Speaking to the Baltimore Council on Foreign Affairs, here's what David Kramer, Deputy U.S. Assistant Secretary for European and Eurasian Affairs, had to say about the problems in the U.S. releationship with Russia:

Russia is no longer, as Ronald Reagan once famously said, the Evil Empire, let's start off with that assertion. In fact, over the past 15-plus years, Russia has become more free than at any time in its history. Let me hasten to add, however, that that is an incredibly low threshold-far too low for a great nation. Far too low for Russia's own aspirations to greatness, and far short of our own hopeful -- and yes, perhaps giddy and even unrealistic --expectations of 16 years ago, when the world was encouraged by the collapse of the Soviet Union. {LR: This is the key point to be made about Russia; saying it is more free than it has ever been says absolutely nothing at all. It's like pointing to the day during World War II when Hitler killed the smallest number of Jews and saying it was a good day.}

For Russia does give us pause; it gives pause to those who follow its evolution with interest, like you; to those who would want to invest there or do business with it, which probably includes many of you as well; and to those of us who deal with it diplomatically, like me.

Speaking in February to the Munich Security Conference, President Putin branded the OSCE a "vulgar instrument designed to promote the foreign policy interests of one or a group of countries." Under the guise of demanding reforms and seeking to place more emphasis on security and economic issues, Russia has proposed changes to the OSCE. Let us be clear, the effect of these reforms would be to cripple the OSCE's democracy promotion efforts.

The Administration strongly defends the OSCE's mandate to advance democratic reforms, including election monitoring. Washington and Moscow committed to these efforts when we signed the Helsinki Final Act in 1975. The elections monitoring efforts of the OSCE's Office of Democratic Institutions and Human Rights, known as ODIHR, constitute nothing less than the international "gold standard" in this area.

In fact, we look forward to the OSCE's involvement in monitoring the conduct of Russia's upcoming Duma elections in December 2007 and Presidential elections in March 2008. I should add, incidentally, that the United States accepts and welcomes ODIHR monitoring of U.S. elections.

I suppose we cannot avoid the fact that differences with Russia over the OSCE reflect negative trends on human rights and democracy inside Russia itself. We hope that the slide in these areas we have seen for the past few years will not deepen, and in fact, will reverse itself -- optimists would point to Russia's history of swings of the pendulum and express hope that things will soon begin to swing in a more positive direction. But we do no one any favors, least of all the Russian people and even their government, by abstaining from speaking out when necessary. We do so, I should point out, as a friend worried about the trends we see unfolding, not simply to wag our finger in a lecturing way. We also do so as a matter of principle.

Suppression of genuine opposition, abridgement of the right to protest, constriction of civil society, and the decline of media freedom are all serious setbacks. They are inconsistent with Russia's professed commitment to building and preserving the foundations of a democratic state.

The State Department has publicly protested the recent police brutality employed to break up opposition marches in Moscow, St. Petersburg, and Nizhny Novgorod, and just the other day in Voronezh. The European Union also protested those actions.

Russian authorities sought to prevent the marches from taking place at all: they denied permission to stage the events or tried to marginalize them by changing their venues. They also harassed and detained Russians traveling to participate in these peaceful rallies; on the day of the events, a disproportionate police presence wielded undue force against the protestors as well as journalists reporting on the events.

And at the EU-Russia Summit just a couple of weeks ago, similar efforts were directed against members of the Russian opposition seeking to express their opinions in Samara. While there was no crackdown at the march itself, where several hundred people protested, organizers and journalists covering the event faced significant harassment. This included officials preventing "Other Russia" activist Garry Kasparov and some 20 others from flying from Moscow to Samara because they might have been carrying "counterfeit" plane tickets.

Again, as with Russian intransigence over CFE and at the OSCE, such ham-fisted behavior has only managed to forge a stronger consensus between us and our Allies. The Russian government must simply realize that it does itself no favors when it uses these strong-armed tactics.

It was interesting to note that Presidential Administration deputy press spokesman Dmitry Peskov acknowledged that the police response to last month's protests merits review. St. Petersburg Governor Matviyenko and the official Human Rights Ombudsman, Vladimir Lukin, have both called for investigations.

President Putin's own chairperson of the Civil Society Institution and Human Rights Council, Ella Pamfilova, has said that Interior Minister Nurgaliyev should resign.

Such calls indicate that, even within official Russia, there is not a monolithic façade on human rights.

Having said that, the backsliding is multifaceted. We are concerned about the increasingly narrow and controlled space within which NGOs are forced to operate. We also continue to monitor the implementation of the new NGO law enacted in April 2006.

And the increasing pressure on Russian journalists is likewise troubling. Simply put, a vigorous, independent and probing media is indispensable in a democracy. In Russia today, unfortunately, most national broadcast media-the primary source of news for most Russians -- are either in the hands of the government or of individuals and entities allied with the Kremlin.

And one cannot talk about the state of journalism in Russia without making mention of recent attacks on journalists, including the brutal and still unsolved murders of Paul Klebnikov and Anna Politkovskaya, among others. These brave and talented journalists cared deeply about Russia, wanted to make it a better place, and lost their lives because of those attributes. The Litvinenko case in London, sadly, raises further serious questions about Russia's record. We believe that Litvineko's murder was a horrible crime that posed a threat to many others who might have been exposed to polonium, and we strongly support British efforts to bring to justice those who perpetrated this dastardly act.

That all this is happening, that Russia is regressing in these areas, ahead of parliamentary and presidential elections, may not be entirely coincidental. The Kremlin is bringing its full weight to bear in shaping the environment in favor of its preferred outcome. What is most disturbing is the apparently selective use of the law to disadvantage a number of political parties, for instance by precluding their registration and thus their ability to put forth candidates.

You should know that the U.S. and its European Allies continue to support Russian democracy and civil society. These issues are regularly taken up in our bilateral and multilateral consultations. Capacity building for civil society and support for the rule of law are key priorities in our assistance to Russia.

President Bush, when he was in St. Petersburg last summer, hosted an event with NGO and civil society leaders, sending a powerful message of American support and solidarity. Just this month, Secretary Rice took part in Moscow in a roundtable discussion with leaders of civil society and other figures.

And because a country's foreign policy can only reflect its internal situation, you should not be surprised to hear that Russia's relations with its neighbors and with Europe remain an issue of considerable concern. This is another area where we are pushing back.

Here's the problem: Moscow still tends to approach its neighbors with a zero-sum mentality, particularly when it comes to those countries, such as Georgia and Ukraine, which choose to pursue closer Euro-Atlantic ties.

Russian-Georgian relations, after a period of extreme tension, have shown tentative signs of improvement, but still remain tense. Russia maintains the economic and transportation sanctions it imposed against Georgia last fall. On the positive side, Russia seems to have resumed issuing visas to Georgians only in the last few days, which if confirmed, would be a notable and positive step.

Yet, Russia continues to take actions that call into question its professed support for Georgia's territorial integrity. Moscow, for example, supports separatist regimes in Georgia's South Ossetia and Abkhazia regions.

And Moscow also gives support to the corrupt, separatist regime in Moldova's Transnistria region, a regime that has avoided engaging in conflict resolution talks for over a year. This is an issue I personally have spent lots of time on, including regular visits to Moldova.

I should add that on one separatist conflict, the one over Nagorno-Karabakh between Azerbaijan and Armenia, the United States and Russia work well together in trying to facilitate a resolution.

But in general, the United States continues to call on Russia to end its support for separatists, and work with our European partners to implement confidence-building measures designed to bring the sides in each conflict closer together. We are working to advance a resolution to all of these conflicts.

Regrettably, Russia has adopted a hostile attitude toward U.S. plans for placing elements of a limited missile defense system in Poland and the Czech Republic.

These systems are intended to shield the United States and its European Allies against missile threats from the Middle East. We have held numerous briefings and consultations with Russia on our missile defense plans for more than a year, both bilaterally and in the NATO-Russia Council, so Russia cannot claim -- as it does -- that we are not being transparent. More than that, we have offered ways to work together in confronting this mutual threat from Iran and rogue regimes, but Russia so far prefers unhelpful rhetoric over actual collaboration.

The very modest system we have in mind poses no threat whatsoever to Russia. This is why, speaking at the NATO Ministerial in Oslo and again just the other day, Secretary Rice described as "purely ludicrous" the idea that somehow 10 interceptors and a few radars in Eastern Europe are going to threaten Russia or somehow undermine the effectiveness of its arsenal of thousands of nuclear weapons. In fact, it's not even designed to confront a threat from that direction.

We and the Russians simply do not agree on missile defense, but we will continue to work to be transparent and reach a better understanding between our two countries on this important issue.

And to round out joint U.S.-European efforts to get Russia to moderate its behavior toward its neighbors, we and our European allies have spoken out against Russia's proclivity to use energy as a political and/or economic lever against neighbors, such as in the case of Ukraine in 2006 or Belarus this year. In both cases, we spoke out clearly against cutoffs of Russian energy to these countries, and encouraged resolution of differences by transparent, commercial means over a gradual term. Hastily shutting down oil and/or gas flows to neighbors in the middle of winter -- and in the process, disrupting supply to other European countries further downstream -- is damaging to Russia's reputation as a reliable supplier of energy resources, and is not an effective way to bolster global energy security.

We are concerned by apparently political interference with infrastructure, as in the case of prolonged "repairs" to an oil pipeline to Lithuania, or the closing of Russia's only legal border crossing with Georgia last year or alleged structural deficiencies that restricted traffic on a bridge to Estonia this month. The recent cyberwarfare against Estonia is additional cause for concern. Restricting traffic to Estonia is but one example of a heavy-handed approach toward that country and is the most recent cause for concern about Russian behavior toward its neighbors.

The reference to energy brings me to my last point, which is the area in the middle, energy security.

Russia holds the world's largest natural gas reserves; second largest coal reserves and seventh largest oil reserves. It is the largest exporter of natural gas, and it is tied with Saudi Arabia as the world's largest oil exporter. Energy is literally fueling Russia's economic growth and growing Russian confidence and assertiveness. At the same time, however, Russia's energy industry is plagued by decaying infrastructure and requires significant new investment to maintain current production levels.

We are concerned about trends here. The Russian government will have to address its decision to exert more state control over strategic industries. Our bilateral energy dialogue was launched with high hopes in 2003. There were some results, such as the ConocoPhillips-Lukoil deal, the success of ExxonMobil in Sakhalin-1 in Russia's Far East, and the continued presence of U.S. energy services companies in Western Siberia and the Volga-Urals, but less than hoped for despite strong interest shown by American companies in this area.

We continue to work with our partners to convey the message that despite continued strong economic growth, Russia must look to the long-term and work with far greater urgency to attract investment into its energy sector in order to reverse production growth stagnation.

Greater U.S. investment in this sector would be a win-win outcome for both countries: American companies have the capital and high technology Russia needs to exploit many of its oil and gas fields. This is increasingly important, as Russia's new fields are located in remote areas, like the Arctic, Eastern Siberia and the Far East, and many future fields will be off-shore.

Although the investment climate has improved on some fronts, investment in energy is still a mixed bag, rife with uncertainties. Overall, many structural improvements remain necessary -- judicial reform to strengthen rule of law, banking reform to improve the capacity of the financial sector, accounting reform to promote greater transparency and integration into international business standards, improved corporate governance, and reduction of government bureaucracy.

Improving the investment climate will establish a strong basis for long-term economic growth both in the energy and non-energy sectors.

The U.S. Government does not support monopolies or cartels. We believe in free markets for energy and transport of oil and gas. Across the board, we encourage further investment to expand production and transport options. Countries in the Caucasus and Central Asia have significant resources and are helping provide more product to market, particularly in Europe.

America's Eurasian energy security policy promotes diversification, and that includes efforts to advance reliable, long-term flows of natural gas from the Caspian region to European markets. Reliability requires sustained investment, multiple sources of energy imports and multiple pipeline routes. These points are not new; they were endorsed by G8 heads of state during their summit in Russia last July, when leaders committed to the St. Petersburg Energy Security Principles, including development of transparent, efficient, and competitive energy markets. During the last U.S.-EU Summit, the United States and the European Commission pledged to seek diversification of energy types, sources, and supply routes, with a particular focus on the Caspian region as a key source of diversified supplies of oil and natural gas.

Now, this month, the Presidents of Russia, Kazakhstan, and Turkmenistan issued a declaration pledging to cooperate on increasing natural gas exports from Central Asia to Russia. This declaration attracted considerable attention and misplaced speculation in the press. But in reality, the three presidents' statement need have no direct impact on our effort to develop multiple gas pipeline routes from the Caspian Sea region to Europe.

The presidents' statement is not surprising. It points up the fact that the Caspian region is ripe for further development. For us and Europe, the key question is what form this further development will take. Clearly, Russia will be a player in Central Asia's energy sector. We believe that Central Asian countries would be wise to court more than one customer.

Before summing up, let me mention briefly one last issue lurking over not just our relations with Russia but also Europe's relations with Russia and that is Kosovo, an issue where there is not yet full cooperation but neither is there, yet, complete disagreement. Stability in Kosovo and elsewhere in Southeast Europe has been a joint project among Russians, Europeans and Americans for over a decade, and a successful one. Now the UN Security Council must exercise its responsibility for international peace and security, looking at the fact that the parties are irreconcilable about Kosovo's status and that President Ahtisaari has presented a compelling compromise. We hope that Russia will support the draft resolution we and the Europeans have presented to establish international supervision of Kosovo in its transition to independence.

We see Kosovo as sui generis -- a set of circumstances not found in any other conflict -- and we also hope that Russia does not invoke Kosovo as a basis for intervention in other places along its borders -- for that would be a most dangerous game to play. Kosovo is an issue of utmost importance to us and to Europe; we and our allies have troops on the ground and we host refugees desiring to return home. The time, however, has come, to move forward with a resolution to the final piece of the Balkan puzzle. While we understand Russian reluctance to embrace the way forward, we also expect Russia not to impose continued stagnation on Kosovo. The answer to this test may be forthcoming over the next few days.