The Real Estate Cold War: Russia and America Fighting Over “Parity”

This past week the United States informed the Russian Federation that it was going to immediately close the Russian consulate in San Francisco as well as two other properties that house trade missions in Washington DC and New York City, respectively. The Russian Foreign Ministry was told this was a tit-for-tat response to the maneuver done earlier in the summer when Russia literally evicted nearly half of the diplomatic and technical corps of the United States, dropping its number down to 455.

Not coincidentally, this number was chosen by Russia because it meant the number of American diplomats working in Russia would exactly equal the number of Russian diplomats working in America. Call it a personnel parity war. But it is when you look below the surface and follow the thread backward in time that one sees a conflict that borders on the farcically absurd.

Back in December, then President Barack Obama actually closed, without much media fanfare, two Russian holiday retreats for diplomatic staff that were located in Maryland and New York, stating that the residences were instead being used for intelligence initiatives. In addition, 35 diplomatic corps members were expelled from the United States. Most of them were technical members and were at least suspected of being likely involved in the attempts to hack and disrupt the 2016 American presidential election. The Kremlin of course denied these allegations but by and large did not respond to these maneuvers. Given how tense and strained Russian-American relations were even then, it is plausible the Russians felt it would be better to simply wait out the exiting Obama administration and see what would come from the incoming President Trump. It is even more likely they considered the possibility of reversing these Obama decisions quite high, given Trump was declaring the need to reestablish positive relations with Russia and his overt passion to overturn just about anything done by Obama. But this is where the stability of American democracy and its system of checks-and-balances got in the way.

As more convoluted and confusing information emerged throughout the first half of 2017 about potential pre-election interactions between Russian officials and Trump go-betweens, it became apparent that Trump dare not risk any major overt initiative towards Russia. Meanwhile, the Republican-controlled Congress has grown ever more hostile toward the mounting evidence of Russian electoral interference. It was this hostility which resulted in new sanctions being put upon Russia this summer, basically doubling down on the still-in-place sanctions over the events in Ukraine that have hampered the Russian economy for the last few years. It was this double-up that forced Russia to finally react and eject several hundred American diplomats from the country (although it is interesting to note that hardly anyone in the media here in the United States has asked why it was necessary for the US to have nearly double the amount of diplomats than Russia had in America). Laughably, this most recent real estate closure initiative does not involve any diplomatic personnel leaving the United States: the only thing effected is the closure of the real estate. People working there can be reshuffled to other diplomatic assets in the United States. Unbelievably, the State Department has officially said this was done so as to not just maintain the 455 to 455 parity in personnel, but now there will be closer parity between the two nations in terms of property holdings within each country. Even more unbelievably, the US has said not ejecting the personnel from the closed properties was done “in an effort to stop the downward spiral in Russian-American relations.” So, uprooting dozens of people and forcing them to move to another part of the country, where their jobs are likely already occupied by people, for example, in Houston, New York, or Seattle (the other places where Russian consulates are located) is not a worsening of relations? This is horrifically flawed diplomatic logic to say the least. So instead of a personnel parity conflict we have a real estate Cold War and we are supposed to consider it an opportunity for improvement in Russian-American relations.

What we have now is a petulant schoolyard tet-a-tet more focused on each side trying its best to humiliate and hinder the other, while still officially stating before press conference microphones that there is hope relations will improve. Not likely. As is often the case in America, the United States government tends to be highly selective in its use of historical precedent. It traces problems in Russian-American relations currently to the actions involving the secession and reintegration of Crimea into the Russian Federation. Russia, of course, considers the Maidan revolution (which directly preceded and ostensibly caused the Crimea secession referendum) to be a fairly obvious attempt by the United States and European Union to put adversarial authorities and policies right on the very borders of the Russian Federation. Follow that up with the original Crimea sanctions which have devastated the income and buying power of most ordinary Russians, seeing the ruble lose 100% of its value over a single year. The Kremlin, if you can get it to speak privately behind closed doors, will admit it considers this to be open interference in their domestic peace and prosperity by a foreign power and thus the US ‘earned’ the cyber interference effort in 2016.  Thus, we have a fundamental historical analysis problem between the two countries.

Foreign Minister Lavrov expressed his disappointment with the real estate closures, but was hesitant to speak in any concrete terms about consequences or repercussions. But if precedent is any indication over the last five years, we can expect some strange countermeasure within a few months that involves the shuttering of American diplomatic offices or the like in Russia. It will not signal either side moving closer to out and out war, but it will also show that the opportunity for the two sides to find new ground for collaboration is purely symbolic. The Real Estate Cold War is in full effect. It won’t bring about the end of the world in nuclear apocalypse, which is a good thing. But it does keep two major global powers acting like 7 yr old schoolyard bullies trying to one-up each other while the rest of the school suffers the consequences, which is a very bad thing indeed.

Dr. Matthew Crosston
Dr. Matthew Crosston
Dr. Matthew Crosston is Executive Vice Chairman of and chief analytical strategist of I3, a strategic intelligence consulting company. All inquiries regarding speaking engagements and consulting needs can be referred to his website: