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Heists and Revolution

Sales of Stolen Artifacts and Gold in Bolshevik Russia and ISIS-controlled Syria/Iraq

In December, 2008, the Russian government announced the creation of a state commission to study the legality of the sale of artwork, jewels and artifacts by the Soviet government in the 1920s. In so doing, Russia turned its attention to a frequently overlooked and almost forgotten chapter in its early, post-revolutionary history. That episode, with its dark consequences for Russian culture, provides a remarkably vivid illustration of how political revolutions grounded in radical, populist ideology, tend to hypocritically rely on base theft to feed the engine of continued conflict. As this analysis examines with the Bolsheviks and ISIS in Syria and Iraq, the source of the ideology does not make much difference.

Failure of “War Communism” – Fire Sale of Russian Antiquities

The confiscation of icons, gold objects, jewels and artifacts from museums, private homes and collections by the Bolsheviks, and their subsequent fire sale at bargain prices to speculators and collectors in the West, represented one of the saddest and most hypocritical episodes of the farcical workers and peasants revolution that supposedly occurred in October, 1917.  The farce was not so much the “revolution” itself, but the fact that in the elections for the Constituent Assembly which followed it in January, 1918, the revolutionaries received less than 25% support from the very soviets in whose name they supposedly took power. The workers and peasants were apparently not impressed with how swiftly the Bolsheviks, led by radicalized sailors and army deserters, took over a few strategic positions in Petrograd. The reaction of Lenin and Trotsky to the popular vote of no confidence? Shut down the Assembly and train loaded rifles on the deputies with a declaration that if they did not abandon the legislative building within twenty-four hours, their safety would not be guaranteed. This presaged not just the demolition of any hope of democratic governance in post-revolutionary Russia, but a series of policy zigzags which brought the country to near total economic ruin.

The Bolsheviks succeeded in turning a country with a pre-WWI annual economic growth of 8.8%, industrial output just behind the U.S., Britain and Germany, a population of 175 million and rising and Europe’s largest gold reserves to one with recurring famines (over 6 million died in the Volga famine of 1921), urban dwellers tearing down the walls of their homes to provide heating material, peasants’ and sailors’ revolts and nearly exhausted hard currency reserves.  Placing the blame on WWI was a popular meme of Bolshevik apologists for decades, until new historical evidence emerged of an economic boom during that period with a huge convergence effect for Russian industry. As Sean McMeekin wrote in his landmark bookHistory’s Greatest Heist: the Looting of Russia by the Bolsheviks, Russia in 1917 (the year of revolution) was less an economic backwater than a casino of speculative investment which fell apart at just the wrong moment.

Following the October seizure of power, the Bolsheviks set about implementing a program of so-called “War Communism” (some of the consequences of which are mentioned above), among whose policies included the confiscation and nationalization of Tsarist treasure, private collections and museum holdings. In the Fall of 1918, the regime issued a decree – “on the registration, accounting and storage of monuments, artwork and antiquities” – which required every Soviet citizen to publicly register all valuables within one month, from artwork and carpets to ornaments and gold jewelry, on pain of forced confiscation and imprisonment (and likely execution). As chronicled by Russian historian Nikolai Svanidze, the decree imposed a prison term for anyone who failed to “properly store” their artwork. The loot, along with confiscated goods from Tsarist palaces and museums, was brought to Petrograd for inspection by a special commission.

In 1920, Lenin personally undertook to empower the commission and accelerate the sale of Russian artwork overseas. When the so-called People’s Commissar of Culture appealed for clarification regarding what was intended to be left for national museums, Lenin promised only the “required minimum” of art and artifacts, with the rest to be sold for hard currency. These shocking measures not only underscore the utter contempt the Bolshevik regime had for the country it found itself governing, but also the degree to which their desire to achieve and retain power trumped any pretense of ideological devotion. While peasants starved and workers rioted, the Bolshevik political class was busy making side deals with European and American capitalists over Russia’s historical treasures to fuel its war machine.

Worse than the deed itself was the price at which a nation’s priceless cultural heritage was carted away. Lenin and Trotsky, as part of the operation to accelerate the sale of confiscated items, created a government collection and special diamond fund.  The diamond fund put the Tsar’s family jewels on display in round the clock auction exhibits for foreign buyers, who acquired sumptuous crowns and rings, over 145 other ornate objects and 7 Fabergé eggs at discount prices ranging from 500 to 5,000 gold rubles which, according to Svanidze’s research, was about the cost of feeding 10 Gulag prison guards for one month in 1930. The Hermitage Museum in Petrograd (now Saint Petersburg), lost most of its Rembrandt collection to the fire sale and at least one curator killed himself for failing to protect several pieces from export. Perhaps a full accounting, even by the Russian government’s investigators, will never be done of the artifacts from churches, private homes and royal residences which were simply melted down and sold as bullion on foreign metal exchanges – Trotsky was particularly aggressive in this area.

Thieves at Allah’s Service – ISIS and Iraqi Gold

report from Bloomberg dated March 25, 2014 revealed that the Iraqi government had purchased $1.56 billion worth of gold (36 tons) during that month – the largest purchase in three years. This huge intake followed a steady increase in private gold purchases throughout the country – a rise in demand for bullion coupled with an outflow of foreign currency from the country’s banks. The autonomous Kurdish region in northern Iraq became a major gold import artery, with an estimated 50 metric tons of the metal coming through during the Summer of 2013 alone. Faced with unsophisticated securities markets and a weak banking sector, citizens turned to gold as the only viable means to store wealth and hoarding became commonplace

Beyond gold, the fate of Iraq’s antiquities has been a sore subject since the U.S. invasion of 2003 and the infamous spate of looting which accompanied the collapse of Saddam Hussein’s regime. Over 15,000 artifacts were lost in the mayhem of Baghdad’s capture and the U.S. army created a special cultural unit to recover collections and pieces for the National Museum of Iraq. The efforts of U.S. forces, coupled with targeted amnesties for the civilian population, led to several thousand artifacts being restored to the Museum, including 613 pieces of Assyrian gold jewelry. Now, with ISIS (renamed the “Islamic State”) having secured Jordanian and Saudi border crossings and encircled Baghdad, the fate of Iraq’s gold and cultural heritage located within the Islamist zone of influence or direct control should emerge as a matter of top priority. Naturally, western media and policymakers have chosen to more or less bury this aspect of the ISIS campaign in favor of purely military assessments.

The relationship between ISIS and Iraq’s treasures is almost identical to that of the Bolsheviks in Russia. A group which seeks to purify the souls of its subjects and impose strict Sharia law over the areas it controls – destroying graves and shrines, keeping women out of public view unless absolutely necessary and banning alcohol, drugs and cigarettes – is financing its war machine with a highly efficient smuggling operation. How ironic that the same people who cut the hands off thieves in the public square shamelessly engage in naked bank robbery and black market fire sales of stolen goods.  And yet, beyond the estimated $500 million in loot from Mosul banks, ISIS has netted tens of millions from illicit sales of artifacts from across Syria and Iraq – $36 million in one region of Syria alone according to one report. Sam Hardy, a research associate at the UCL Institute of Archaeology in London, has written extensively on ISIS activities in the international artifacts market – particularly in Syria and Mosul where the city’s museum, shrines and churches have been looted. This comes on top of the jizya tax which the group has imposed on Christians and other non-Muslims in its areas of control. That tax, levied on religious grounds, parallels the Bolshevik confiscation directive in its execution.

If ISIS succeeds in taking Baghdad (a prospect considered increasingly unlikely with each passing day) or consolidates control over more outlying territory in Shia or Kurdish-controlled Iraq, there appears little doubt that the looting of museums and banks will shift to confiscation of private gold holdings; this makes the protection of Iraq’s gold as important as safeguarding its territorial integrity (to the extent this is still possible) for any foreign powers determined enough to intervene against the ISIS-Sunni alliance. In 1936, Soviet dictator Joseph Stalin engineered the theft of Spain’s gold reserves in a top secret operation (codenamed “X”) in which 500 tons of bullion, coins and jewels were spirited away by barge to Odessa, transported to Moscow and stored in a Kremlin vault. Stalin allegedly exclaimed that the Spaniards, who foolishly agreed to hand over the gold for safekeeping in return for continued Soviet support against Franco’s Nationalists, would not see their gold again “just as they do not see their ears”. Perhaps this type of extortion is being carried out by ISIS and Shia militants at a micro level across Iraq now. In any case, it is incumbent upon Iraq’s neighbors to take steps to preserve the country’s cultural heritage and intercede between ISIS and the treasures presently within its grasp.

 

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