Preliminaries

(1) Full disclosure: My personal involvement in the Russia Insider project is minimal. I donated $40 during the 2015 summer Kickstarter campaign, and until recently, they have been republishing my articles. I got no recompense for that, but I have always been okay with that. I want Russia Insider to succeed and I get free publicity besides. Otherwise, though Charles and I did discuss me getting paid doing things specifically for Russia Insider, nothing came of it since unfortunately I simply had too many other things on my plate at that time.

(2) I have finished reading all the main accusations, defenses, and more or less prominent discussions.

These include:

A series of Facebook posts from Peter Lavelle starting a week ago (1, 2). One of them purports to show an agreement that he had with Bausman which allocates him 25% of the shares of a legal entity that was to be formed to assume ownership of Russia Insider.

An extended investigation from Fort Russ that extensively quotes from Lavelle, two journalists who have in the past contributed to Russia Insider (Ryan Dawson and Joaquin Flores), and some anonymous sources. They ridicule Bausman’s business model, accuse him of nepotism, and as good as allege that Bausman has stolen from Russia Insider’s donors and from Peter Lavelle himself.

Bausman has today responded and called these accusations “scurrilous.” He promises an exegesis of Russia Insider’s financing in the days to come, and says he is also exploring legal options.

As a result, a number of prominent Russia watchers such as Graham Phillips, Andrew Korybko, and many others around Peter Lavelle’s circles are rushing to disassociate themselves from Russia Insider.

Others such as Ajay Goyal have mounted a forceful defense of him.

Although I (think I) have good relations with both Peter Lavelle and Charles Bausman, I am not very close to either of them, nor am I involved to any substantial degree with their respective projects. Though I once interviewed Lavelle on my blog, I have never appeared on his CrossTalk. As for Bausman, as per above, my involvement with him can only be described as fleeting.

This hopefully perhaps allows me to comment on this from a certain position of distanced neutrality.

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Who is to Blame?

(1) First of all, I absolutely cannot condone the public airing of this affair, except if it were done in the most extreme of circumstances.

I do not believe the conditions for such have been met on the strength of the evidence displayed by Bausman’s critics to date.

Although I personally don’t see eye to eye on The Saker on many things, right now I think he has by far the best considered position on this. (Not surprising, perhaps, seeing as how he has been the victim of a defamation campaign in the past himself). Most germane to the situation, the only group this actually benefits is the neocons:

Finally, I want to remind everybody that we are the potential targets of very sophisticated attacks, including personal attacks, by multi-billion dollar organizations who are very experienced in using our every weakness and failing, who know exactly how to surround us with agent provocateurs who will skillfully entice us to do stupid and even immoral things in order to discredit us, and who excel at using our mistakes and wrongdoings in a way which serve their interests.

They have already noticed this scandal and are predictably having a field day with it.

Bit of internal drama at Russia Insider, which we now know Peter Lavelle had a hand in starting: https://t.co/FfBilJmZVM — Michael Weiss (@michaeldweiss) April 12, 2016

Let’s face it: The PR of the pro-Russian side has never been that great, and trading accusations in the open is just about the last thing we need. I’m afraid it is now but a matter of time before we start seeing articles cropping up about this from The Interpreter to The Daily Beast and Buzzfeed.

Congratulations? /s

I also agree with The Saker entirely that its been highly disappointing to see so many people turning their backs on Bausman just on the words of a few obviously aggrieved former partners:

Finally, I am saddened by the outright nastiness of some comments and the eager willingness of some people to join a virtual lynch mob against Charles Bausman. Even if he is truly guilty of all the accusation made against him, this is worthy of tears and not of vitriolic glee.

It’s as if a large chunk of the alternative media’s audience haven’t even bothered drawing any lessons from the Western media’s demonization of Putin.

(2) Another disclosure on my part: Although I have been skeptical of some of Russia Insider’s design choices and even to some extent share some of the criticisms against Bausman’s editorial decisions – too much direct copying of content, too many overly bizarre articles, and far too intrusive panhandling – I am also extremely skeptical that a businessman of Bausman’s stature would risk his reputation to bother with stealing or doing anything resembling such in regards to a few measly tens of thousands of dollars. Not impossible, but I daresay, very unlikely.

I am also almost entirely sure that neither Peter Lavelle nor Charles Bausman are some kind of neocon/CIA/NWO/ZOG plant (cross out as per your particular mental illness). Bausman has a record of pro-Russian commentary at least half a decade old, and Peter Lavelle’s record is three times longer. I would be extremely surprised if either turned out to be a Judas.

That said, it is important to keep an open mind on all these factors in the days and weeks to come.

(3) The most substantive accusation comes via Peter Lavelle, who essentially alleges that Charles Bausman muscled him out of his share of the ownership of Russia Insider.

Peter Lavelle is understandably not all that happy about this, and neither are some other people who contributed to Russia Insider for free, such as Patrick Armstrong:

Personally speaking, Peter Lavelle, I’m a little disgusted that something which depended on people like me working for free, had any kind of “share”.

This is ultimately a case of “he said that” and “he said that.” Maybe Bausman did steal Lavelle’s shares, or maybe Lavelle faked the entire thing, or maybe it’s all just one big misunderstanding, or maybe Bausman had too close a shave with Hanlon’s Razor.

(4) Be that as it may, it is now incumbent on Charles Bausman to provide a detailed and documented accounting of where all the donor and investor money went. In any event, this furore leaves him no choice if what remains of Russia Insider’s credibility is to be salvaged.

As per above, that is something Bausman has already promised to do.

I will point out from the outset that there may have been entirely legitimate reasons for a measure of secrecy in Russia Insider’s financial operations (if that is what indeed happened). For instance, here is one of the many allegations made by the Fort Russ editorial staff in their lengthy kompromat against Bausman:

Bausman falsely claimed, according to our sources, in attempting to push for investors, that the site was worth some $2 million dollars US, in a failed attempt to get about $300,000 poured in. This figure is about 5000% (five thousand percent) higher than what it is realistically valued at.

Although such schemes might not be to the liking of Fort Russ/Peter Lavelle’s generally Leftist fans and followers, they are not usually illegal. To the contrary, they are both expected and prevalent in the business world.

To illustrate this, here is a quote from Scott Alexander’s review of Donald Trump’s The Art of the Deal, in which the controversial businessman-turned-politician describes the realities of real estate business in the US. I do not necessarily mean to endorse Trump or even hold him up as a moral authority, but I do think that someone who raised his net worth by four orders of magnitude in the real estate business might have something useful to say:

As best I can tell, the developer’s job is coordination. This often means blatant lies. The usual process goes like this: the bank would be happy to lend you the money as long as you have guaranteed renters. The renters would be happy to sign up as long as you show them a design. The architect would be happy to design the building as long as you tell them what the government’s allowing. The government would be happy to give you your permit as long as you have a construction company lined up. And the construction company would be happy to sign on with you as long as you have the money from the bank in your pocket. Or some kind of complicated multi-step catch-22 like that. The solution – or at least Trump’s solution – is to tell everybody that all the other players have agreed and the deal is completely done except for their signature. The trick is to lie to the right people in the right order, so that by the time somebody checks to see whether they’ve been conned, you actually do have the signatures you told them that you had. The whole thing sounds very stressful.

Now back to Russia Insider.

Charles Bausman has never denied that Russia Insider was a corporate venture. The idea was to have early donors take the project off the ground, and secure much bigger investors – private or even state-backed – once it was proved that the idea works. It was at that point that many of the most active and enthusiastic contributors would be given monetary offers to join on formally.

(My own Russian Spectrum translation project floundered because I did not have the organizational skills, connections, and business savvy to accomplish what Charles Bausman did).

Some of his critics have even called him out for “betraying” the promise of crowdfunded alternative media. For all their excellent work, considering that until recently Fort Russ ran on a blogspot domain and remain for all intents and purposes a glorified blog that unlike Russia Insider isn’t even in the Alexa list of the world’s 100,000 most visited websites, they are perhaps not the best authorities on how to achieve media market share.

Ultimately, the English language audience for what people such as The Saker, the RI Staff, and Fort Russ write is neither big nor particularly deep-pocketed, and it is impossible to run a media project of the scope and sophistication that Charles Bausman envisaged on a shoestring budget.

(4) Assuming that Charles Bausman is not a crook, the ultimately result of this scandal is that the chances of this project securing the big investors needed to make it into a formidable journalistic enterprise that argues the pro-Russian position as opposed to yet another alternate journalism site with crappy code and a marginal rating on Alexa have at best been substantially dented, and at worst they have wholly cratered.

In this sense, Russia Insider’s star writers such as Alexander Mercouris and Gilbert Doctorow have arguably been hurt even more than Charles Bausman himself.

So, again… Congratulations? /s

In all fairness, Peter Lavelle claims that he has tried to resolve this privately for a year and a half (which if so puts this affair back to 2014, whereas the document he cosigned with Bausman is dated February 14, 2015. A rather strange thing to do if he had misgivings about Bausman from such an early stage).

I do not know if there were any attempts to adjudicate this privately by referring complaints to a neutral arbiter. I.e., taking a cue from Russian clan politics, LOL. But this does seem to be coming as a surprise to many people in the Russia watching community, people who are far more closely affiliated with Russia Insider than I am and whom I have no reason to believe are dishonest or literal “Russia insiders” on the scam with Bausman. This suggests but does not prove that if there were any such efforts at mediation they were woefully underpowered.

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What is to be Done?

(1) There is no way to turn back the clock so we will have to deal with the ensuing fallout from the neocon attack dogs as it comes.

(2) Please, please stop splattering any more of your grievances across Facebook – if not a week ago, then at least now.

(3) Yes I am aware of the irony of saying this while writing a blog post on the scandal. I am writing this on my old website, which has very little traffic nowadays, in the hope that the value of convincing more wellwishers in practicing restraint outweighs any further damage it might do in publicizing this scandal further.

(4) Give Bausman a reasonable amount of time to formally respond to the claims against him.

(5) If Charles Bausman’s defense is unconvincing and the allegations against him turn out to be credible, then by all means – abandon Russia Insider and shun him out of any future journalistic and/or commercial projects he might wish to undertake in Russia.

(6) If however it turns out that these accusations have been without merit, there must likewise be consequences for the people who made them.

We can’t afford to be any laxer on this than the Western media itself, which blacklists internal dissenters who go public as a matter of course no matter the merits of their particular case.

But we’ll discuss (5) and/or (6) when the time comes. That time has not yet come.

(7) Comments will only be open for a short period and contrary to my usual practice will be moderated vigorously.

Updates

04/15/2016 – Charles has released a second, far more detailed comment on the allegations against Russia Insider.

That this is true is patently obvious. We took in about $100,000 in donations last year, and about $50,000 in advertising, yet were able to put out a better and more information rich site than organizations with 10 times larger budgets. Our expenses over the past 6 months have amounted to about $17,000 per month and they exceed our income by a substantial amount. Anyone who believes the claim that there is money to squeeze out of this situation, is frankly, naive. … We are very sorry to see Peter Lavelle being dragged into this ploy. Peter and I disagree about his involvement in RI, but the proper place to resolve this is not in below-the-belt 4000 word media ambushes. I know Peter well, and he is a good man, and his heart is in the right place, but I’m afraid he is being manipulated by people who do not have his best interests at heart. If he has a serious case, he should address it via proper legal channels, not on a fringy neo-Bolshevik blog or his Facebook page.

We will now await the audit.

2016, May – The Awara Group audit of RI was released on April 25:

Some key quotes:

This review covers a 13 month period of March 1, 2015 to March 31, 2016. The object of the review was to verify the appropriate spending of the business revenue. … The total expenses (excluding aforementioned direct cost connected with crowdfunding) for the period were $US 233,927. Of these, salaries (wages, fees) totaled $US 188,086, averaging $US 14,468 per month. The rest, $US 45,840 averaging $US 3,526 per month, consisted of office rent, IT-costs, travel, legal, marketing, taxes and other regular administrative overhead costs. In the first crowdfunding the company committed to spending the revenue ($31,523) entirely on journalists’ salaries. They fulfilled this commitment, paying in excess of this amount to writers over the next 6 months. The operating expenses of Russia Insider exceed its income, requiring the company operations to be subsidized by investor capital, which is occurring on an ongoing basis, including from Mr. Bausman. … In our opinion, the accounts under review present fairly, in all material respects, the revenue of the company and its costs. We have not discovered anything untoward, problems with transparency or corporate governance, nor any irregular payments to anybody.

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Peter Lavelle and a group of other journalists have since started up The Duran, an online magazine dedicated to Russia coverage.