Andrew Korybko

Russia has done much to defend itself from the subversive intrigue of Color Revolution-oriented “NGOs”, but it needs to finish what it started by identifying and responding to one of the remaining ways in which these illegal organizations could conceivable continue to fund their activities.

Background Defenses

Ever since the outbreak of urban terrorism that is now commonly referred to as “EuroMaidan”, most of the non-West has woken up to the dangers that ostensibly “non-governmental organizations” (NGOs) can pose to the sovereignty and security of the targeted host state. Russia had already been countering this menace since even before that happened, having passed its Foreign Agent Law in 2012 in order to identify politically active organizations that were receiving financial assistance from abroad. Still, looking at the lessons that were learned from EuroMaidan, it’s not necessarily enough to pinpoint the provocateurs, but sometimes to outright ban them from the country if their activities are dangerous enough, hence why the Undesirable Organizations Law was enacted in 2015. This new piece of legislation complemented the existing one and gave the government the right to shut down the most dangerous intelligence-linked organizations that are subverting the state, such as the “National Endowment for Democracy” and the Soros Foundation.

Vulnerabilities

Russia’s proactive policies are a commendable step in the right direction and have solidified its role as the global leader in democratic security solutions, but it’s anticipated that the de-facto government-organized NGOs (or “GONGOs”) will find clever ways to adapt to the new restrictions and clandestinely continue their illegal activities. The easiest workaround that they could enact at the moment and are likely practicing to some extent right now is to exploit online crowdfunding platforms in order to launder money into Russian-based front organizations. The pretense is ‘innocuous’ enough – a supposed ‘grassroots’ organization and/or individual is soliciting public donations for its stated endeavor – but beneath this ‘plausibly deniable’ façade lies the limitless potential for abuse in surreptitiously funneling funds to regime change entities. While it’ll always remain a conceptual threat that money can simply be transferred from one foreign bank card to another inside of Russia and used at a carousel of ATM trips, crowdfunding changes the paradigm by lending the recipient the semi-plausible guise of ‘legitimacy’.

This strategic factor, combined with the potential for unaware and sympathetic elements to also contribute to the total amount of money being “raised” (laundered), make crowdfunding an innovative tool for discretely supporting banned Color Revolution movements inside of the Russian Federation. There are certain red flags for the security services to watch out for, but ultimately there’s no way that they’ll be able to identify all of the possible rackets that could be attempted at any given time without proactively doing something about it. The best defense in safeguarding against this threat is to enact preventative oversight mechanisms such as the passing of relevant legislation and the creation of an applicable task force to tackle these problems as they arise, which is becoming ever the more urgent as Russia approaches its September 2016 parliamentary elections. President Putin recently warned at a February meeting with the FSB that foreign intelligence agents are conspiring “to intervene in our election and our country’s political life”, thus underscoring the necessity of the present proposal in closing one of the most obvious vulnerabilities to the country’s democratic security and strengthening the viability of its existing measures.

The General Idea

Crowdfunding is a relatively new solicitation technique which fuses a functional platform with social media in order to make a given “cause” “go viral” and maximize the largest amount of possible “donations”. One of the most popular global services is Kickstarter, but its Russian-based equivalents are Pleneta and Boomstarter. The latter two are most directly relevant to the Russian Federation because they fall under its legal jurisdiction and are the most likely to be used by its citizens. It’s technically possible for a Russian-American dual citizen to launch an initiative on Kickstarter and then transfer the funds to an American bank card for use at a series of Russian ATMs, which in that case would be considerably more difficult for the authorities to detect and respond to. Nevertheless, focusing on what’s anticipated to be the most practical and easiest method for the largest possible number of conspirators to use – exploiting Russian-based platforms and utilizing in-country Russian collaborators – one can pinpoint exactly how this scheme would operate and thereby craft appropriate methods to combat it before it becomes a serious problem.

In general, the issue with crowdfunding is that the source of the money is always obscured because there’s no reliable way to verify the donors’ identities, meaning that they can be used as platforms for laundering government- or GONGO-connected funds to Color Revolution organizations inside of Russia. Anybody from across the world can give money to the soliciting organization, but because these deposited donations are laundered through a Russian-based company before reaching the end user, the Russian recipient’s bank statement only indicates that the funds came from the crowdfunding platform and not from wherever else they may have initially originated (e.g. USA, UK, Saudi Arabia, etc.), thereby sidestepping a major tripwire of government attention. The facilitative site charges a certain percentage of all the money gained, but this is accepted by the organizer as a necessary tax in order to ‘certify’ their “cause” as a “grassroots” initiative, which further deflects any circumstantial accusations that their campaign had ulterior and unstated political motives.

Political Panhandling In Practice

As a functional example, a major state and/or GONGO donor could be ready to fund a Russian-based Color Revolution organization, but in order to slyly avoid detection, they might ask their in-country partner to create a crowdfunding cause on Planeta and/or Boomstarter in order to securely enable the transaction. It doesn’t matter what the organizer says they’re raising money for, but for practical reasons, it will probably be a service and not a physical product that they’d later be legally obligated to give to any unaware citizens that also contribute to the campaign. Once the appropriate front explanation is thought up and the related crowdfunding page has gone live, the predetermined state and/or GONGO donors can then divvy up their total funds among a number of individual “private donors” who would then register with the site and dole out the payment in inconspicuous increments. “Donors” usually have the choice to remain “anonymous” and not have their user names or given amounts made public, which therefore makes it easier for sock puppets to repeatedly function in this capacity and avoid unnecessary suspicion.

It’s at this point where the “crowdfunding campaign” can go one of two ways – it can either be a short-term and de-facto ‘closed’ operation or a medium/long-term one that’s essentially opened to the public. The first option guarantees that the money is given to the recipient in the shortest amount of time possible as mandated by the individual site (some enforce a two-week minimum period of ‘fundraising’), but it could also appear more suspicious if there’s only a handful of newly created accounts and a few “regulars” donating to the initiative, especially if it’s already come under the attention of the security services. On the other hand, the second option has more a ‘genuine’ vibe to it, running for around a month or two and appearing by all superficial indicators to be a legitimate fundraising cause, especially if it gets shared on social media and an active effort is made to solicit donations outside of the predetermined government and/or GONGO circle. It’s this latter form of Color Revolution crowdfunding that’s the most difficult to detect, and there might not be any suspicion about a given cause’s motivations if the operators are ‘professional’ enough to gradually mix their donations in alongside unassuming individuals’ during the entire length of the campaign.

Red Flags

There are some ways in which sloppy practitioners of this money-laundering scheme can attract undue attention to their operations, but it’s not predicted that this will occur often enough to allow the authorities to detect each and every instance of covert Color Revolution funding on their own. One of the most obvious giveaways is if there’s a ridiculously large amount of money being transferred in general, let alone by a single anonymous user. Capping the total sum of “donations” at a plausible level for whatever the given “fundraising” front is can help to avoid attention, as can dividing the said amount out via a wide range of sock puppets help to mitigate any additional concern (even if some of these are anonymous ‘repeat donors’ to other similar campaigns). Some platforms have an option where the pledged donations are processed even if the organizer’s goal isn’t met, which is usually the most amenable to front organizations, while others are “all or nothing” and refund all of the donations if that doesn’t happen. In the latter scenario, predetermined donors can submit pledges of various amounts throughout the entire time or wait until the end and dump a large sum of money before the deadline expires, with the second strategy likely to happen mostly in instances where the organizers are trying to squeeze as many donations as possible from the public before ‘turning them off’ by surpassing the goal and ‘eliminating the excitement’.

Another way that the Color Revolution panhandlers could raise suspicion is if a large number of donations don’t correspond with any given ‘reward’ levels. To explain, every crowdfunding platform allows the organizer to create a tiered level of ‘rewards’ that donors can receive for pledging a certain amount of money to their cause. These can be anything from a simple “thank you” email to a t-shirt, video conference, or more, but in most instances, it’s not expected that the organizer will bother to go out of their way with sending donors any physical products in response. Even if they do have such an option available as a ‘reward’, it’s only because the amount pledged exceeds the cost of the given item and is thus profitable to offer in exchange for a financial commitment to their cause, but still, most organizers will not have the time nor interest in doing this and will likely omit this option from their rewards list or limit it to one or two categories of donations for the sake of superficial appearance. No matter what, though, it’s important that the rewards are plausible and somewhat sensible for their pledged donation, since promising only “heartfelt appreciation” in exchange for $500 is a sure sign that something irregular might be going on.

In the same vein as the above red flag, no matter what the said rewards actually are, another giveaway of possible illegal behavior could be if there are a certain number of donations that don’t correspond to any of the given reward tiers. The threshold of suspicion varies on a case-by-case basis, but some examples could be if there’s one noticeably large donation that doesn’t fit into any of the categories or if there are a bunch of smaller amounts that also don’t correspond to any of the donation benchmarks either, with both cases appearing as though the individual purposely went out of their way to choose that given amount. Anyone is free to donate as they see fit, but it would be odd that a private individual would want to commit their money to something and not receive any reward in return, especially if the donation amount in question is quite considerable, no matter how symbolic the said reward actually is. Genuine crowdfunding organizers will usually limit the number of rewards in order to create an artificial demand among the public and foster a sense of personal investment in their project, and while the lack of this criterion isn’t a red flag in and of itself, its occurrence in combination with the other cause-concerning features could be enough to convince investigators that something foul is at play.

The Legal-Administrative Solution

The proposal has thus far convincingly established that crowdfunding platforms can be used as money laundering mediums to skirt Russia’s restrictive anti-Color Revolution/GONGO legislation, but an intertwined legal-administrative solution exists to diminish this threat. On the legal front, Russia needs to adopt a new set of legislation that obligates Russian-based crowdfunding platforms to submit all of their users’ information to the government and to allow the authorities on a case-by-case basis to label any media-, social-, or NGO-related projects as foreign agents if they receive donations from abroad. The crowdfunding companies would be mandated to cooperate with the authorities whenever they’re asked to do so, and ideally there’d also be a retroactive clause included in the law which would permit the government to request full information about projects that were completed before the legislation was passed.

To specify, the crowdfunding platforms must be made to submit every bit of information that they have about their users’ fundraising campaigns to the government, with special attention being given to the legal name of the Russian citizen responsible for each one and the identifying details behind every one of their donors. For example, the authorities need to know what country the donation came from and whose name is on the account, which is relevant in determining whether individuals whose identity doesn’t obviously indicate any knowledge of Russian (e.g. Jayshaun Brown from Birmingham, Alabama or Ricardo Sanchez from Tegucigalpa, Honduras) somehow navigated a Russian-only crowdfunding portal well enough to succeed in processing a donation, especially if this amount is unusually high and/or submitted in an oddly frequent manner according to the investigators’ estimation. It would also be helpful for them to know the date that the financial pledge was made and the IP address that it came from, since this could aid the authorities in pursuing whatever leads they may have in proving that an undoubtable amount of questionable and inconsistent activity occurred in relation to the suspected Color Revolution front individual/organization.

Simplifying the above, the Russian government needs to know who is donating to what from where and how frequently.

Assembling a database of this information would then allow the authorities to apply software tools in distinguishing which cases warrant a closer look by a human investigator and which pass the test of credibility (as the overwhelming vast majority of them are expected to). In line with the aforementioned legislative proposal, it’s strongly recommended that a clause also be included which stipulates the legal procedure through which a crowdfunding company can disperse their funds to the recipient. The author suggests that the following financial flow be established:

Donor money à crowdfunding company à temporary government holding entity à recipient

As an explanation, the improvised addition to the existing process is the inclusion of the temporary government holding entity to process the funds between the crowdfunding company and the recipient. This authority would actually be whatever administrative-security organ is tasked with verifying the legality of the crowdfunding campaign, preferably the same entity that handles the designation of NGOs as foreign agents. It’s advisable that this security formality take no more than 5 working days to complete in order that it doesn’t unnecessarily impede the crowdfunding process. It’s anticipated that almost all crowdfunding campaigns will only take no more than a day to verify since the process will likely be automated by the aforementioned software system that was described above in accordance to a relevant algorithm (amount, date, donor location and identity, IP address, frequency, etc.), with only suspicion-arousing cases warranting human intervention and subsequent delay.

In the event that an investigator finds reason to presume that some irregularity was committed, the government would then have the right to indefinitely hold on to some or all of the donated amount until the relevant security uncertainties are accounted for. If any issues remain unresolved after the informal 5-day deadline, then the funds in question can remain under the administrative-security organ’s control to compensate for the investigation costs while the unaffected ones could be dispersed to the intended recipient on a case-by-case basis. It might be impossible in many instances to conclude beyond a reasonable doubt that a Color Revolution-financing scheme was at play, but in that event the state could simply label the foreign funds-receiving media-, social-, or NGO-related project as a foreign agent and force it to comply with all relevant legislation on the matter, including a publicly available and regular full audit of all of its expenses (including employee salaries, travel expenses, unspent cash, etc.).

Before And After

Approaching the end of the research, it’s timely to remind the reader of the structural vulnerabilities that exist in the present situation and indicate how the proposed legal-administrative solution presents a suitable protection to most prospective threats.

As it stands, Russian citizens receiving money from abroad are obviously subject to suspicion under certain circumstances (just like in any country), but this is less so if money is being transferred from within the country. Considering this, Color Revolution financiers are less likely to use foreign-based crowdfunding platforms in laundering their Russian-directed funds and are more apt to rely on their Russian equivalents like Planeta and Boomstarter. Right now there isn’t any mechanism to monitor where the money is coming from, who’s providing it, and who it’s going to, since all that’s feasibly traceable in any practical sense is that the said company made a deposit of such-and-such amount to the given recipient’s bank account. It’s therefore very difficult for the security services to detect any illegal activity that might be occurring on these platforms, especially those that relate to funding illegal GONGOs and their regime change activities. If the organizers employ sock puppets to divvy out their “donations” in inconspicuous amounts and frequencies, especially if this is intermingled with a campaign of plausible length and with a visible effort to solicit donations from social media and the general public, then it can be almost impossible under the current conditions to discern any possibly illegal behavior.

On the other hand, the authorities’ chances of doing so are dramatically improved if a new series of legislation is enacted which empowers them to craft a workable process to analyze all relevant information about crowdfunding campaigns and pursue investigative leads as needed. Shifting through the amount of money given, the date it was pledged, the identity and location of the donors, their IP addresses, the frequency with which these people “crowdfund” money throughout Russia, and other such pertinent variables would be a herculean task for any human being to follow up on for any given campaign, let alone for the thousands that are hosted on these platforms regularly. It’s thus necessary to implement an effective process whereby all of these details are automatically sent to the security services for automated analysis, with human investigators only looking into the ones that the algorithm highlights as being suspicious. Imparting the government with the middleman responsibility to transfer funds between the crowdfunding platform and the intended recipient allows it to hold on to any “donations” that are deemed potentially illegal, thus preventing their use for Color Revolution purposes. Since the administrative-security organ handling this task would be the one that designates NGOs as foreign agents, it could presumably also do this to any media-, social-, or NGO-related crowdfunding projects that satisfy the same criteria via their foreign-sourced funds, thus hampering their anti-government effectiveness in the same way.

Concluding Thoughts

It can be reasonably assumed that the undesirable organizations that have been banned in Russia and their legal foreign agent counterparts that are still active in the country are frantically brainstorming creative ways to undermine the law and continue their activities without any official oversight or restrictions. Both categories of Color Revolution actors importantly have in common their shared dependence on foreign funding, which incidentally had been one of the red flags that brought them to the attention of the Russian authorities. If this critical part of their being can be obscured in any way, then it follows that the government would be less likely to detect their activities and those of their affiliated organizations, thus enabling them to operate with relatively more liberty in pursuing their objectives. Correspondingly, the Russian Federation would be less safe because of this and many of the legal advances in democratic security that had been rolled out over the past couple of years would be largely nullified as a result.

Keeping in mind that Color Revolution actors always have some sort of connection with forces abroad, particularly when it comes to their financing, it’s absolutely imperative that the Russian government maintain its present situational dominance in identifying and publicly labelling each and every single politically active entity that receives funding  from outside the country. At the present moment, the utilization of crowdfunding platforms for Color Revolution purposes is still in its infancy, but there’s an urgent need for the authorities to proactively deal with this incipient threat before it becomes uncontrollable. Failure to act with immediacy would cede the momentum to hostile forces and enable them to indefinitely exploit this structural vulnerability in laundering funds to their proxies without the government’s knowledge. The first step in dealing with any asymmetrical threat is to recognize it for what it is, and the sooner that the state recognizes that crowdfunding platforms can be exploited for Color Revolution purposes, then the sooner that it can partake in preventative measures in safeguarding against this threat, mitigating its impact, and deterring its future occurrences.