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John J. Sullivan’s venerable career has spanned four decades in private law practice and in the public sector — including, most recently, as U.S. ambassador to the Russian Federation, from December 2019 to October 2022. A former U.S. deputy secretary of state and U.S. deputy secretary of commerce, and partner in the global law firm Mayer Brown, Amb. Sullivan serves as a distinguished fellow at Georgetown University’s School of Foreign Service.

On February 22, the FiscalNote Executive Institute, in collaboration with FrontierView, hosted a fireside chat with Amb. Sullivan facilitated by Mark McNamee, Director, Europe at FrontierView,  who assists multinationals in understanding their external political and economic environment in Western, Central, and Eastern Europe, with a focus on Russia/CIS. Below are some insights from the discussion.

Diplomacy with Russia

  • Strained U.S.-Russia relations, pre-Ukraine war. Russia’s line to the United States: Russia’s bad relations with you are “all your fault. So how are you going to fix them?” When dealing with U.S. diplomats off the record, Russia repeatedly dismissed any plans to invade Ukraine in late 2021.
  • Negotiation theater. Despite its claims to the contrary, Russia had no interest in negotiating any grievances over Ukraine. By December 2021, it had therefore become clear to Amb. Sullivan that Russia was going to invade.
  • Surely it won’t happen. Yet as late as February 2022, the U.S. business community in Russia (around 1,200 companies of varying sizes) was largely convinced that a full-scale war would not happen — because “it would be completely irrational.”

Understanding Putin

  • In it for the long haul. Vladimir Putin’s rhetoric suggests he’s not interested in a truce, but instead wants victory at nearly any cost. Putin expects a war of attrition — and victory for Russia, once Western military and financial support for Ukraine withers. 
  • Take him at his word. Putin truly views much of Ukraine as Russian land and much of the Ukrainian population as Russian. To protect them, he must conquer (“liberate”) them.
  • Russia has shattered its support within Ukraine. Many, if not most, Ukrainians who were pro-Russia before the invasion have since turned strongly against Russia.
  • Russia has reinvigorated NATO. Putin’s desire to weaken NATO has had the opposite effect.
  • Peace at what price? In Europe and the U.S., there is growing pressure to seek a truce. But such a truce would, at present, require significant land concessions to Russia, thereby shredding the post-WW2 international principle against wars of aggression — and emboldening other would-be conquerors.
  • Nuclear blackmail. If Putin follows through on his threat to pull Russia out of the START treaty, the cause of nuclear nonproliferation may quickly unravel.

Business implications

  • Fortress Russia. Putin is now firmly committed to making Russia as self-sufficient as possible while pursuing closer ties with sympathetic governments in Asia, the Middle East, and Africa. 
  • Time to say goodbye … Putin’s growing embrace of total war means “good luck” for Western companies hoping to salvage their investments in Russia. At best, such firms might recoup 10-20 percent of the value of their businesses, via a fire sale.
  • …and don’t plan on a reunion, either. For the foreseeable future, the West and Russia will continue to “decouple” — especially over energy, Russia’s biggest export.
  • Whack-a-mole sanctions. Creating sanctions is one thing, enforcing them is another, as Western governments have learned painfully.

The China effect

  • Feelings aren’t mutual. Russia needs China much more than China needs Russia.
  • Walking a tightrope. China wants to support Russia, as a fellow authoritarian bulwark against the West; yet China must tread warily when considering whether to do things like send weapons to Russia — especially because China doesn’t want to (overly) upset its biggest trading partner, the EU.
  • Help with strings attached. Chinese support for Russia is not unlimited. Xi Jinping, for instance, has referenced the use of nuclear weapons in Ukraine as a “red line” that must not be crossed.

A few predictions

  • Chemical risk. If Russia is backed into a corner, it may be more likely to use chemical weapons than nuclear weapons, because use of the former can be more easily denied. 
  • Don’t forget your Russian. In the long term, the West will have to vigorously reengage Russia. But when this would happen is unclear.