By John Walcott and Warren Strobel
WASHINGTON (Reuters) - Russia has mounted a campaign of covert economic and political measures to manipulate five countries in central and eastern Europe, discredit the West's liberal democratic model, and undermine trans-Atlantic ties, a report by a private U.S. research group said.
The report released on Thursday said Moscow had co-opted sympathetic politicians, strived to dominate energy markets and other economic sectors, and undermined anti-corruption measures in an attempt to gain sway over governments in Bulgaria, Hungary, Latvia, Serbia, and Slovakia.
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"In certain countries, Russian influence has become so pervasive and endemic that it has challenged national stability as well as a country's Western orientation and Euro-Atlantic stability," said the report of a 16-month study by the Center for Strategic and International Studies in Washington and the Sofia, Bulgaria-based Center for the Study of Democracy.
The publication of "The Kremlin Playbook: Understanding Russian Influence in Eastern and Central Europe" coincides with an unprecedented debate in the United States over whether Russia is attempting to interfere in the Nov. 8 presidential election with cyber attacks and the release of emails from the campaign of Democratic Party candidate Hillary Clinton.
The former U.S. Secretary of State's campaign has said the Kremlin is trying to help Republican Donald Trump win the White House.
On Friday, the U.S. government for the first time formally accused Russia of hacking Democratic Party organizations. Russian President Vladimir Putin on Wednesday rejected allegations of meddling in the election.
The Russian Embassy in Washington did not immediately respond to an email seeking comment on the report. On Sunday, however, Russian Foreign Minister Sergei Lavrov told Russian state TV the United States was increasing its hostility toward Moscow.
Lavrov complained that NATO had been steadily moving military infrastructure closer to Russia's borders with Eastern European countries and criticized sanctions imposed over Moscow's role in the Ukraine crisis.
A former U.S. State Department official is the report's lead author and U.S. officials said they concur with the findings on Russia's involvement in Eastern Europe.
"The Russians have been engaged in a sustained campaign to recapture what Putin considers their rightful buffer in Eastern Europe, and to undermine not just NATO and the EU, but the entire democratic foundation of both institutions," said a U.S. official who has studied Russian behavior since before the Soviet Union's collapse in 1991.
The official requested anonymity because, he said, the White House has ordered officials not to publicly discuss hostile Russian activities.
Those activities, he said, include bribery, propaganda, disinformation, "the occasional" assassination of Kremlin critics at home or abroad, and now using the internet to undermine opponents and weaken Western institutions.
"The Kremlin Playbook" cites a series of Russian efforts to expand its writ in central and eastern Europe.
They range from "megadeal" projects such as the 12.2 billion euro contract to build two new nuclear reactors in Hungary, awarded to Russia under opaque terms, to the cultivation of pro-Russian businessmen who gain political office and then shield Moscow's interests, it said.
In Bulgaria, Russia's economic presence is so strong, averaging 22 percent of GDP between 2005 and 2014, "that the country is at high risk of Russian-influenced state capture," the report said.
Heather Conley, the former U.S. official and lead author of the report, said in an interview that the study was intended to highlight a challenge that has received insufficient attention from American and European policymakers.
"The first step is to acknowledge that which is happening," said Conley. "What is at stake here is how we view ourselves and the functioning of our democracy."
The report proposes measures to curb what it calls an "unvirtuous cycle" of covert Russian influence. They include more focus on illicit financial flows and revamping U.S. assistance programs to stress strengthening governance and combating Russian influence.
It is not the only study this year to highlight Russia's measures in the region.
"Russia has opened a new political front within Europe by supporting the far right against the liberal European Union," the Centre for Historical Analysis and Conflict Research, a British Army research group, said in February.
Governments such as those in Hungary and Greece "openly sympathize" with Putin, it said. "The result is that there is a substantial 'fifth column' in western and central Europe which weakens our response to Russian aggression."
(Editing by Grant McCool)