous times in the past about the critical role of Italy in Russia’s energy strategy, and I’ve made a point of highlighting the fact that Eni and Enel, with the support of the Prodi administration, became the first foreign companies to purchase stolen Yukos assets in the auctions (BP did once stand in for a bid to help make it look real, but did not acquire them). If these acquisitions were legal and commercial as the executives claim, and not politically corrupt quid pro quo to assist the Russian government in an act of fraud, then there would be no problem for Eni, Enel, Scaroni, and Prodi to openly discuss the relationship between owning Yukos assets, being Gazprom’s largest customer in Europe (and only market to allow Gazprom direct access to consumers), key partners in one of Moscow’s main foreign policy pipeline projects, and now the invitation to Prodi for a lucrative, cushy post. But no, we do not get satisfactory answers to any of these questions, and suspicions deepen with every announcement of this type.Blogger and author Steve LeVine has described Eni’s strategy to deal with aggressive and corrupt resource nationalist governments as jumping into bed with the adversary. I think a similar observation can be made against Prodi if he fails to speak about the ethical problems and extraordinary conflicts of interest of the South Stream offer … but for Moscow, the message has already been made clear to other heads of state across the world: If you play our game, advance our interests, stay quiet on Khodorkovsky/Yukos, human rights, and democracy, we will take care of you handsomely in retirement.