Late last year, the Massachusetts Institute of Technology signed a five-year extension of a multimillion-dollar partnership with a Russian technology research institute that has long raised espionage fears among foreign policy experts and the FBI. The contract renewal was a dramatic reversal in an MIT-Russia partnership that appeared to be dormant. And, the extension came just three months after the federal government announced it is investigating MIT’s compliance with reporting requirements for the Russian money it has received in connection with the project.
Scrutiny of the partnership — known as the MIT Skoltech Program — and the Skolkovo Foundation, a Russian organization founded in 2010 to promote innovation, has underscored MIT’s willingness to work with and take money from institutions and individuals with problematic backgrounds. This has raised questions about the school’s entanglements. In the past year, MIT’s relationship with Jeffrey Epstein, a convicted sex offender who died in a Manhattan jail cell while awaiting trial on new charges, forced the school to audit its processes for vetting donors and led to the resignation of a high-level staff member. MIT has also come under fire for working with entities in Saudi Arabia, including its government, in the wake of the killing of Washington Post journalist Jamal Khashoggi.
Continuing a collaboration with Skolkovo, which has close ties to Russian President Vladimir Putin’s government, has raised concerns that MIT is vulnerable to technology transfer theft and is helping to soften Russia’s image on the global stage, according to sources from the U.S. national security community.
The partnership began in 2010 with an agreement between MIT and the Russian Skolkovo Foundation to launch a Skolkovo Institute of Science and Technology, or “Skoltech.” The institute would be the cornerstone of a new Skolkovo Innovation Center, a $3 billion project to build a Russian version of Silicon Valley — or Kendall Square — outside Moscow.
Viktor Vekselberg, one of Russia’s richest men and a member of Putin’s inner circle, heads up the Skolkovo Foundation and was the linchpin for the deal with MIT.
Vekselberg, who has a Ph.D. in mathematics, made a fortune gobbling up oil, technology and metal industries following the collapse of the Soviet Union and has maintained close relations with former President Dmitry Medvedev and Putin, according to Richard Sakwa in his book "Putin and The Oligarch." Vekselberg, in 2005 at Putin’s urging, was selected to head the international section of The Russian Union of Industrialists and Entrepreneurs (RSPP), a lobby group based in Moscow with close ties to the Kremlin, according to the Russian newspaper Izvestiya. Five years later, at Medvedev’s behest, Vekselberg agreed to build a world-class science and technology center in Russia in cooperation with MIT.
Part two of this report aired on Feb. 19, 2020.
The groundbreaking took place in October 2011 at a time when Washington and Moscow were trying to reset their historically hostile relationship. MIT Professor Edward Crawley, an eminent rocket scientist, was selected as the founding president of Skoltech. “When we started in 2011, Russia was an ally,” he told WGBH News’ New England Center for Investigative Reporting (NECIR). “We had the sort of relationships between Skoltech and MIT that there would be between any two universities. We exchanged some scholars; some professors go in and give lectures. We attracted 140 or 150 professors from around the world of the caliber that would be considered for appointment to the MIT faculty. And we recruited them to Moscow.”
Crawley said such endeavors are not unusual. “MIT has an international policy. We won't build MIT campuses around the world, but we will help other universities develop along the lines of MIT. This is a manifestation of the foreign policy of MIT— to create like-minded institutions around the world.”
Phillip Frost, an American billionaire based in Florida, served as an advisor to Skolkovo and to Vekselberg. Frost, who made a fortune from generic pharmaceuticals, said in an interview that MIT’s connection to the project was a win-win situation. “MIT is a great institution and has a long history of being very successful with its tech transfer efforts and has benefited greatly from the royalties that they enjoy from that effort.”
Skolkovo was seen as an opportunity for MIT to leverage the intellectual power of Russia and for Russia to leverage the gold standard of MIT’s worldwide reputation. Specifically, Medvedev and Putin wanted to spur home-grown tech start-ups, stop the brain drain of scientists and engineers leaving for the West, and develop new applied technology, according to Alexei Sitnikov, a Russian who currently serves as vice president for Communications and Community Development for Skoltech. In an interview at the start of the joint project, Sitnikov added that the innovation center was also focused on “five priority areas identified by President Medvedev, which are biotechnology, information technology, space technology, communication and nuclear technology.”
That is what drew Skolkovo to the attention of the Boston office of the FBI. In 2014, the agency issued an unusual public warning via the Boston Business Journal. “The foundation may be a means for the Russian government to access our nation’s sensitive or classified research development facilities and dual-use technologies with military and commercial application,” wrote Lucia Ziobro, the then-assistant special agent in charge. The warning came three months after the Russian invasion of Crimea.
Bruce Tidor, a professor of biological engineering and computer science at MIT, dismisses these concerns. He told NECIR that he and other Skolkovo faculty members, first and foremost, are “scientists, engineers, researchers, designers and problem solvers” and work with their Russian counterparts is all above board.
“Everything that we do is open, publishable, unclassified, freely available research,” Tidor said. “You can go to our website and read about the projects that we support, the research that's being covered. It's all published. It's all open. If we didn’t do it with Russia, we would do it with someone else.”
But Michael Carpenter, a former deputy director of the State Department's Office of Russian Affairs who later served as director for Russia at the National Security Council during the Obama era, said it would be “naïve” to assume that Russia would only use scientific collaboration with MIT “to develop benign civilian types of technologies.”
Carpenter was in Russia as the MIT-Skolkovo collaboration was developing and has been a close observer of the project ever since. He said he believes the Russians saw Skolkovo as a means of partnering with the U.S. to advance their own biomedical, nanotechnology, I.T. and other capabilities, in part, he said, “by learning from how U.S. scientists and academics conduct research and then convert it into applied applications.
"I think from an intelligence perspective, they sought to steal technologies and intellectual property that they could then use for their own benefit."Michael Carpenter
“I think from an intelligence perspective, they sought to steal technologies and intellectual property that they could then use for their own benefit,” he added.
The Skoltech curriculum includes a series of disciplines with potential military or espionage value, including data science, high-performance computing, materials science and advanced manufacturing technologies. Shortly after MIT and Skolkovo inked the initial agreement in 2011, Russian defense contractor KAMAZ announced that it would build a research and development center on the Skolkovo campus.
Carpenter said Vekselberg’s leadership of the collaboration may help explain why no red flags were raised by KAMAZ and other questionable Skolkovo connections. “Victor Vekselberg was seen as someone who is a, quote unquote, ‘a good oligarch,’ someone who you could work with, who understood how Western businesses functioned, who is engaged in philanthropic efforts in the United States,” he said.
After the Skolkovo deal was launched, MIT added Vekselberg to its Board of Trustees. Vekselberg became a significant donor and gave at least $50,000 dollars to the school during the 2017-2018 school year. He also funded a scholarship program in his name. Vekselberg was reappointed to the MIT board in 2015.
But in April 2018 — after revelations of Russian meddling in the 2016 presidential election — Vekselberg was sanctioned by the U.S. Treasury Department. He and his business group were among the Russian oligarchs, officials and entities suspected of participating in the government’s “worldwide malign activity.” In a press release, the Treasury Department said, “The Russian government operates for the disproportionate benefit of oligarchs and government elites” and those “who profit from this corrupt system will no longer be insulated from the consequences of their government’s destabilizing activities.”
After the sanctions were announced, MIT removed Vekselberg from the Board and erased any online reference to his tenure there. An MIT spokeswoman told NECIR that Vekselberg was taken off the Board after he was placed on the Treasury Department’s designated Russian nationals list.
The D.C.-based Project on Government Oversight has been looking at Vekselberg and the MIT-Skolkovo Foundation relationship for some time. Dylan Hedtler-Gaudette is a policy analyst with the non-governmental organization best known by its acronym POGO. “I don't view there being anything wrong with having relationships with entities that exist outside of the country,” Hedtler-Gaudette said in an interview. “There are all kinds of legitimate reasons why. But in this case, this is a foundation that has links to the Russian government. MIT should have known for a long time that there were some problems here, which included allowing the head of the foundation to be on the MIT Corporation board.”
Carpenter, the Russia expert who now heads the Penn Biden Center for Diplomacy and Global Engagement at the University of Pennsylvania, said MIT should have foreseen problems with Skolkovo and Vekselberg. “When dealing with someone like that, one has to assume that they do have close links to the Russian government,” he said.
Carpenter believes that the connections between Vekselberg, the Kremlin and MIT-Skolkovo are not incidental. “Russia sees itself as being essentially in a covert war with Western democracies. And they will use whatever applications they can where it suits them. And as one of the founding fathers of Skolkovo, he was in a position to support the development of that particular project.”
But Professor Tidor of MIT downplayed concerns about Vekselberg. “The project that we’re involved with is bigger than any one individual,” said Tidor.
He added that the collaboration has been a success and points to joint research advancements in gene science and technology.
"I think we've created a really important program. ... Terrific research has been done and people understand each other in a much deeper level. It's very important for us going forward in this world."Bruce Tidor
“I think we've created a really important program. I think we've exposed MIT students, MIT faculty and MIT problem-solving abilities to Russia,” said Tidor. “And we've connected important scientists and students in Russia back to our way of doing things here. Terrific research has been done and people understand each other in a much deeper level. It's very important for us going forward in this world.”
Tidor said MIT has acknowledged errors made in its dealing with sexual predator Jeffrey Epstein and other donors and institutions.
“I'm actually on the ad hoc faculty committee looking at creating guidelines for how MIT chooses its outside engagements,” Tidor said. “And I can say that people are being very thoughtful in examining what principles we should apply, how they reflect our values and how they affect our ability to have impact in the world.”
With its reputation in question over the handling of the Epstein scandal, Tidor said that the university is taking a closer look at those relationships, and Russia was among the countries reviewed.
Tidor does not regard Skolkovo and Skoltech as problematic. MIT looked at the program from multiple angles, he said, examining the advantages and disadvantages and soliciting input across the university. “And the upshot of all of that is that it is a good idea to continue and I'm proud of that. I'm happy with that decision.”
By contrast, Ilya Ponomarev was shocked by the decision to renew the partnership.
Ponomarev headed up international development and technology transfer for Skolkovo/Skoltech and worked closely with MIT. A former member of the Russian Duma, Ponomarev spoke with NECIR from his home in Kyiv, Ukraine. He left Russia after publicly criticizing Putin for invading Crimea. He was the sole vote in the Duma in favor of condemning Russia’s annexation of the peninsula. The Kremlin investigated Ponomarev for allegedly misusing public funds that had been directed to Skolkovo, a charge he dismisses as politically motivated.
He said in light of current U.S.-Russia tensions it was a “great surprise” to learn from NECIR that MIT had entered into a third phase agreement with Skolkovo on Dec. 19. A year ago, the MIT-Skolkovo website trumpeted the partnership’s achievements but said that the collaboration had concluded and “is not currently active.”
“With so many [sic] negative buzz and this whole environment between the U.S. and Russia and the security concerns, it's hard to believe,” Ponomarev said. “Of course, for MIT it was beneficial financially. [The] Russian government was paying quite a lot, there was hundreds of millions” of dollars.
The agreement signed in October 2011 altogether transferred $302.5 million to MIT — $150.5 million for MIT’s development of the Skoltech curriculum and another $152 million for MIT to use “for its own development,” per the 99-page contract. MIT’s Ed Crawley denied that the relationship was predicated on money. The latest five-year agreement, according to an MIT spokeswoman, comes with new funding from Skoltech. But MIT, citing confidentiality, declined to disclose the amount.
“There's no doubt about the fact that MIT received some funds associated with the development of Skoltech, but there were also significant costs incurred,” Crawley said. “This is sort of the way of doing business amongst international universities. We share resources and we share ideas.“
MIT and Skolkovo also share profits and royalties from their relationship, which includes CRISPR gene editing technology.
That was long the goal of the Skolkovo initiative, said Alexei Sitiniko. In partnership with MIT, the Russians wanted to “create inventions and … commercialize them and bring them to market. So, basically to complete the innovation chain from idea to profit,” Sitiniko explained in 2011.
Federal Investigation Into MIT-Skolkovo
In September of last year, the federal government began probing MIT’s financial relationship with the Skolkovo Foundation. A letter from the Department of Education addressed to MIT President Rafael Reif raised questions about whether MIT has properly reported gifts and contracts with Skolkovo and other foreign entities or enterprises. Hedtler-Gaudette of POGO says millions of dollars exchanged may not have been properly accounted for.
“When we’re talking about the dollar amount we’re talking about, it appears as though the Department of Education thinks that MIT may not have been in compliance and that’s why they opened up this investigation particularly around the Russian foundation,” Hedtler-Gaudette said.
The university said in a statement, “MIT takes its federal reporting obligations seriously. Over a year ago, MIT identified ways to improve its foreign gift and contract reporting. MIT’s reporting since January 2019 has been based on these improved processes. The Institute is committed to working constructively with federal officials to address the department’s questions.”
Still, the relationship with the Russians is likely to continue raising questions.
Carpenter, the former NSA official, said that with 10 years of research, reputation and faculty invested in the project, MIT “is a little bit stuck between a rock and a hard place. They're in now completely. But at the same time, you know, Russia is now an actor that is an aggressive, revanchist actor on the world stage. And so now they have to cope with the consequences of that.”
NECIR interns Brianna McKinley and Lena Novins-Montague contributed to this report.
