I first met Senator Robert Dole when I was a senior adviser to the Senate’s Joint Economic Committee from 1984 to 1986. During that time, my good friend Senator Steve Symms (R., Idaho) introduced me to Dole. As it turns out, we hit it off immediately. I think that was, in part, due to us being three country boys (Dole from Kansas, Symms from Idaho, and yours truly from Iowa). We spoke the same language, if you will.
I was always impressed by Senator Dole — a man who seemed to be comfortable in his own skin and never appeared to take himself too seriously. Each time Senator Symms and I needed to see Dole about something, Symms would call Dole’s office and ask whether the leader was in. If he was, Symms and I would make a beeline for his office. Even though it always seemed as if he was juggling a thousand balls at once, Dole would hear us out — loud and clear.
My trip down memory lane with Dole and the Russians began in the early 1990s.
One of our most serious encounters occurred in 1992, when we engaged in intensive collaboration on the topic of Russia and, more specifically, the ruble. At that time, Senator Dole was the Senate minority leader. I recounted our Russian collaboration in full when I delivered the first John Ise Distinguished Lecture at the University of Kansas in 2019. When I mentioned Dole’s name, I thought the audience was going to rise and salute.
Over an extended period of time, the currency-board idea circulated in Russia, moving in cycles from hot to cold. Two of the first Russian politicians I discussed the currency-board idea with were Sergei Krasavchenko, the chairman of the Committee on Economic Reform and Ownership of the Russian Duma, and Vladimir Shumeyko, the deputy chairman of the Committee on Economic Reform and Ownership of the Russian Duma. Shumeyko and a delegation of ten Russian parliamentarians paid me a visit at Johns Hopkins University in Baltimore, where I conducted a one-day briefing on currency boards on one hot June day in 1991.
My next meeting with a delegation from Russia took place in Paris at a meeting that Mrs. Hanke and I helped arrange in early November 1991. It lasted several days and was eventful. The leader of the Russian delegation, Academician Dmitry S. Lvov, opened the meetings with a press conference. By the time the meetings had concluded, there had been another change of direction in Moscow (the Soviet Union was by then entering its chaotic final weeks). Dr. Yegor Gaidar, not Academician Lvov, held forth as the Russians’ leader at the final press conference. Mrs. Hanke and I immediately knew something significant had happened in Paris.
Sure enough, shortly after he returned to Moscow, Dr. Gaidar was appointed to his first major post — minister of economy and finance — on November 11, 1991. For me, this mattered because I was a member of the Scientific Advisory Council of the International Centre for Research into Economic Transformation (ICRET), a think tank that Dr. Gaidar had founded in Moscow.
The Soviet Union finally expired on December 26, 1991. In 1992, I spent a considerable amount of time arguing for a Russian currency board. To that end, I met with Anatoly Sobchak, the mayor of St. Petersburg, an influential advocate of economic reforms, during an early May 1992 visit to St. Petersburg. It was at a reception following our meetings that Mrs. Hanke and I met with Vladimir Putin, who was one of Sobchak’s advisers at the time.
Following that St. Petersburg trip, Jean-Bernard Raimond, the former French ambassador to the Soviet Union, commissioned a private jet, and in late June 1992, we, along with Mrs. Hanke and Madame Raimond flew in to Moscow. I thought things looked very promising when we met up with Gaidar, who was by then installed as prime minister.
During 1992, I also spent a great deal of time trying to beat back objections to a currency board coming from certain elements within the International Monetary Fund’s management. Their argument was, in short, that the IMF couldn’t approve a Russian currency board because the U.S. Congress would be opposed to it. To counter this argument, I worked with Senators Dole, Symms, and Phil Gramm (R., Texas) to draft legislation that would allow countries to use part of the U.S.’s quota contribution to the IMF for the establishment of currency boards. Dole introduced the amendment to the Foreign Operations, Export Financing, and Related Programs Appropriations Act from the floor of the Senate, and it passed. Indeed, HR-5368, Law no. 102-391 was signed into law on October 6, 1992. Symms and I immediately repaired to Dole’s office to congratulate and thank him, whereupon, he smiled and said, “No problem. Let’s just call it the Hanke amendment.” As it turned out, the amendment was a game changer. Indeed, it squashed the IMF’s currency-board objections.
But, by then, the currency-board idea had cooled down in Russia. It didn’t heat up again until the ruble collapse occurred a few years later (August 1998), a collapse that I had anticipated.
In the middle of the crisis, IMF managing director Michel Camdessus rushed off to Crimea with copies of Russian Currency and Finance, a book I co-wrote with Professor Lars Jonung, Sweden’s top monetary economist and chief economist for Prime Minister Carl Bildt, and Dr. Kurt Schuler, one of my most distinguished post-doctoral students. Camdessus arrived at a meeting with Russia’s prime minister designate, the late Viktor Chernomyrdin, with Russian Currency and Finance in tow. It was then that Camdessus informed the Russian delegation that the IMF would back a Russian currency board. The currency-board idea got hot again. But the type of discipline associated with a currency board wasn’t agreeable to Moscow’s power brokers, and the idea cooled down once again.
I made one last attempt to sell the currency-board idea in March 1999, when Mrs. Hanke and I spent a weekend with Chernomyrdin at the Château de Divonne in Divonne-les-Bains, France. At that time, Chernomyrdin was no longer part of the government, but was serving as chairman of the Council of Directors of Gazprom, Russia’s oil and gas giant, and thus still had plenty of clout. In any case, my arguments clearly did not carry the day. Looking back, I am confident that if Senator Dole would have joined us we could have closed a currency-board deal. Dole was just that kind of guy. R.I.P.