Category: Donald Trump

Senate’s Russia Inquiry Examined Trump’s Ties to Epstein

The House Oversight Committee released the following text exchange as part of its investigation into Jeffrey Epstein. It captures a conversation between Steve Bannon and Epstein after Bannon’s appearance before the Senate Intelligence Committee during its probe into Russian interference in the 2016 election. The messages span two days, November 19 and November 21.

For background, read my post on Jeffrey Epstein, Leon Black, and Russia.

November 19, 2018

EPSTEIN:
How was it

BANNON:
Dude: 8 and 1/2 hours

BANNON:
15 minutes on u

EPSTEIN:
Members or staff

EPSTEIN:
Was burke allowed in? Does he have clearance

Note: Epstein is referring to Bannon’s attorney William Burck.

BANNON:
Staff ::: took alex spiro— his NYC partner, stone cold killer

EPSTEIN:
Why me? Did they want bagels and coffee

EPSTEIN:
Or did they get your text s

BANNON:
Neither ::: went thru list of 50 names– Leon Black

BANNON:
Then u–grilled me when I said I knew u about relationship with djt

EPSTEIN:
Did they ask you if i had a silver bullet

EPSTEIN:
Toughest we’re republicans?

EPSTEIN:
Were

BANNON:
No democrats– spiro also big dem

EPSTEIN:
Oy

EPSTEIN:
So it begins

BANNON:
Somehow your name has come up in this thing; Leon’s about “Russia”

EPSTEIN:
Message: This thing being Russia or djt or .. play

EPSTEIN:
Is the somehow, my friendship with lucifer

EPSTEIN:
🙂

BANNON:
Leon about Russia; u about trump but they ask every witness these 50 names— 25+ Russian


November 21, 2018

EPSTEIN:
Do you recall any specific questions re me, and your interview?

EPSTEIN:
at

BANNON:
Yes ::: “what is his relationship with potus”; “does he talk about trump”;
“when was last time he saw trump”… etc etc etc

EPSTEIN:
Some reporters asking the same question ? Can figure out why?

EPSTEIN:
Can’t

BANNON:
Interview ends with 50 names — everybody gets the request — 25 Russian names; 25 American — u and Leon are #3 / #4 on american list

EPSTEIN:
Understood

EPSTEIN:
funny

BANNON:
“has Leon Black ever mentioned Russia”; “Do you know of any connections
Leon Black has with Russia” etc etc

EPSTEIN:
Other Americans? David geovanis? Ken lebow? Any other names you recall

EPSTEIN:
Nick ribs? Tom barrack?

BANNON:
Benton Lebow

BANNON:
Barrack

BANNON:
Geovanias

BANNON:
Ton other I didn’t know– and only Russian was Alexander Dugin

EPSTEIN:
Ha

From Trump Tower to Arson

The long, strange fall of Jacob Bogatin, a onetime partner of the “Brainy Don” Semion Mogilevich, now accused of murder in Virginia.

Once upon a time, Semion Mogilevich was one of the biggest gangsters in the world. The “Brainy Don” had his fingers in virtually every criminal activity imaginable, including murder, extortion, sex trafficking, weapons trafficking, money laundering, and even a stock fraud occurring right under the FBI’s nose.

In 2003, federal prosecutors unsealed an indictment charging Mogilevich in a $150 million stock fraud scheme involving YBM Magnex, a purported manufacturer of bicycles and magnets based outside Philadelphia. Also indicted was the company’s CEO, Jacob Bogatin.

Semion Mogilevich, FBI photo

The case drew attention from those of us investigating Donald Trump’s Russia ties because Jacob’s brother, David Bogatin, had bought five apartments in the newly opened Trump Tower in 1984 for $5.8 million. The money came from a gasoline-tax scam he was running in Brooklyn with the Colombo crime family. According to one of Bogatin’s partners in that scheme, Trump himself persuaded Bogatin to purchase the apartments “as an investment.”

Trump didn’t merely broker the sale. As investigative reporter Wayne Barrett reported in Trump: The Deals and the Downfall, Trump personally attended the closing—an unusual move for a developer, and one that suggested this was no ordinary real-estate transaction.

The Bogatin deal carried classic money-laundering red flags. Of the five condos, only one was in David Bogatin’s name; the other four were held by shell companies created the same day by attorney Marvin E. Kramer, who specialized in forming shelf corporations from his Coney Island office. “We didn’t think he was living in five apartments,” former New York assistant attorney general Ronda Lustman told me. Prosecutors quickly concluded that the purchases were intended to launder cash and conceal assets.

Bogatin wasn’t alone. From its earliest days, Trump Tower attracted Russian organized crime figures. Roughly a third of its units were owned by foreign corporations, many of which were registered in Panama or the Netherlands Antilles. It was one of only two buildings in New York that allowed anonymous buyers. “Trump Tower allowed people who wanted to hide their money to buy there because their names were never really published,” said Jim E. Moody, former deputy assistant director of the FBI.

Among its early residents was Vyacheslav Ivankov, one of Russia’s most feared vory v zakone—“thieves-in-law.” The FBI tracked him to a Trump Tower apartment while he directed Russian Mafia operations in the United States. Years later, another mobster, Vadim Trincher, ran a multimillion-dollar gambling ring from a Trump Tower apartment just floors below Trump’s own penthouse.

Another figure often mentioned in connection with Mogilevich is Felix Sater, a Russian-born stockbroker-turned-government-informant and real estate developer who became one of Donald Trump’s more controversial business partners, scouting property deals in Moscow. While some have speculated about ties between Sater and Mogilevich’s network, any link appears to run through Sater’s father, Michael Sheferofsky. In Putin’s People, journalist Catherine Belton reported that two former Mogilevich associates said Sheferofsky had “become an ‘enforcer’ for some of Mogilevich’s interests” in Brighton Beach, where he ran protection rackets with the Genovese crime family.

Whether Trump knew about the Bogatins’ mob ties in 1984 remains unclear. The FBI never questioned him about David Bogatin. “In retrospect, we should have been looking in that direction,” said Ronald Noel, a former FBI agent on the case. What’s certain is that Trump was eager to make the sale, so eager he showed up in person at the closing.

David Bogatin fled the country, settling first in Austria and later in Poland, where he launched one of the country’s first private banking chains. When a Warsaw newspaper exposed his past in 1992, he was arrested and extradited to New York, where he served eight years in Attica.

His brother was more fortunate. The YBM case never reached trial. Mogilevich remains a fugitive despite years on the FBI’s Ten Most Wanted list and a $5 million reward for his capture. Jacob Bogatin remained free on bail ever since.

Until this week.

Jacob Bogatin, booking photo

On October 28, Jacob Bogatin, now 78, was arrested and charged with murder and arson for a blaze that killed a 36-year-old woman and destroyed three townhomes in Sterling, Virginia.

According to the Loudoun Times-Mirror, Bogatin lived in the complex with his girlfriend, Valeria Gunkova, the listed owner, in a unit under foreclosure. One day after the October 24 fire, Bogatin filed an insurance claim for more than twice what was owed on the property.

Investigators say surveillance footage showed a man resembling Bogatin walking away from the scene moments after the fire began. A search of his car turned up a bottle of lighter fluid and a grill lighter.

Bogatin had been free on a $1 million bond since 2003 in the YBM Magnex case. His home-monitoring restrictions were lifted a year later, and he was permitted to travel abroad on the condition that he not commit any crime.

After the Loudoun County fire, pretrial-services officer Keri Foster asked the court to revoke Bogatin’s bail. In her report, Foster noted that Bogatin had dutifully called in to report his home had burned down—without mentioning that he might have been the one who struck the match.

Another Russian gangster who did business with Trump

Trump with Tamir Sapir (center) and Sapir’s son, Alex.

It will never cease to amaze me that America elected a president with so many links to Russian organized crime.

There was Vyacheslav Ivankov whose FBI file contained numerous references to Donald Trump that the bureau refused to release to me. There was David Bogatin who spent $6 million to buy five separate units in Trump Tower. There was Anatoly Golubchik and Vadim Trincher, who went to prison for running an illegal sports betting ring in Trump Tower that catered primarily to Russian oligarchs.

Add another name to the list: The FBI’s file on Tamir Sapir, a Georgian developer who financed the construction of Trump Soho in Manhattan in 2008, shows he was under investigation for links to Russian organized crime.

A memo in the FBI file states that C-24, the FBI’s Russian Organized Crime squad in New York, was investigating Sapir for money laundering and extortion:

“NYO squad C-24 is currently involved in a money laundering and extortion investigation of TAMIR SAPIR, a naturalized Armenian citizen who immigrated from the former Soviet Republic of Georgia through Israel. SAPIR has residences in New York City, Long Island, and Mexico and he frequently travels to Moscow and other Eastern European countries.”

“SAPIR has approximately 12 companies incorporated in New York including ZAR REALTY which owns commercial and residential buildings in New York City. [Note: One of those residences was a condo on the 58th floor of Trump Tower.]”

“Additionally, SAPIR is believed to own a 150-foot pleasure yacht, the MYSTERE, registered in the Cayman Islands and three private jets, one being a Boeing 727 also registered in the Cayman Islands.”

“It is believed that SAPIR is a front for Russian organized crime money including activity for the President of Tartarstan.

Another FBI notes that Sapir allegedly paid a $5 million bribe to an employee of the New York Transit Authority to get employees to move into a building he owned.

The file lists numerous FBI investigations involving Sapir, some dating back to 1977.

Another FBI investigation involved Joy-Lud, a Manhattan electronics store that Sapir ran with Sam Kislin, a Ukrainian immigrant who was a major donor to Rudy Giuliani’s mayoral campaigns.

Joy-Lud catered to a Soviet clientele—with one notable exception. Donald Trump purchased 200 televisions on credit from Sapir and Kislin’s electronics store in the 1970s for his newly acquired Commodore Hotel.

I’ve asked the FBI to process these other files and will post them here when I receive them.

Jeffrey Epstein, Leon Black, and Russia

Leon Black, wearing sunglasses, watches the 2016 U.S. Open tennis tournament with Jared Kushner

Leon Black, co-founder of the private equity giant Apollo Global Management, has agreed to step down from his duties as CEO after an independent review found he had paid $148 million to the convicted pedophile Jeffrey Epstein over a period of four years.

The New York Times notes that Black’s millions bankrolled Epstein after he pleaded guilty in 2008 to a prostitution charge involving a teenage girl. Black’s payments to Epstein were made between 2013 and 2017.

Why would a sophisticated man like Leon Black, a billionaire with a reputation to protect, associate with and pay millions to Epstein?

The independent report commissioned by Apollo from the law firm, Dechert, provides an answer:

Black viewed Epstein as a confirmed bachelor with eclectic tastes, who often employed attractive women. However, Black did not believe that any of the women in Epstein’s employ were underage. Black has no recollection of ever seeing Epstein with an underage woman at any time.

“A confirmed bachelor with eclectic tastes.” OK, sure. And Hannibal Lecter is a erudite psychiatrist with unusual appetites.

The Dechert report notes that Black trusted Epstein and confided in him on “personal matters.” Epstein had intimate knowledge of Black’s personal finances. Black regularly visited Epstein to discuss business or meet “well known businessmen, political figures, diplomats, scientists and celebrities” who gathered at Epstein’s enormous New York townhouse.

For the conspiracy-minded, the connections between the two men are interesting in light of reports that Epstein collected dirt on powerful men and had cameras in his house monitoring private moments.

And let’s not forget Epstein’s ties to intelligence services. Alex Acosta, Trump’s former labor secretary who led the prosecution of Epstein in Florida said he had been told “Epstein ‘belonged to intelligence’ and to leave it alone,” according to Vicky Ward’s report in The Daily Beast.

No one has yet noted something I pointed out more than a year ago, namely, Black’s numerous ties to Russia, Donald Trump, and Russian money.

Both Black and Trump were friends of Epstein’s at different times. Black also socialized with Trump and Jared Kushner, as the photo at the top shows. Apollo loaned $187 million to Jared Kushner’s family real estate firm.

Volume 5 of the Senate Intelligence Committee’s Russia report establishes that Leon Black accompanied Trump during his 1996 visit to Moscow to pursue real estate deals.

Trump’s trip to Moscow was organized by investor Bennett LeBow, who was trying to get Trump to develop a site he owned in Moscow. Not only did he serve up a site for Trump, LeBow lined up financing from Apollo Group, a then six-year-old private equity firm.

Black, drink in hand, and Trump in Moscow in 1996.

Black told the Senate Intelligence Committee that he did not recall any compromising behavior during the trip. He also did not recall the event in the photograph above.

Black did recall going to a concert with Trump, followed by a “discotheque.” Black later added that he and Trump “might have been in a strip club together.”

Moscow strip clubs were well-known as a potential source of kompromat or blackmail.

For years in Russia there were a number of Russian government officials or others who were exposed in these strip clubs doing not very nice things that their wives, if they have wives, probably didn’t know about. I think most of us appreciated that there was that risk in these types of clubs.

Peter O’Brien, CFO of the Russian-government controlled oil firm Rosneft, as quoted in Vol. 5 of the Senate intelligence committee’ Russia report.

It’s worth noting that the Moscow trip was not part of Dechert’s investigation into Black’s dealings with Epstein. The report says it reviewed documents dating back to 1998.

In 2011, Black was back in Russia, this time for a one-on-one meeting with Russian President Vladimir Putin.

Black committed to help Russia set up a $10 billion sovereign wealth fund, the Russian Direct Investment Fund (RDIF).

It was a privilege to help the fund, Black told Reuters, and described Russia’s “strong political leadership” as an advantage for investors at a time of global economic and financial difficulty. Black was named to the advisory board of the RDIF in 2011.

Four years later, after Russia invaded Crimea, the U.S. Treasury imposed sanctions on the RDIF. `

Kirill Dmitriev, CEO of the RDIF, makes numerous appearances in the Mueller Report. After Trump’s election, it was Dmitriev who wrote received an email that read, “Putin has won.” It was also Dmitirev who met in the Seychelles island with Erik Prince after Trump’s election.

Black also knows many Russian oligarchs. He met with the notorious aluminum tycoon Oleg Deripaska in Russia and the United States prior to Deripaska being sanctioned by the United States in 2018. Black knows Allen Vine, whom Black described as “consigliere” to the Russian oligarch Suleiman Kerimov, who was sanctioned by the United States in 2018.

And he does business with Vladimir Potanin, one of the world’s richest men. Unlike Deripaska and Kerimov, Potanin has not been sanctioned the U.S. government.

Potanin is a large investor in U.S. companies, including Apollo Global. In a 2014 court filing in her divorce, Potanin’s wife, Natalia, listed Apollo Global Management LLC as one of the companies in which her husband has had a financial interest.

Why did Black have such close connections to Russia? Did Epstein, who had an intimate knowledge of Black’s personal affairs, know the answer?

Sammy “The Bull” Gravano and Donald Trump

You can’t always fit everything into a story. This was one of the loose ends that didn’t make it into my recent Rolling Stone piece on Donald Trump’s connections to the world depicted in the Martin Scorsese film, The Irishman. You can read it here.

Sammy “The Bull” Gravano was an underboss in the Gambino crime family, who admitted a role in 19 murders.

After his arrest in 1991, Gravano agreed to testify against his boss, John Gotti, and dozens of other Mafia stalwarts. In exchange, he received a sweetheart deal from prosecutors: five years in prison.

On March 10, 1993, Gravano testified before the Senate as part of the Permanent Subcommittee on Investigation’s probe into corruption in professional boxing. Trump, who owned several casinos in Atlantic City that staged big fights, comes up several times in Gravano’s testimony.

Here, Gravano tells the Senate how he would “reach” Donald Trump.

Impeachment Showcases Putin’s Skill at “Working with People”

Few people realize that Vladimir Putin was once asked how his past experience as an officer in the KGB helped him as a politician. His answer related to his experience “working with people.” (работы с людьми)

For Fiona Hill, the former National Security Council and Russia expert who delivered powerful testimony last month before the House impeachment inquiry, “working with people” is not as innocent as it sounds.

It is a bit of what she calls “KGB jargon” that reveals a great deal about Putin’s nearly two-decades long hold on power. And it also sheds light on what has befallen our current political order here in the United States.

During Putin’s days as a spy in the 1970s and 1980s, the KGB was all about “working with people,” a euphemism for what might better be described as working on people. Rather than repressing, detaining, or killing critics and opponents of the Soviet regime, Yuri Andropov’s KGB decided it would try to win them over using guile, patience and, most importantly, leverage. “It means studying the minds of the targets, finding their vulnerabilities, and figuring out how to use them,” Hill writes in her insightful 2012 book, Mr. Putin, Operative in the Kremlin.

Hill lays out how Putin has used this skill to great effect in winning over the Russian political elite as well as its citizens, nearly half of whom still approve of his performance as he approaches the 20th anniversary of his election as president. It’s also quite clear that one of the people with whom Putin has been diligently “working” is President Donald Trump.

The Russian leader has had ample opportunity to work with Trump over the course of more than a dozen phone calls and in-person meetings, including the two-hour private meeting in Helsinki that offered the relaxed, informal setting that Putin prefers. “To be able to work with people effectively,” Putin has said, “you have to be able to establish a dialogue, contact.”

While we know when the two leaders have spoken, including a phone call between Trump and Putin shortly after the Ukraine election is of particular interest to House investigators, we know little about what they have discussed. Even Trump’s former director of national intelligence, Dan Coats, said he did not “fully understand” what the two leaders had discussed privately in Helsinki. But Trump has given us some clues about a frequent topic of conversation.

Putin has repeatedly told Trump that Russia did not interfere in the 2016 U.S. presidential election.  “He just — every time he sees me, he says, ‘I didn’t do that.’ And I believe — I really believe that when he tells me that, he means it,” Trump told reporters in 2017. The president went even further the following year in Helsinki when he said he didn’t “see any reason why” Russia would have interfered, citing the Russian president’s “strong and powerful” denial.

Putin has called working with people “the most complicated work on the face of the Earth,” but for an experienced KGB case officer Trump isn’t a tough study. The president’s deep insecurity about being perceived as an illegitimate leader is painfully obvious.

This insecurity is at the root of his false claims about the “millions and millions” of illegal ballots that cost him the popular vote in 2016 or his “massive landslide victory.” Trump cannot stomach the fact that he was elected by a minority of the people.

Nor is the president able to accept the U.S. intelligence community’s assessment that Russia interfered in the 2016 election. A former aide, Hope Hicks, told Special Counsel Robert Mueller’s investigators that whether or not Russia had an impact on the election or not didn’t matter to the president because “people would think Russia helped him win.” Hicks astutely described the intelligence assessment as Trump’s “Achilles heel.”  

Another leader might let the matter drop, but a former KGB case officer recognizes the issue of election interference – the very same one the U.S. intelligence community found Putin ordered — is a vulnerability he can skillfully exploit. It provides an opportunity for the Russian president to create the shared understanding necessary to “achieve results,” in working with people. “You need to make that person an ally,” Putin has said, “you have to make that person feel that you and he have something that unites you, that you have common goals.”

It’s not hard to see how destructive this shared understanding that Russia didn’t interfere in the election has been to Trump’s presidency. The July 25 phone call with Ukrainian President Volodmyr Zelensky that is at the heart of the House impeachment inquiry was in part an attempt by Trump to cast doubt on Russian interference.  Similarly, Trump’s potentially criminal efforts to obstruct his own Justice Department’s investigation into Russian interference are the fruits of the poisoned seeds planted and carefully nurtured by Putin.

After the uproar over Trump’s comments in Helsinki, which he swiftly walked back, the president no longer publicly voices his doubts about Russian interference. He leaves it to surrogates like Republican Senator John Kennedy of Louisiana, who show loyalty to the president by voicing his feelings. Asked recently whether it was Russia or Ukraine that hacked the computer servers of the Democratic National Committee, Kennedy replied, “I don’t know, nor do you, nor do any others.”

Likewise, Hill called out Republican members of the intelligence committee for suggesting that Russia did not attack the election but somehow Ukraine did. “This is a fictional narrative that has been perpetrated and propagated by the Russian Security Services themselves,” she said. 

Hill stopped short of accusing the Trump of serving the Kremlin’s interests for fear of creating more fodder that the Russians could use against American democracy in 2020.

At the same time, she made it perfectly clear that anyone who pushes the debunked theory that Ukraine interfered in the 2016 presidential election – as Trump did on Fox & Friends the day after Hill testified — is serving Russia’s interests.

Surely, not even Putin could have imagined the uproar that would flow from his shared understanding with the American president, but the upcoming impeachment vote in Congress is in no small measure a testament to the remarkable power of Putin’s skills at “working with people.”

Tulsi Gabbard’s Strange Visit to Syria (David Duke’s a fan!)

In last night’s Democratic debate Rep. Tulsi Gabbard was strongly criticized for her trip to Syria when she met with the country’s brutal dictator, Bashar al-Assad

PETE BUTTIGIEG: I’m talking about building up — I’m talking about building up alliances. And if your question is about experience, let’s also talk about judgment. One of the foreign leaders you mentioned meeting was Bashar al-Assad. I have in my experience, such as it is, whether you think it counts or not since it wasn’t accumulated in Washington, enough judgment that I would not have sat down with a murderous dictator like that.

Buttigieg could also have mentioned Gabbard’s bizarre claims that chemical weapons attacks in Syria “may have been staged by opposition forces for the purpose of drawing the United States and the West deeper into the war.” According to Bellingcat, Gabbard’s “evidence” rests on “fake intelligence, dodgy dossiers, and lies.”

Gabbard visited Syria in January 2017. She initially declined to say who paid for the trip, citing “security reasons.” She then said the trip had been paid for a little-known group called the Arab American Community Center for Economic and Social Services (AACCESS) – Ohio.

The nearly $9,000 cost of bringing Gabbard and her husband, Abraham Williams, to Syria and Lebanon was paid for by two Lebansese-American brothers, Bassam (Sam) and Elias (Elie) Khawam. (Gabbard later announced that she was personally reimbursing AACCESS for the cost of her trip to Syria.)

On Gabbard’s House disclosure form, (here) they are listed as board members of AACCESS; in a story first published by The Daily Beast, the Khawams are officials in the Syrian Social Nationalist Party (SSNP). The Khawams were part of the “Syrian National Socialists of North America,” according to this archived post from SSNP.net.

Critics of the SSNP have long labeled it fascist. The group rejects that characterization, but it’s true the SSNP drew inspiration from European fascism upon its founding in 1932. Members of the SSNP assassinated of Lebanon’s president-elect in 1982 and bombed a TWA jetliner in 1986. According to this U.S. government fact sheet, the first female suicide bomber may have been a member of the SSNP who detonated a car bomb in 1985 in Lebanon, killing two Israeli soldiers and injuring two others.

The late, great Christopher Hitchens recounted in Vanity Fair how was assaulted by SSNP thugs during a 2009 visit to Beirut. Hitchens begins his account saying he was strolling through a neigbhorhood when he recognized the party’s symbol, a modified Swastika.

The SSNP logo

I recognized it as the logo of the Syrian Social Nationalist Party, a Fascist organization (it would be more honest if it called itself “National Socialist”) that yells for a “Greater Syria” comprising all of Lebanon, Israel/Palestine, Cyprus, Jordan, Kuwait, Iraq, and swaths of Iran, Saudi Arabia, Turkey, and Egypt. It’s one of the suicide-bomber front organizations—the other one being Hezbollah, or “the party of god”—through which Syria’s Ba’thist dictatorship exerts overt and covert influence on Lebanese affairs.

Christopher Hitchens, “The Swastika and the Cedar,” Vanity Fair, May 2009

In a statement, Gabbard said that, at first, she had no intention of meeting Assad during her trip to Syria, “but when given the opportunity, I felt it was important to take it. I think we should be ready to meet with anyone if there’s a chance it can help bring about an end to this war, which is causing the Syrian people so much suffering.”

Indeed, the meeting with Assad was not on Gabbard’s proposed itinerary. However, the first thing Gabbard did in Syria was meet with Assad, her revised itinerary shows:

She met again with Assad and Syrian Foreign Minister Walid Muallem before leaving Syria.

It bears repeating: Gabbard said she met with Assad because she believed there was a “chance” it could help end a war. Even so, Gabbard said little about what she and Assad had discussed over the course of two hours of meetings. Interestingly, no photos of Gabbard’s visit with Assad have ever surfaced.

In April 2017, Al-Akhbar, a Lebanese newspaper with links to the Assad regime, reported that Tulsi Gabbard had delivered a message to Assad on behalf of President Trump.

The Al-Akhbar report quoted Gabbard as saying, “This is a question to you coming from President Trump which he asked me to convey to you. So let me repeat the question: If President Trump contacted you, would you answer the call?” Gabbard denied it.

What is certain is that Tulsi Gabbard met with president-elect Trump in November 2016 and the two discussed Syria:

President-elect Trump asked me to meet with him about our current policies regarding Syria, our fight against terrorist groups like al-Qaeda and ISIS, as well as other foreign policy challenges we face. I felt it important to take the opportunity to meet with the President-elect now before the drumbeats of war that neocons have been beating drag us into an escalation of the war to overthrow the Syrian government—a war which has already cost hundreds of thousands of lives and forced millions of refugees to flee their homes in search of safety for themselves and their families.

The Gabbard/Trump meeting was arranged by Steve Bannon.

“He loves Tulsi Gabbard. Loves her,” a source told The Hill. “Wants to work with her on everything.”

“She would fit perfectly too [inside the administration],” the source added. “She gets the foreign policy stuff, the Islamic terrorism stuff.”

Gabbard’s meeting with Trump caught the eye of former KKK leader David Duke who lavished praise on her on his website:

I call your attention to a quote from the article on Duke’s website:

“In particular, she is unique in being a strong and principled opponent of any intervention in Syria. She wants the United States to stop supporting ISIS and other “rebel” groups and let the Russians, Iranians, and Hezbollah help President Assad defeat the jihadists and end the Syrian Civil War (which is more an armed invasion than a real civil war). This is exactly the right approach.”

Gabbard (and David Duke) would have you believe that Assad, a bloodthirsty ruler who used chemical weapons against his own people, was not an enemy of the United States. Rather, she said Syria was being devastated by terrorists whom the Hawaii Democrat claimed were being armed by the United States.

In other words, she would keep dictators like Assad in power under the guise of counter- Islamic terrorism and peace activism.

Gabbard is playing a clever game here.

The question is: Whose game is she playing?

Mike Pence Has Something to Hide on Impeachment

President Trump reminds us every chance he gets to “READ THE TRANSCRIPT” of his “perfect” July 25 phone call with Ukraine’s new president.

But there’s another transcript that we can’t see, as we learned during Tuesday’s impeachment hearing. That’s a September 18th phone call between President Volodymyr Zelensky and Vice President Mike Pence.

The news came early in Tuesday morning’s House intelligence committee session featuring Jennifer Williams, a foreign service officer serving as Pence’s special advisor for Europe and Russia.

Justin Shur, Williams’ attorney, interrupted Chairman Adam Schiff to announce that “the office of the Vice President has taken the position that the September 18th call is classified.”

Last month, Pence said releasing transcripts of his conversations with Zelensky was fine with him.

I’d have no objection to that, and we’re discussing that with White House Counsel as we speak.

But when people see the transcripts of my calls and when they hear the reporting of our conversation — President Trump’s focus with Ukraine, from the very beginning, was on enlisting more European support and supporting President Zelensky’s efforts to advance reforms that would end an era of corruption in Ukraine.

White House press gaggle with VP Pence, October 10, 2019

But that was then. With the impeachment inquiry underway, Pence changed his mind.

The timing of the move to classify the call means that “the most transparent president in history” has a vice president with something to hide. It also hints that Pence was more deeply involved in Trump’s effort to use the leader of Ukraine as a political prop. 

What’s strange about all this is that as recently as November 7th the Pence-Zelensky phone call wasn’t yet a secret.

The September 18th Phone Call

That’s the day that Jennifer Williams, the Pence aide who testified Tuesday, appeared before the House intelligence committee for her deposition. According to a transcript of the deposition – stamped “UNCLASSIFIED” on every page – Williams described the call in some detail, calling it a “very positive discussion.”

In her deposition, Williams testified that during the now-classified September 18th phone call, Pence had reiterated that the frozen military aid was now being released.

Even though the hold on the aid had been lifted, there were still things that the Ukrainians very much wanted, namely, a visit with the White House with President Trump. It was important for Zelensky, a novice politician, to show Ukrainians that the U.S. president had his back.

In addition, Pence told Zelensky that President Trump was looking forward to meeting him the following week at the United Nations General Assembly in New York.

Williams said that Pence had not provided Zelensky with any specific guidance on what to say to Trump during their upcoming meeting, but did refer to Ukrainian corruption in general terms. The vice president said Trump “would be eager to hear about Zelensky’s progress” on Ukraine’s anti-corruption reforms.  

A White House readout of the call stated “The Vice President commended President Zelensky’s administration for its bold action to tackle corruption through legislative reforms, and offered full U.S. support for those efforts.”

Pence didn’t go into specifics, but he did discuss corruption. This is key: Several Trump administration officials have testified in depositions that “corruption” was code for the specific investigations that the president had mentioned in his July 25 call.

Tuesday’s surprise announcement that the Pence-Zelensky phone call was now a secret and it couldn’t even be discussed in a public session of Congress lends credence that testimony.

“In other words, no pressure”

The decision to classify the September 18th phone call also raises the question of whether Vice President Pence played a role in something that unfolded when Presidents Zelensky and Trump met September 25 in New York.

Trump and Zelensky’s meeting in New York came on the heels of Trump’s release of a transcript of the July 25 phone call between the two men that is now at the center of the House impeachment inquiry.

During a joint news conference in New York, an uncomfortable-looking Zelenskyy was asked whether he felt pressure during the call with Trump.

“It was normal,” the Ukrainian leader replied. “We spoke about many things.  And I — so I think, and you read it, that nobody pushed — pushed me.”

Trump jumped in to state, “In other words, no pressure.”

With Pence classifying his call, I can’t help but wonder whether this was another “favor” the White House had asked of Zelensky. Had Pence’s mentions of “corruption” and the fact that the aid was being released sent some signal in his call that the New York meeting was important to the president?

We do know that Pence did play a role in Trump’s efforts to coerce Ukraine into serving up an investigation that would help him politically, as Williams’ testimony Tuesday showed.

In May, Trump “decided” that Pence would not attend Zelensky’s inauguration, even though the vice president had already accepted the invitation, Williams told the House.

The Warsaw Meeting

On September 1, Pence and Zelensky met in Poland at a commemoration of World War II.

Update: On Wednesday, Ambassador Gordon Sondland testified that he briefed Pence about the meeting and the issue of investigations.

“I mentioned to Vice President Pence before the meetings with the Ukrainians that I had concerns that the delay in aid had become tied to the issue of investigations,” Sondland said.

Pence knew what he meant. Sondland agreed that Pence did not ask “Gordon, what are you talking about?’ or “What investigations?’

Pence’s office, now in full damage control mode, denies this.

During that meeting in Warsaw, Zelensky asked the vice president about news articles reporting that $391 million in military aid for Ukraine was being held up. Politico had reported about the hold just a few days earlier. Here’s how Williams described it in her deposition

Once the cameras left the room, the very first question that President Zelensky had was about the status of security assistance. And the VP responded by really expressing our ongoing support for Ukraine, but wanting to hear from President Zelensky, you know, what the status of his reform efforts were that he could then convey back to the President, and also wanting to hear if there was more that European countries could do to support Ukraine.

Deposition of Jennifer Williams

There it is again. Zelensky asks about the security assistance. We support you, Pence responds, but what about the “reform efforts that he could then convey back to the president.” It’s less crude than Trump’s request to “do us a favor” in his July 25 call with Zelensky, but it’s basically the same.

The corruption box is also ticked in the White House readout of the Sept. 1 Pence-Zelensky meeting:

The Vice President met today with President Volodymyr Zelenskyy of Ukraine in Warsaw, Poland, following the Ceremony of the 80th Anniversary of the Outbreak of World War II. The Vice President conveyed the United States’ unwavering support for Ukraine’s territorial integrity and sovereignty. He commended President Zelenskyy for his government’s efforts to introduce bold reform legislation to combat corruption and improve the business climate to encourage foreign investment. The leaders also discussed recent progress toward securing Ukraine’s energy independence.

Williams, who attended the meeting, testified Tuesday in her opening statement, that Zelensky also told Pence that withholding military aid would only help Russia.

“Any signal or sign that U.S. support was wavering would be construed by Russia as potentially an opportunity for them to strengthen their own hand in Ukraine,” Williams said, referring to what the Ukrainian leader told the U.S. vice president.

Williams said that the two men did not discuss specific investigations that Trump had outlined for Zelensky.

“The vice president responded that Ukraine had the United States’ unwavering support and promised to relay their conversation to President Trump that night,” Williams said.

Pence did speak to Trump that night, but Williams said she wasn’t privy to the conversation. The military aid to Ukraine wasn’t unfrozen for another 10 days.

The Problem with “Letting the Voters Decide” about Donald Trump

Photo via Flickr: https://flic.kr/p/8M6PhK

Nikki Haley, the former South Carolina governor and President Trump’s former UN ambassador, is out with a new book this week. Casting her lot with Trump and his base, Haley says she doesn’t think her former boss has done anything to merit impeachment.

“There’s just nothing impeachable there, and more than that, I think the biggest thing that bothers me is the American people should decide this. Why do we have a bunch of people in Congress making this decision?” Haley told CBS’ Norah O’Donnell.

Ralph Reed, the former executive director of the Christian Coalition who was so fond of telling us during the Clinton impeachment hearings that “character matters,” agrees with Haley.

“Let the voters decide who should be president! This impeachment inquiry is a sham and is an attack on our democracy,” Reed tweeted.

“Let the voters decide” is fast becoming the impeachment battle cry of Trump and his band of loyal Republicans who say the president’s only real “crime” was winning the 2016 election.

But Trump’s defenders have it backwards. Impeachment is the only remedy left for a president who has welcomed, solicited, and extorted foreign interference in our elections. Letting the voters decide is a fine idea when elections are free and fair, but there is simply no guarantee that an election will be free and fair as long as Trump’s name is on the ballot.

The framers of the Constitution worried about foreign interference in elections, which they saw as chief among “the most deadly adversaries of republican government.” But the framers surely never anticipated a president like Trump who would make foreign interference in domestic politics an element of his statecraft.

As the impeachment inquiry in Congress has made painfully clear, the scheme that Trump and his personal lawyer, Rudy Giuliani, cooked up in Ukraine took advantage of a beleaguered country’s need for help battling Russian invaders and sought to use it for Trump’s political advantage back home. Congressionally-appropriated money for Javelin anti-tank weapons was held hostage as the White House tried to coerce Ukraine’s new president into announcing an investigation of a company connected to Joe Biden’s son.

To be sure, politics is a dirty business and candidates have been slinging mud in elections for as long as we’ve had them. But using the power of the presidency to coerce a shaky democracy into investigating the family of a political opponent is so breathtakingly corrupt that it manages to undermine American democracy, damage the rule of law, weaken a U.S. ally, and undermine our national security all at the same time.

The cry of “let the voters decide” signals a retreat to safer ground from the earlier, now abandoned position that no such quid pro quo occurred. An anonymous whistleblower followed by a parade of current and former members of the administration who defied the White House told Congress a sordid story about the administration’s shady goings-on in Ukraine. That led Gordon Sondland, a hotelier who serves as Trump’s ambassador to the European Union, to “refresh” his recollection and concede, contrary to his earlier denials, that not only was there an ultimatum given to Ukraine, but he was the one who had delivered it.

Letting the voters decide might be a plausible if Ukraine were the only instance of foreign interference in a Trump election, but it isn’t. Russia interfered in the 2016 election in what Special Counsel Robert Mueller called a “sweeping and systematic fashion” to help elect Trump, and the campaign welcomed some offers of Russian assistance, such as the June 2016 Trump Tower meeting with a Russian attorney whose offer of dirt on Hillary Clinton was described as “part of Russia and its government’s support for Mr. Trump.”

Not much has changed. Offers of help from abroad were still welcome in the Trump campaign, even after Special Counsel Robert Mueller sent Trump’s campaign chairman, his lawyer and a campaign aide to prison for lying about Russia. The president told ABC News’s George Stephanopoulos in June that there was nothing wrong with accepting dirt from foreign governments. “It’s not an interference, they have information — I think I’d take it,” Trump said — a statement that was noted by the anonymous whistleblower in his complaint laying out the details of the president’s efforts to shake down Ukraine.

The trial of Roger Stone, Trump’s longtime political advisor, is a reminder of the lengths the Trump campaign was willing to go in order to benefit from Russian interference in the 2016 election. As early as April 2016, Stone was informing the Trump campaign of upcoming Wikileaks email dumps of emails stolen from the Democratic Party by Russian intelligence. Prosecutors said that Stone repeatedly lied to Congress about his contacts with Wikileaks because “the truth looked bad for the Trump campaign and the truth looked bad for Donald Trump.”

The toxic combination of foreign interference and Trump’s desire to win at all costs also may go a long way to explaining Trump’s strange attraction to tyrants and strongmen like Vladimir Putin. Trump was clearly willing to punish Ukraine because it wasn’t willing to “do us a favor,” as he put it, and help the president politically. Just imagine what Trump would do for a country that did help him win.

As new details emerge, one can’t help but wonder how many other times the Trump White House solicited foreign interference in episodes that we don’t yet know about. How many testimonies collected by Special Counsel Robert Mueller might have been “refreshed” had courageous insiders stood up to Trump’s bullying and blown the whistle? How many witnesses were less than forthcoming because of the intimidation Trump openly directed at those who stood in his way?

In the end, impeachment isn’t about who wins, regardless of what Trump says. It’s about whether Congress believes foreign governments belong in our elections and whether a leader who welcomes help from abroad or tries to extort it is worthy of letting the people cast their votes for him.

John Durham and the Ghosts of Abu Ghraib

The Trump Justice Department has decided to open a criminal investigation into the origins into the FBI’s investigation into the links between the Trump campaign and Russia. Leading this investigation is a veteran federal prosecutor named John Durham.

John Durham

The New York Times reports that Durham wants to interview former officials who ran the CIA in 2016. Some CIA officials have retained criminal lawyers in anticipation of being questioned.

Durham has investigated the CIA before in a case that I know very well.  And the outcome of that investigation tells us a lot about what justice means when it comes to the actions of the U.S. intelligence community.

Charles Graner poses with Al-Jamadi’s corpse in Abu Ghraib prison

In 2009, Durham was tapped to investigate the homicide of an Iraqi prisoner named Manadel al-Jamadi. Al-Jamadi’s corpse appears in the gruesome photos taken by U.S. soldiers in Abu Ghraib prison. Grinning soldiers flash thumbs up over his decomposing body.

Al-Jamadi was a “high-value target,” suspecting of supplying explosives in the October 2003 bombing of a Red Cross facility in Baghdad that killed 12 and a group of Navy SEALs was sent out to go and get him. The SEALs captured al-Jamadi in his home the following month in a nighttime raid.  They had returned to their base. There, the SEAL and CIA team that captured ai-Jamadi took turns punching, kicking and striking him with their rifles after he was detained in a small area in the Navy camp at Baghdad International Airport known as the “Romper Room.”

A CIA interrogator threatened him, saying: “I’m going to barbecue you if you don’t tell me the information.” A government report states that another CIA security guard recalled al-Jamadi saying he was dying. “You’ll be wishing you were dying,” the interrogator replied.

Al-Jamadi was handed over to the CIA. The next day, he was dead.

A group of Navy SEALs was being prosecuted for abusing al-Jamadi – but, critically, not for killing him. Exactly how al-Jamadi died was shrouded in mystery and the CIA was working very hard to keep it that way. A team of young CIA lawyers sat with us journalists during the courtroom proceedings in a San Diego Navy base. When one of the SEALs’ defense lawyers asked a curious question – “what position was al-Jamadi in when he died?” – a CIA lawyer stood up and objected. “That’s classified,” he said.

Back then, when I working for The Associated Press, I found out that al-Jamadi had died in the shower room at Abu Ghraib a position known as a “Palestinian hanging” – a position that human rights groups condemn as torture.

His arms, which were handcuffed behind his back, were attached by a chain to the wall behind him. If he tried to sit or lie down his arms would be wrenched up painfully behind his back. And that’s how he died, with his arms wrenched behind his back. One Army guard, Sgt. Jeffery Frost, told investigators he was surprised al-Jamadi’s arms “didn’t pop out of their sockets.”

This was a crucifixion. “Asphyxia is what he died from — as in a crucifixion,” said the military pathologist who ruled the case a homicide.

Mark Swanner

There were only two people in the room with al-Jamadi when he died, a CIA interrogator and a translator. The interrogator’s name, I found out later, was Mark B. Swanner.

Swanner told guards that al-Jamadi was “playing possum” — faking it — and then watched as guards struggled to get him on his feet. But the guards realized it was useless.

“After we found out he was dead, they were nervous,” Spc. Dennis E. Stevanus said of the CIA interrogator and translator. “They didn’t know what the hell to do.” Blood was cleaned up. Evidence was disposed of and al-Jamadi was spirited out of the prison with an IV attached to his lifeless arm to make it appear that he was still alive.

But years later, all that had come of it was that a bunch of Navy SEALs were spending their life savings hiring defense attorneys. Of the 10 who were accused, nine ended up with nonjudicial punishment. A SEAL officer was acquitted at trial.

As for Swanner, nothing was happening to him. The CIA’s Inspector General referred the case to the Justice Department, but nothing happened. Jane Mayer of The New Yorker wrote a big story about Swanner. Still nothing.

Enter Durham.

In August 2009, U.S. Attorney General Eric Holder directed Durham to review roughly a dozen cases of alleged abuse against “war on terror” suspects that had gone dormant. He narrowed the cases down to two: Al-Jamadi and an Afghani named Gul Rahman.

Durham convened a grand jury in the Eastern District of Virginia and began calling witnesses. TIME magazine obtained a subpoena signed by Durham that stated “the grand jury is conducting an investigation of possible violations of federal criminal laws involving War Crimes (18 USC/2441), Torture (18 USC 243OA) and related federal offenses.”

Once again, the Navy SEALs who captured al-Jamadi were called up to testify. One SEAL called me after he received a subpoena. He was angry and upset that he had to go through the whole ordeal all over again. I put him in touch with a DC attorney I knew who agreed to help him out.  

Three years went by. In 2012, Holder announced that “based on the fully developed factual record concerning the two deaths, the department has declined prosecution because the admissible evidence would not be sufficient to obtain and sustain a conviction beyond a reasonable doubt.”

The word “admissible” is doing a lot of work in that sentence.

Durham had looked at whether Swanner had used “unauthorized” interrogation techniques. “The approach taken in the inquiry was not to prosecute anyone who acted in good faith and within the scope of the legal guidance given by the justice department’s Office of Legal Counsel regarding the interrogation of detainees,” the Guardian wrote.

In other words, CIA officers were immune from prosecution as long as they stayed within the guidelines of the dubious “Torture Memo” drafted in 2002 by John Yoo that was withdrawn, reinstated, and ultimately rescinded by President Obama. Although Yoo’s memo only applied to one high-level al Qaida suspect, the CIA treated it as a generalized authorization to use the “enhanced” techniques on detainees held at black sites.

According to Yoo’s memo, placing a prisoner on the floor with legs extended and arms raised above his head was authorized as a “stress position.” Yoo said such a position “falls far below the threshold of severe physical pain” that would constitute torture.

The legal reasoning here, as applied to Swanner, appears to have been equally tortured, for it implies that although al-Jamadi was crucified to death he didn’t experience severe physical pain.

When Durham’s decision was announced, the CIA breathed a sigh of relief; human rights advocates called it a scandal. “Continuing impunity threatens to undermine the universally recognized prohibition on torture and other abusive treatment,” said Jameel Jaffer, deputy legal director of the American Civil Liberties Union.

The question is whether John Durham will find a way to do what he failed to in the al-Jamadi case: prosecute CIA officials for daring to investigate a presidential campaign that, as the Muller Report found, welcomed offers of Russian assistance.

It may be that investigating a presidential candidate carries greater risks than crucifying a man to death.

Exclusive: Trump/Russia on Manhattan’s E. 64th Street

There’s a single block on Manhattan’s Upper East Side that perfectly embodies the conflicted state of relations between the Trump family and Russia.

The block is East 64th Street in Manhattan between Madison and Fifth avenues, one of the poshest in the city.

Residents and owners have over the years included Trump’s children, the family of Jared Kushner, a Russian oligarch, a Soviet-born billionaire and major GOP donor, and the family of another Russian oligarch friendly with Ivanka.

The story of East 64th Street isn’t a story of collusion over a cup of borrowed sugar, but rather a story about the global elite — people from all over the world who are connected by networks of money, power and influence that concentrate themselves in cities like New York and London.

Just across the street from Central Park, you’ll find the limestone mansion that Trump’s children once called home. Don Junior, Ivanka and Eric Trump moved into 10 E. 64th Street after their mother, Ivana, was granted sole custody in her tumultuous 1992 divorce. Ivana still lives in the building.

Across the street, at 11 E. 64 Street, sits a mansion owned by Oleg Deripaska, the Russian oligarch and aluminum tycoon who has been sanctioned by the U.S. government.

Deripaska’s stake in the building was revealed in a case brought in New York by Alexander Gliklad, who was seeking billions in dollars from Deripaska:

Gliklad v Deripaska

U.S. government sanctions prevent Deripaska from selling the pied-a-terre he purchased a decade ago for $42.5 million from art dealer Alec Wildenstein.

Complicating matters, Deripaska’s house was occupied last year by the ex-wife and children of Roman Abramovich, another Russian oligarch connected to Putin who is perhaps best known for his ownership of London’s Chelsea Football Club.

Dasha Zhukova, Abramovich’s ex-wife, listed her address as 11 East 64th Street on this New York City property record a year ago:

Perhaps not coincidentally, Dasha Zhukova happens to be good friends with Ivanka Trump. The two women have known each other for more than a decade and were photographed together at the U.S. Open tennis tournament during the 2016 presidential election. Abramovich and Kusher have met three to four times in social settings, Bloomberg reported.

Another owner on East 64th Street is Ukrainian-born Len Blavatnick, one of the richest men in the world. Blavatnik spent $90 million to buy a Gilded Age limestone townhouse at 19 E. 64th St.

Blavatnik is a business partner of his 64th Street neighbor, Oleg Deripaska. The two have stakes in Rusal, one of the world’s biggest aluminum producers, although Deripaska was recently forced by the U.S. government to give up control of the company.

One of Rusal’s major shareholders, SUAL Partners Limited, was founded by Blavatnik and the sanctioned Russian oligarch Viktor Vekselberg. Blavatnik resigned from Rusal’s board two days after Donald Trump was elected president.

Blavatnik, who is now a citizen of both Britain and America, donated $1 million donation to Trump’s inauguration

During the 2016 election, Blavatnik contributed another $6.35 million to leading Republican candidates and incumbent senators.

The top recipient was Senate Majority Leader Mitch McConnell, who raked in $2.5 million for his GOP Senate Leadership Fund under the names of two of Blavatnik’s holding companies, Access Industries and AI Altep Holdings.

Marco Rubio’s Conservative Solutions PAC and his Florida First Project received $1.5 million through Blavatnik’s two holding companies. Lindsey Graham of South Carolina received $800,000 from Blavatnik’s company. Ohio Governor John Kasich took $250,000 from Blavatnik and Arizona Senator John McCain another $200,000.

Blavatnik had tried to buy 19 E. 64th St. for years. He even sued the previous owners, the Wildenstein family, when an earlier deal fell through. His lawsuit describes the building in almost loving terms:

Access v 1964 Realty LLC

The Kushners long had a presence on the block as well. A family company purchased 26 E. 64th Street in 1989 and sold it 2007, the same year that Jared met Ivanka.

Finally, the last person I could find connected to Trump on this fascinating block was Verina Hixon, who used to rent an apartment at 14 E. 64th Street. She was kicked out for nonpayment of maintenance fees.

Hixon’s story is just as wild as any of her better-known neighbors. The Daily Beast ran a story about her titled “The Party Girl Who Brought Trump to His Knees.”

In 1982, the Austrian-born, Swiss-educated Hixon bought four apartments in Trump Tower for $10 million. The apartments were widely believed to belong to Hixon’s “friend,” John Cody, head of a local Teamsters union that was closely linked to the Cosa Nostra. Cody went to jail, Hixon went bankrupt and lost the Trump Tower apartments.

She found a new home on East 64th Street where she befriended Ivana Trump. Ivana visited Hixon’s $20 million chalet in St. Moritz, Switzerland. Ivana brought along her dachshunds who relieved themselves all over Hixon’s home and that was the end of their friendship.

Overstock CEO Patrick Byrne on Maria Butina and the FBI

Maria Butina with Overstock.com CEO Patrick Byrne

“July 2015: That is when the Russian investigation started, not July 2016. That is the big coverup.”

Editor’s note: There is an updated version of this post available here.

Not long ago, I had an email exchange with Patrick Byrne, the CEO of Overstock.com, about his relationship with Maria Butina, the Russian gun-rights activist who was sentenced to prison after she tried to set up a backchannel between the Trump camapign and the Kremlin.

Byrne told me three high-ranking officials (whom he calls “X,Y, and Z”) in the Obama administration directed him to “resume a romantic relationship” with Butina. He says the Russia investigation started when he contacted the FBI (which he refers to as the “Men in Black”) about Butina in July 2015. Byrne says he has a “non-standard relationship” with the FBI.

I have concerns about Byrne’s credibility, as I noted in a previous post, and I’ve tried, with limited success, to verify his claims. What I’ve been able to confirm is that Byrne and Butina did meet in July 2015. Butina’s attorney, Robert Driscoll, has confirmed that they did have a romantic relationship. Driscoll also says the government “flatly denied” his speculation that Byrne was a government informant.

The Justice Department declined my request for comment, although, interestingly, my email was routed to Peter Carr, former spokesman for Special Counsel Robert Mueller’s office. Carr is now with the Office of Professional Responsibility, which will be handling any investigation into Byrne’s claims.

So there things stood until this week, when Byrne’s story took on a life of its own. Overstock issued a press release in which Byrne announced, “I am the notorious ‘missing Chapter 1’ of the Russian investigation.” (The company’s stock fell more than 30 percent on the news.) On Thursday, The New York Times followed up with a story on Byrne’s claims.

I believe people need to hear what Byrne told me, so here goes:


Q. You met Maria Butina at Freedom Fest in July 2015.

A. Correct.

Q. You began dating shortly thereafter.

A. No. We had an intellectual discussion for 90 minutes. She knew all about me already.

She told me there was a circle in Russia of about 150 liberals, from across the Russian power structure, including the oligarchs. They watched my videos on liberalism. They know about my relationship with Milton Friedman. They discuss things I say and write.

They had sent her with a message for me to come to Moscow to speak on Bitcoin, then go to the Altai Mountains to a resort that would be shut down for three days so I could meet with 40-45 people from across the Russian power structure — government, oligarchs — to discuss liberalism, John Stuart Mill, Hayek, etc.

We parted after meeting that day in Vegas, her stipulating that we would text to make future arrangements and that she would be texting me under the guise of us having a romantic relationship.

I reported that night to my clearance authority (where I once kept a low level clearance due to some minor advisory work I do in foreign policy).

I gave a description of the situation and wanted to know:

  • May I introduce her to some senior thinkers in the foreign policy establishment (My hope was to Yenta her in to talking to some senior thinkers in the foreign policy establishment whom I know through the Council on Foreign Relations. I thought she would be interesting for someone to spend an afternoon talking to, and perhaps her dreams of a back channel for peace might ring a bell with someone.)
  • Is it OK if I travel to Russia on her invitation?
  • Or should I cut her out of my life as being a security risk?

I learned later that my report “sent up a flare over Washington” that very night. July 2015: That is when the Russian investigation started, not July 2016. That is the big coverup.

I got contacted by Men In Black (I do not like using the acronym “FBI”). They were unclear, but seemed to suggest that I should learn more then they would decide, but were not sure. It went back and forth for two weeks.

Meanwhile, Maria was writing me, asking me to Moscow, then Montenegro, then Rome, Paris, etc. Watching my YouTube videos on liberalism. Pretending to be in love.

Finally, in September, I sent word to the U.S. government that I was not going to meet Maria again (lest I get in some hassle with the U.S. government) unless I was given the word “Greenlight.” They sent: “Greenlight.”

So I went to meet her for the second time in September 2015 at hotel room in New York City with the idea that we would spend a few days talking, getting to know each other, a possible trip to Russia and the purposes thereof. It was a two-bedroom suite. She arrived first. When I arrived, she made clear immediately (as in, less than three seconds) that she had not been pretending and wanted to make it romantic. I was putty in her hands.

Q. You had done some work for the FBI in the past?

A. I helped the Men in Black twice before.

[Note: Byrne forwarded two links to me. One is a Sports Illustrated story that discusses Byrne’s friendship with ex-NBA player Bison Dele, who disappeared while sailing in the South Pacific in 2002. The other is a link to his talk about naked short selling and corruption on Wall Street, Deepcapturethemovie.com]

Q. What happened next with you and Butina?

A. I saw her sporadically (every 4-6 weeks?) from September 2015 through March 2016. Initially my estimation was:

  • 66% chance this is an opportunity of some kind. Maybe just getting a chance to preach the gospel of Liberalism and freedom in Russia. Maybe some good contacts. Maybe push the peace ball a couple of yards down the field.
  • 33% chance this is a risk

The Men In Black’s lack of responsiveness or concern was odd.

As the September 2015-March 2016 wore on, my estimation changed. Maria was spending less time talking about John Locke and John Stuart Mill, more time talking about the political circles in which she was swanking around.

She let me know [Alexander] Torshin, had told her to focus on Hillary, Rubio, Cruz, and Trump. Whichever of the four won, she was to have a contact in their administration.

[Note: Torshin was the deputy governor of the Central Bank of Russia who prosecutors say was directing Butina’s activities in the United States]

This kind of talk was especially concerning. So the Men in Black’s lack of apparent interest or concern was frustrating to me.

Around February, she asked me to fly to Russia, give a talk in St. Petersburg on Liberalism and Bitcoin, then spend an hour with Putin (who would be in town). The Men in Black studied, came back, said it was too dangerous, don’t go, break up with Maria. So I did. (I was also stage four of two things at once at the time, and they were on the brink of starting to yank out organs, so I was not going to argue.)

The Men in Black then had me get involved with a corruption case involving a federal official. That ran a couple of months. Something deeply unusual and troubling came out of that experience that led me to wonder if I was involved in law enforcement or political espionage.

On July 1, 2016, they came back and said, “What a mistake we made. Russia, Russia, Russia. We want you to know that the U.S. government never asks something like this but we are here to ask you to rekindle a romantic relationship with Maria. The orders are coming from X, Y, and Z.”

[Byrne declined to name these officials.]

“The USA never, ever does this, but these circumstances are so extraordinary, that you are being asked to do this. We want to remind you that you can refuse.”

And the agents were clearly extremely discomfitted and unhappy about the whole thing. But the request came from X, Y, and Z.

I decided that I had gotten sucked into what was starting to seem a lot more like political espionage than law enforcement. I knew this was all going to end up in front of a jury, or in television, or in the history books, and I did not want to disgrace our country or Maria by carrying out those orders. I would have if I had thought them legitimate. I’ve done lots of stranger things for our country, but this smelled like skunk, so I decided to do two things instead:

  1. Lie to the feds. I would wine and dine and romance Maria, and give the public perception that we were once again romantically involved. I would blow her away with being this unbelievably romantic gentleman to her. I would report that I was back in the saddle, but all the while 100% NEVER TOUCH HER. I knew I had to be 100% pure on that bright line, so when the day came that it was all unearthed (which I knew would happen), the record would show that actually I had not laid a finger on her. (I understand that she and her lawyer have confirmed to other journalists that I was a total gentleman to her).
  2. Set up X,Y, Z for felony charges down the road

Q. You conveyed all of this to the Justice Department, including the name of the three higher-ups in the Obama administration in April 2019?

A. Yes on April 30 I told them all of this, including that the U.S. government had know all about Maria in July 2015 from me, and had known about each of her subsequent meetings (e.g. Don Jr.) before she had them, and had let them all occur.

[Note: On May 20, 2016, Butina and Torshin attended the National Rifle Association convention in Louisville, Kentucky and shared a table with Donald Trump Jr. at a private dinner.]

I learned that Maria was transferred 9 days later from a SHU unit [solitary confinement] in a prison in Virginia to the nicest women’s camp in the federal system. So I give great compliments to the DOJ. Nothing happens in 9 days normally. But I think they heard my story, checked out some of the basic claims, and moved her out of isolation by the end of the following week (May 9). The following Wednesday they announced John Durham.

[Note: John H. Durham, the U.S. attorney for the District of Connecticut, is investingating the origins of the special counsel’s probe into Russian interference in the 2016 election. News broke about his investigation on May 13. The Washington Post reported that the investigation had been picked “in recent weeks.”]

Q. It’s a fascinating story, but I need to report it out. Is there someone who can corroborate this? 

Sara Carter has had some recent confirmation from the Department of Justice. I don’t know what your connections are like there, but that’s why you get paid the big bucks! I’m not in the convincing business. I am simply in the business or letting the world know what happend.

I watched this unfold for the last year knowing I had a lot of the answers, and in late June decided (and was advised by my rabbi) that I had a moral duty to come forward. So I have. It is proving interesting to see how long it takes the world to get it.

[Note: Byrne’s “rabbi” is Warren Buffett. Byrne’s father, John, was the CEO GEICO, one of Buffett’s companies, and Patrick has known Buffett for years.)

Ok, Seth, I have qualms. From what you have written so far, I fear that when you learn the full truth you will seek to distort it because it conflicts with some things you have written so far. On the other hand, I have it on good authority that you are a legitimate, honest reporter. I have given you a ton. I have a mountain more. Let us see how you represent what I have told you before going any further.

The Strange Case of Eurotech

The company that links Paul Manafort, Anthony Pellicano, the Mafia, and action star Steven Seagal

Bruce Bigelow was a San Diego journalist and friend of mine who sadly passed away after a hiking trip in Utah at the age of 63.

A few weeks before his untimely death last year, Bruce and I shared a beer at a local bar in San Diego with game three of the NBA finals playing the background.

Bruce had spotted my book in Barnes & Noble and he wanted to catch up. He also had a story he wanted to share with me about a strange little company in San Diego that tried to sell the finest in Soviet technology.

Eurotech, Ltd. was trying to bring to market a foam that that had been developed in Russia and used to control the nuclear disaster at Chernobyl’s Reactor No. 4.

It might sound like the setup for a bad joke but Eurotech had convinced some investors to part with their money. The company’s shares had soared more than 800 percent in a few months from 1996 to January 1997. “Not bad for an enterprise with no sales, four employees and a strategy focused on striking deals in the risky, raucous business world of Russia,” as Bruce put it in his story.

At first glance, Eurotech seemed respectable. The chairman of the publicly-traded company was James D. Watkins, a retired Navy admiral and former chief of Navy operations who had served as energy secretary in the first Bush administration.

Things were less clear on close inspection. One Eurotech board member, Karl Krobath, was a business advisor to Nordex GmbH. That’s a name that ran alarm bells in the CIA in the 1990s, which suspected Nordex of smuggling drugs, weapons, and even nuclear technology for the Russian Mafia. Eurotech also was introducing automated parking garage technology in Moscow’s Arbat district in partnership with the notoriously corrupt local mayor’s office.

To Bruce, Eurotech looked like a classic “pump-and-dump” stock scam, where a company cashes out on sales of illegally inflated stocks. Eurotech’s shares were sold in private placements that evaded disclosure to the U.S. Securities and Exchange. As readers of my book know, this is the same murky world that Felix Sater operated in the 1990s in his days at the Mafia-linked White Rock Partners.

Bruce did a little digging and learned that no one working at Chernobyl had ever heard of Eurotech or its foam, called Ekor, and the company’s claims that it was part of a $3.1 billion cleanup was dubious, at best.

Bruce’s story, which ran in February 1997, left a mark. The Nordex advisor left the board followed shortly by the rest of the board and the company moved to Virginia.

A few days after Bruce’s story ran, he noticed someone sitting in a car parked on the street outside his house. The car stayed around for several days. An editor told Bruce he was just being paranoid.

Around the same time, he got a call from a private investigator in Los Angeles, who told Bruce that he was taking over press operations for Eurotech. If he had any questions for the company, this investigator told Bruce, he was the man to call.

I asked Bruce if he felt threatened. “No, it was just qualitatively different,” he told me. “This was not a typical PR/marketing firm. So it felt more intimidating in that sense.”

The private eye’s name was Anthony Pellicano.

*

I wrote to Pellicano at the Terminal Island prison in San Pedro where he was serving his 15-year sentence on 78 counts of wiretapping, racketeering, conspiracy and wire fraud.

Pellicano didn’t know anything about who was parked outside Bruce’s house and barely remembered Eurotech except for a possible connection to the mayor of Moscow, Yuri Luzhkov.

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But Pellicano has other interesting ties to the Eurotech story.

His case unraveled in 2002 when Los Angeles Times journalist Anita Busch walked out to her car to find a dead fish with a red rose in its mouth on the cracked windshield along with a note that read “Stop.” Busch believed that the threat was related to a story she was working on involving a dispute between actor Steven Seagal and his former producer, Julius R. Nasso. The FBI soon learned that Pellicano was behind the fish incident. Seagal was one of Pellicano’s clients.

Nasso, an associate of the Gambino organized crime family, had produced 10 films starring Seagal, including On Deadly Ground and Under Siege 2, and Out for Justice but their relationship ended in 1999. Nasso sued Seagal for $60 million.

(Interestingly, Nasso has an uncle, also named Julius Nasso, who ran a concrete company that partnered with S&A Concrete, the Mob-connected firm that built Trump Tower.)

Seagal claims that in February 2001 he was visiting Nasso in Brooklyn when he was ordered into a car and ushered into the back room of a Brooklyn steakhouse, Gage & Tollner. There, Seagal was threatened by a Gambino family captain, who told Seagal that he would be required to pay earnings from his movies to Nasso. The feds were listening in and the extortion plot got Nasso sentenced to prison for a year.

Around the same time of Seagal’s back room meeting in the steakhouse, Nasso purchased 500,000 shares of Eurotech at 33 cents a share.

How did Nasso come to learn about this company trying to market Russian foam? Probably through his friend and partner, Paul Manafort.

*

In January 2001, Eurotech agreed to pay Paul Manafort $300,000 a year to help it bring its superfoam to market. Eurotech subsequently hired Davis Manafort to raise capital on its behalf in exchange for a 4 percent finder’s fee. The guy who hired Trump’s future campaign chairman was the late Don Hahnfeldt, a one-time Florida lawmaker.

In addition, Manafort acquired 2,500,000 shares of Eurotech at 33 1/3 cents per share, through one of his companies, John Hannah LLC.

That name might ring a bell. John Hannah LLC is the same company that paid $3.675 million in 2006 for Manafort’s apartment 43G in Trump Tower.

On the same day that Manafort acquired his shares in Eurotech, Julius Nasso also acquired 500,000 shares in the company.

Nasso and Manafort, along with producer Paul Cohen and actor Danny Aiello, were partners together in a short-lived film production and distribution company formed in 2001 called Manhattan Pictures International. Another investor in Manhattan Pictures was Fred Trump’s right-hand man, Brad Zackson.

Manafort apparently saw film making as a natural extension of his work representing corrupt dictators around the world like Ferdinand Marcos and Mobutu Sese Seko.

“In many respects, a lot of what makes a film successful also makes lobbying successful,” Manafort told the New York Daily News. “You need to understand the demographics of the country whether it’s a candidate or a motion picture. In films, like successful campaigns, you need to know how to create messages.”

The company produced Enigma, starring Kate Winslet, and a few other films and then shut down.

During a search of Paul Manafort’s storage locker, the FBI came across some boxes relating to Manhattan Pictures and Julius Nasso.

Manafort is now in prison. Nasso, out of prison, is back producing movies. And his old friend Steven Seagal has gotten very, very close to the president of Russia. He’s now Vladimir Putin’s special envoy to the United States.

Who is Aron Shaviv?

Aron Shaviv

Updates with additional background.

The name of Aron Shaviv, a British-born Israeli campaign consultant with an impressive resume, has surfaced lately in investigations of underhanded election plots by Russia.

The Senate Intelligence Committee recently took an interest in Mr. Shaviv as part of its investigation into the Trump campaign’s ties to the Russian government.

According to a scoop by independent journalist Scott Stedman, Shaviv’s name was mentioned in a subpoena issued in April 2019 by the Senate Intelligence Committee to Walter Soriano, a British security consultant whose connections to Israeli intelligence and Russian oligarchs was the subject of one of my previous posts.

On his website, Shaviv claims to have helped elect 14 heads of state, including Israeli Prime Minister Benjamin Netanyahu.

It’s unknown whether Shaviv did any work for the Trump campaign or why the Senate Intelligence Committee is interested in him. But that isn’t the end of his problems.

One country that’s absent from Shaviv’s impressive roster of clients is the tiny Balkan state of Montenegro. Shaviv was the chief consultant for the pro-Russian party Democratic Front in the 2016 Montenegrin parliamentary elections.

My friend Alon Eisenberg pointed me to a report this week in The Times of Israel that suggested Shaviv had another, less overt mission there. According to prosecutors in Montenegro, Shaviv took part in a plot led by two Russian military intelligence officers to overthrow Montenegro’s government and stop it from joining NATO. Police broke up the plot on the eve of the country’s parliamentary elections.

Shaviv’s partner in this was an ex-CIA officer named Joseph Assad, who was working as Shaviv’s security consultant. Prosecutors suspected that Assad’s real job in Montenegro was to help coup plotters flee the country after assassinating the country’s prime minister, The New York Times reported.

“During the investigation that was launched against Joseph Assad and eight others for creating a criminal organization and attempting terrorism, the prosecutors found evidence that Shaviv, a UK and Israeli citizen, also committed a crime. So we have ordered an extension of the investigation,” Cadjenovic told Balkan Insight.

In the run up to the Montenegrin parliamentary elections, one of Shaviv’s companies received 1.5 million Euros from a Czech company — codenamed “S.” The Czech company’s CEO and representatives are Russian, Cadjenovic said. Assad was paid out of this fund.

Four men identified as ex-FBI agents are also said to be under investigation for their role in the attempted coup backed by Russia.

Shaviv was born in Oxford, England in 1979 and made aliyah to Israel as a teenager. He became a captain in the Israeli Defense Forces and served as a “field agent for a civilian intelligence agency,” according to an archived version of his company’s website.

Shaviv got his start in politics in 2006 working for Avigdor Lieberman, an influential Israeli politician who has long been investigated — but never charged — for receiving millions of dollars from Russian oligarchs like the notorious Michael Cherney and others connected to Vladimir Putin.

While working in government for Lieberman, then the minister of strategic affairs, Shaviv set up a private consulting firm, Shaviv Strategy & Campaigns, began consulting for politicians throughout Europe and Africa. Shaviv’s clients include past and current presidents and prime ministers of Israel, Thailand, Cambodia, Poland, Romania, Kenya, Congo, Bulgaria, Cyprus, Serbia and the European Commission, according to the company’s website, which also cites its work for U.S. presidential elections.

In 2012, Shaviv played a role in the U.S. presidential election. He ran iVoteIsrael, which sought to get U.S. citizens living in Israel to vote in the American election with messages like this:

Shaviv said iVoteIsrael received its financial backing from the “[Sheldon] Adelsons of the world.” Reporters found that iVoteIsrael’s corporate filings listed the Manhattan address of the Ronald S. Lauder Foundation. iVoteIsrael claimed 80,000 Americans living in Israel voted in 2012, with the majority overwhelmingly casting ballots for Republican Mitt Romney.

In 2015, Shaviv was campaign manager and chief strategist for Netanyahu’s re-election. As the vote approached, polls showed Netanyahu on the verge of losing. But then on Election Day, in a move straight out of the Cambridge Analytica playbook, Netanyahu bombarded right-wing voters with millions of fearmongering text messages warning them — falsely — that Arabs were going to the polls in “droves.” Netanyahu won.

See this excellent report, featuring Shaviv, on how Netanyahu won:

The iVoteIsrael campaign won Shaviv a political consulting award from Campaigns & Elections and the Netanyahu campaign victory earned him international consultant of the year honors from American Association of Political Consultants.

But Montenegro and his alleged role in an attempted coup has cast a dark shadow over his bright career. He tweeted that he has been “PNGed” — presumably a reference to being made persona non grata — after the alleged coup attempt.

In May 2017, Shaviv said there are two theories about what happened in Montenegro.

“The first theory would be to believe that it is a failed Russian operation involving an Israeli political consultant, a retired Serbian general, a former CIA agent and some villagers with hunting rifles,” a Democratic Front press statement quoted Shaviv as saying.

But, “if there is anything to be learned from the recent past, Russian military operations neither look like that nor fail like that.”

Felix Sater, Scoundrel or Hero?

Can a scoundrel become a hero?

Felix Sater

Tales of redemption sure make for a great story. The Bible is filled with them. Anna Karenina, arguably the greatest novel, is a story of redemption. So is Star Wars. But when we’re faced with a real life example, our hearts harden. Do people really change? Is it all just an act?

Felix Sater, who scouted real estate deals for Donald Trump during the 2016 campaign and earlier, is an ex-con who ran a Mafia-linked stock fraud scheme. He is also an undercover government informant for the FBI, the CIA, and other three-letter agencies who risked his life overseas for the country that put him in prison.

So what is Felix Sater, a scoundrel or a hero?

Before you answer, you should know that we don’t have all the facts. There’s reams of material on all the bad things Mr. Sater did in his 20s. Countless articles and even an entire book has been written about it. However, when it comes to to the sensitive work Mr. Sater subsequently did as an undercover government informant, we know only the vaguest outlines.

Much of the court filings regarding Mr. Sater’s years of cooperation with the government — described as being “of an extraordinary depth and breadth, almost unseen in this United States Attorney’s Office” — still remain under wraps. Trump’s election and Mr. Sater’s desire to tell his own story are slowly forcing the details to come out of the shadows.

We got another glimpse yesterday thanks to Leo Glasser, the 95-year-old (!) judge who’s being hearing Mr. Sater’s case since 1998. Judge Glasser ordered the release of previously redacted portions of Mr. Sater’s 2009 sentencing hearing where prosecutors described the details of his cooperation.

I’ve compiled the bulk of the newly unsealed passages and skipped over two shorter redactions that tell us nothing. If you want the whole transcript as released by Judge Glasser, it’s here.

First up, Sater’s attorney Leslie Caldwell:

The information he provided was extraordinary. He provided information, as our letter and the government’s letter indicate, about Russian military intelligence. He provided the United States intelligence authorities with information relating to missiles — Stinger missiles — that the United States intelligence authorities were interested in repurchasing from the Taliban. That information was real. It was provided to the intelligence authority. We didn’t know it was acted upon. Of course we wouldn’t know, but F.B.I, agents confirmed that Mr. Slater’s serial numbers he actually provided were actual serial numbers. …

But he also risked his life working with the F.B.I, on unrelated matters, completely unrelated to his case. He flew to Cypress where he met with criminals from Russia in connection with this identity theft scheme which he had no involvement in.

At one point Mr. Slater was [in] Cypress, those Russian criminals told him to get into the car and drive away with him, which he did to the chagrin of the F.B.I, watching him. He’s here to tell the tale, but he really has risked his life in ways that the court doesn’t often see.

He flew to Central Asia to gather intelligence information. That information related to the kinds of individuals, including surprisingly and somewhat surprisingly, Osama Bin Laden, which are really the more extreme enemies of this country. Mr. Slater, really, he provided, and I don’t want to get into all of the details, he provided a telephone number to the government for Osama Bin Laden. He provided locations for Osama Bin Laden. He knew somebody who had a connection to Osama Bin Laden and was able to provide that person with a satellite phone so that that person could relay information, which Mr. Slater relayed to the F.B.I., which the F.B.I relayed to the intelligence authorities.

The kind of cooperation provided – and I’m not minimizing the underlying criminal activity – but had Mr. Slater’s case come to light in 1991, rather than being asked to come back from Russia to surrender, Mr. Slater might have been asked to stay in Russia to provide — he was capable of providing information not because he, himself, was involved in those terrorist-type activities, but because he had contacts who had contacts, who could put him in touch with certain people. So I think there’s a real possibility that he may not have been standing in a court of law in the United States, had his case come to light somewhat later than it did. Again, I’m not minimizing the underlying criminal conduct, but I do think that’s a fact, in light of the changing world after September 11th.

Assistant U.S. Attorney Todd Kaminsky:

Felix Slater worked in the field of foreign intelligence, which [Assistant U.S. Attorney] Miller is going to address in a minute, was just exemplary. He traveled to parts of the country — parts of the world, rather, to countries that the United States had no known ties, that were extremely dangerous, where there would have been no recourse for him,should something have gone wrong, and he went there willingly, voluntarily, and with enthusiasm to help the agency and to help the United States. Then when he was in the process of doing that, he came back to the United States and continued to do the work in the leading and cutting edges of wherever burgeoning fields of crime were first coming forth, international financial fraud, Felix Slater was on the cutting edge of that. Even though he was not a participant,he was able to determine from his contacts what was going on,brought it to the F.B.I., had brought cases to them or he brought instances to them, and once again arrests were made,and whole fields of criminal activity were eliminated to agencies, and arrested were made, and he did this.

Judge Glasser says he will release Sater’s 5k1.1 letter in 30 days, barring an objection from the government.

This is the real gold mine. It’s the official government letter to the court requesting a lenient sentence on a defendant for his extraordinary cooperation. It will catalogue all his work for the government.

No doubt some of it will be redacted, but it may help more of us make up our minds about Felix Sater.

Time to Put a Lie about Felix Sater to Rest (Updated)

Of all the characters in the Trump/Russia saga, few are more fascinating than Felix Sater.

Felix Sater

Sater is many things: a Russian emigre, the son of a gangster, an ex-con, and the guy who scouted real estate deals in Moscow for Donald Trump.

He was also a very valuable informant to the U.S. government for many years, as you can see from some photos I recently came across regarding Evgeny Shmykov, an ex-spy who was Sater’s long-time contact in Russia:

The guy that Shmykov stands shoulder-to-shoulder with? That’s Ahmad Shah Massoud, the anti-Taliban leader assassinated right before the 9/11 attacks.

These photos got some attention on Twitter, but as always, whenever Sater’s name comes up, people inevitably connect him to a powerful Russian Mafia boss named Semion Mogilevich, known as “the most dangerous mobster in the world.

It’s time to put this to rest.

There is no, I repeat, no credible evidence linking Sater to a Russian Mob boss who was on the FBI’s 10 Most Wanted List.

In writing my book, Trump/Russia, I spent quite a bit of time looking for evidence of the Sater-Mogilevich connection. In the end, I concluded that it just wasn’t there. To paraphrase Robert Mueller, if I had found evidence that Sater was connected to Mogilevich, I would so state.

There’s no doubt Sater did have ties to Russian organized crime. Sater’s father, Michael Sheferfofsky, was a Russian gangster who pleaded guilty in 2000 to two counts of extortion for shaking down businesses in Brooklyn.

Update: In her 2020 book, Putin’s People, Catherine Belton wrote that she spoke to two former Mogilevich associates in 2018 who told her that Sater’s father “become an ‘enforcer’ for some of Mogilevich’s interests” in Brighton Beach, Brooklyn. Another British journalist, Paul Wood, told me in 2019 that he spoke with someone from Mogilevich’s organization who told him that there is a link between Sater himself and Mogilevich.

Even so, proof is still lacking. There’s no mention of Mogilevich in Sherorfksy’s criminal file.

So where does this claim come from?

The Sater-Mogilevich link is found in a Supreme Court petition for a writ of certiorari in Palmer v John Doe. 14-676.

This sounds like credible evidence. It’s convinced many people, including me, as my 2017 blog post shows.

The thing is it’s bullshit. Yes, I know. Mea culpa, mea culpa, mea maxima culpa.

While reporting my book, Trump/Russia, I tried to get to the bottom of this. I asked Richard Lerner, the attorney who wrote the Supreme Court petition, how he learned about the Sater-Mogilevich connection.

He somewhat sheepishly admitted that it comes from a website called Deep Capture.

This is where things get weird.

Deep Capture was written by Mark Mitchell, a former editor at Columbia Journalism Review, to “expose the ‘deep capture’ of American institutions by powerful and corrupt financial interests.”

Patrick Byrne

Bankrolling Deep Capture was Patrick Byrne, the CEO of Overstock.com, a publicly-traded online retailer.

Byrne is famous for, among other things, a 2005 conference call with investors that touched on subjects ranging from:

“Miscreants, an unnamed Sith Lord he hopes the feds will bury under a prison, gay bath houses, whether he is gay, does cocaine, both or neither, and an obligatory, not that there is anything wrong with that, phone taps, phone lines misdirected to Mexico, arrested reporters, payoffs, conspiracies, crooks, egomaniacs, fools, paranoia, which newspapers are shills and for who, payoffs, money laundering, his Irish temper, false identities, threats, intimidation, and private investigators,” wrote Mark Cuban, the basketball team owner, investor, and host of Shark Tank.

That’s just a sampling. You can read the full thing here.

Byrne has also accused reporter Bethany McLean of giving Goldman Sachs traders blowjobs and said on live TV that he knew for a fact of a fax machine in the offices of CNBC where every morning hedge funds send in “instructions” for journalists. Authorities at Salt Lake City’s airport arrested him in 2013 when they found a loaded handgun in his carry-on luggage.

Sater is one of Byrne’s “miscreants” who appears as a recurring character in Deep Capture, where he is described to this day as a “Mafia boss” and “a Russian mobster and a member of the Mogilevich organization (controlled by Semion Mogilevich).”

To give you a taste of Deep Capture, check out this now-deleted post that describes … well, just read it for yourself:

A month or so after that, an offshore businessman who had provided some information to our investigation received in the mail a beautiful, lacquered, Russian matryoshka doll. And inside this doll, there was a slip of paper.

On the paper was the letter “F” — with a cross on it. The businessman knew right away that the letter “F” stood for “Felix” – Felix Sater.

The businessman said he had called Felix Sater to see what the deal was with the doll. And after talking to Felix, the businessman invited Patrick Byrne to a greasy spoon diner in Long Island. It was urgent, aid the businessman — so Patrick made haste.

And when Patrick arrived at the diner (along with two other people, who can testify to this) the offshore businessman, discarding with formalities, said, “This meeting can be very short. I have a message for you from Russia.”

The message, said the businessman, was this: “‘We are about to kill you. We are about to kill you.’ Patrick, they are going to kill you – if you do not stop this crusade [the investigation into destructive market manipulation], they will kill you. Normally they’d have already hurt you as a warning, but you’re so weird, they don’t know how you’d react. So their first step is, they’re just going to kill you.”

According to the businessman, this threat had come straight from the mouth of Felix Sater.

Maybe this did happen. Then again, maybe the moon landing was faked. Maybe the Illuminati controls the world. Maybe 9/11 was an inside job.

I’m pretty sure it didn’t happen.

Editor’s note: I am striking my snarky comments because I was wrong. Patrick Byrne has shown me evidence that this conversation did take place. In a recorded 2007 phone call, a transcript of which is in my possession, Byrne’s associate was told: “And there’s a beautiful box and inside is a matryoshka and I opened up the last matryoshka and inside is an F with a cross on it, which is for Felix.” I was also played the recording of this call. A clear threat was relayed to Mr. Byrne, who did not make this story up. I owe him an apology.

Patrick Byrne emailed me August 4 to say:

“For the record, your email reminded me that Felix wrote me once (while I was very ill) and denied being the source of the Russian death threat against me. He was quite gentlemanly, and I think I said I would post it. However, I think I was in a cardiac unit at the time, come to think of it, and it never got done.”

Byrne didn’t answer my questions about what evidence he has for the Sater-Mogilevich connection, which can still be found on his website.

In 2016, a Canadian judge ordered Byrne and Mitchell to pay $1.2 million (Canadian) over published claims that Altaf Nazerali, a Vancouver businessman, was a gangster, an arms dealer, a drug trafficker, a financier of al-Qaida and member of the Russian and Italian Mafias.

Nazerali is mentioned in the deleted post quoted above about Sater and the matryoshka doll. Nazerali is described as a friend of Sater’s, although I’d wager that they never met.

The judge wrote that Mitchell and Byrne “engaged in a calculated and ruthless campaign to inflict as much damage on Mr. Nazerali’s reputation as they could achieve. It is clear on the evidence that their intention was to conduct a vendetta in which the truth about Mr. Nazerali himself was of no consequence.” Read the decision here.

A month before the ruling was issued, Byrne announced he was taking an indefinite personal leave of absence from Overstock.com to battle stage 4 Hepatitis C. He returned to his duties a few months later.

The Supreme Court of Canada dismissed Mitchell and Byrne’s appeal in August 2018 and affirmed a seven-figure award.

Maybe you think Sater a bad guy. Maybe you think he made amends for his criminal past. Either way, a man whose life is far more fascinating than most of ours will ever be doesn’t need to be embellished with fiction.

We’re Responding to Russia. Don’t Tell the President

During the just-concluded G20 summit in Osaka, Japan, President Trump cynically told Russian President Vladimir Putin not to meddle in our elections.

The president might think that the ongoing Russian efforts to interfere in American democracy is all just a big joke. But his administration doesn’t.

It was only a few days earlier that Trump accused The New York Times of a “virtual act of treason” for a June 15 story that revealed that U.S. Cyber Command had placed “implants” — software code that can be used for surveillance or attack — deep inside the Russian electrical grid. Still mad about the story two days later, he tweeted that it was “fake news” and called on the newspaper to release its “phony” sources.  

Even Putin was puzzled by the president’s reaction.  “I am not sure how we should interpret that — if it means that they disclosed real information or it was a planted story,” he said during his annual “Direct Line” with Russian citizens. “But in any case, we have to respond one way or another; we must understand what this is about.”

Putin was asking the right question. What about the report had prompted the president’s unhinged response? Why was the president so upset about a report that the U.S. government was, after years of inaction, finally fighting back against Russian cyberattacks?

The little-noticed answer lies buried in defense legislation and executive orders signed by Trump himself. Although written in dense bureaucratese, what it says is pretty remarkable: Rather than work with the president when it comes to Russia, Trump’s administration has simply decided to work around him.

Like a parent with a obstinate child, the Trump administration, with an assist from Congress, cut the president out of the decision-making loop on national security decisions involving Russia. The Times, then, was a convenient scapegoat for the president’s impotent fury at his own people.

It’s no secret that Trump has long refused to acknowledge even basic truths about the Russian threat, but the consequences to U.S. national security aren’t so well known.

This definitive report in The Washington Post — based on interviews with more than 50 (!) current and former U.S. officials — described how the intelligence community was structuring the president’s daily brief (PDB) to avoid upsetting Trump.

“If you talk about Russia, meddling, interference — that takes the PDB off the rails,” said a second former senior U.S. intelligence official….

Trump has never convened a Cabinet-level meeting on Russian interference or what to do about it, administration officials said. Although the issue has been discussed at lower levels at the National Security Council, one former high-ranking Trump administration official said there is an unspoken understanding within the NSC that to raise the matter is to acknowledge its validity, which the president would see as an affront.

“Doubting the intelligence, Trump pursues Putin and leaves a Russian threat unchecked,” Greg Miller, Greg Jaffe, Philip Rucker, Dec. 14, 2017.

For far too long, the response to ongoing Russian cyberattacks was a big fat ZERO. That only encouraged Russia and other countries to wreak havoc in cyberspace.

“The warning lights are blinking red again,” Dan Coats, Trump’s own director of national intelligence warned in July 2018. “Today, the digital infrastructure that serves this country is literally under attack.”

Then things started to change.

On August 13, 2018, Trump signed a defense bill that basically gave the U.S. military’s Cyber Command a green light to respond to Russia.

The aptly named John S. McCain National Defense Authorization Act authorized Cyber Command to take “appropriate and proportional” action aimed at disrupting, defeating, and deterring Russian cyberattacks, including those aimed at our democracy. The bill also allowed the defense secretary to authorize clandestine military activity in cyberspace without prior presidential approval.

The conference report on the bill was revealing:

The conferees have been disappointed with the past responses of the executive branch to adversary cyberattacks and urge the President to respond to the continuous aggression that we see, for example, in Russia’s information operations against the United States and European allies in an attempt to undermine democracy. The administration’s passivity in combatting this campaign, as documented repeatedly in hearings before the congressional defense committees in the past 2 years, in the judgment of numerous executive branch officials, will encourage rather than dissuade additional aggression. The Congress has worked diligently to ensure that the Department possesses the necessary capabilities and authorities to combat, in particular, these Russian information operations, and this authorization represents further progress toward that objective. The conferees strongly encourage the President to defend the American people and institutions of government from foreign intervention.

Read that again and take a moment to reflect on that remarkable passage.

Two days after signing the McCain defense bill, the president signed National Security Presidential Memorandum No. 13. This still-secret memorandum freed the military to conduct offensive cyber operations “without a lengthy approval process,” so long as they don’t cause “death, destruction or significant economic impact,” The Washington Post reported last year.

Apparently without realizing what he was doing, Trump had just given the go-ahead for the types of operations described in the Times article that left him so unhinged.

General Paul Nakasone

Spearheading America’s aggressive response in cyberspace to Russia is General Paul Nakasone, the dual-hatted leader of the National Security Agency and U.S. Cyber Command.

Nakasone has pushed a strategy of “persistent engagement” with our Russian foes in cyberspace. In other words, we don’t sit back and wait for our enemies to attack; we take the fight to them.

Under Nakasone, U.S. Cyber Command has shifted from a response force to a proactive one that meets our adversaries in the foreign networks where they lurk. “If we find ourselves defending inside our own networks, we have lost the initiative and the advantage,” Nakasone told a professional military journal.

Securing the 2018 midterm elections was Cyber Command’s No. 1 priority, Nakasone told Congress, and it prompted him to create the “Russia Small Group.”

On Election Day last year, the Russia Small Group shut down the computer networks at the Internet Research Agency, the so-called St. Petersburg “troll factory” behind much of the social media manipulation during the 2016 election. The Russia Small Group also helped state election officials identify vulnerabilities and improve threat warning and it dispatched forces to beef up cyber defenses in Montenegro, North Macedonia and Ukraine.

Much of its work remains secret, but U.S. senators hinted earlier this year that it was no coincidence that the 2018 midterms were not impacted by Russia. Further proof of the group’s success is the fact that it’s now a permanent fixture at the NSA/Cyber Command, housed in a new, $500 million cyberwarfare bunker at Fort Meade, Maryland.

Few Americans realize that the United States is flexing its muscles in the cyber realm, but Russia is keenly aware of what’s going on. “Vitally important spheres of our economy have been targeted with cyberattacks from abroad,” Dmitry Peskov, the Kremlin spokesman, said in the wake of the Times report. An anonymous law enforcement source told RIA Novosti, a Kremlin-owned news outlet, that the Times story about U.S. incursions in the electrical grid is true, although the Russians say they’ve managed to stop the attacks so far. Last fall, Russian trolls and hackers received direct messages identifying them by their real names and warning them not to interfere in the affairs of other nations.

The only one who seems unsure of what’s happening is the president, who may have realized too late what he signed away when he gave his administration the authority to go on the offensive against Russia.

The implications of the decision to take decision-making authority out of the president’s hands are sobering. It was not a decision that was taken lightly.

It reflects a judgement on the part of Congress and the administration that when it comes to Russia, the 45th president poses a threat to the national security of the United States.

The pee tape

Someday, we may find ourselves staring in amazement at our computer screens as a man who resembles the 45th president performs unspeakable acts with prostitutes in a Moscow hotel room.

But Michael Cohen, the president’s former lawyer and fixer, thinks that day will never come. And he’s in a good position to know one way or another.

The public first learned of the possible existence of what came to be known as the pee tape from the Steele dossier. Former British MI6 officer Christopher Steele reported that prostitutes had performed a “golden shower” urination show for Trump in the Moscow Ritz where he was staying during the 2013 Miss Universe pageant. This had been recorded by Russian intelligence for purposes of blackmailing Trump.

But this claim about a pee tape wasn’t news to Cohen. Thanks to a newly released transcript from the House intelligence committee, we now know that Cohen first heard about the pee tape shortly after Trump returned from Russia.

Trump denied it, but he asked Cohen to find out where the rumors were coming from.

Testifying under oath, Cohen says he spoke to many people about the tape, including one unnamed caller who demanded $20 million.

Another person who called Cohen about the tape was Harvey Levin of the gossip site TMZ, who also had heard about the existence of the tape. (TMZ did not immediately respond to a request for comment.)

In the end, Cohen concluded that the pee tape didn’t exist for a very practical reason. If prostitutes had urinated on the bed in the Moscow Ritz, where did Trump sleep that night?

The tape had acquired a life of its own, Cohen said, much like the claim that he had attended secret meetings with Russians in Prague, which also appeared in the dossier. Cohen said under oath that all the allegations concerning him in the dossier are false.

But, Cohen also relates an interesting anecdote about the dossier. After it was published January 10, 2017 by Buzzfeed, Trump called Cohen at home.

In other words, Trump seemed very concerned. He appeared unsure whether the allegations in the dossier regarding Cohen were true or not.

So let me make sure I got this right. This is the same dossier with the golden showers allegations that Trump scoffs at. If those claims, which appear in the very front of the dossier, were false, would he really need to see Cohen’s passport in the middle of the night?

In other words, if there’s a huge lie on page one of the dossier, you don’t need to scrutinize pages two, three, four, and five, especially not in the middle of the night. It can wait until morning.

Perhaps Trump was just panicking, but it seems quite possible that something in the dossier hit the mark to cause such panic for Cohen to go rushing back to Trump Tower waving his passport. Whether that’s the pee tape or not, we don’t know.

Steele, unlike Cohen and Levin, Steele, was passing along more than a rumor about the pee tape. He claimed to have confirmed the incident with three separate sources:

  • “Source D,” described as having “been present.”
  • “Source E,” a “senior/western member of the staff at the hotel,” who was aware of the golden showers incident at the time it occurred in 2013.
  • “Source F,” a female staffer at the hotel who confirmed the story.

I remain unconvinced. It could be Steele was the victim of a Russian disinformation effort. As I wrote in Trump/Russia, this kind of tawdry material in reports compiled by former spooks was not out of the ordinary:

What people failed to realize was that sordid allegations like the one in Steele’s report were a dirty secret of the world of private investigations. Several people familiar with this world told me that reports by companies like Kroll, K2, Mintz Group, IGI, and others were often littered with tawdry allegations. “Yes, sex stuff comes up a lot and it’s often nonsense,” a DC attorney who often hires private investigators told me. One veteran opposition researcher told me he has seen the same thing so often that he has detected a pattern: when the subject of the investigation was connected to Latin America, drugs were involved; when the connection was Russia or Eastern Europe, then it was usually sex. “Every single one of their reports has something like that,” the opposition researcher said. “That’s what they pitch the client to keep them on the hook. They then spend months trying to confirm it.”

Then again, maybe Steele got it right and one day we may find ourselves staring in amazement at our computer screens as a man who resembles the 45th president performs unspeakable acts with prostitutes in a Moscow hotel room.

Who is Fima Shusterman?

“Due to ongoing threats against his family,” Michael Cohen announced yesterday that he was postponing his highly-anticipated congressional testimony.

The threats are coming from the White House where President Trump won’t stop talking about Michael Cohen’s father-in-law, a guy by the name of Fima Shusterman.

On a phone call January 12th with Fox News host Jeanine Pirro, the president of the United States launched into an extraordinary attack on Cohen’s father-in-law, a private citizen:

TRUMP: He should give information maybe on his father-in-law. Because that’s the one that people want to look. Because where does that money? That’s the money in the family. And I guess he didn’t want to talk about his father-in-law. Trying to get his sentence reduced. So it’s pretty sad. He is weak. And is very sad to watch a thing like that. I couldn’t care less.

PIRRO: What is his father-in-law’s name? 

TRUMP: I don’t know but you’ll find out and you’ll look into it. Because nobody knows what’s going on other there. 

The implication here is that Shusterman, a Ukrainian emigre, is some sort of Russian organized crime figure, although in typical Trump fashion he provides no evidence.

As readers of my book know, Trump knows that Shusterman is “the money” in the Cohen family because his business benefited from it.

Even with the spotlight the president has put on him, we still know very little about Michael Cohen’s father-in-law, Fima Shusterman. The only bit of insight comes from his 1993 testimony in federal court. So here goes.

Shusterman had pleaded guilty to the charge of conspiracy to defraud the United States. In exchange for leniency, he agreed to testify at the trial of Harold Wapnick, his accountant. Shusterman was sentenced to probation and fined $5,000.

On May 13, 1993, Shusterman took the witness stand in the court of Judge Carol Amon. Although he spoke some English, he had a translator present at his own request “because I do not understand English 100 percent.”

Q. Good morning, Mr. Shusterman.
A. Good morning.
Q. How old are you, sir?
A. 48.
Q. Are you married, Mr. Shusterman?
A. Yes, I am.
Q. And do you have any children, sir?
A. Yes, I have a daughter.
Q. Where were you born, Mr. Shusterman?
A. In the Soviet Union.
Q. When did you come to the United States, sir?
A. In May '75.
Q. And are you a citizen, Mr. Shusterman?
A. Yes, I am.
Q. Are you employed?
A. Yes.
Q. Where are you employed?
A. I'm employed as a manager with Future Knits.
Q. And are you a co-owner of of Future Knits, sir?
A. Yes, I am. 
Q. Who are your partners?
A. My partners are Shalva Botier and Edward Zubok.
Q. What business is Future Knits in?
A. This is a knitting factory.
Q. When was Future Knits established, sir?
A. I'm not sure. I think it was established in '81.
Q. Future Knits, sir, when was Future Knits established?
A. In 1988.
Q. And prior to Future Knits, sir, how were you employed?
A. I was employed with S&Z Fashions and LVA Corp.
Q. Were you a co-owner of those corporations?
A. Yes, I was. 
Q. And were your partners the same individuals as your partners
in Future Knits?
A. Yes, correct. 
Q. Were S&Z Fashions and LVA also in the knitting business?
A. Yes. 
Q. When did you join S&Z Fashions and LVA?
A. In July of '84. 
Q. Between years 1985 to 1988, were you involved with any other corporations
other than S&Z and LVA and Future Knits?
A. No. 
Q. Did you have an ownership or office position with any other corporation, sir?
A. Yes. I was secretary with Martha Cab Corporation, and Bar Trans Corporation.
Q. And, sir, is Barn Transportation with an "N" end, B-A-R-N?
A. Barn, B-A-R-N.
Q. Who is shareholder of Martha and Barn, sir?
A. My wife was.
Q. Are you an officer of those corporations?
A. Yes, I am.

Shusterman was also secretary of N.Y. Funky Taxi Corp. and New York Fulton Taxi Corp.

Today, the chief executive of N.Y. Funky Taxi, Martha Cab and Barn Trans is Michael Cohen, who married Mr. Shusterman’s daughter, Laura, a year following her father’s guilty plea and court appearance. Cohen owns and operates a fleet of cabs in New York and Chicago.

Note to my readers: This work costs me both time and money (in the case of this transcript quite a bit of money). I do this work for free in the hope that people will find it valuable. If you agree, the best way you can support this work is by purchasing my book, Trump/Russia, which has much more information on the president’s decades-long connection to Russian criminal money.

Click here to purchase Trump/Russia.

Q. Mr. Shusterman, have you been convicted of a crime?
A. Yes. 
Q. What crime were you convicted of, sir?
A. Conspiracy. 
Q. When were you convicted?
A. In March of this year, '93.
Q. How were you convicted, sir?
A. I pleaded guilty. 
Q. And, Mr. Shusterman, in connection with your guilty plea,
did you enter into an agreement with the government?
A. Yes.
Q. Would you tell the ladies and gentlemen of the jury, Mr. Shusterman,
what your understanding is of that agreement?
A. My understanding is that I obligated myself to fully, 100 percent, 
cooperate with the government. 
Q. And did the government agree to do anything in return, sir?
A. Yes, they did. 
Q. What did they agree to do, sir?
A. They would advise the judge about my full cooperation and 
about my help rendered in their investigations. 
Q. Mr. Shusterman, have you been sentenced yet?
A. No, not yet.
Q. Do you know what sentence you are facing, sir?
A. Yes.
Q. What is that, sir?
A. Five years in prison, and up to $250,000 in fines. 
Q. Sir, have any promises been made to you regarding your sentence?
A. No. 
Q. Do you know who will be sentencing you, Mr. Shusterman?
A. Yes, I do. 
Q. And who is that, sir?
A. Judge Amon. 
Q. Mr. Shusterman, you've testified that you pled guilty to 
the crime of conspiracy. Could you tell the ladies and gentlemen 
of the jury what is it that you did?
A. I concealed income from the state, and I cashed checks in the amounts 
that exceeded $10,000.
Q. Mr. Shusterman, what did you need this cash for, sir?
A. To operate our business. 

Shusterman goes on to say that from 1984 to 1988 he would regularly bring checks from his customers made out to S&Z Fashions, LVA, and Future Knits and leave them in Wapnick’s office.

A few days later, Shusterman would return and collect cash, always in amounts more than $10,000, in a paper bag or envelope. Wapnick would keep 3 percent for his services.

The total amount cashed with the Wapnicks was “somewhere between five and five and a half million dollars,” Shusterman testified.

Shusterman is then cross-examined by Harold Wapnick, who does a terrible job of representing himself with convoluted lines of questions.

However, he does stumble into a couple of things that are interesting in light of Trump’s claims that Shusterman is “the money in the family.”

Wapnick: Sir, you own a -- you own 40 percent of a 
40-machine factory, sir?
A. No. 
Q. What percentage do you own of a 40-machine factory, sir?
A. 15 percent as of today. 
Q. 15 percent. Would you say that the 15 percent value is in excess 
of a million dollars, sir?
A. If you pay me half a million I'll sell it to you gladly.
Q. Thank you. How about the -- do you own five -- 9 taxicab medallions? 
And are they worth about two million dollars?
The Court: Wait a minute. I don't think he gave an answer. 
Q. Are they worth about two million dollars, sir?
A. Did you say two million?
Q. Let's say $170,000 apiece, and we multiply it by nine, so, okay -- 
what's a half a million dollars among friends. Is it worth ---
The court: I take it you're withdrawing your last question. 
Wapnick: No I'm asking him is it worth a million and a half dollars, sir. 
Shusterman: Only on paper. 

A decade later, beginning in 2003, Shusterman made the first of three apartment purchases at Trump World Tower across from the United Nations building in Manhattan. By 2005, Shusterman had spent $7.6 million on Trump’s properties.

So where did this money come from and what did Trump know about it?

Trump/Russia Review in TLS

Andrew Sullivan has written a nice review of Trump/Russia: A Definitive History in the Times Literary Supplement of London, “the world’s leading journal for literature and ideas.”

Unless, that is, you see all of this as some grand plan hatched in the halls of the Kremlin to unsettle the post-Cold War order, break up the EU and NATO, and legitimize the authoritarian pseudo-democracy in Russia. Seth Hettena, an investigative journalist with the Associated Press, lays out the entire labyrinth of ties Trump has long had with the Russian mafia in New York, and with the Russian government itself. His essential insight is that there is no clear distinction between the two. Putin’s Russia is a mafia state; its oligarchs deep in financial crime and close to mobsters. And Trump was ensnared early on, as his Trump Tower and Taj Mahal casino in New Jersey attracted all manner of Russian hoodlums, tycoons and hit men. But it deepened as Trump became bankrupt, saved only by bankers who were acting to protect themselves, and sought new financing when America’s banks refused to loan to this shiftiest of failed businessmen. His son, Eric, blurted out the truth to a friend: “We have all the funding we need out of Russia. We go there all the time”.

Hettena writes that Trump Tower was one of only two buildings in Manhattan to allow buyers to conceal their true identities. Money-launderers flocked to it. Trump’s Taj Mahal casino in Atlantic City was found to have “willfully violated” anti-money laundering rules of the Bank Secrecy Act, was subject to four separate investigations by the Internal Revenue Service for “repeated and significant” deviations from money-laundering laws, and was forced to pay what was then the largest ever money-laundering fine filed against a casino. The Trump World Tower, by the UN head­quarters in New York, had a large number of investors connected to Russia, Ukraine and Kazakhstan. Trump’s consigliere, Michael Cohen, was found by a Congressional Com­mit­tee to have “had a lot of connections to the former Soviet Union and . . . seemed to have associations with Russian organized crime figures in New York and Florida”. His campaign manager for a while – Paul Manafort – made a fortune channelling Kremlin propaganda in Ukraine. Trump’s new towers in Southern Florida were also humming with Russian buyers. Over a third of all the apartments in the seven Trump towers were connected either directly to Russian passports or to companies designed to conceal the owners. Hettena finds a prosecutor who spelled it out: “his towers were built specifically for the Russian middle class criminal”.

Trump’s unique refusal as a modern candidate to release his tax returns suddenly doesn’t seem so strange. And it is no surprise whatsoever that when the Trump campaign was told that the Kremlin had hacked Hillary Clinton’s emails and offered them to the campaign – as “part of Russia and its government’s support for Mr Trump” – they took the bait instantly. “If it’s what you say, I love it”, Donald Trump Jr emailed back to the Russian intermediary, “especially later in the summer”, clear proof of a conspiracy with a foreign power to corrupt the US elections. This led to the infamous Trump Tower meeting between Trump campaign officials and an emissary from Putin. In the autumn, the Clinton emails were duly unleashed, via WikiLeaks, and constantly touted by Trump himself. At one point, he even went on national television and directly asked the Kremlin to release more of them. Trump, in other words, was openly asking a hostile foreign government to help take down his opponent. But by then, his hourly outrages had lost the power to shock. As strong evidence emerged of a Russian campaign to influence the election in the summer and autumn of 2016, Obama proposed that a bipartisan group of senators release the information to warn the public. The Senate Majority leader, the Republican Mitch McConnell, refused. Much of the Republican Party would rather have the election rigged by Russians than see a Democrat win.

The quid pro quo appears to have been a promise to undo sanctions when Trump came to power – something his first National Security Counsel head, Mike Flynn, immediately started work on after the election victory….

Watergate’s John Dean on the Chennault Affair

My Rolling Stone Q&A with Watergate figure John Dean got a lot of people talking. Dean told me that Nixon might have survived if he had Fox News. He also said that he doesn’t expect Trump to resign and a whole lot more.

One thing that we didn’t have room for was a question I asked John Dean about the Chennault Affair, another Nixon scandal that involved collusion with a foreign power to win an election and allegations of treason.

Continue reading

The Problem with (Helsinki) Summit Notes

So my Rolling Stone piece is up about the dangers of a one-on-one meeting between President Trump and Russian President Vladimir Putin in Helsinki, Finland.

There’s an interesting bit of history I couldn’t fit into the story. It involves another Russian leader telling another U.S. president at a summit in Helsinki that he would help re-elect him.

And the fact that we know about this conversation is one more reason why Putin doesn’t want any notetakers around when he meets with Trump alone on July 16th.  Continue reading

Mr. Johnson Goes to Moscow

“Our freedoms are slowly but surely being taken away from us,” Senator Ron Johnson of Wisconsin declared on the Fourth of July. “The world would be a far better places if it were more free.”

It was no small irony that while he served up platitudes of democracy and freedom to his constituents, Senator Johnson himself was a world away in Moscow, appeasing a regime that attacked American democracy and wreaks havoc around the world.

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Exclusive: Trump’s 1987 Moscow Casino Deal

I recently got an e-mail from a man who told me a story I’d never heard before: Donald Trump had tried to cheat him out of a deal involving a casino in Moscow in 1987.

Was I interested in talking? You bet I was.

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Five Myths about the Trump-Russia Investigation

Hardly a day goes by without President Trump attacking Special Counsel Robert Mueller’s year-old investigation into contacts between his presidential campaign and Russia. The president has presented no explanation for why his campaign had so many contacts with Russian operatives. Instead, he appears to be betting his presidency on his ability to frame the entire investigation as a hoax and confuse us about the facts. Here’s a guide for the perplexed:

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The Problem with Russian Backdoors

During one of my media appearances for the release of Trump/Russia: A Definitive History, someone asked me an interesting question: What’s wrong with a Russian backdoor?

Continue reading

A Mobster President?

Former FBI Director James B. Comey Jr. has been making the rounds with the stunning observation that President Donald J. Trump behaved much liked the mob bosses he put on trial in his days as a federal prosecutor in Manhattan.

During his time in the White House, Comey says he felt the president repeatedly trying to make him a member of his corrupted inner circle when he famously asked the FBI director for loyalty.

In his last conversation with Comey on April 11, Trump told him: “I have been very loyal to you, very loyal, we had that thing, you know.” We had that thing. That thing of ours. It’s literally a translation of La Cosa Nostra, which is how  members of the American Mafia describe their organization.

Comey tells us a fundamental truth about the man we have elected to the most powerful office in the world: Donald Trump was a mob-friendly businessman.

Continue reading

The Steele Dossier Murder

My friend Amy Knight is out with an interesting piece in The Daily Beast about something I pointed out recently: Did the Steele Dossier lead to someone’s murder?

This was raised during the Senate testimony of Glenn Simpson of Fusion GPS, the ex-journalist who hired former British spy Christopher Steele. Simpson was being pressed about his sources when his lawyer, Josh Levy, blurted out, “Somebody’s already been killed as a result of the publication of this dossier and no harm should come to anybody related to this honest work.”

In his subsequent testimony to the House intelligence committee, Simpson denied knowing specific cases of people being killed because of the dossier, but he then noted that “people literally risked their lives to tell us some of this stuff.”

One who may have risked everything was FSB General Oleg Erovinkin. He was right-hand man to Igor Sechin, who was in turn Putin’s right-hand man. He was known as the “keeper of the Kremlin’s secrets. Erovinkin was found dead in his car in Central Moscow in December 2016.

Amy writes:

Erovinkin, as chief administrator at Rosneft, was Sechin’s right-hand man and must have known everything about Sechin’s contacts with Americans. Those included the former head of ExxonMobil, now Secretary of State Rex Tillerson. (Sechin once said he felt thwarted by U.S.-imposed sanctions that kept him from riding motorcycles in America with his friend Tillerson.)

More importantly, in terms of allegations made by the Steele dossier and currently the focus of multiple investigations in Washington, Erovinkin was in a position to keep track of contacts with Trump advisers in considerable detail. 

Let me add that Amy is no slouch. She is considered one of the foremost experts on the KGB, speaks Russian, writes regularly for the New York Review of Books and authored numerous books, the most recent of which is an exploration of political murder by the Putin Regime called Orders to Kill. (I still would love to do a Q&A with you, Amy!)

Glad to see a Trump-Russia story written by someone who knows what she’s talking about.

 

 

Five surprises in Glenn Simpson’s testimony

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Glenn Simpson

Well, it took a couple of days, but I finally managed to read through Fusion GPS co-founder Glenn Simpson’s 312-page testimony to the Senate Judiciary Committee.

Thank you to Sen. Dianne Feinstein for releasing this information last week over the objections of Republicans. Sen. Feinstein said the American public deserve to make up their own minds. Couldn’t agree more. You can find the testimony here.

So I thought I would pick things that jumped out at me from Simpson’s testimony:

1. An internal source in the Trump Organization was providing the FBI with information about Russian collusion.

Simpson learned this from Christopher Steele, the former British spy he had hired to investigate Trump’s links to Russia. Steele’s findings, including the scandalous scene in the Moscow Ritz, were so alarming that he took his findings to the FBI. The FBI told Steele, yes, we’ve heard something similar from our internal Trump source. Simpson refused to answer questions about who this source might have been, but this source was not one of Steele’s source. Huge bombshell. (p. 175)

2. Someone has been killed as a result of Steele’s reports.

Simpson’s lawyer, Josh Levy, drops this on p. 279. “Somebody’s already been killed as a result of the publication of this dossier and no harm should come to anybody related to this honest work,” he says. Curiously, nobody challenges this, which makes it seem an accepted fact. Maybe they were all just tired after 9 hours of questioning. The person is not named, but presumably it’s someone in Russia. Otherwise, it would be a bigger deal, right?

3. Felix Sater is connected to Russian organized crime kingpin Semion Mogilevich  This connection has been alleged in a Supreme Court petition filed in 2012 by lawyers Fred Oberlander and Richard Lerner to unseal Sater’s criminal case. The Website Deep Capture made the same claim, but the sourcing wasn’t very strong, as did two New York attorneys in court filings. (Update: Sources I’ve spoken to led me to doubt this claim.)  (p.69)

4. Chris Steele broke off talks with the FBI in part because of a story in The New York Times. This was the infamous Halloween 2016 story that reported that an FBI investigation of Trump found no ties to Russia. The Times story and FBI Director James Comey’s bizarre decision to reopen the investigation of Hillary Clinton’s email made Steele concerned that the FBI was being manipulated for political ends by Trump’s people. (p. 178).

5. Bill Browder’s comical efforts to hide from Fusion GPS and Glenn Simpson.
This isn’t a single event. It’s more like a pattern. Maybe Simpson is a liar as Browder says or maybe Browder doesn’t like anybody nosing around in his business practices in Russia. Read it for yourself and see what you think pp 40-48.

Fusion GPS Speaks

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Glenn Simpson 

Simpson and Fritsch penned an opinion piece in today’s New York Times. The purpose of the opinion piece was to let the public know what they spent 21 hours explaining to three congressional committees.

Most of the piece rebuts the many rumors surrounding Fusion GPS, including one big one — former British spy Christopher Steele’s sources were not paid for the information that he compiled about Trump, including the scandalous watersports-in-Moscow story.  This is big because paying sources undermines their credibility.

Simpson and Fritsch note their “dismay” that Buzzfeed published the Steele dossier in January 2017. This bothers me because Fusion GPS was shopping Steele and this dossier to every major news outlet who would listen. I guess this is the Washington game, but washing your hands in dirty water is not how you stay clean.

For Trump-Russia investigators, they did offer up a few tidbits:

  • Simpson and Fritsch told investigators to look into the bank records of Deutsche Bank and others that were funding Trump’s businesses.
  • In Manhattan,  Sunny Isles Beach, Florida; Toronto; and Panama, they found “widespread evidence” that Trump had worked with “dubious Russians in arrangements that often raised questions about money laundering.”

There is a lot of information packed in to those few sentences.

Simpson and Fritsch also note, as we did recently here, that Trump’s allies in Congress have dug through their bank records to tarnish the firm and punish them for bringing light into the darkness of Trump’s Russia dealings.

One person who lit up after reading this piece was Bill Browder, Putin’s self-styled enemy No. 1 who was once his biggest fan. Here he is, borrowing from the Devin Nunes “attack the client” strategy, as he vented his anger on Twitter today:

The Steele dossier, unfortunately, is a distraction. It is raw intelligence, not evidence, and was never intended to be used in a court of law. In the public’s mind, however, it has been impossibly conflated with the legitimate investigation by Special Counsel Robert Mueller.

It does Browder no credit that he stokes this confusion and allows his hatred of Fusion GPS to become grist for conservative media outlets that seek to undermine the Mueller inquiry. (“The dossier is the foundation on which the case for Russiagate, including Mueller’s investigation, is built.”)

As Browder surely knows, since he’s paid for many an investigation himself, who hired Fusion GPS doesn’t really matter. The bottom line is that if Fusion GPS didn’t dish up facts, it wouldn’t be in business. Period.

Devin Nunes v Fusion GPS

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Devin Nunes

What are the limits of a congressional committee’s power?

That is the question posed by the actions of Rep. Devin Nunes who is using — abusing, some say — his power as chairman of the House intelligence committee to investigate Fusion GPS, the company that produce the Steele dossier.

In its purported investigation of Russian meddling in the 2016 election, the committee has issued a single subpoena for financial records. That subpoena went to Fusion GPS’ bank and is now the subject of a lawsuit in U.S. District Court in Washington D.C.

You’ll recall that Chairman Nunes worked on the Trump campaign and purportedly recused himself from his committee’s Russia investigation. But he is unable to restrain himself when it comes to Fusion GPS. The subpoena to the firm went out with his signature on it.

Fusion GPS says the subpoena, which demands years of records, is little more than a transparent effort by Chairman Nunes to expose its clients — even those that had nothing to do with Russia — and destroy the secretive company’s business model.

It’s worth noting that Deutsche Bank, which has all sorts of shady dealings with Russia and continued lending to Trump even after he sued them, got a pass from Chairman Nunes’ committee.

In a more recent court filing a few days ago, lawyers for Fusion GPS make the claim that Chairman Nunes is actively working to undermine his own committee’s investigation:

There is evidence that the Committee is coordinating with the President, his personal lawyers, and the Senate Judiciary Committee to misdirect attention to Fusion and its associates in an effort to punish and discredit Fusion, due to their perceived role in exposing the ties between the Trump campaign and the Russians. This coordinated effort includes the subpoena to Fusion’s bank and the apparent leaks from the Committee, and it has been amplified in recent days by attacks on the FBI and Justice Department by members of Congress, the President, and his lawyers.

In its pleadings to the court, Fusion GPS cites the Supreme Court ruling in Watkins v. United States. This case involved John Watkins, a labor organizer, who in 1954 was subpoenaed to testify before Sen. Joe McCarthy’s House Committee on Un-American Activities. Watkins answered questions about his own activities in the Communist Party but he refused to answer questions about other people.  He was convicted of contempt of Congress, but appealed his conviction saying Congress had abused its powers.

The Supreme Court agreed, ruling 6-1, that Congress’ power to investigate was broad, but not unlimited.  “No inquiry is an end in itself; it must be related to, and in furtherance of, a legitimate task of the Congress,” the court ruled. “Investigations conducted solely for the personal aggrandizement of the investigators or to ‘punish’ those investigated are indefensible.”

Indefensible seems an apt work to describe Chairman Nunes’ investigation of Fusion GPS.

 

Trump and the Russian Beauty Queen

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Part I: The princess in the gilded cage

Oxana Fedorova was a tall, raven-haired beauty from Pskov, a old Russian city near Estonia.  She was studying to be a police officer in St. Petersburg, Russia when she decided to try her luck in a local modeling contest. Fedorova entered the 1999 Miss St. Petersburg pageant and won. Two years later, the 23-year-old police lieutenant became Miss Russia, which awarded her a new Mercedes and a Cartier watch.

Vladimir Putin, newly installed as Russia’s president, was said to be a keen admirer of the reigning Miss Russia, a karate black belt and an excellent shot. A photo of Fedorova was on display near his office in the Kremlin. The Telegraph of London reported that the organizers of the Miss Russia pageant had crowned Fedorova “in a feudal display of loyalty to the head of state.” She was even rumored to be Putin’s secret lover. Not true, Fedorova said. “It’s just a coincidence that we are both from St. Petersburg, the work of fate. There are no links with the president.”

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Vladimir Golubev

Fedorova’s real boyfriend wasn’t the president. He was a Russian mobster from St. Petersburg.

Vladimir Semenovich Golubev, aka “Barmeley,” got out of  in prison and became a gangster in St. Petersburg in the 1990s. Golubev was a silent partner in Adamant Holding, a real estate company founded in 1992 that today controls 29 shopping malls in St. Petersburg.  (See Russian Forbes.)

The Russian press reported that Golubev had links to the Tambov gang, a criminal syndicate that dominated St. Petersburg in the 1990s. Back then, the deputy mayor of St. Petersburg, a man named Vladimir Putin, was collaborating with the Tambov gang to launder money and gain control of the gambling business. (See Karen Dawisha’s excellent book Putin’s Kleptocracy.)

According to Russian press reports, Golubev had supported Fedorova since she she had won Miss St. Petersburg as a teenager. Fedorova reportedly traveled either in his company or with guards he sent to accompany her. Officials with Miss Universe noted that money never seemed to be a problem for the beauty queen.  She was like a beautiful bird living in Golubev’s gilded cage.

Part II: Miss Universe

In 2002, Oxana Fedorova entered Miss Universe, the international beauty pageant then owned by Donald Trump.

The pageant was held in San Juan, Puerto Rico. Fedorova and other beauties from around the world competed for prizes that included a year’s salary and an apartment in one of Trump’s Manhattan buildings. (The apartment was more like a dormitory for Miss Universe shared it with Miss USA and Miss Teen USA.)

At the Coliseo Roberto Clemente in San Juan, Fedorova dominated the swimsuit competition and was crowned with the diamond-studded tiara.

Trump, who was in the audience watching, allegedly rigged the contest for Fedorova, according to Seth Abramson, an author and attorney. Abramson said he spoke to a source present that night in Puerto Rico who claimed that Trump told the celebrity judges — actors, fashion designers, and NFL star Marshall Faulk —  whom to choose as winner.

Four months after she was crowned Miss Universe, Fedorova was fired. Federova had failed to show at numerous photo shoots and other high-profile functions, including a commitment to help crown Miss Teen USA. It was the first time that a winner had been forced to surrender her title.

Trump said the president of the Miss Universe organization, Paula Shugart, had asked Fedorova to resign. “When Oxana didn’t resign, Paula had no choice but to terminate her,” he said. Anonymous “insider” sources quoted by the New York Post went for Fedorova’s jugular. “An unbelievably spoiled bitch,” one called her. Another said she was overweight and pregnant, which Fedorova denied.

Over the years, Fedorova has given several reasons for her decision to give up the title of Miss Universe. She had to care for an ailing relative.  She did not want to give up her studies. (She now holds a doctoral degree.) She was upset no one had warned her before her lewd interview with radio host Howard Stern.

Asked by Russian reporters whether pressure from her gangster boyfriend Golubev led her to abandon the Miss Universe crown, Fedorova replied, “This is my personal life, and I do not want to talk about it.”

The view from Russia was that Trump had been paid off to crown Fedorova. Nikolay Kostin, the organizer of the Miss Russia contest, suggested to a reporter for the respected Russian daily Kommersant that Trump had been bribed to hand the crown to Fedorova.

“Nikolay Kostin in response to such accusations only smiles and asks who then dared to offer a bribe to the owner of the Miss Universe contest Donald Trump, who presented the crown to Oxana Fedorova, and how much he was given.

Vitali Leiba, president of the model agency Red Stars, told the newspaper, “It is very difficult to determine the addressee of a possible bribe. We can say that Trump was given a bribe, or it is possible that the U.S., in the person of Trump, offered a bribe to Russia, encouraging her representative at the contest.”

Update: An astute reader points out that Vitali Leiba was a founding shareholder of Arigon Company Ltd., a Channel Islands company established in 1990 by the Brainy Don, Semion Mogilevich whose name keeps turning up in the Trump-Russia affair. An 1996 FBI report called Arigon “the center of the Mogilevich Organization’s financial operations.”

Part III: The Ugliness in Trump’s Beauty Contests

There is no proof that Trump was bribed or that he tipped the scale for Oxana Fedorova, but there were multiple claims that the pageants were rigged.

Michael Schwandt, a choreographer who worked on Miss Universe and Miss USA, told Guanabee.com that Trump would have all the contestants line up and he would walk past like a commander reviewing his troops with an assistant taking notes. “It’s just kind of common knowledge that he picks six of the top 15 single-handedly,” Schwandt said.

The choreographer said Trump told him he exercised the “Trump rule” so because some of the most beautiful women were not chosen as finalists in the past “and he was kind of upset by that.” Schwandt disavowed his comments but here is audio  of Trump explaining the “Trump Rule” to Miss USA contestants.

A contestant in 2012 Miss USA told a judge that her contest had been rigged. Sheena Monnin wrote on her Facebook page that a fellow contestant had seen a sheet of paper listing the five finalists before the contest. (She reaffirmed the claim in her delcaration.)

…. I witnessed another contestant who said she saw the Top 5 BEFORE THE SHOW EVER STARTED proceed to call out in order who the Top 5 were before they were announced on stage. Apparently the morning on June 3rd she saw a folder lying open to a page that said ‘FINAL SHOW telecast, June 3, 2012’. After the Top 16 were called and we were standing backstage she hesitantly said to me and another contestant that she knew who the Top 5 were. I said ‘who do you think they will be? She said that she didn’t ‘think’ she ‘knew’ because she saw the list that morning. She relayed whose names were on the list. Then we agreed to wait and see if that was indeed the Top 5 called that night. ….

Trump was furious. He said Monnin had “loser’s remorse,” and said that if you “looked at her and compared her to the other people who were in the top 15, you would understand why she was not in the top 15.” His  consigliere Michael Cohen called into TMZ Live and said that Monnin had 24 hours to retract her statement or that she could “bet [her] a** that [Miss Universe] will sue . . . seeking massive damages.” Consigliere Cohen was good to his word. Trump obtained a $5 million defamation award against Monnin in an uncontested arbitration proceeding, which was upheld by a federal judge.

A 2013 investigation by Jezebel found that a pageant recruiter in Trump’s Miss USA franchise allegedly demanded a blow job in exchange for magazine work that would allow a contestant to pay the $895 contest entrance fee.

Trump had acquired the Miss Universe franchise in 1996. He reportedly paid tens of millions of dollars (the exact figure was not disclosed) to buy it from ITT Corp., beating out beat two television networks and several South American media moguls. (The deal also included Miss USA and Miss Teen USA.)  Trump ran Miss Universe as a 50-50 partnership with TV networks, first with CBS, and, after 2002, with NBC.

On the surface, it looked like a good business. It cost $20 million to bring the 2013 Miss Universe pageant to Moscow. Emin Agalarov whose family owns the arena that hosted the pageant broke down the costs for Russian Forbes. A third of that $20 million went to secure rights. Another third: organizational costs. And the final third goes to the production and broadcast costs.  (Another report said overseas rights to Miss Universe were selling for $6 million in 2003.)

Very little of that money, however, was distributed to the general partners of Miss Universe. We know this because Trump had assigned his half of his interest in Miss Universe (25 percent of the company) to his publicly-traded corporation, Trump Entertainment Resorts, Inc.  In 2002, the year Fedorova won in Puerto Rico, Trump Entertainment collected a mere $700,000 for it quarter share of the pageant. In 2003 and 2004, Trump Entertainment earned nothing from Miss Universe.

Where was all the money going?

Even if the business was a stinker, there was one attraction for Trump. It allowed him to indulge his Porky’s-style adolescent fantasy of seeing beautiful women naked when they were in no position to refuse.

“I’ll go backstage and everyone’s getting dressed, and everything else, and you know, no men are anywhere, and I’m allowed to go in because I’m the owner of the pageant and therefore I’m inspecting it,” Trump told Howard Stern in 2005.

Listen for yourself:

Asked whether he had ever slept with a contestant, Trump declined to say. “It could be a conflict of interest. … But, you know, it’s the kind of thing you worry about later, you tend to think about the conflict a little bit later on.”

Trump sold Miss Universe in 2015 to the talent agency WME | IMG for $28 million. The value of the franchise had been damaged by Trump’s description of Mexican immigrants as criminals and rapists, which led NBC and Univision to drop coverage of Miss USA.

Trump Ocean Club

My friend Ken Silverstein has a great new story out via Global Witness about Trump’s tower in Panama.

Put simply, it’s is the most revealing look we’ve had into how Russians were recruited for Trump’s towers.

Part of the business strategy at Trump Ocean Club was luring wealthy and “secretive” Russians — who didn’t want any questions asked about where their money came from.

The money quote in this story for me comes from a broker involved with the project named Alexandre Henrique Ventura Nogueira. Half of Nogueria’s customers were Russian.

“I had some customers with some, you know, questionable backgrounds.” He also said that he found out later that some customers were part of the Russian Mafia.

Another real estate broker who worked in Panama during the TOC pre-construction sales period told Global Witness that Eastern European and Russian investors at the TOC were “very secretive”, especially when setting up shell corporations, so you “don’t know their names” and “didn’t know where their money came from.”

Rich Russians – whom he called “the whales” – were prized clients because brokers could earn substantial commissions working with them. These were exactly the kind of purchasers needed by Trump and others to secure early sales, and therefore the financing through Bear Stearns to develop the project.

Ventura Nogueira was asked point blank about this: “Did the Trump Organization know there were some Russians there with strange backgrounds involved in buying? I don’t know.”

There are a lot of things to like about this story. (Story is the wrong word. It’s a 28-page report.) Not only does it reveal the corruption that built the Trump Ocean Club, but it goes a step further. Ken’s story offers solutions — a rarity in journalism — to eliminate the pervasive money laundering in real estate that built not only Trump’s tower in Panama, but his tower Manhattan’s Soho neighborhood, Azerbaijan, and other places.

The story calls the Trump Ocean Club one of Trump’s most lucrative deals. How lucrative? We don’t know.

But what was in it for Trump? There is little transparency around Trump’s financial agreement with Newland, a company that filed for bankruptcy in 2013. In fact, according to Univision News’ reporting of a New York court’s hearing on the bankruptcy, Newland refused to turn over the agreement with Trump to license his name. This prompted the judge to say to Newland’s attorney: “Go to Panama. If you want to do your deals in secret, go and do it in Panama. Don’t do it in my court.”

You should also check out Ken’s popular blog, Washington Babylon.

 

 

The Russian Gangster Who Loved Trump’s Taj Mahal

vyacheslav-ivankov

Vyacheslav Ivankov

Remember Vyacheslav Ivankov, the Russian gangster?

He was perhaps the most feared of the Vory vor v zakone, a member of the “thieves-in-law,” the highest criminal echelon in Russia.”Yaponchik” (Little Japanese), as he was known, came to New York in March 1992 to organize the Russian Mob.

Despite Ivankov’s flagrant, multinational criminal activities, during his first years in America, the FBI had a hard time even locating him.

They eventually found him in Trump Tower. A copy of Ivankov’s personal phone book, which was obtained by author Robert I. Friedman, included a working number for the Trump Organization’s Trump Tower Residence, and a Trump Organization office fax machine.

Ivankov vanished again and then turned up at the Taj Mahal in Atlantic City, the Trump-owned casino that Trump liked to call the “eighth wonder of the world.”

I’ve come across some FBI documents that add a bit more to this story:

Screen Shot 2017-10-05 at 9.39.19 AM

And this:

Screen Shot 2017-10-05 at 9.40.55 AM

The Taj Mahal had become the Russian mob’s favorite East Coast destination. As with other high rollers, scores of Russian hoodlums received “comps” for up to $100,000 a visit for free food, rooms, champagne, cartons of cigarettes, entertainment, and transportation in stretch limos and helicopters.

The Taj Mahal was just treating Ivankov as a good customer, right?

Who is Tevfik Arif, Part II

alg-arif-ivanka-donald-trump-jpg

In June of 2005, Tevfik Arif celebrated his birthday at the grand opening of  Turkey’s most luxurious hotel, the “seven-star” Rixos Premium Belek.

Guests came from all over the world: from America, from Latvia, from St. Petersburg, Israel, the Cote d’Azur, Ukraine and Samara.  Attendees included retired NHL star Pavel Bure, Moscow restaurateurs, Russian businessmen, and billionaires who sailed in by yacht or flew in on private jets.

Donald Trump, who had partnered with Arif’s New York company Bayrock to build a tower in Ft. Lauderdale, Florida, could not make it, but he sent a message of congratulations: “Tevfik is my friend! Let’s drink to Tevfik!”

Recep Erdogan, the prime minister of Turkey and future president, stopped by to join the well-wishers, according to a gossipy report on the party in the Kremlin-friendly Russian newspaper Izvestia.

Turkey has been good to Arif.  It became Arif’s home after he left Kazakhstan in 1994. Arif obtained a Turkish passport that same year and  went into business with Fettah Tamince, the founder of the Rixos hotel chain. The two men partnered in 1999 to build a hotel Antalya. Then Arif expanded his business in New York.

Another guest at the Rixos Premium Belek was Tamir Sapir, the New York real estate tycoon and Soviet emigre who partnered with Trump and Arif to build Trump SoHo. Sapir arrived on his 160-foot yacht Mystere.

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Alexander Mashkevitch

Also arriving for the party was Israeli-Kazakh billionaire Alexander Mashkevtich. , one of Bayrock’s strategic partners. Mashkevitch’s  friendship with Arif will soon embroil him in a deeply embarrassing scandal — but I’m getting ahead of myself.

Mashkevitch and Arif had crossed paths in the post-Soviet metals industry in Kazakhstan. (See Part I) Mashkevitch, together with his partners Patokh Chodiev and Alijan Ibragimov, had joined up with Michael Cherney and Trans World Group to enter the metals business in post-Soviet Kazakhstan.

Back to Arif’s party. What a celebration! What a moment for a simple Soviet hotel bureaucrat!

Two years later, Arif will stand next to Donald Trump at another lavish party in lower Manhattan for the  launch of Trump SoHo, the tower the two men are building together.

And that was the top of Arif’s roller coaster ride.

Shortly after the Trump SoHo launch one of his employees, Felix Sater, was exposed in The New York Times as a convicted felon who had swindled investors out of $40 million with the help of the Russian and American mafia. Trump SoHo opened on 2010 and began a multi-year slide to foreclosure.

And then, on the night of September 28th, 2010, Turkish police roped down from helicopters onto a yacht and bust up a prostitution ring with underage girls that prosecutors alleged was run and financed by Arif.   Some 20 people are detained. Among them, according to the Israeli press, is the Kazakh billionaire Alexander Mashkevitch, who paid for the yacht.

Models

Some of the “models” rounded up on the Savarona yacht (as photographed by Turkish media).

Arif’s friends, including Donald Trump, can’t get away from him fast enough.  “I really don’t know him well, Mr. Arif,” Trump said in a 2011 deposition. “I’ve met him a couple of times.”

According to a copy of the bill of indictment, obtained by theblacksea.eu, the charges laid against Arif are: “Trade in human beings, involvement in, inducement or aiding and abetting to prostitution, traffic in juveniles under 18, creation of criminal organization with the purpose of commission of crime.”

Before I get a nasty letter from Arif’s lawyer, I should say that Arif was acquitted of all charges in 2011 and no underage girls were found on the yacht. It didn’t help the prosecution’s case that the ring instructed the girls not to testify. “Keep the girls as silent as the grave,” read one text.

But the indictment lists the details that Turkish police uncovered while listening in on the prostitution ring’s phone conversations for months. They recorded members of the group haggling over prices for underage girls and this exchange of text messages between a member of the prostitution ring and a woman named Olga.

Olga: “Do you want all models for sex? I should know it because many don’t agree for sex”,

The response: “Olga, client wants sex”

The indictment describes this harrowing discussion between Arif’s major domo, Gyundyuz Akdeniz, and one of his underlings:

Screen Shot 2017-10-06 at 4.50.19 PM

Arif was usually more circumspect, possibly aware that people were listening. In this conversation in March 2010, Arif and Akdeniz discuss the arrival of five girls, (including two 16-year-olds) to meet “guests” (including Mashkevitch) at the Rixos Premium Belek.

Tevfik Arif: What is the matter, what is happening? Tell me.

Akdeniz: Do you mean the guests?

Arif: What is happening at all? I know nothing.

Akdeniz: The guests are arriving tomorrow evening. Mr. Mashkevitch will arrive.

Tevfik: When will the guests arrive?

Akdeniz: The plane will arrive in a little while, there must be four.

Arif: Umph, umph

Akdeniz: Oh, sorry, five must arrive now.

Arif: Who are they from?

Akdeniz: Two are from Sasha [provider of girls]

Arif: Umph, umph

Akdeniz: Three are from the new agency.

Arif: And those two from Sasha are the former ones, aren’t they?

Akdeniz: No, the former ones will arrive at 1 a.m.

Arif: I see, he sent the new ones.

Akdeniz: Yes, tomorrow two will arrive from Sasha.

Arif: Okey.

To be continued….

Who is Tevfik Arif? Part I

12da9121ed5094b55d5fcb2f7129e37d

Tefvik Arif was the chairman of Bayrock Group, the murky company that partnered with Donald Trump to build Trump SoHo in lower Manhattan.

Figuring out who he is was not an easy task.

Tevfik Arif (Тевфик Ариф) was born Toifik Arifov (Тофик Арифов) on May 15, 1953 in the Soviet Socialist Republic of Kazakhstan. He was one of four brothers born to a Turkish family in the Jambyl Region in northern Kazakhstan.

That’s about the only thing we know about his early life with any certainty.

What he did for the next 38 years is unclear. The oft-repeated facts of his background come from a short profile on Arif published in Real Estate Weekly in 2007, just as Trump was preparing to kick off sales of Trump SoHo.

Real Estate Weekly reported that Arif had received a degree from Moscow Institute of Trade and Economics and then worked in the Soviet Ministry of Commerce and Trade in the former Soviet Union for 17 years, where he served as the chief economist and deputy director of the Ministry’s Department of Hotel Management.

Many journalists have repeated this story. It may be true, but no one seems to have bothered to check.  It’s worth noting that this is the only reference to a Soviet Ministry of Commerce and Trade that I found on the Internet. There is a Russian ministry that has this name, but I could find nothing from the Soviet era. (Arif did not speak English very well, so it’s possible this is a mistranslation.)

There was, however, something called the USSR Chamber of Commerce and Industry, which was run by the KGB and spied on the West. A third of the chamber’s staff were KGB, according to a US State Department report that cited CIA information. And the USS Chamber of Commerce and Industry did have a hotel division, V/0 Sovintsentr, which ran a trade center and various Moscow hotels.

In the Russian press, Arif is affiliated with the Soviet Ministry of Foreign Trade (which did exist). Or maybe he was just a Soviet hotel bureaucrat, as he claims. Whatever Arif did for the first 40 odd years of his life, he hasn’t been very open about it.

Trans World Group

After the collapse of the Soviet Union in 1991, Arif left the government and made a career leap. A huge leap.

In a court proceeding in Turkey, the former Soviet hotel bureaucrat testified that he “worked in energy sector, chemical sector and metallurgy sector. I was producing coal in Russia and copper in Kazakhstan. Due to lack of coal, it was not possible to make production. I started to organize them.” He started a private company called the Speciality Chemicals Trading Co., trading in “chrome, rare metals and raw materials.”

And then he went to work for Trans World Group. TWG was a British company headed by two brothers, David and Simon Reuben. After the Soviet Union collapsed, the Reubens moved aggressively into metals production, buying up smelters and refineries.

As foreigners, however, the Reubens needed locals to build their business. Enter Arif. He became an “agent on the ground” — a fixer, in other words — for TWG in Kazakhstan, according to internal company documents reviewed by theblacksea.eu, an online investigative Website.

Arif apparently did his job well. Very well. In a few years, TWG’s holdings of steel, iron, chrome and alumina refineries in Kazakhstan generated one fifth of the entire country’s gross revenues.

Maybe Arif was just a Soviet hotel bureaucrat who seized a once-in-a-lifetime opportunity to get into the post-Soviet metals sector. But his hotel background would have been of little use to TWG. What TWG needed was someone with deep connections in the country’s political and business circles. The kind of people who had those connections in the Russia of the 1990s were either ex-KGB, or mobsters.

michael-cherney

Michael Cherney

Consider another pair of fixers the Reubens brought into TWG in 1992. They were the Cherney brothers, Lev and Michael, and they formed a 50-50 partnership with TWG. It was a successful partnership. With the Cherneys help, TWG grew by leaps and bounds. The problem for the Reubens was that Michael Cherney’s name soon became publicly linked to Russian organized crime groups. The Reubens quickly bought out Cherney’s share of TWG for $410 million.

vyacheslav-ivankov

Vyacheslav Ivankov

Swiss authorities in 1996 accused Michael Cherney of “drug trafficking, money laundering, fraud and sponsoring murder” on behalf of  a Russian organized crime group run by “V Ivankov.” This was the infamous Russian mob boss nicknamed “Yaponchik” who had settled in New York, where the FBI found him hiding out in Trump Tower and Trump’s New Jersey casino.

Michael Cherney has repeatedly denied these allegations, which he blames on his archenemy and former partner Oleg Deripaska, one of the wealthiest men in Russia. In 2008, the federal Swiss court exonerated him of the charges, but two years later, Spain issued an international arrest warrant for Michael Cherney’s arrest on money laundering charges.

Did Arif have links to the Russian Mafia? Felix Sater, who worked under Arif at Bayrock, seems to think so.

The Wall Street Journal reported that Sater and his attorney threatened to expose Arif’s past unless he paid Sater’s attorney fees. Sater warned of a possible lawsuit that would include details of Arif’s wrongdoing “in the post-Soviet metals business in Kazakhstan.”

In a personal memo, Sater was even more blunt: “The headlines will be, ‘The Kazakh Gangster and President Trump.'”

A High-Net Worth Individual

“The head of the family is my uncle Roustam Arif [sic],” Tevfik’s son Arif writes in 2013 in correspondence obtained by theblacksea.eu. “In our culture, the patriarch is usually the oldest member of the family. Roustam is my father’s oldest brother. Even though my father is a successful entrepreneur in his own right (hotels, construction and real estate), his younger brother Refik Arif is the principal figure in the main family business (commodities).”

In the mid-90s, Refik reportedly acquired control of the Aktyubinsk Chromium Chemicals Plant (ACCP) in Aktobe, in north-western Kazakhstan, near the border with Russia. Refik also established a highly profitable chemicals trading business.  And this is an important piece of the story, because the money for Bayrock, at least part of it, came through Kazakhstan.

Consider that for a moment. The Arifs managed to pool enough capital and influence to buy what turned out to be a highly lucrative chemical plant. How was this possible? What really happened in Kazakhstan in 1990s?

Around 1999, Refik Arif’s chemical trading business was generating so much cash that the family retained Hamels, a UK tax consultancy, to help structure their investments. On its website, Hamels describes its typical clients as “high net worth individuals seeking to minimize their respective tax burdens on current income or investment streams…”

In a 2011 memo, Hamels partner Zig Wilamowski wrote, “Mr. Refik Arif is one of four brothers who have over many years built up a substantial and profitable international business from the sale of chrome-based chemicals.” Williamowski said he was in a position to verify the “good origin” of the Arif family’s wealth. You can read the document here.

With the help of Hamels, the Arifs set up a network of shell companies, many of which were established in the Caribbean tax haven of the British Virgin Islands. These companies included Bennington Trade Assets Ltd., which owns property in the center of London and Merlin Trading Assets Ltd., which owns an executive jet. There are too many companies to name them all. Many are found in the Panama Papers leak of offshore companies founded by the Panamanian law firm Mossack Fonseca.

The real moneymaker for the family was Castello Global Ltd., which handled the profits from the chrome trading business. Here is a breakdown of Castello Global’s profits:

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So much money was pouring out of Kazakhstan that Tevfik Arif decided it was time to try something big. Really big.

He moved to New York and set out to do a real estate deal with the biggest and the best. So he set up offices of his new company Bayrock Group in Trump Tower, one floor below Trump’s own offices.

To be continued…

Facebook, Jared Kushner and Russia

forbes-cover-12202016-final_1000x1311Call me skeptical.

I don’t believe that Facebook won the election for Donald Trump. That’s the claim put forth in this hagiographic profile of Jared Kushner in Forbes and in many other media outlets.

The traditional campaign is dead, another victim of the unfiltered democracy of the Web–and Kushner, more than anyone not named Donald Trump, killed it.

We see these stories every time a new president is elected. A while back it was Obama’s “data crunchers.” This time, the key to Trump’s victory, Kushner would like us to believe, were computer algorithms that targeted potential Trump supporters with social media to stunning effect.

Kushner takes credit for hiring Cambridge Analytica, a company owned by Robert Mercer who also happens to be a Trump supporter, Breitbart investor, and a reclusive hedge fund billionaire.

The secret weapon was Cambridge Analytica’s computer algorithms that figure out who you are based and what motivates you based on all the times you click Like on Facebook, as Cambridge Analytica’s Jack Hansom explains in this video:

These algorithms turned up some surprising findings. Liking the New Orleans Saints mean you’re less likely to be “conscientious,” i.e. do the right thing. And liking the Energizer Bunny means you’re more likely to be neurotic.

So what? Well, one or two of these things don’t tell you much, but the average person has hundreds of Facebook Likes which allows Hansom and his colleagues to build a surprisingly accurate picture of your personality. You can test this on yourself here.

Facebook allows you to drill down to the kind of person in the kind of place you want. (You can even reach “Jew haters” in Idaho if you wish.) Here’s Cambridge Analytica’s CEO Alexander Nix showing how his company’s model could be used to drill down to find every “persuadable” gun rights advocate in Iowa:

It’s very impressive (and very creepy), and it makes for a good story, one that Silicon Valley loves in an everybody-is-stupid-except-for-me way.

But the problem with the claim that Kushner and his machine learning wizardry won the election for Trump is that everybody was doing it. Hillary Clinton had a team of mathematicians and analysts crunching data. Ted Cruz had hired Cambridge Analytica as well, but then he ran into the Trump train.

I may be wrong, but I’d wager the $1.8 billion worth of free airtime that TV networks gave Trump every time he opened his trap probably had a lot more to do with him winning the election than Cambridge Analytica.

Trump knows how to get on TV: He is a promotional genius. What will he say next? He’s a modern day PT Barnum and Jeff Zucker‘s CNN couldn’t get enough.

Setting that aside, the Facebook/Jared Kushner story is still pretty important. And what’s important about it is that Special Counsel Robert Mueller thinks it’s pretty important. Facebook may not have won Trump the election, but it may seriously damage his presidency.

CNN reported Sunday that Mueller, who’s investigating Trump’s links to Russia, had served Facebook with a search warrant.  Mueller was interested in the $100,000 worth of ads purchased by bogus accounts that Facebook on Sept. 6 acknowledged had  “likely operated out of Russia.”

Mueller’s search warrant for Facebook is a big deal, a former federal prosecutor explains:

Mueller would have had to show the judge that there was reason to believe that one or more foreign individuals committed a crime and the evidence of the crime could be found on Facebook’s servers.

The crime is that foreign nationals are prohibited from contributing money “or other thing of value” (like $100,000 worth of Facebook ads) in connection with an election. It’s also against the law to solicit, accept, or receive such a contribution.  (Here is the statute.) And if someone on the Trump campaign knew about the Russian Facebook ads and did nothing to stop it, that is also a crime — aiding and abetting.

Did someone on the Trump campaign know about the Russian Facebook ads. We don’t know yet, but the answer lies in targeting. To put it in Watergate terms: Who targeted whom and when?

Were the Russian Facebook ads and the Trump campaign targeting the same people? And if so, how did a bunch of Russian trolls in St. Petersburg or Vladivostok or where ever know to target, say, black women in Milwaukee or rural voters in Michigan’s Upper Peninsula, for example?

I tried to ask Alex Stamos, Facebook’s chief security officer, but didn’t get a reply.

This question intrigues Sen. Mark Warner, the leading Democrat on the Senate intelligence committee, as he said on the Pod Save America podcast:

Warner: When you see some of the explanation and some of the fact that it appears that, for example, women and African Americans were targeted in places like Wisconsin and Michigan, where the Democrats were too brain dead to realize those states were even in play … It was interesting that those states seem to be targeted where the bots — where they could could create a lot of these fake Twitter and Facebook accounts, could in fact overwhelm the targeted search engines that would end up saying on your news feed, you suddenly got stuff that “Hillary Clinton’s sick” or “Hillary Clinton’s stealing money from the State Department.”

I get the fact that the Russian intel services could figure out how to manipulate and use the bots. Whether they could know how to target states and levels of voters that the Democrats weren’t even aware really raises some questions. I think that’s a worthwhile area of inquiry.

How did they know to go to that level of detail in those kinds of jurisdictions?

Vietor : I wonder if they just asked Jared [Kushner] like Trump does with all of his questions. We’ll find out.

Warner : We’ll find out. More to come on that.

Sen. Warner thinks it’s a worthwhile line of inquiry, and it’s a good bet Mueller does too. The information Facebook handed over to Mueller included the targeting criteria the bogus Russian accounts used, The Wall Street Journal reported.

An unnamed Trump campaign staffer told CNN that the key to the whole inquiry may be found on Facebook’s servers.

Only Facebook can answer three critical questions: were the same databases used by the Trump campaign and Russian operatives to coordinate targeting of voters; was money used to promote pro-Trump posts, and, if so, how much was spent and by whom; and will Facebook reveal if bots were successfully used to push fake news posts?

Hopefully, Robert Mueller knows the answers.

Exclusive: Felix Sater’s 2010 White House Visit

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Felix Sater, a former senior business advisor to Donald Trump, was granted access to visit the Obama White House in 2010 as part of a delegation of Hasidic Jews.

Sater’s name appears on the list of 100 White House visitors associated with American Friends of Lubavitch, which represents the international Chabad-Lubavitch movement in Washington.

The Obama administration released logs of White House visitors, a practice that the Trump administration has discontinued.

Sater has come under scrutiny for his relationship to Donald Trump. Sater worked for Bayrock, a development firm with offices in Trump Tower that partnered to build Trump SoHo. For six months in 2010, Sater went to work for Trump directly, carrying a Trump Organization business card that described him as a “senior advisor to Donald Trump.”

According to the White House visitor log, Sater’s 100-member delegation visited the Old Executive Office Building in the White House complex on June 17th. The group gathered in the South Court Auditorium where Sater and the rest of the delegation were addressed by Vice President Joe Biden.

Sater’s attorney, Robert S. Wolf, did not return a phone call seeking comment.

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The decision by the Secret Service to grant Sater access to the White House grounds is noteworthy. Every visitor to the White House Complex undergoes a comprehensive security check, and Sater’s criminal past would surely have raised red flags.

Other ex-convicts have reported that they were denied access to the Obama White House. Even those who received a formal invitation were handed pink badges that read “Needs Escort” and were not allowed to move freely around the White House grounds. (See Glenn E. Martin’s open letter to President Obama.)

However, Sater was  a prized government informant. He helped the FBI thwart attempts by the Mafia to muscle in on Wall Street and also aided in the hunt for terrorists overseas. As a result prosecutors took the highly unusual step of requesting that Sater’s entire federal racketeering case be sealed.

Former U.S. Attorney General Loretta Lynch, whose oversaw Sater’s case in her previous role as the U.S. Attorney for the Eastern District of New York, told Congress that he provided valuable and sensitive information.  Sater’s cooperation led to the conviction of 20 individuals, including members of the Mafia. In addition, Lynch said, Sater provided information “crucial to the national security.”

The White House visitor log shows Sater’s appointment was made June 15th, two days before his visit.

The White House visit was the highlight of the annual “Living Legacy” conference organized by American Friends of Lubavitch. The conference is held to mark the anniversary of the passing of Rabbi Menachem M. Schneerson, the former leader of the Chabad-Lubavitch movement and one of the most influential Jewish leaders of the 20th century.

Sater belongs to the Port Washington Chabad house and told Politico that he is on the board of Chabad organizations in the U.S. and abroad, though none in Russia.  Rabbi Shalom Palatiel, the director of the Port Washington Chabad house, also visited the White House along with Sater. Palatiel did not immediately respond to an email message left seeking comment.

More than 190 names were submitted to the White House, but the logs show that only 100 entered the grounds.

According to a report in the Jewish Telegraphic Agency, Biden spent 40 minutes with Sater and the rest of the Lubavitch delegation.

The vice president reviewed Chabad teachings he had acquired over the years, including the necessity of combining “wisdom, knowledge and understanding,” and related them to the administration’s handling of the Middle East.

Biden suggested that the threat posed by Iran necessitated intensive peacemaking and it was important for the Jewish community to understand that context.

“As you’ve always taught me, the rebbe said, what we do for one day isn’t enough for the next day,” Biden said.

Felix Sater’s Wall Street Days

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Felix Sater

Once upon a time, Felix Sater had a promising career on Wall Street.

Beginning in 1983 as an assistant cold-caller, Sater worked his way up the Wall Street food chain, ending up at Lehman Brothers in 1993, which is where his finance career, at least the reputable part of it, came to an end.

That was the year he went to prison for stabbing a commodities trader in the face with the broken stem of a margarita glass.  Then he got out and joined a Mafia-linked boiler room operation. He got caught, became a government informant, and partnered with Donald Trump to build Trump SoHo and become a figure of endless speculation and fascination.

Long before all of that, here’s what Sater was up to, taken from his employment record with FINRA:

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After doing a bit of reading, it seems that Felix Sater’s Wall Street career amounted to making cold calls. Lehman Brothers and Gruntal, the two firms on the top of the list, were famous for their cold-calling.

A junior broker like Sater probably would have spent most of his time on the phone trying to rustle up new clients.  Lehman Brothers had a cold-calling script that was legendary on Wall Street. I couldn’t find a copy but here is a sample of another firm’s scripts that was obtained by Buzzfeed.

Prospective Client:  ”I have to talk to my wife.”

Wall Street Guy: “I’m calling you because you are a successful individual. Your success is the result of years of making the right calls in business. Am I right? Lets be real. You don‘t confer with your wife on your day-to-day business decisions and I’m sure your wife respects your investment decisions.”

It was mind-numbing, soul-crushing work — a white-collar sweatshop. But it was effective. According to Fortune, in the late 1980s, half of new accounts for Lehman’s brokers came from cold-calling. (The numbers dropped after Lehman got censured and fined.) But here’s how it used to work:

At these sites, the initial ”dials” are often made by young kids, many right out of college, who get $5 an hour and lunch for spending their day on the blower intoning, say, ”I’m calling for Martin Shafiroff, a managing director of Lehman Brothers.” Usually the dialers get rebuffed in seconds by the prospect or his secretary. But once in a while they get a live mark and then the dialer hands off the call by yelling to a ”qualifier” to pick it up (”I’ve got Henry Longfellow on line 4”). The qualifier, who is an assistant somewhat higher on the pay scale, collects what information he can about Henry and, if Henry acquiesces, assures him that Martin Shafiroff, say, will be calling him shortly with an idea.

Sater dropped out of college to work at Bear Stearns at age 18 as an assistant cold caller. Several months later, Sater got his broker licenses and then moved jobs to Ladenburg Thalmann, one of Wall Street’s oldest firms. (Bear Stearns and Ladenburg don’t show up on Felix’s official FINRA record, but he testified about them in a 2010 deposition.)

It’s worth noting that Howard Lorber, a friend of Trump’s who brought him to Russia in 1996, became chairman of Ladenberg in 2001 and holds the post of vice chairman today. Lorber is a member of Trump’s Council of Economic Advisers.

Gennady Klotsman, one of Sater’s longtime friends, soon joined him on Wall Street. They both worked at Rooney Pace, although Sater left after a few weeks to join Lehman Brothers, then known as Shearson Lehman following its acquisition by American Express. Klotsman and Sater worked together at Shearson Lehman in 1987.

The following year, Sater made his jump to Gruntal, one of the oldest stock brokerages in America. It traced its roots back to 1880. Gruntal not only survived the Crash of 1929, but when Sater joined the firm’s offices on 14 Wall Street at 605 Third Avenue in Manhattan, Gruntal was approaching its zenith as the country’s 14th-largest brokerage firm, fielding an army of brokers with phones glued to their ears.

But Gruntal was no staid brokerage. Far from it. It was a place for people who “weren’t presentable enough” to work for the big houses, Don Jans, one of the firm’s top earners, told Fortune.

“One of our biggest producers was bipolar,” Jans said. “My old sales assistant is a punk rocker with tattoos and piercings. Who would hire this guy? But he was the best salesman I ever had. Gruntal was the Island of the Misfit Toys. But they didn’t care what was going on in our sick, dysfunctional office as long as we were making money. We had no manager, and it’s illegal not to supervise brokers. I remember doing cartwheels down the hall, drinking beer at my desk, smoking pot, having sex in the stairwell. Whatever!”

Gruntal’s cold callers were, shall we say, a bit loose with the truth. Fortune reported that at one Gruntal office in Manhattan cold callers said they were with the firm’s ”executive services group.”

Sal Lauria, another of Sater’s good friends, joined at Gruntal in 1991 and lasted less than a year. After Sater lost his job at Lehman in the bar stabbing, he and Lauria took their cold-calling scripts and went to work at a boiler room operation involving four Mafia families. The two were prosecuted for their roles in a $40 million pump-and-dump stock scheme .

Gruntal, however, was more than a cold-calling shop. It a powerhouse of analytical talent.

The best example was Stephen A. Cohen, one of the greatest stock traders of all time whose tenure at Gruntal overlapped with Sater.

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Steve Cohen

Cohen landed a job trading options at Gruntal in 1978 made $8,000 on his first day and eventually  managed a $75 million portfolio and six traders. Cohen left Gruntal in 1992 to start his own hedge fund, SAC Capital Advisors, which made him into one of the richest men in America.

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Steve Feinberg

Stephen A. Feinberg was another Gruntal veteran who worked at the firm at the same time as Sater.

Feinberg joined the firm in 1985 after a stint at Mike Miliken’s Drexel, Burnham & Lambert. He managed separate pools of capital and other accounts until he left in 1992 to start Cerebus Capital Management, which today is one of the country’s biggest private investment firms.

Feinberg is also a member of Trump’s Council of Economic Advisers. In February, Feinberg was reportedly being considered for a post in the Trump Administration, overseeing a shakeup of the United States intelligence community.

Another Gruntal alumnus with ties to the Trump administration is billionaire investor Carl Icahn, who worked at the firm from 1964 to 1968.  A few weeks ago, Icahn announced that he was leaving his position as Trump’s special adviser on regulatory reform. Just a few hours after the announcement, The New Yorker published an article showing how Icahn used his influence to attack regulations that hurt his business interests at oil refineries. 

Update:  Wall Street firms like Gruntal had a practice then of advancing money to their brokers.  Sater had apparently failed to pay back his loan for Gruntal obtained a judgement against Sater for more than $137,000 in 1995.  By that time, Sater was in prison for his margarita glass bar assault.

Since I’m writing about this topic, I feel obliged to point out that if you search around for Sater and Gruntal on the Internet, you’ll run into theories of a giant Wall Street/Mafia conspiracy. The curious can check out the website deepcapture.com.

Deepcapture.com was the subject of a libel trial in Vancouver, Canada. In 2016, a judge found the website was not only libelous but had engaged in a “calculated and ruthless campaign” against an investor, Altaf Nazerali (supposedly a friend of Sater’s, according to deepcapture.com). Nazerali was awarded him damages of more than $750,000. (The ruling can be found here.)

This would normally be the death knell of any conspiracy website. Not deepcapture.com It is backed by the deep pockets of Patrick Byrne, the CEO of Overstock.com. Byrne saw the whole libel case as a lark. The ruling quotes Byrne as saying “It looks like Ali Nazerali wants to go a few rounds. Happy to oblige.”

Byrne has been a critic of stock market practices such as naked short selling. He may have a valid point, but, unfortunately, he has given full voice to garbage reporting on his website. That garbage reporting has found a receptive ear because legions of Trump haters want to believe the worst about him and the kind of people with whom he associated.

The truth was far more mundane.

Felix Sater and Michael Cohen: Childhood Friends.

Somehow I missed this. Buried deep in this excellent New York magazine piece on Felix Sater is this tidbit:

Cohen, one of Trump’s personal attorneys, had known Sater since they were teenagers.

I’m curious how these two met. Sater was born in Russia and grew up in the Russian enclave of Brighton Beach as a Mobster’s son. Cohen grew up on Long Island as a doctor’s son. About the only thing the two seem to have in common is that they are both Jewish and roughly the same age.

Update: Sater told Talking Points Memo he knew Cohen through Cohen’s wife, Laura Shusterman:

Sater said he most clearly remembers the beginning of his relationship with Cohen from the time the former Trump Organization attorney began dating his now-wife, whom Sater describes as a girl from his neighborhood of Jewish Soviet expatriates. Cohen told TPM the pair had known each other before then, in their teenage years, and that he hadn’t yet begun dating his wife, reportedly a Ukrainian émigré, when he was in his teens.

Their friendship puts a different light of the chummy emails between the two men in 2015, after Trump announced he was running for president. In the emails, obtained by The New York Times, Sater promised to use his contacts in Russia to help Trump win.

“Our boy can become president of the USA and we can engineer it,” Sater wrote in an email. “I will get all of Putins team to buy in on this, I will manage this process.”

Cohen had been in negotiations with Sater and foreign investors to build a Trump Tower in Moscow from September 2015 through the end of January 2016. Trump announced he was running for president in June 2015.

In January 2016, when negotiations stalled, Cohen wrote to Putin’s spokesman, Dmitri S. asking for help.  But Mr. Cohen did not appear to have Peskov’s direct email.

That’s really strange. Why would he do this? As an attorney, he knows how important records are. It’s almost as if Cohen didn’t really expect a reply, but wanted to leave a trail.

And the White House has been referring questions about this whole matter to Cohen’s attorney, suggesting that this was Cohen’s deal, not the Trump Organization’s.

Trump’s Russian Deposit Boxes

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The Baltschug Hotel is one of Moscow’s most venerable hotels. Overlooking the Moskva River, across from the Kremlin, the Baltschug dates back to the reign of Czar Nicholas II. After the Russian Revolution, it became a dormitory, but the collapse of  the Soviet Union saw the Baltschug restored to its former glory as a five-star hotel

And it was here on a Tuesday evening in September 2002, that Donald Trump arrived to sell apartments in New York to newly-wealthy Russians.

Trump wanted to make it easy for Russians to buy one of his New York apartments without even leaving the country. His real estate agent, Sotheby’s International Realty, had partnered with Kirsanova Realty to open an office in Moscow to sell his condos and apartments to Russians who were interested in buying abroad.

Trump is such a spectacle that we often forget to ask the interesting questions. What was interesting about the Baltschug event was not Trump himself. The interesting question to ask was who was buying. And the answer to that question is, well, we don’t know.

Guests at this event did not want to give their names, a reporter from the respected Russian business newspaper Vedemosti found:

However, potential customers present at yesterday’s presentation of New York real estate not only refused to reveal themselves, but also did not admit that they were interested in this real estate, insisting that they simply went in for “pies to eat”.

The Moscow Times, an English-language newspaper, also sent a reporter and noted the same thing:

When asked about the prospect of acquiring property through Sotheby’s and Kirsanova Realty, guests at Tuesday’s reception shied away from saying directly whether they were interested in the super expensive apartments. One guest said most were there to see “how the other side lives.”

Why would a Russian be embarrassed to admit they were interested in buying Trump property?  That’s the interesting question.

The reason why the buyers at the event were embarrassed to give their names is because they didn’t want anybody doing exactly what these reporters from Vedemosti and The Moscow Times were doing: Asking questions.

Phllip Bogdanov of Kirsanova Realty said he didn’t consider his potential clients oligarchs, but rather owners of sustainable businesses. But that’s nonsense.

One of the few who wasn’t  afraid to introduce himself to Vedemosti’s reporter was Pavel Syutkin, then the head of the investment department of the Presidential Administration of the Russian Federation.  Today, Pavel Skyutkin is a food historian and author of an English-language cookbook about Russian cuisine.

The Russians who could afford a million-dollar apartment in New York were a special class of people who owed their wealth to their political connections, not their business skills. People get outrageously rich in Russia because the Kremlin allows it.  The Kremlin lets them get rich; the Kremlin could take everything away.  If you’re wealthy in Russia, your money is never secure. Your money was only safe if and when it moved out of the country, beyond the reach of the Kremlin.

Trump had spent a lot of time trying to put his name on something in Moscow in the 1990s. We’ve looked at his efforts to build a tower in Moscow and develop a pair of run-down Moscow hotels. At some point, Trump realized that building a tower in Moscow was the wrong way to go about it.

The Russians didn’t want to keep their money in Russia. The wealthiest of Russians weren’t interested in a Trump Tower in Moscow, but a tower in New York, now, that was something that interested them.  Why not build luxury towers that served as deposit boxes for wealthy Russians and other foreigners who wanted to stash their money away? What if Trump could build right here in New York for Russian money? 

This was Trump’s sales pitch. Come to New York. You can enjoy your money, no questions asked.

“Now, Russian connoisseurs of high-class housing will have the opportunity to become neighbors of well-known politicians, businessmen and Hollywood stars,” said SIR vice-president Mika Sakamoto.

Trump’s towers in New York were really safe deposit boxes for foreign money. Trump World Tower (pictured above), the 72-story skyscraper that opened in 2001, was a giant deposit box of Russian money.

Bloomberg found that Sam Kislin, a Ukrainian immigrant, issued mortgages to buyers of multimillion-dollar apartments in World Tower. An individual issuing mortgages for luxury homes is highly unusual.

One of the people Kislin provided mortgages to was Vasily Salygin, a future official of the Ukrainian Party of Regions. The Party of Regions is the Putin-linked party whose best known member is Viktor Yanykovych, the man who former Trump campaign manager Paul Manafort helped win the presidency of the Ukraine before he fled to Russia.

Kislin was business partners with Tamir Sapir, who would later partner with Trump to build the scandal-plagued Trump SoHo condo hotel.

Bloomberg also turned up another person who bought in Trump World Tower. It was Eduard Nektalov, an Uzbekistan-born diamond dealer, who purchased a $1.6 million apartment in July 2003. He was being investigated by federal agents for a money-laundering scheme. Nektalov sold his unit a month after he bought it for a $500,000 profit. He was gunned down on Manhattan’s Sixth Avenue in 2004.

Kellyanne Conway and Michael Cohen, Trump’s consigliere, bought units in Trump World Tower. Cohen also persuaded his Ukrainian in-laws and a business partner to buy in the tower as well.  Cohen also helped Trump take back control of the tower’s board from a group of apartment owners upset over the way the building was being run.

What began in 2002 was the steady influx of Russian money into the Trump Organization. The same Russian money that kept him afloat during the financial crisis and the same money that is now the subject of an investigation by Special Counsel Robert Mueller.

NEW: Eric Trump: “a lot of Russians” buying Trump SoHo

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Eric Trump told the Russian publication Home Overseas that the “bulk of buyers” in Trump SoHo were “foreigners, among whom there are a lot of Russians.”

He also added that the Trump Organization was expecting Russian buyers in its planned tower on Palm Jumeirah in Dubai. “We very much count on good demand from the Russians,” he said.

I haven’t seen these comments reported anywhere else before.

The comments from Eric Trump come in an article titled, “Luxury is Beyond Time,” on the website of the Russian publication. Although undated, it appears that he made the remarks around 2007-2008. Construction on the Dubai tower was halted at the end of 2008 as the financial crisis put the squeeze on the heavily-indebted Arab emirate.

Eric Trump’s comments in Home Overseas underscores what his brother Don Jr told eTurboNews in 2008: “Russians make up a pretty disproportionate cross-section of a lot of our assets; say in Dubai, and certainly with our project in SoHo and anywhere in New York.”

Here is the full quote from Eric Trump:

In your projects, do you focus on domestic demand or are you looking for foreign investors? 

It depends on the particular project. So, in the New York hotel-condominium Trump SoHo the bulk of buyers are foreigners, among whom there are a lot of Russians. The fact is that New York is one of the centers of international business and tourism, many foreigners often come here and want to have real estate. Quite a different situation in Chicago, where most buyers are from America.
Another example – a golf resort in Scotland is interesting both to local golf lovers, and to Americans who want to play in European fields. Also in the case of the Dubai project, our Palm Jumeirah tower will certainly attract not only investors from the Gulf countries, but also Europeans, Americans, and representatives of developed Asian states. We very much count on good demand from the Russians.

The Trump Organization’s connections with Russia in the scandal-plagued Trump SoHo project have been exhaustively covered.

I’ve written before about how Dubai was a favorite destination for Russian criminals and international money lauderers here.

Trump’s Dubai Dreams

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As the cameras flashed, Donald Trump welcomed Demi Moore and Naomi Watts, Heidi Klum as they joined him at his party the Park Avenue Plaza in New York.

It was the summer of 2008 and Trump was launching his company’s newest hotel, The Trump International Hotel & Tower in Dubai.

This stunning 62-floor stainless steel and glass structure in the shape of a tulip would have sat in the center of Palm Jumeirah, Dubai’s iconic man-made archipelago in the shape of a palm.

I say would have because Trump’s Dubai tower was never built. It was a castle in the air, a fever dream built on the belief that good times would never stop rolling. Which they did not long after the New York party.

As Trump officially kicked off sales of apartments at his party in New York, the Dubai tower was attracting a lot of interest halfway around the world.  Donald Trump Jr. famously said in September 2008, “In terms of high-end product influx into the US, Russians make up a pretty disproportionate cross-section of a lot of our assets; say in Dubai, and certainly with our project in SoHo and anywhere in New York. ” (emphasis added)

And these Russian buyers, whoever they were, were loaded. At the time of the New York party, pre-sales of the Dubai tower had fetched an average of $2,450 per square foot, with some units receiving bids as high as $3,270 per square foot.

After learning a little about Dubai, I’m not surprised that Russian money was attracted to Trump’s $1.1 billion project, his first venture in the Middle East.

Dubai is known for its sun-splashed towers and its man-made archipelagos but it also has a darker side. Sitting at the junction of Europe, Africa and Asia, Dubai was a crossroads for international criminals. When the emirate opened its property market to foreign buyers in 2002, Dubai quickly became a place where dirty money could be washed clean, particularly through property sales.

“During the boom, Dubai was a good place for money laundering, through property, land sales and the big projects,” Hamdan Abdullah al-Sayyah, a managing partner at Al Sayyah Advocates and Legal Consultants in Dubai, told The New York Times (for a 2010 story headlined “Dubai Labors Under Money-Laundering Image.”)

Dubai was and is a bright place for shady people. The emirate’s laissez-faire attitude allowed the vice president of Afghanistan to arrive in Dubai with $57 million in cash and continue on his way. The chairman of Kabul Bank owned 39 properties on Palm Jumeirah.

Russian criminals, too, could relax in Dubai. At least they could until 2006 when Zahar Kalashov, a top Russian Mafia boss, was arrested after leaving a party attended by members of the Georgian and Russia Mafia.

Another Russian criminal exposed in Dubai was Olga Stepanova, who, together with her now ex-husband, acquired three properties in Palm Jumeirah, the site of Trump’s tower, worth a combined $7 million. Quite a feat considering the couple reported an official joint income of $38,000.

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The Stepanova villa in Dubai

It turns out Stepanova was a Russian tax official who had authorized $230 million in fraudulent tax rebates for organized crime groups. The scam was uncovered by Sergei Magnitsky, a lawyer working for financier turned human-rights campaigner Bill Browder.

Magnitsky was murdered in a Russian prison in 2009 and Browder has never forgotten him. The Magnitsky Act, signed into law by President Obama three years later, seeks to punish those responsible for his death. (For details and photos of the Dubai properties, see the Website Russian Untouchables.)

Russians were well known for buying luxury properties that then sat empty. “Russians are still coming with suitcases of cash to buy flats which they never live in,” a UK financier working in Dubai told The Guardian of London in 2010 . “It’s easy to get resident permits. These sort of stories are rife. Russia is the biggest source. A lot of it is mafia.”  Today one in five Dubai luxury properties sits empty, with many owned by Russians.

Hamdan Abdullah al-Sayyah, the attorney quoted earlier by the Times, cited a case he dealt with, where a person claiming to be a businessman filtered $10 million from Russia into a Dubai land  deal. “The money arrived in small transactions, so the bank wouldn’t be suspicious, and he had a sales contract to show the bank,” Mr. Sayyah said. “At that time, nobody was looking into it because the country needed investors to come in.”

Given this background, it’s not surprising then that Trump’s Dubai tower was getting a lot of interest from Russian buyers.

Trump’s partner in the deal was effectively Dubai itself. The developer on the project was Nakheel, a subsidiary of Dubai World, a giant conglomerate owned ultimately by Dubai’s ruler, Sheikh Mohammed bin Rashid Al Maktoum.  The terms of the deal made it a partial licensing deal and a partial partnership, Trump said during a 2010 deposition.

Trump and Nakheel were riding high in the summer of 2008. There was another party for Trump’s Dubai tower. This time it was at an even more star-studded affair in Bel Air, California. Christina Aguilera sang for the crowd of 1,000 guests at Tar’s home, which is known as the Cheateau d’Or , which included Pete Wentz, Orlando Bloom, Omarosa, P. Diddy, Hilary Swank, and Aaron Eckhart. The event was held at the estate of Yousuf Tar, a Pakistani who owns Bernini clothing company.

“The battle of the towers” was underway between Trump’s Dubai tower and the Burj Dubai, the world’s tallest building, to see which one could sell the emirate’s most expensive apartment. (“Dubai high rises reach record prices as battle of the towers hots up,” Financial Trump was hoping to sell a penthouse in his tower for more than $30 million, which would smash the record.

No one seemed to notice danger signs. Nakheel itself had fueled its incredible expansion on debt and the credit markets were flashing red.  Although sign that things were spinning out of control came in August 2008, just before the Bel Air gala, when two Nakheel executives, including the top sales manager, were arrested on suspicion of bribery.  (Details on the case were not made public and Trump was never implicated.)

The end came quickly.

Within a few months of the Bel Air party, work on the project came to an abrupt halt, as Nakheel groaned under the weight of its massive debts. Trump’s Dubai tower, just one of the many mega-projects Nakheel had going. Planned and underway projects exceeded $310 billion (!) in 2008.  All were predicated on the availability of cheap finance.

The collapse of Lehman Brothers and the ensuing credit crunch forced Dubai to face reality and its massive debts. Its parent company, Dubai World, in 2009 ceased payment on its $59 billion in debts and had to be bailed out by neighboring Abu Dhabi.

In 2011, Nakheel revealed what everyone already knew. Trump’s Dubai tower would not be built.

Trump Estates Park Residences in Dubai: The Dream Never Dies

But Trump’s Dubai dream never died.

Today in 2017, his company is selling the Trump Estates Park Residences in Dubai. He has a new partner, Hussain Sajwani of DAMAC Properties in Dubai, and a new site on the outskirts of the city.

The prices are lower: $800,000 will buy you a  4-bedroom villa with a complimentary 3-year family membership at Trump’s nearby golf course.  DAMAC is also building a second Trump-branded golf course, designed by Tiger Woods, in Dubai.

I wonder who the buyers are.

Trump-Russia, 2008 edition

As my readers know, I see 2008 as the critical year when Trump found himself on the hook with Russia.

It was the year that the Russian fertilizer king Dmitry Rybolovlev paid $95 million for Trump’s Palm Beach mansion, netting Trump more than $50 million in a shady transaction that Special Counsel Robert Mueller is said to be investigating.

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Donald Trump Jr. in Moscow in 2008

It was in 2008 that Donald Trump Jr. famously declared: “Russians make up a pretty disproportionate cross-section of a lot of our assets. Click here for the full quote from eTurbo News.

By his own account, Donald Jr. made “half a dozen trips to Russia” between January 2007 and June 2008.

It was in June 2008 that he appeared in Moscow as the keynote speaker for the “Real Estate in Russia” conference.

Don Jr. tantalized the crowd by telling them that a Russian was interested in buying his father’s Palm Beach mansion and announced plans to build elite housing and hotels in Moscow, St. Petersburg and Sochi and to license the Trump name.

The Russian projects never happened as developers balked at the costs of licensing the Trump name. Kommersant reported that, according to one Moscow developer, Trump was charging as much as a quarter of the project costs to put his name on the building.

But the money from Russia still poured into the Trump Organization. A man who claims to have sold Trump-branded properties in Russia at the time was a Belarusan American businessman named Sergei Millian.

“You could say I was their exclusive broker,” Millian told Russian state broadcaster RIA Novosti in April of last year. “Then, in 2007-2008, Russians bought dozens of apartments in Trump houses in the US. But I would not want to disclose specific amounts and names.”

Interestingly, Millian was also a source, apparently unwittingly, for former MI6 officer Christopher Steele’s Trump dossier.  (The White House and Trump consigliere Michael Cohen have dismissed him as a publicity-seeking hanger-on.)

Roger Khafif also hosted sales meetings in Russia for Trump for a property in Panama. “Russians like brands,” he told The Washington Post, “and Trump was famous in Russia” during the early 2000s real estate boom. “These were good days for Trump. He was the only man in town for real estate.”

And 2008 was also the year Trump invited a correspondent for Chayka, a Russian magazine, to breakfast at Trump Tower. Here is the lead of that story (translated by Google Translate):

Donald Trump invited us to report on a new project, which is largely designed for Russians.

The project was Trump SoHo, arguably the shadiest of all Trump’s shady deals. This was the project that employed Felix Sater, a felon with ties to Russian and American organized crime. Sater worked for Bayrock, a firm backed by Russian money close to Putin, according to a lawsuit filed by a former employee. Later, Sater worked for Trump himself.

The story goes on to quote Trump:

I have very good business relations with the Russians. A Russian recently bought a house for me in Florida for $100 million. Some Russians buy houses at 50 million each. Great buyers! People with good taste and good money understand the value of the Trump brand. It is always a guarantee of quality and a win-win location. Investing in “Trump,” you invest for sure. By the way, I really like Vladimir Putin. I respect him. He does his job well. Much better than our Bush.

Trump goes on:

Russian buyers got to taste the building we built in Palm Beach, Florida.

Maybe this is a mistranslation, but it’s not clear which Florida project Trump is referring to here.  Is he talking about  Trump Towers in Sunny Isles Beach, Florida, a development known as “Little Moscow”?  Is he talking about his planned tower in Palm Beach that was launched in 2007. Or is he talking about a sales event attended by potential Russian investors and celebrity guests like Regis Philbin at his Mar-a-Lago Club in Palm Beach in January 2008?

And 2008 was also the year when Trump assured the Scottish government that he had the funds to build the “greatest golf course in the world” on the northeast coast near Aberdeen, Scotland. “The money is there, ready to be wired at any time,” Trump attorney George Sorial said. “I am not discussing where it is, whether it is in a Scottish bank or what, but it is earmarked for this project. If we needed to put the development up tomorrow, we have the cash to do that. It is sitting there in the bank and is ready to go.”

But 2008 was also a very challenging year for Trump and this, more than anything, may explain his tilt toward Russia. The global financial crisis put the squeeze on his finances and pushed him to the wall.  Within a year, Trump-branded projects in Tampa; Vancouver, Canada; Dubai; and Baja California went bust or were put on hold. Trump Entertainment Resorts, the operator of the Trump Taj Mahal, filed (again) for bankruptcy.

In December 2008 Trump made the fateful decision to sue his lender, Deutsche Bank, when he failed to make good on a $40 million guarantee on a loan for Trump International Hotel and Tower in Chicago. Amazingly, Deutsche Bank continued to lend to him. The bank now finds itself in the cross hairs of many Russia investigators.

Trump, of course, emerged from the wreckage of the financial crisis, and some think he did it with Russian money.  As Sir Richard Dearlove, former head of MI6, told Prospect Magazine, “what lingers for Trump may be what deals – on what terms – he did after the financial crisis of 2008 to borrow Russian money” when other banks and lenders would not risk the money.

Something happened around 2008 that tied Trump’s future to Russia. Was Trump the subject of Russian kompromat or blackmail? Did he meet Putin, as he long claimed he did? Did Russia give him much-need capital when no other banks would in the midst of the financial crisis?

I don’t know the answer, but I hope that someday, we will find out.

Who is Lanny Wiles?

This is a guest post by Terry J. Clark, a frequent reader of this site who follows the Trump-Russia story.

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Lanny Wiles

As we now know, on June 9th, 2016, Donald Trump Jr., the future president’s son, met with several Russian operatives at Trump Tower in New York City.

The meeting is the best evidence yet of collusion between the Trump campaign and Russia. Don Jr. had been lured to the meeting by a promise of dirt on Hillary Clinton from Russia.

One of the operatives at the June 9th meeting was a a former Soviet intelligence named Rinat Akhmetshin, who was working as a lobbyist in the United States. Akhmetshin, like everyone else who attended the meeting, has been the focus of intense scrutiny. A profile in The New York Times described him as a “master of the dark arts.”

A figure who has mostly escaped attention is a GOP operative working quietly behind the scenes with Akhmetshin. The operative is Lanny F. Wiles, a genial Southerner whose family is closely tied to Trump.

A week after the Trump Tower this meeting took place, Akhmetshin asked Wiles to hold a seat for someone at a June 14, 2016 hearing before the Foreign Affairs Committee on “U.S Policy Toward Putin’s Russia.”

The person whose seat Wiles was saving at the June 14 hearing turned out to be Natalia Veselnitskaya — the Russian attorney who lured Don Jr. to the Trump Tower by claiming that she had “dirt” on Hillary Clinton which she had obtained from the Russian government.

Wiles told ABC News he has “absolute, zero connection” to any relations the Russian lawyer may have had to the Trump campaign.  But Wilkes clearly had a connection to Russia: He was working for it.

Wiles was working with Akhmetshin to undo the Magnitsky Act, a law despised by the Kremlin that sanctioned Russian officials connected to Sergei Magnitsky’s 2009 death. Magnitsky was a Russian lawyer who had worked for American-born investor Bill Browder to uncover a $230 million Russian government corruption scheme

The night of the June 14 House hearing, Wiles organized a dinner at the Capitol Hill Club, a private social club for Republicans. The dinner guests included Akhmetshin and Veselnitskaya as well as Rep. Dana Rohrabacher, a member of the House Foreign Affairs Committee who is seen as Vladimir Putin’s staunchest ally in Congress, and Paul Behrends, the congressman’s staff director (who was recently fired over his Russia connections).

According to this excellent Politico story, Rohrabacher and Behrends had, with Akhmetshin’s help, planned the day’s hearing to be a show trial of investor Bill Browder, the man behind the Magnitsky Act. That plan was nixed by senior committee Republicans and replaced with a panel that included two former US ambassadors to Russia.

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Rinat Akhmetshin

Akhmetshin had been hired by Denis Katsyv, the owner of the Cyprus-registered company Prevezon Holdings, Ltd., which was linked to the Magnitsky case. Some of the money stolen in the scam uncovered by Magnitsky turned up in US bank accounts controlled by Prevezon.

Together, Katsyv and Akhmetshin recruited Wiles to undermine the Magnitsky Act.

While Wiles was working on behalf of Russian interests, he did not register as a foreign agent as required by the US law. Wiles told Politico that Akhmetshin told Wiles he wouldn’t have to register because he would be working for the law firm BakerHostetler.

[Side note: Fusion GPS, the DC firm that commissioned former British MI6 officer Christopher Steele to produce what became known as the Trump dossier, was also hired by BakerHostetler to dig up dirt on Bill Browder. (See Browder’s letter.) The firm is the subject of a July 19 hearing before the US Senate Judiciary Committee, at which Don Jr. is also expected to affair.]

Why Wiles was brought in for this anti-Magnitsky work is unclear. He was a longtime DC lobbyist for the PGA Tour and a Florida utility. Clients have included a companies that produce anthrax vaccines. His areas of expertise, while wide-ranging, don’t involve foreign affairs.

What may have brought Wiles into the world of Russian lobbying is his friendship Rep. Rohrabacher. The two men have been friends since their days in the Reagan administration, according to Politico.

Wiles got his start working on Ronald Reagan’s failed 1976 run for the White House. When Reagan won four years later, Wiles became a Reagan advance man. In 1983, Wiles was taken hostage inside the pro shop at famed Augusta National while Reagan golfed. Wiles managed to talk his way out.

Wiles went on to work on many campaigns, including Sen. John McCain’s 2000 and 2008 failed presidential runs. (McCain is a strong supporter of the Magnitsky Act). Both Wiles and his wife worked on the campaign of Florida Gov. Rick Scott, who was asked about his former aide’s connections to Russia.

Wiles’ wife, Susie, is the former co-chair of the Trump presidential campaign in Florida. Trump credited Ms. Wiles with the crucial Florida victory.

Wiles’ daughter, Caroline, was named director of scheduling at the White House until February of this year when she was “escorted” out of the White House after failing an FBI background check.

Wiles heads Wiles Consulting LLC in Florida. He’s also listed as president and chief executive of TransEuro America, which he formed in 2015 after “seeing a need to assist US aerospace and defense companies to achieve greater market share in the dynamic Middle East and international business environment in the most efficient manner.”

Mueller Said to Be Looking into 2008 Palm Beach Mansion Sale

Bloomberg reports that Special Counsel Robert Mueller has decided that Trump’s sale of his Palm Beach mansion to a Russian billionaire is worth a deeper look.

As readers of this site know, Dmitry Rybolovlev, the Russian fertilizer king, bought the future president’s Palm Beach mansion in 2008 for $50 million more than Trump paid for it just a few years earlier. The mansion, called Maison de l’Aimitie (House of Friendship), was in such bad shape that Rybolovlev got permission to tear it down and sell off the land beneath it.

Dmitry Rybolovlev

I’ve written how this transaction has the marks of a bribery case I followed here in San Diego.

Not long after the mansion sold, Trump was approaching default on loan from Deutsche Bank. And the $50 million Trump pocketed on the mansion sale was enough to cover the $40 million he had personally guaranteed to the German lender.

Here’s a bit more detail: The Palm Beach mansion sold in July 2008. That fall, Trump was desperately trying to get Deutsche Bank to extend a senior construction loan for the 92-story Trump International Hotel and Tower in Chicago. The Chicago project was already facing weak sales before the 2008 financial meltdown hit.

Unlike many other Trump Organization projects, the Donald was personally on the hook in Chicago.  He hadn’t licensed his name. He had no partners. He arranged all the financing himself: He put $77 million of his own equity into the tower and had given Deutsche Bank a $40 million personal guarantee.  (See “In Chicago, Trump Hits Headwinds,” The Wall Street Journal, 29 Oct. 2008.)

Trump’s Deutsche Bank loan came due Nov. 7, 2008 with an outstanding principal balance of $334 million, plus $251 million in interest. Not only did Trump not pay, but with his usual bombast, he sued Deutsche Bank to force them to extend the loan. Deutsche Bank countersued, and demanded Trump cough up his $40 million guarantee. Deutsche Bank ultimately extended the loan for five years and eventually Trump paid it.

There are a lot of dogs sniffing around this tree. The personal guarantees Trump made for his Deutsche Bank loans are also of interest to New York State regulators looking at the president’s relationship with the German lender’s wealth management division: according to The New York Times:

Additionally, the New York regulators recently requested information related to the hundreds of millions in loans Deutsche Bank’s private wealth management division provided Mr. Trump, one of the people said, paying particular attention to personal guarantees he made to obtain the loans. Those guarantees have declined as the loans were paid down and the property values increased, but it remains a source of interest to the regulators.

For those who want even more detail, I’ve embedded Trump’s Deutsche Bank personal guarantee at the end of this post. If anyone with some expertise in these matters finds anything interesting in there, please let me know.

Mueller’s team are also said to be interested in dealings involving the Bank of Cyprus. Rybolovlev, the Russian oligarch who bought Trump’s Palm Beach mansion, became the bank’s largest shareholder in 2010 when he purchased a 9.7 percent stake through his British Virgin Islands holding firm, Odella Resources. (Wilbur Ross, Trump’s commerce secretary, invested in the bank in 2014.)

The shady mansion sale is just one of the things FBI investigators and others are examining:

It seems that Mueller’s team is looking for evidence of a payment disguised as a real estate transaction, fee or gift that would give Russians what the intelligence community likes to call “levers of pressure” that could be used against the US president.

Trump’s Personal Guarantee

Who Is Sam Clovis?

In September 2016, a longtime GOP operative launched a campaign to obtain Hillary Clinton’s emails from hackers.

The operative’s name was Peter W. Smith. According to a pair of blockbuster articles (here and here) by The Wall Street Journal, Smith “implied” that he had a connection to retired Gen. Michael Flynn, who served briefly as Trump’s national security advisor until he was ousted for lying about his contacts with Russian officials.

Flynn’s name is mentioned in a recruitment document Smith passed around last year:

Officials identified in the document include Steve Bannon, now chief strategist for President Donald Trump; Kellyanne Conway, former campaign manager and now White House counselor; Sam Clovis, a policy adviser to the Trump campaign and now a senior adviser at the Agriculture Department; and retired Lt. Gen. Mike Flynn, who was a campaign adviser and briefly was national security adviser in the Trump administration.

A name people might not recognize on this list is that of Sam Clovis, a porcine former college professor from Iowa better known as host of the radio talk show “Impact with Sam Clovis.” We don’t know how Clovis’ name wound up on the list but I have a feeling we may hearing more about Clovis in coming weeks or months.

Clovis was an early backer of Trump in Iowa, where Clovis is something of a conservative power broker. It earned him a spot in the campaign as senior policy adviser and co-chairman.

Trump finished second in Iowa, but he soon ran the table in ensuing primaries, and, as the Trump train gathered momentum, Clovis took leave from his position as a professor at Morningside College in Sioux City, Iowa to devote himself to the campaign. FEC records show he was paid more than $198,000 during the 16 months he worked on the Trump campaign.

The FEC filings say Clovis was paid for “communications consulting.” He described his role on the campaign to his hometown newspaper, the Sioux City Journal, as a “utility infielder.” His job was to appear on TV as a Trump surrogate, write talking points for speeches and “help find key people who can inform Trump’s developing policies on economics, immigration and foreign affairs”

Clovis told Bloomberg he led a two-person policy team that worked with campaign manager Corey Lewandowski to connect Trump to experts and former officials constantly.

In other words, Clovis was something of a gatekeeper for Trump.  If you wanted to work on the campaign in a policy role or as a subject matter expert you went through Clovis.

“This whole notion that he is devoid of advisers is wrong. We have a lot of smart guys around us and a lot of smart people helping us,” Clovis said in January 2016.

One of the “smart people” whose name crossed Clovis’ desk was Carter Page, the head of an energy investment firm and a former banker with Merrill Lynch in Moscow. Clovis employed what The Washington Post described as the campaign’s “go-to vetting process” — a quick Google search — to check him out. Clovis gave Page his OK.

Page, we know now, was a disastrous choice. During his time as a Trump advisor, Page was the subject of a Foreign Intelligence Surveillance Act warrant, meaning that a US judge found probable cause to suspect that Page was acting as an agent of a foreign power. He reportedly was one of the Trump advisors Russian intelligence tried to use to infiltrate the Trump campaign.

Foreign diplomats trying to figure out Trump also realized that Clovis was the man to see. He was one of the few Trump campaign officials authorized to speak on behalf of his boss.

Joe Hockey, Australia’s ambassador to the United States, was one who called on Clovis. Hockey hosted Clovis and Stephen Miller, in March 2016 at his private residence. (See “Deep ties to keep relations on track,” The Australian, 11 Nov. 2016) It was the first of several meetings on defense, trade and immigration.

In April, German Foreign Minister Frank-Walter Steinmeier, who described Trump as a “hate preacher,” sent his state secretary, Markus Ederer, to meet with Clovis. The two men met discreetly at a cafe in Washington where Ederer struggled to understand what a Trump victory would mean for German-American relations. According to a report in Der Spiegel, “The Iowa Republican sought to ease the German’s concern about a possible Trump victory. But whenever Ederer probed deeper, Clovis was unable to provide satisfactory answers.” (See “Merkel Anticipates Frosty Relations with U.S.,” Spiegel, 4 January 2017) Clovis also met with Germany’s US ambassador, Peter Wittig, as did Jared Kushner.

It remains to be seen what meetings, if any, Clovis had with Russian diplomats.

Meanwhile, Clovis’ formerly hardline views on Russia were evolving. During his long career in the U.S. Air Force, Clovis had trained and planned for combat with the Soviet Union.  In 2014, when Clovis ran unsuccessfully for the US Senate in Iowa, he advocated a “containment” policy against Russia. “I think we need to also make it very clear to Russia … that any incursions outside of Crimea, the Ukraine, would be met with great vigor,” Clovis told Radio Iowa.

Two years later during the Republican convention in Cleveland, however, Clovis angrily defended the  campaign’s decision to remove language from the GOP platform that called for providing lethal defensive weaponry to Ukraine. It was too expensive, Clovis felt.

“It’s okay to go out here and load your mouth up and say stuff and say, ‘Yeah we are going to come to your aid, we’re going to provide you arms, we’re going to come out and do all these things. But nobody has taken the time to think this through to its logical conclusion,’” Clovis said. “What are the costs going to be to the United States, not just in Ukraine but also in NATO and also around the world?”

Although he doesn’t look the part, Samuel H. Clovis Jr. is a former fighter pilot. He grew up in rural Kansas and attended the U.S. Air Force Academy in Colorado. Clovis spent 25 years with the U.S. Air Force from 1971 to 1996.

His career included command of the 70th Fighter Squadron, at Moody Air Force Base in Valdosta, Georgia. In the mid 1980s, he served on the staff of  the Pentagon’s Project CHECKMATE, where he assessed the performance of the Air Force in a hypothetical war with the Soviet Union. Clovis also served as chief of the office of military cooperation at the embassy in Bahrain. (He considers himself an expert on the Middle East.) He retired as the Inspector General of NORAD and the United States Space Command with the rank of colonel.

After leaving the military, Clovis worked at Logicon, an Alabama-based subsidiary of Northrop Grumman Corp. Then, he entered academia, which led him to Iowa and eventually to his position at Morningside College.

Today, Clovis is Trump’s nominee to be the US Department of Agriculture’s chief scientist.  Clovis is not a scientist. What he is is a hardcore Trump loyalist. He once described Trump as “one of the greatest men to ever walk the face of this earth.”

But his feelings for Trump weren’t always so favorable. Before he joined forces with Trump in August 2015, Clovis had signed on as Iowa state chairman for former Texas Gov. Rick Perry. Emails leaked by the Perry campaign revealed Clovis as an opportunist who was scornful of Trump before switching sides. Trump’s remarks disparaging Sen. John McCain’s status as a war hero  particularly galled Clovis, who served 25 years in the U.S. Air Force.

“I was offended by a man who sought and gained four student deferments to avoid the draft and who has never served this nation a day — not a day — in any fashion or way,” he wrote.

What Was Michael Cohen’s Role at the Trump Organization?

Michael Cohen

Michael D. Cohen

The New York Times is out with a front-page story today on Michael Cohen, Trump’s consigliere and personal attorney.

The article makes the point that Cohen has been sidelined because he’s been caught up in the Russia inquiry. He apparently was expecting to land a senior administration post in the White House, but nothing ever came of it.

But the article raises another point: What did Michael Cohen do at the Trump Organization?

He has declined to discuss the details of what he did at the company, and the Trump Organization did not respond to requests for comment. Some people who worked with him also declined to describe Mr. Cohen’s tenure, with several of them saying they feared being sued.

Whatever Cohen did, he wasn’t just reviewing contracts and documents. If you fear being sued for discussing Cohen’s job at the Trump Organization, something else was going on.

From May 2007 to the present, Cohen served as an executive vice president and special counsel to the Trump Organization, according to his LinkedIn profile.  He was and is unquestioningly loyal to his boss. Despite the attention he attracts from the Russia inquiry, Cohen remains Trump’s personal attorney.

Cohen is slated to appear before the House intelligence committee in its investigation of Trump’s ties to Russia. Cohen’s name appeared in a dossier prepared by former British MI6 officer Christopher Steele. The dossier stated that Cohen served as an intermediary between Trump and Russian operatives and Kremlin officials. Cohen has denied these links.

While the dossier may have gotten the details of Cohen’s meetings in Prague wrong, it may have struck upon a deeper truth: namely, that Cohen did serve as an intermediary between Trump and the unsavory characters the Donald encountered in his business.

Before joining forces with Trump, Cohen was involved in the New York City taxi business, set up businesses in the Ukraine, invested in a gambling cruise with a pair of Ukrainians, and he once deposited a $350,000 check from a Russian hockey player that he can’t explain and doesn’t remember receiving.

These ventures, reported by Buzzfeed’s Anthony Cormier who has been doggedly investigating Cohen, all have an unsavory element. When asked about them, Cohen  offers blanket denials, which he walks back when confronted with documents. But the unsavory elements in Cohen’s past obviously did not prevent him from getting a job with Trump; instead they may have helped him land it.

Every Mafia family has a consigliere. He (and it’s always a he) is a counselor to the boss, advising him on political relationships. He is traditionally not a member of the family and his role as an outsider is seen as allowing him to provide objective advice. Cohen may have played a similar role in the Trump Organization.

A search of news archives shows that Cohen appears mostly in the press as a Trump spokesman. In the 2012 campaign, Cohen launched a “Should Donald Run?” campaign. He later defended Trump in the press  from charges that he had fraudulently bilked students out of thousands of dollars in the scam known as Trump University. He is known for threatening reporters with lawsuits.

A few instances, however, offer a clue as to what Cohen’s job involved.

After he joined up with Trump, Cohen’s name first surfaced in a batch of articles about EnCap, a plan to build a golf course on New Jersey landfill. One article about an EnCap contractor arrested on money laundering charges references Cohen trying to get an attorney removed from the project.  (See “EnCap contractor hauled away; Arrested in unrelated money-laundering case,” The Record, 26 January 2008)

Nothing ever came of EnCap. The state pulled the plug on the project and EnCap filed for bankruptcy the next day. Trump kept a hand in the project, nevertheless.

The U.S. Attorney’s office, then led by future New Jersey Gov. Chris Christie, subpoenaed EnCap’s records. Cohen told a reporter the Trump Organization had not received a subpoena but he seemed to have insight into what exactly what interested investigators. (See “Feds Subpoena EnCap; Billing Records Sought,” The Record, 19 June 2008)

Cohen said those investigators appear to be focusing, in part, on the critical time frame from 2000 to 2005, when he said many key decisions were being negotiated.

“That’s when all the deals were cut,” he said, referring in part to the favorable loans from the Department of Environmental Protection and the Environmental Infrastructure Trust.

Another set of articles involve Cohen’s 2010 visit to Adjara in the former Soviet republic of Georgia. “Cohen has come to Adjara as he is interested in the investment climate in the region,” an article in the Black Sea Press. “Namely, Michael Cohen paid his attention to the ‘Project of Future’ which envisaged construction of comfortable hotels, entertaining complexes, modern buildings in Batumi.”

Trump signed up for a $250 million deal to build a 47-story residential tower in the Georgian Black Sea resort of Batumi, Work halted when Georgia’s then President Mikheil Saakashvili was ousted and fled in exile. His successor, Bidzina Ivanishvili, told reporters, “Trump did not invest in Georgia. It was kind of like a trick. They gave him money and they both played along, Saakashvili and Trump.” Construction eventually resumed, but Trump formally pulled out of the project shortly after his election to avoid what the Trump Organization said were conflicts of interest.

Trump pursued these kinds of deals with shady characters, whether in New Jersey or further away in places like Georgia or Azerbaijan. The potential rewards were huge. So were the risks.  He needed a tough, loyal outsider like Cohen to figure out who the players were, what were the risks, and how exposed Trump would be if the whole thing went sideways.

That’s a consigliere.

 

 

Jared Kushner’s Shady Real Estate Deal?

Readers of this site will recall that in 2008 Donald Trump sold a Palm Beach mansion to a Russian billionaire named Dmitry Rybolovlev for $95 million. As we now know, Rybolovlev grossly overpaid.

This sale is remarkably similar to a real estate deal at the heart of a bribery scandal involving Congressman Randy “Duke” Cunningham of California, who sold his home to a defense contractor for much more than it was worth. Cunningham pleaded guilty to accepting at least $2.4 million in bribes and in 2006 was sentenced to prison.

Well, there are two ways this bribery-scam-disguised-as-a-real-estate-transaction can work. You can overpay for an asset. Or you can sell an asset for much less than it’s worth.

Buried in The Washington Post’s recent story about Jared Kushner’s loans from Deutsche Bank, Trump’s favorite bank are interesting details about a real estate transaction that should invite scrutiny from Special Counsel Robert S. Mueller, who is said to be investigating Kushner’s finances.

Kushner, it turns out, purchased four floors of a New York City office building for $296 million in October 2015. Fast forward 12 months and — presto! — Kushner’s office space was appraised at $470 million.

That’s a 59 percent increase in a year.  Not quite as impressive as Trump’s 231 percent markup on the Palm Beach mansion he sold to the Russian billionaire, but still. Not bad.

What was Kushner’s secret?

An executive at Kushner Cos. told The Washington Post that the company had a “vision for the property when we purchased it that no one else had, and are proud to say that we executed on it.”

Translation: Kushner Cos. leased the space. When the four floors in the former New York Times building near Times Square were purchased, the offices were only been 25 percent occupied.

A great business move. Or …

Is there another explanation?  Indeed, there may be.

The firm that sold Kushner Cos. the space in The New York Times building was Africa Israel USA, part of the conglomerate owned by Israeli billionaire Lev Leviev.

Born in the former Soviet Union, Leviev keeps a framed photo of Vladimir Putin on a shelf in his office.  In a 2007 profile in The New York Times, Leviev described Putin as a “true friend.”

Did Leviev give Kushner a — wink, wink — good deal as a favor from friends overseas?

Kushner isn’t Leviev’s only connection to Trump’s inner circle. He has tried to do business in Moscow with the man himself.

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Trump and Leviev

AFI Development, another subsidiary of Leviev’s Israeli conglomerate, develops real estate in Russia. In May 2008, he invited Trump to his Madison Avenue store.

Leviev wanted to work with the Trump Organization on developing two hotels in Russia, according to Kommersant, the respected Russian business daily.

Astute readers of this site will recall that back in the 1990s, a corrupt Moscow city official named Vladimir Resin (aka The Russian with the Million-Dollar Watch) offered Trump the opportunity to develop a pair of decrepit hotels in Moscow, the Hotel Rossiya, just off Red Square, and the rundown Hotel Moskva.

During Trump’s meeting with Leviev, the Israeli billionaire offered Trump the chance to develop the very same hotels, the Rossiya and the Moskva, according to Kommersant.

hotelrossia

The Rossiya

The Moskva was a small, venerable Moscow hotel that is now run by the Four Seasons. The Rossiya was a 3,000 room concrete box that was plagued with vermin and organized crime. The hotel’s general director was shot dead in a December 1997 contract killing. The hotel has been demolished.

(I’m beginning to wonder whether the Rossiya and Moskva are some sort of code words, given how often they come up in Trump’s life.)

Nothing came of this meeting with Leviev. In a statement, Leviev said that he and Trump “never had any business dealings with one another, contrary to speculation.” [Trump sold his Palm Beach mansion to the Russian billionaire in July, a few months later after meting Leviev.]

Another coincidence overlooked by reporters:  Kasowitz Benson Torres LLP represented Leviev’s firm Africa-Israel USA in the sale of the former New York Times building. The lawyer representing Trump in the Russia probe is Marc E. Kasowitz, a name partner at the firm.

Rotem Rosen, described as Leviev’s “right-hand man” in this press release for a circumcision ceremony or bris is a former chief executive of Africa-Israel USA and CEO of the Sapir Organization. The Sapir Organization jointly developed the troubled Trump SoHo, a 46-story Manhattan luxury hotel-condominium completed in 2010.

Trump hosted Rosen’s wedding to Sapir’s daughter, Zina, at Mar-a-Lago in December 2007. Both Trump and Kushner attended the aforementioned 2008 bris.

It’s these interlocking links that must be driving Mueller’s office nuts. What is coincidence and what isn’t?

Maybe Kushner’s big gain on the old New York Times building is just savvy business. After all, when Leviev’s Africa-Israel Investments purchased the building in June 2007 for $530 million. Just three years earlier, the newspaper had sold the property for $175 million, prompting this observation from the Donald:

More on Robert Mueller and Mogilevich…

Mueller Hungary 2005

Special Counsel Robert Mueller, speaking in Budapest in 2005

Special Counsel Robert Mueller isn’t playing.

As I mentioned in my previous post, Mueller has brought on board attorney Lisa Caroline Page who worked on the FBI Task Force in Budapest that investigated Russian Mob kingpin Semion Mogilevich.

By adding Page, Mueller may be sending a signal that he’s going after links between Trump and Russian organized crime, and perhaps zeroing in on Mogilevich ties.

Catching Mogilevich was an important part of Mueller’s 12-year tenure as head of the bureau and big reason why the FBI put the Mob boss on its 10 Most Wanted List in 2009.

Here’s what Mueller himself had to say in 2005 during a visit to Budapest for the 10th anniversary of the International Law Enforcement Academy:

And the FBI/­Hungarian National Police Organized Crime Task Force has been up and running for five years, working to dismantle organized crime groups. Just last month, we obtained approval to have FBI agents permanently stationed here in Budapest to work on the Task Force.

The Task Force has had a number of successes. Right here in Budapest , Ukranian-­born Semion Mogilevich established the headquarters of his powerful organized crime enterprise. The group engaged in drug and weapons trafficking, prostitution, and money laundering, and organized stock fraud in the United States and Canada in which investors lost over $150 million.

As soon as the Task Force began investigating his activities, Mogilevich realized he could no longer use Budapest as his base of operations. He immediately fled the country, and is now hiding in Moscow. Working closely with Hungarian authorities, United States prosecutors obtained a 45-­count indictment against Mogilevich and three other criminals, charging them with money laundering, securities fraud, and racketeering.

Mueller’s biographer, Garrett Graff, called the Budapest task force “perhaps the most unique FBI force in the world.” Hungary was the only country outside Afghanistan and Iraq where agents were permanently stationed.

The Budapest task force assembled a global picture of Mogilevich’s operation. According to a Dec. 22, 2006 report in The Wall Street Journal, FBI agents in Budapest got help from authorities in Israel, another of Mr. Mogilevich’s suspected bases of operations, and Cyprus, an offshore banking center used by many Russians.

So elusive was Mogilevich, however, that agents in Budapest were chasing smoke, sometimes even in their own backyard. Graff’s book, The Threat Matrix: Inside Robert Mueller’s FBI and the War on Global Terror, contains this tantalizing piece of information:

The full extent of Mogilevich’s US ties are still unknown. Although banned from entering the country because of his alleged criminal ties, Mogilevich has visited Boston, Philadelphia, and Miami under aliases to meet with U.S. associates, and the FBI photographed at least one of his aides attending a Republican Party fundraiser in Texas.

Mogilevich was arrested in Moscow in 2008 and then subsequently released him the following year. He lives more or less openly in Russia today. While US eventually caught up with Osama bin Laden, Mogilevich was the one who got away.

Mueller’s role as special counsel for Trump’s Russia links may be a second chance of sorts. By probing Trump’s links to Mogilevich, Mueller may be able to snare an even bigger fish.

No wonder he’s driving Trump crazy.

Is Robert Mueller Examining Trump’s Links to Mogilevich?

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Former Ukrainian President Viktor Yanukovych (left) and Dmitry Firtash (right)

As we noted earlier here and here, among the many dictators, despots, and shady foreigners who called Trump Tower home were members of the Russian Mafia with connections to Semion Mogilevich, said to be the most dangerous Mobster in the world.

Robert Mueller, the special counsel appointed to investigate Trump’s links to Russia, may also be taking an interest in Trump’s ties to Mogilevich, a man the FBI says is involved in weapons trafficking, contract murders, extortion, drug trafficking, and prostitution on an international scale.

As described in Wired, among the prosecutors and investigators hired by Mueller, is one Lisa Page:

Also, while the Special Counsel’s office has yet to make any formal announcements about Mueller’s team, it appears he has recruited an experienced Justice Department trial attorney, Lisa Page, a little-known figure outside the halls of Main Justice but one whose résumé boasts intriguing hints about where Mueller’s Russia investigation might lead. Page has deep experience with money laundering and organized crime cases, including investigations where she’s partnered with an FBI task force in Budapest, Hungary, that focuses on eastern European organized crime. That Budapest task force helped put together the still-unfolding money laundering case against Ukrainian oligarch Dmitry Firtash…

The hiring of Page, which was confirmed by a Mueller spokesman in The New York Times, gives the special counsel a team member with knowledge of not only Dmitry Firtash, but of the man who is believed to stand behind him: Semion Mogilevich.

Full disclosure: Firtash hired the Washington law firm Akin Gump to clear him of links to Mogilevich. I profiled Akin Gump partner Mark MacDougall in this 2008 piece.

Firtash, pictured above, made his fortune in the 2000s in the natural gas sector. In 2004, Firtash and a minority partner emerged with 50 percent ownership of a murky Swiss company called RosUkrEnergo (RUE). RUE extracts gas from Central Asia and acts an intermediary between Russia and Ukraine for the delivery of gas.  The other half of RUE is held by Gazprom, the gas giant controlled by the Russian government, which shows that Firtash has close ties with the Kremlin.

Billions of dollars flowed through RUE and some of that money was allegedly siphoned off by Semion Mogilevich, who U.S. government officials say (see here) is the man behind the curtain at the gas company. One of the few willing to say this publicly was Ukraine’s former prime minister, Yulia Tymoshenko, a political enemy of Firtash, who got thrown in jail for her troubles. Notably, Firtash’s stake in RUE remained a secret for two years.

Intelligence Online, a Paris-based news organization with deep sources in the spy world, published this handy chart of the Firtash/Mogilevich connections, under the headline “The Tip of the Mogilevich Iceberg:”

Mog:RUE

Firtash admitted to William Taylor, the US ambassador to the Ukraine, that he has had dealings with Mogilevich, according to a 2008 State Department cable leaked by Wikileaks:

(S) The Ambassador asked Firtash to address his alleged ties to Russian organized crime bosses like Semyon Mogilievich. Firtash answered that many Westerners do not understand what Ukraine was like after the break up of the Soviet Union, adding that when a government cannot rule effectively, the country is ruled by “the laws of the streets.” He noted that it was impossible to approach a government official for any reason without also meeting with an organized crime member at the same time. Firtash acknowledged that he needed, and received, permission from Mogilievich when he established various businesses, but he denied any close relationship to him.

And in this October 2009 press release, the FBI took note of Mogilevich’s control of natural gas supplies. “Through his extensive international criminal network, Mogilevich controls extensive natural gas pipelines in Eastern Europe,” the bureau wrote in a veiled reference to RUE.

The question is what is the nature of the relationship between Firtash and Mogilevich. Is it a thing of the past, as Firtash insists? Or is Firtash a front man for Mogilevich?

Presumably, the FBI — and, by extension, Lisa Page — knows the answer. The bureau has been investigating Firtash since 2006, according to The New York Times. A year before that, the FBI passed their counterparts in the Austrian police a confidential report naming Firtash as a “senior member” of the Semion Mogilevich Organization, according to a  2008 report by Roman Kupchinsky, an analyst with Radio Free Europe.

Page’s work in Budapest involved her deeply in the Firtash/Mogilevich world. The Wired article suggests she worked on the case that led to Firtash’s arrest in Vienna in 2014. Firtash was indicted by a federal grand jury in Chicago on charges of plotting a bribery scheme to set up a $500 million titanium business in India. He remains free after a Russian billionaire friend posted bail of $174 million but cannot leave Austria.

And Budapest is also a home of sorts for Mogilevich. He resided in Budapest when he ran a pump-and-dump scheme through a publicly traded front company called YBM Magnex Inc. Mogilevich was indicted in 2003 on charges of fraud, racketeering and money laundering in YBM Magnex.

So, what does this have to do with President Trump?

Firtash was a business partner of Trump’s former campaign manager, Paul Manafort, who was deeply involved in Ukrainian politics. Manafort advised Viktor Yanukovych on his successful 2010 campaign for the presidency of Ukraine. He resigned from the Trump campaign after The New York Times found a handwritten ledger showing that Yanukovych paid Manfort $12.7 million in cash.

While he was assisting Yanukovych, Manafort became business partners with Firtash. The two men explored developing a 65-floor tower on the site of the Drake Hotel in Midtown Manhattan.

A 2011 lawsuit filed in New York by Tymoshenko, the former Ukrainian prime minister, called this partnership between Firtash and Manafort a means of laundering the proceeds of gas deals between the Ukraine and Russia. Firtash says that the lawsuit was full of lies, but he confirmed to Bloomberg Businessweek that he did put $25 million in an escrow account for the developers of the Drake project that Manafort helped him set up. The deal collapsed and the tower was never built.

It’s a good bet to say that we only know a little of this story, which is buried in the files of the FBI and the US intelligence community. But Trump Tower’s role as a home away from home for Russian mobsters with Mogilevich and his unhinged, self-destructive reactions to anyone probing into Russia suggests that there is more, much more to come. Stay tuned.

Carter Page Mystery Solved?

Ed Cox

The Washington Post is reporting that Carter Page was introduced to the Trump campaign by Nixon’s son-in-law, NY GOP Chair Ed Cox.

This may be the answer to one of the ongoing mysteries of the Trump-Russia affair: How did Page wind up working for Trump?

Edward Finch Cox is a retired partner formerly with the firm of Patterson Belnkap Webb & Tyler, LLP.  He is chairman of the New York Republican State Committee. Cox is married to Nixon’s daughter Trish. The two were married in a White House ceremony in 1971.

How did Cox meet Page?

Their paths may have intersected in a couple of ays: Cox’s has served as a director of Noble Energy, Inc. for more than two decades. Page, you’ll recall, was an energy industry analyst. In addition Cox has been a member of the Council on Foreign Relations since 1993. Page served a fellowship at the CFR.

One person tweeting about this is Roger Stone, a former Nixon aide and GOP political operative, who is himself under investigation for his links to Russia:

This is interesting. Cox and Stone both worked together in the Nixon administration (where Stone was involved in the dirty tricks operation), and it seems there’s no love lost between them:

Then again, as someone on Twitter pointed out, here’s Carter Page attending one of Stone’s speeches:

Stone Pence

The Russian Mobster Who Hid out in Trump Tower and the Taj Mahal

Vyacheslav Ivankov

Vyacheslav Ivankov was a top Russian mob boss, wanted in Russia and in America.

He was a Vory v Zakone, a member of the “thieves-in-law,” the highest criminal echelon in the Soviet Union before the Communist government collapsed.

An infamous 1995 FBI affidavit describes Semion Mogilevich, considered by the bureau as the most dangerous Russian mobster in the world, as “one of IVANKOV’s closest associates.”

It was Mogilevich, according to Alan Block’s All Is Clouded by Desire, who paid a Russian judge to arrange for Ivankov’s early release in 1991 from a tough Siberian prison where he was being held for ‘robbery and torture.

After his release from prison, Ivankov was accused of murdering two Turkish nationals in a Moscow restaurant in January 1992.  Later that year, he fled Russia for New York.

Journalist Robert I. Friedman tells the story of where the FBI found him in his book Red Mafiya (which you can read for free at this link).

Despite Ivankov’s flagrant, multinational criminal activities, during his first years in America, the FBI had a hard time even locating him. “At first all we had was a name,” says the FBI’s James Moody. “We were looking around, looking around, looking around, and had to go out and really beat the bushes. And then we found out that he was in a luxury condo in Trump Towers” in Manhattan.

[A copy of Ivankov’s personal phone book, which was obtained by the author, included a working number for the Trump Organization’s Trump Tower Residence, and a Trump Organization office fax machine.]

But almost as soon as they found him, he disappeared again leaving nothing but vapor trails for the FBI to follow. “Ivankov,” explained an FBI agent, “didn’t come from a walk-and-talk culture,” like Italian gangsters who take walks to discuss family business so they can’t be bugged or overheard by the bureau. “As soon as he’d sniff out the feds, he’d go into hiding for days at a time,” a trait that made him harder to keep tabs on than Italian mobsters. “He was like a ghost to the FBI,” says Gregory Stasiuk, the New York State Organized Crime Task Force special investigator.

Stasiuk picked up Ivankov’s trail at the Taj Mahal in Atlantic City, the Trump-owned casino that the real estate magnate boasted was the “eighth wonder of the world.” The Taj Mahal had become the Russian mob’s favorite East Coast destination. As with other high rollers, scores of Russian hoodlums received “comps” for up to $100,000 a visit for free food, rooms, champagne, cartons of cigarettes, entertainment, and transportation in stretch limos and helicopters. “As long as these guys attract a lot of money or spend a lot of money, the casinos don’t care,” a federal agent asserted. Russian mobsters like Ivankov proved a windfall for the casinos, since they often lost hundreds of thousands of dollars a night in the “High-Roller Pit,” sometimes betting more than $5,000 on a single hand of blackjack. “They’re degenerate gamblers,” says Stasiuk. Although the FBI still couldn’t find Ivankov, Stasiuk managed to tail him from the Taj Mahal to shipping mogul Leonard Lev’s sprawling home on a dead-end street in Far Rockaway, Queens, and on another occasion, from the Taj to the Paradise Club, a notorious Russian mob haunt in Sheepshead Bay, Brooklyn, then managed by godfather Marat Balagula’s youngest daughter, Aksana, the onetime aspiring optometrist.

The implication here is that Trump or his organization was welcoming these Russian mobsters because they were laundering huge sums through his casino. “The casinos don’t care” means Trump didn’t care either.

Friedman’s reporting is backed up in a report by the Tri-State Joint Soviet-Emigre Organized Crime Project, an effort by New York, New Jersey and Pennsylvania to come to grips with Russian mob influence:

Russian emigres have also been conducting various types of money laundering schemes in hotels and casinos in Atlantic City, N.J. Casino operators indicate that a significant number of Russian emigres frequent casinos. Many of them are “high- rollers” recognized as favored customers and, as such, have received such perks as limousine service, plush hotel suites, meal and alcohol allowances, and seating for prime events. One of the schemes observed by various law enforcement agencies, including the United States Secret Service and the New Jersey State Police, involves the use or attempted use of counterfeit currency and traveler’s checks. Russian-emigre criminals use the bogus currency, in amounts below the federal Currency Transaction Report threshold, to obtain cash and/or playing chips.

The Taj Mahal repeatedly failed to properly report gamblers who cashed out $10,000 or more in a single day, according to a 1998 IRS settlement unearthed by CNN. The casino violated anti-money laundering rules 106 times in its first year and a half of operation in the early 1990s.

Ivanov’s stay at the Taj Mahal came to an end in April 1993 when Ivankov’s presence in the United States was reported by The Associated Press’ Charles Hanley.
Ivankov was arrested in 1995 and sent to prison  for conspiring to extort $3.5 million from two Russian emigres who ran an investment advice company in lower Manhattan. He served nine years.

After his release he returned to Russia where he was assassinated.

Did Trump Really Have A £1 Billion Cash Stockpile During the Financial Crisis?

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Trump on his golf course in northeast Scotland

NBC reported recently that a focus of the House intelligence committee’s investigation into Trump and Russia involves the president’s finances:

Among the House lines of inquiry, one official familiar with the investigation told NBC News, is to what extent Russian money bailed out Trump’s real estate empire after the 2008 real estate crash.

Richard Dearlove, the former head of Britain’s MI6 made the same point in an interview with Prospect magazine:

As for the president’s personal position, he said, “What lingers for Trump may be what deals—on what terms—he did after the financial crisis of 2008 to borrow Russian money when others in the west apparently would not lend to him.”

I’m wondering: Was Dearlove speaking from insider knowledge?

The Trump Organization did lay claim to having a substantial amount of cash ready to deploy in the 2008 financial crisis.  And it planned to invest that money in Great Britain.

Was MI6 tracking the source of this funding?

In the fall of 2008, the Scottish government was considering whether to grant approval for Trump’s golf resort on the coast of northeast Scotland. Questions were mounting over whether the future US president had the £1 billion he had promised to spend to build “the greatest golf course in the world.” Lehman Brothers’ spectacular collapse had triggered a global financial crisis and lending on projects like Trump’s golf course had ground to a halt.

Throughout that fall, George Sorial, managing director of international development and assistant general counsel at the Trump Organization, insisted that Trump had a huge sum of cash at his disposal earmarked for what became Trump International Golf Links near Aberdeen, Scotland.

In November 2008, Sorial told The Scotsman of Edinburgh that Trump had the cash on hand to fund the Aberdeenshire course.

Mr Sorial said: “The money is there, ready to be wired at any time. I am not discussing where it is, whether it is in a Scottish bank or what, but it is earmarked for this project. If we needed to put the development up tomorrow, we have the cash to do that. It is sitting there in the bank and is ready to go.”

He added: “As we have said all along, Aberdeen is a project we have chosen to fund with cash. Mr Trump has recently increased his cash position and we have no need for a bank loan in respect of the Aberdeenshire project.”

This is most likely Trumpian bluster. Trump was claiming he would spend £1 billion on the project and never came close to that sum. He promised vacation homes that were never built, jobs that never materialized and a huge hotel that was never built.

While Sorial was boasting about money in the bank, his boss was suing a group of lenders led by Deutsche Bank to extend payment on a $640 million construction loan for a tower in Chicago. Deutsche Bank would use Sorial’s comments in court filing to argue that Trump had the funds to pay up.

It wasn’t Trump’s bluster, per se, it was Sorial speaking. And his refusal to discuss the source of the money — “whether it is in a Scottish bank or what” — and his assertion that Trump had “recently increased his cash position” is interesting, given the interest in Trump’s funding sources during the 2008 financial crisis.

Trump’s International Golf Links opened in 2012.  The course is owned through Trump International Golf Club Scotland Ltd. (TIGCS), a British company registered in 2005. The company is controlled by Donald Trump, with Sorial serving as corporate secretary.

This Russian funding source, if it ever existed, flowed through Donald Trump. The 1,400-acre grounds were purchased with what Sorial described to Scottish Parliament in 2008 as “Mr Trump’s personal money, with no financing, and we have carried all the associated costs, again out of Mr Trump’s personal expenses.” In its latest corporate filing available here, TIGCS reported that Trump had loaned the company more than £39 million.

After Trump’s election, Sorial, a British citizen, was named chief compliance officer of the Trump Organization. He manages potential conflicts of interest that may emerge between the presidency and private business.

Before joining the Trump Organization in 2007, Sorial was a partner at Day Pitney and New Jersey’s DeCotiis, FitzPatrick, Cole & Wisler. His name turns up as co-owner of Interlink Sun Homes, which sold vacation homes in Bulgaria to UK citizens.

In September 2007, Sorial was named a “Global Scot,” a network of executives with strong ties to Scotland. Trump’s inclusion on that list was revoked after his harsh comments about Muslims during the 2016 election campaign.

James Dodson, author of several books on golfing, recounts an interesting exchange he had a few years back at one of Donald Trump’s golf courses with the president’s son, Eric. According to Eric, Trump had several Russian investors who were big on golf.

“So when I got in the cart with Eric,” Dodson says, “as we were setting off, I said, ‘Eric, who’s funding? I know no banks — because of the recession, the Great Recession — have touched a golf course. You know, no one’s funding any kind of golf construction. It’s dead in the water the last four or five years.’ And this is what he said. He said, ‘Well, we don’t rely on American banks. We have all the funding we need out of Russia.’ I said, ‘Really?’ And he said, ‘Oh, yeah. We’ve got some guys that really, really love golf, and they’re really invested in our programs. We just go there all the time.’ Now that was three years ago, so it was pretty interesting.”

The whole article posted on WBUR’s website is well worth reading, but the little snippet above is the one getting some attention on Twitter. This conversation allegedly took place in 2014 at the Trump National Golf Club Charlotte. The club is actually located in Mooresville, North Carolina about 30 miles outside Charlotte.

Eric Trump on Twitter called Dodson’s story made up.

Trump and the Sculptor: A Tale of Corruption, Organized Crime and Murder

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Trump and the sculptor, Zurab Tsereteli

Not long after his 1996 visit to Moscow, Donald Trump was working the phones.

In a conversation captured by The New Yorker’s Mark Singer, Trump took a call from Michael Gordon, a reporter from The New York Times in Moscow.  Gordon had just interviewed a Russian sculptor named Zurab Tsereteli. Was it true that Trump and Tsereteli had discussed erecting a 306-foot-tall statue of Christopher Columbus on the Hudson River?

“Yes, it’s already been made, from what I understand,” said Trump, who had met Tsereteli a couple of months earlier, in Moscow. “It’s got forty million dollars’ worth of bronze in it, and Zurab would like it to be at my West Side Yards development”—a seventy-five-acre tract called Riverside South—“and we are working toward that end.”

According to Trump, the head had arrived in America, the rest of the body was still in Moscow, and the whole thing was being donated by the Russian government. “The mayor of Moscow has written a letter to Rudy Giuliani stating that they would like to make a gift of this great work by Zurab. It would be my honor if we could work it out with the City of New York. I am absolutely favorably disposed toward it. Zurab is a very unusual guy. This man is major and legit.”

Trump hung up and said to me, “See what I do? All this bullshit. Know what? After shaking five thousand hands, I think I’ll go wash mine.”

Tsereteli had been trying to find a home in America for his unwanted, unloved statue. The Miami Herald art critic Helen Kohen called the 311-foot-tall statue “graceless as a herd of brontosaurs … [and] configured in the shape of an exploded hydra.” Miami, along with Baltimore, Columbus, Ohio, Cleveland Ft. Lauderdale, and Boston had all said nyet.

While President Trump is not known for his taste (gold-plated sinks, anyone?), it seems curious that Trump would go out of his way to help Tsereteli. Why do this in front of a reporter? Why help Tsereteli?

luzhkov_yury

Yuri Luzhkov

The answer, I believe, has little to do with the sculptor or his work and more to do with his patron: Yuri Luzhkov, the powerful and notoriously corrupt mayor of Moscow from 1992 to 2010.

It was Luzhkov who gave Tesereteli important commissions such as reconstruction of the Cathedral of Christ the Savior. Under Luzhkov, Tesereteli’s statues popped up all over Moscow, including his much-reviled statue of Peter the Great that many see as a tasteless monument to Russia’s corruption. And thanks to his friend Luzhkov, Tsereteli lived in a Moscow mansion that once housed the German Embassy.

In 1996 and 1997, Trump was exploring the possibilities of developing a property in Moscow for his first overseas venture. And nothing happened in Moscow without approval from the all-powerful Mayor Luzhkov.  President Yeltsin had given Luzhkov exclusive control over privatization of property and businesses within the city limits. So, by doing a favor for Tesereteli, Trump may have been trying to do a favor for Moscow’s infamous mayor.

Luzhkov, his family, friends, and his staff had made themselves into a wealthy man by skimming from development projects like Trump’s in one of Europe’s most lucrative real estate markets. It’s no coincidence that Luzhkov’s wife, Yelena Baturina, became Russia’s richest woman running a Russian construction company. (She has since fled the country.) His deputy wore a million-dollar watch.

A 2010 State Department cable released by Wikileaks quoted an investigative journalist who told an American diplomat that “Luzhkov used criminal money to support his rise to power and has been involved with bribes and deals regarding lucrative construction contracts throughout Moscow.”  Corruption pervaded Moscow, the State Department concluded, “with Mayor Luzhkov at the top of the pyramid.”

Tsereteli may have been running his own schemes. In 1993, customs officers in St. Petersburg opened shipping crates carrying another (smaller) Tsereteli statue of Columbus as a gift to the city of Seville, Spain. Inside were thousands of copper ingots, too soft for use in sculpture but normally used for electronic circuitry. Investigators later revealed that Tsereteli’s holding company, Kolumb, had contracted privately to ship 85,000 tons of copper (ten percent of Russia’s then annual copper exports) out of the country. Tesereteli was never charged.  (See New Moscow Monuments, or, States of Innocence, Bruce Grant, American Ethnologist, May, 2001.)

vyacheslav-ivankov

Vyacheslav Ivankov

According to sources quoted in the State Department cable, Luzhkov and his wife had links to organized crime in Moscow. One of Luzhkov’s friends was crime boss Vyacheslav Ivankov.

This is interesting because Ivankov became one of the most powerful Russian Mafia bosses in America, and, when the FBI went it went looking for Ivankov, agents tracked him down in a luxury apartment in Trump Tower, according to journalist Robert I. Friedman’s expose Red Mafiya. Invakov disappeared and then turned up again in Trump’s New Jersey casino, the Taj Mahal.

Organized crime also pervaded Moscow’s hotels, and Moscow city officials had offered Trump the chance to invest in a pair of hotels, which Luzhkov and his cronies controlled through the Moscow City Property Committee. In The New Yorker profile, Trump seemed excited about the prospect:

“We are actually looking at something in Moscow right now, and it would be skyscrapers and hotels, not casinos. Only quality stuff. But thank you for defending me. I’ll soon be going again to Moscow. We’re looking at the Moskva Hotel. We’re also looking at the Rossiya. That’s a very big project; I think it’s the largest hotel in the world. And we’re working with the local government, the mayor of Moscow and the mayor’s people. So far, they’ve been very responsive.”

The Rossiya, a 3,000 room concrete box, was Europe’s biggest hotel, and it was infested with rats and criminals. The hotel’s general director, Yevgeny Tsimbalistov, was shot dead in a December 1997 contract killing apparently, according to The Economist magazine, for trying to reorganize things in a way that upset the balance of power between the gangs. The Economist had called it “Russia’s hotel from hell.” Fortunately for Trump, nothing came of the Rossiya deal and the hotel was razed in 2006.

hotelrossia

The Rossiya

And Tsimbalistov’s murder was one in a string of four murders of Moscow hotel executives in an 18-month period bracketing Trump’s visit to the city. An American hotelier, Paul Tatum, had been gunned down on Nov. 3, 1996 the center of Moscow. (Trump arrived in Moscow a little more than a week after Tatum’s murder.)

Tatum had been in a bitter fight with the city for control of his hotel, the Radisson. Just a few days before his death, Tatum had placed newspaper ads accusing Mr. Luzhkov of corruption. After Tatum’s death, Luzhkov’s office took over control of the Radisson.

Back to our sculptor. Before Trump made his calls about the statue, Tsereteli had been trying for years to bring his sculpture to America. One of his first attempts was Miami, where one of Trump’s friends, Bennett S. LeBow, had been trying trying to help Tsereteli bring his 500-ton Columbus sculpture to America — and perhaps to curry favor with Luzhkov at the same time.

LeBow took Tsereteli and his friend Luzhkov to Miami’s City Hall to offer the statue to the city, and in August of 1992, he set up the New World Foundation Inc. to raise the estimated $20 million it would cost to erect the sculpture in the sea off Miami Beach.  The short-lived company was staffed his executives from his various companies.

LeBow had many business interests in Russia. His Brooke Group made and sold cigarettes in Russia through Liggett-Ducat, a Russian joint stock company. More importantly to this story, LeBow’s conglomerate, Brooke Group Ltd., owned real estate in downtown Moscow.

A Brooke Group subsidiary owned Ducat Place, which was prime office space in the middle of downtown Moscow. In late 1996, one office building had been completed in Ducat Place, construction on a second building was underway, and a third building was in the planning stages. Doing a favor for Luzkhov certainly was good for business.

LeBow had helped bring Trump to Moscow in 1996 and partnered with him on a deal to build or at least put his name another Trump Tower in Ducat Place. That deal went nowhere.

It seems possible that LeBow might have advised Trump to be nice to Tsereteli if he wanted to do a real estate deal in Moscow.  We know what Trump wanted: a real estate deal in Russia. What we don’t know is what else, if anything, Trump was asked to give up in return.

Update: In 2008, Trump was still sucking up to Tsereteli, and, by extension, Luzhkov, while promoting his Trump-Soho project to Russians in Chayka magazine:

I’m always looking for good partners. In the Trump-Soho project, our partner is Alex Sapir, the son of my friend Timur Sapir. Now we are discussing construction projects in Moscow and St. Petersburg. We conduct negotiations there with potential partners. Apparently, we’ll order a few sculptures from Zurab Tsereteli, the closest to me in spirit, the best sculptor of Russia, the author of a grandiose creation – the statue of Peter the Great.

A final note: In 2016, Tsereteli’s unwanted, unloved Columbus statue was unveiled in its new home in Puerto Rico.

Before He Bought Trump’s Mansion, This Russian Billionaire Was Jailed for Murder

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Dmitry Rybolovlev

It’s a bit suspect, to say the least, that Dmitry Rybolovlev, the Russian fertilizer king, bought the future president’s Palm Beach mansion for $50 million more than Trump paid for it just a few years earlier.

The mansion, called Maison de l’Aimitie was in such bad shape that Rybolovlev got permission to tear it down and sell off the land beneath it. I’ve written how this transaction has the marks of a bribery case I followed here in San Diego.

I decided to take a deeper look at Rybolovlev. Turns out, he’s got an interesting past: He spent nearly a year in jail on murder charges. Depending on whom you ask, Rybolovlev is a man who rubbed out a competitor or an innocent man framed for murder by corrupt Russian officials.

The evidence points to the latter. Rybolovlev, born in 1966, came from a family of doctors in Perm, an industrial city in the Ural Moutains. After graduating from the Perm Medical Institute in Russia in 1990 he joined the cardiology department of a local emergency room.

It was the dramatic upheaval after the fall of the Soviet Union that changed his life and the lives of his patients, who could not afford to pay him. Rybolovlev moved to Moscow and became one of the first licensed brokers in the country.

It was the right place at the right time. The Russian government, desperate to raise cash and stave off collapse, and being totally unacquainted with capitalism, began selling off its companies for mere fractions of their value. It was perhaps the single greatest investment opportunity in history.

In 1995, Rybolovlev started buying up shares of Uralkali, a fertilizer maker that was located back in his home region of Perm, the center of the country’s potash industry. He quickly amassed a controlling interest in the company and was named chairman of the board.

In 1996, Rybolovlev was arrested on a murder conpiracy charge. He would spend his 30th birthday and the next 11 months in jail.

[The definitive account of Rybolovlev’s time in jail comes from an interview he gave to the Russian edition of Forbes magazine about a decade ago.]

Rybolovlev was accused of ordering the 1995 murder of Evgeny Panteleymonov, the general director of Netfchimik, which produced industrial alcohol.  Rybolovlev was chairman of Netfchimik and owned 40 percent of the company, according to Forbes.

Netfchimik generated high cash flows — and attracted attention from criminals. In the summer of 1995, Panteleymonov met with Rybolovlev and told him the criminals had to go. Rybolovlev had offered him bodyguards for his protection. Panteleymonov had refused.

Rybolovlev was not so cavalier. He had grown so worried for his family’s safety that he moved them to Florida and then to Switzerland. He hired bodyguards to protect his family, his parents and his business partners. “From time to time, I had to wear a bulletproof vest,” he told the Russian edition of Forbes.

Unprotected, Panteleymonov was gunned down by a mob-linked businessman named Oleg Lomakin (aka Prokop). Lomakin was arrested for Panteleymonov’s shooting, and, oin exchange for leniency, he accused Rybolovlev of ordering the murder.

It was enough to get Rybolovlev thrown in jail, where he languished. Authorities moved from from cell to cell in an effort, he suspects, to break him. Weeks dragged into months. Offered freedom if he sold his shares in Ukrakali, he refused. He told Forbes he was prepared to serve 10 years, if necessary.

Finally, the case against him began to fall apart. No other evidence linked Rybolovlev to the shooting, and eventually Prokop admitted that he had perjured himself. After nearly a year of incarceration, Rybolovlev was allowed to post bail of one billion rubles (about $200,000). In late 1997, he was acquitted of murder charges.

It turned out that Rybolovlev’s arrest was tied to the politics of the fertilizer industry. There was a familiar Soviet problem of overproduction, and to smooth things out the Rybolovlev’s company Uralkali and other fertilizer producers decided to collude. In 1993, they formed the International Potash Company to channel their exports.

Things were uneventful until 1996. On May 20th, Uralkali shareholders voted to end its relationship with the International Potash Company and export the company’s products through an American company, Transammonia.  The next day, Rybolovlev was arrested.

“I definitely came out a different person,” Rybolovlev told Forbes. “I got an understanding of how the world actually works. ” In prison, the businessman realized that the state can ruin his business at any time. Political risks were too significant and could never be neglected.

Freed from jail, Rybolovlev resumed command of his business. In 2007, he listed Uralkali on the London stock exchange and overnight became one of Russia’s richest men. He sold most of his stake in the company in 2010 to three Russian tycoons. Forbes estimates his fortune today at $7.4 billion.

Another Useful Idiot

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The Washington Post is out with a story about the American right’s ties to Russia and the article centers on the tale of accused Russian Mob boss and Russian Duma member Alexander Torshin and his red-headed friend, Maria Butina, which I’ve written about here. 

In that post, I wrote that David Keene — opinion editor of The Washington Times editorial page and past NRA president — was a useful idiot who allowed a suspected Russian mobster to get close to the president.

Torshin is a member of the Russian Duma and, simultaneously, (while the Post story doesn’t mention it), he was accused by Spanish police of being a ranking member of the Moscow-based Taganskaya crime syndicate. He was slated to meet with President Trump at the National Prayer Breakfast until a White House national security aide noticed Torshin’s name and flagged him as a figure who had “baggage.”

The Post adds an important new detail: How Torshin met Keene.

At least one connection came about thanks to a conservative Nashville lawyer named G. Kline Preston IV, who had done business in Russia for years.

Preston said that in 2011 he introduced then-NRA President David Keene to a Russian senator, Alexander Torshin, a member of Putin’s party who later became a top official at the Russian central bank. Keene had been a stalwart on the right, a past chairman of the American Conservative Union who was NRA’s president from 2011 to 2013.

I never realized that Vladimir Putin had such open and effusive admirers in the United States like George Kline Preston.

Preston, born in 1966, is an expert on Russian law who displays a white porcelain bust of Putin in his office, according to the Post.

He believes that we have it backwards: Putin is the good guy in this story. He has told friends for years not to believe reports that Putin murdered journalists or political opponents. Here he is effusively praising Putin to his friend Torshin on Twitter.

Translation: “@torshin_ru Tomorrow is Presidents’ Day in the USA. I want to say that you are fortunate to have President Vladimir Putin.”

Preston’s relationship with Torshin goes back to at least 2009 when Preston briefed Russian legislators on the implementation of immunity agreements in Russia:

Mr. Torshin asked me to briefly describe the concept of a “deal with the investigation,” or, more precisely, the “plea bargaining”, as we used to call this term in the West. (source: archived web page of prestonkline.com)

Preston was an international observer during the 2011 Russian duma elections that led to mass street protests about election fraud. Preston said he concluded the Russian election system was “impressive” and “very well-organized,” but the Western view was overwhelmingly negative. The reason why, he said, lay in the fact the West does not like Vladimir Putin. Asked why, he speculated that “maybe because he’s a strong leader, maybe he’s done a pretty effective job:”

Interestingly, this video was posted to YouTube (and possibly made by) Johan Backman, a controversial Finnish academic. Backman is a Putin cheerleader and Kremlin propagandist (which is detailed in this lengthy expose).  Preston was apparently didn’t know or didn’t mind that he was being used for propaganda purposes.

In 2012, Preston returned the favor and  invited Torshin to be an election observer in Nashville. Both men appear in the picture below (Preston on the left, and Torshin in the middle). Torshin’s tweet below reads: “Standing in line at the polling place. As an ordinary American. 6:45 a.m.”

In contrast to his experience observing voting Russia, Preston said he saw violations of U.S. law during the presidential election: pro-Obama signs posted too close to a polling place.

Preston earned his bachelors degree in Russian language and literature at the University of Tennessee in 1989, the same year he  studied in Leningrad via an Indiana University program at Leningrad State. He and earned his law degree at Nashville School of Law in 1994.  For a time, Preston was involved in trading Russian/Ukrainian securities and importing Kievskaya Rus ultra premium vodka.

Preston’s law practice appears heavily focused on Russia. A version of his website archived in 2011 appears in both English and Cyrillic. On his office web page of is what appears to be a double-headed eagle, the symbol on the coat of arms of the Russian Federation.

A portion of the Preston’s practice involved assisting Americans in adopting children born in the Ukraine and the former Soviet Union. (Putin in 2012 signed into law a ban on adoptions of Russian children by Americans.) Preston also represented Bering Strait, a classically-trained Russian bluegrass and Russian scholar Mikhail Anikin, who claimed that author Dan Brown stole his idea for the “Da Vinci Code.”

On his Twitter feed, @gittinpaid, Preston often retweets Russian propaganda from RT, Pravda and other news outlets:

I’m not sure what happened to G. Kline Preston, but it’s hard to look at him and see a man who has turned himself, quite happily it seems, into another of Putin’s useful idiots.

Donald Trump and the Russian with the Million-Dollar Watch

Vladimir Resin and his million-dollar watch

Eight years ago, I came across an interesting item in the Russian publication Vedemosti. A reporter decided to take a close look at the ridiculously expensive watches worn by Russian government officials.

Vedomosti found the most expensive watch on the wrist of Vladimir Resin, the former deputy mayor of Moscow.

He was photographed wearing an extremely rare Swiss watch made of platinum called the La Pressy Grande Complication model, which retails for more than $1 million. (The original story is gone, but you see another version here.)

It was interesting to learn that Resin met with Donald Trump during early business forays into Russia in the 1990s. This was an interesting moment for two larger-than-life characters: The Russian city official with the million-dollar watch and the future American president looking to do his first overseas deal in Moscow.

Trump has insisted that he has no loans, no deals, and no business, but it’s not for want of trying. In the mid 1990s, Trump was trying to put his name something in Moscow. But no matter what he wanted to build, renovate or brand, Trump had to go through Resin, who for two decades oversaw construction in Russia’s capital city as deputy mayor.

Resin listed his work as his only hobby in his official biography, but it was a different kind of labor that earned him a $1 million watch. Moscow government officials welcomed foreign partners into their hotels — and demanded their own pound of flesh in return. “Corruption is a very, very big problem,” an anonymous Western hotel executive told Businessweek in a story about the Russian hotel wars during Resin’s time in office.

Trump had reportedly grown interested in the Moscow luxury apartment market after noticing how many Russians were buying space in Trump Palace, Trump Parc and Trump Plaza towers in New York.

In November 1996, Trump traveled to Russia to explore the possibility of replicating the success of Trump Tower in Moscow. In a news conference at Moscow’s Baltschug Hotel, Trump announced he planned to invest $250 million to build two “super-luxury” residential towers to be called Trump International and — surprise — Trump Tower, both of which he said “Moscow desperately wants and needs.”

“Moscow is going to be huge, take it from the Trumpster!” he told Playboy magazine.

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Donald Trump in Moscow Nov. 5, 1996

It’s not clear whether Trump had the money to do deals in Moscow because 1996 was a difficult time for the future president. Although Trump claimed to be worth $2 billion, partial tax returns published by The New York Times revealed that Trump declared a loss of $916 million for the previous year. During his Moscow trip with then-wife Marla Maples, Trump had to suffer the indignity of flying commercial airlines. “We had to wait about an hour in London for a flight, right out there with all the other passengers,” Marla told Playboy. “Well, you can imagine how that went over with Donald.”

Trump met with Resin during his 1996 visit to Moscow. The Moscow Times quoted one of Trump’s partners in the deal, David Geovanis, as describing Resin as “one of the key people in charge of attracting foreign invest to the Moscow real estate market.” Geovanis added that the city was “very receptive” to Trump’s developments in Moscow.

Except they weren’t. Maybe the whole build-a-tower-in-Russia was just another in a long series of self-promotion. Or maybe Resin put his foot down. Resin said he wasn’t interested in having a glass-and-steel tower in the middle of Moscow. “We are not building any towers in the old part of the city,” he told the ITAR-Tass news agency. “We are not going to turn the ancient city into a Manhattan.”

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Hotel Rossiya

Resin had other ideas for Trump. In December 1996, Resin offered him the chance to invest in a pair of decrepit Moscow hotels, the Hotel Rossiya, just off Red Square, and the rundown Hotel Moskva. The city controlled the hotels through a joint-stock company.

Back in New York, Trump seemed excited about the prospects of putting his imprint on the Moskva or the Rossiya when he met in with Alexsandr Lebed, who at the time was viewed as a potential successor to Russian president Boris Yeltsin. A profile in The New Yorker quoted Trump telling Lebed:

“We are actually looking at something in Moscow right now, and it would be skyscrapers and hotels, not casinos. Only quality stuff. But thank you for defending me. I’ll soon be going again to Moscow. We’re looking at the Moskva Hotel. We’re also looking at the Rossiya. That’s a very big project; I think it’s the largest hotel in the world. And we’re working with the local government, the mayor of Moscow and the mayor’s people. So far, they’ve been very responsive.”

The Moskva was a small, venerable Moscow hotel that is now run by the Four Seasons. The Rossiya was another matter.

The Rossiya, a 3,000 room concrete box and Europe’s biggest hotel, intrigued Trump, but it was a nightmare. The Economist magazine called it “Russia’s hotel from hell.”  The city had tried without success to close it in 1994 because it was overrun by rats and cockroaches. Renovating it would cost a small fortune.

The Rossiya was also plagued by an even more dangerous problem: Organized crime. The hotel’s general director, Yevgeny Tsimbalistov, was shot dead in a December 1997 contract killing apparently, according to The Economist, for trying to reorganize things in a way that upset the balance of power between the gangs. And Tsimbalistov’s murder was one in a string of four murders of Moscow hotel executives in an 18-month period from 1996 to 1998.

Then there were the all-powerful city officials to deal with, like Resin.

Trump wisely passed on the fortresslike Rossiya, and the hotel was eventually razed in 2006 to make way for a new development.

Trump, however, did show some interest in the other Moscow hotel Resin offered him, the Moskva. Trump submitted a proposal for a $175 million renovation of the crumbling Moskva with the top floor converted into luxury apartments. Trump promised to turn the hotel around in 18 months.

In January of 1997, Resin told Interfax that an agreement with Trump’s representatives was “practically reached”.  In the end, the Moskva deal fizzled out, too.

I should note that two of Trump’s friends longtime friends brought him to Moscow, Howard Lorber and Bennnett S. LeBow. Lorber’s New Valley LLC partnered with Trump on Moskva deal and LeBow’s Liggett-Ducat Ltd. subsidiary helped out on the would-be tower in Moscow. Today,  Lorber is president and CEO and Bennett is chairman of the Vector Group, the parent company of both the Liggett tobacco firm and New York real estate giant Douglas Elliman.  Both men are close friends and supporters of Trump.

By 2004, Resin had changed his mind about skyscrapers in Moscow. A $5 billion development plan called for 60 skyscrapers to be built, with the tallest reaching 116 floors. Resin flew to New York to to discuss the project with Trump’s representatives. As far we know, nothing came of that meeting.

Today, Resin serves in the lower house of Russia’s parliament, the Duma, as a member of Vladimir Putin’s United Russia party. In 2010, he was named acting mayor of Moscow when President Dimtry Medvedev fired his boss, Mayor Yuri Luzhkov.  Resin resigned the following year.

The fact that nothing came of Trump’s meeting of the man with the million-dollar watch is somewhat reassuring, given the president’s questionable judgment as president in foreign affairs and his rumored ties to Moscow.  No doubt Trump could have done a deal in Moscow had he wished. And he probably wanted to — “Moscow’s going to be huge” — and putting his name on one of the world’s biggest hotels might have been tempting. In the end, we hope, he found the cost or the risk of dealing with men like Resin, or both, too high.

 

Why Did a Russian NHL Player Sue Trump’s Lawyer, Michael Cohen?

Vladimir Malakhov is a Russian-born retired professional hockey player. He was active in the NHL 1992 to 2006, playing for the New York Islanders, the Montreal Canadiens, and the New Jersey Devils.

In January of 1999, Malakhov wrote a check for $350,000 to Michael D. Cohen, Trump’s personal lawyer. The check was deposited — and then the money disappeared.

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What happened to the money and how this check came to be written to Michael Cohen was the subject of years of litigation in Circuit Court in Miami, Florida. (See Fomina v. Netscheret, 2006-001330-CA-01.)

Malakhov sued Cohen (/a/k/a “Michael D. Hacking”) in 2010 in Miami Circuit Court. (Malakov v. Cohen, 2010-14576-CA-03). I’ve embedded the lawsuit at the bottom of this post.

The story begins in late 1998 or early 1999, when Malakhov was living in Florida, and earning millions as a professional hockey player playing with the Montreal Canadiens.

One day, an acquaintance asked him for a large loan. The acquaintance was a woman named Julia Fomina. According to an affidavit filed by Malakhov’s agent, the money was intended not for Fomina but rather her boyfriend in Russia, Vitaly Buslaev. (For more on Buslaev’s background, see Yuri Felstinsky’s original article at the website Gordonua.com. There’s also a story out in Buzzfeed.)

Malakhov loaned $350,000 to Fomina and, on the advice of his attorney, secured the loan by having Fomina sign over a mortgage for her apartment on the 24th floor of Miami Beach condo tower.

For reasons that aren’t clear, Fomina instructed Malakhov’s wife to send the $350,000 loan to Michael Cohen. The check was issued in January 1999 to Cohen personally, not his law firm or many businesses, and deposited in Cohen’s Citibank trust account.

Sometime later, Fomina defaulted on her loan.  When Malakhov moved to foreclose on the condominium, Fomina swore under oath that she never received the $350,000 that had been sent to Cohen.

It took years before Cohen was finally deposed and asked what happened to the money. Cohen’s response: “I don’t recall.”  He insisted he didn’t know Malakhov, had no idea why the hockey player would write him such a huge check, had no records relating to the check, and had no clue what happened to the money.

A Miami judge accepted Cohen’s story and dismissed the case.

In deposition, Cohen speculated that one of the reasons why Malakhov might have sent him the check were his ties to Russians, including his business partner, the Ukrainian-born “Taxi King” Simon Garber. I’ve written previously about Cohen’s family ethanol business in Ukraine.

The Malakhov story connects to Trump in another roundabout way.

A few years before he wrote the check to Cohen, Malakhov was shaken down by a Russian mobster, according to testimony at a U.S. Senate hearing on Russian organized crime.

Malakhov, who at the time was playing for the New York Islanders, was approached in the National Restaurant in New York City’s Brighton Beach neighborhood. The man who demanded money from the hockey player worked for Vyacheslav Kirillovich Ivankov, one of the most powerful Russian Mafia bosses in America.

As I noted in an earlier post, Ivankov is one of several Mobsters who turned up in Trump Tower. Invakov also showed up Trump’s New Jersey casino, the Taj Mahal. Ivankov’s phone book included a working number for the Trump Organization’s Trump Tower residence, and a Trump Organization fax machine.

Ivankov was arrested in 1995 and sent to prison for extortion. After his release he returned to Russia where he was assassinated.

As for Malakhov, after he was shaken down, he spent the next months in fear, looking over his shoulder. His worries ended when he was traded to the Canadiens.

A Missing Piece of the Puzzle

The Guardian is out with a report that contacts between the Trump campaign and Russian intelligence occurred much earlier than previously reported:

GCHQ first became aware in late 2015 of suspicious “interactions” between figures connected to Trump and known or suspected Russian agents, a source close to UK intelligence said. This intelligence was passed to the US as part of a routine exchange of information, they added.

Looking at the Trump-Russian Timeline, this puts other events around that time into context. Beginning in late 2015,  the following events occurred:

  • December: Accounts associated with Russian propaganda “troll farm” called the Internet Research Agency begins supporting Donald Trump
  • December 17: Vladimir Putin praises Donald Trump at his annual news conference. “He is a bright and talented person without any doubt. He is the absolute leader of the presidential race.”
  • Feb. 2: Alexander Dugin, a conservative “philosopher” with close ties to the Kremlin, endorses Trump.
  • March: Individuals linked to the Russian government begin openly supporting Donald Trump. Government-funded propaganda outlets RT and Sputnik cast Trump as the target of unfair coverage from mainstream media outlets.
  • March: A hacking group known as “Fancy Bear” or “APT28” launches a spearfishing campaign targeting email addresses at hillaryclinton.com and dnc.org that gains them access to DNC network. The hacking group is run by the Russian foreign military intelligence service (GRU) and appears focused on a single target: the DNC’s opposition research files on Donald Trump.

What the publicly available information shows is a steady ramping up of Russian support for Trump.

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Our man in Moscow

The GHCQ information fills in the missing piece. The contacts between the Trump campaign and Russian intelligence appear to be the catalyst for the covert and overt support from Moscow.

Michael Flynn’s December 10 trip to Moscow also emerges as a possible lynchpin in this story. Flynn, you will recall, attended RT’s 10th anniversary gala in Moscow, where was seated at the head table next to Vladimir Putin. It’s not clear what Flynn’s role in the campaign was in this time, if any. The two men first met in August; Flynn announced he was advising Trump in February 2016.

A website that tracked Trump’s evolving campaign team lists the following people as part of Trump’s inner circle in late 2015:

  • Corey Lewandowski
  • Michael Glassner
  • Donald F. McGahn
  • Michael Cohen
  • Hope Hicks
  • Roger Stone (resigned Aug. 8, 2015)

More TK.

 

 

 

 

 

Op-Ed: Trump’s $95 million home sale to Russian deserves scrutiny

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Trump outside Maison de l’Aimitie, which he sold to a Russian billionaire.

Published online April 6, 2017 in The San Diego Union-Tribune

by Seth Hettena

When the FBI recently revealed that it was investigating the nature of any links between President Trump, his associates and the Russian government, I was reminded of another scandal involving disgraced San Diego County Congressman Randy “Duke” Cunningham.

The story, which began with a report published in the San Diego Union-Tribune, grew into one of the biggest political scandals in county history. In 2006, a federal judge sentenced Cunningham to 100 months in prison for accepting $2.4 million in bribes from defense contractors to whom he steered lucrative Pentagon contracts.

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Duke Cunningham

While there are many differences between the two men — Cunningham, unlike Trump, served his country honorably during the Vietnam War and became a highly decorated Navy fighter pilot — there are similarities where their political careers are concerned.

Like Trump, Cunningham had a loose tongue that often got him in trouble. Like Trump, he mocked, taunted, bullied and insulted his political opponents. And like Trump, Cunningham was drawn into far-fetched conspiracies. Look in the Congressional Record, and you’ll find Cunningham denouncing President Bill Clinton as a traitor and a KGB dupe because of a visit to Moscow as a college-aged man.

At the center of Cunningham’s bribery scandal was a real estate deal. Cunningham sold his home in Del Mar to a defense contractor and campaign contributor named Mitchell Wade, one of the shady “friends” the congressman attracted. Wade paid $1.675 million for the congressman’s home in 2003, an eye-popping figure that attracted attention even in San Diego County’s red-hot housing market.

Wade bought the home without ever having set foot in it, and only later found out that it was in sorry shape, darkened by the bars Cunningham installed over every window and skylight to foil Del Mar’s burglars. Wade put the home up for sale a month later, but it languished for a year before he managed to unload it for a $700,000 loss. To prosecutors, it smelled like bribery. And it was.

President Trump also sold a home for more than it was worth — except the house itself and the sale price were both much, much bigger. The property was a sprawling, oceanfront mansion in Palm Beach, Florida that Trump sold for $95 million after purchasing it four years earlier for $41 million. At the time, it was the most expensive U.S. home sale ever.

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Dmitry Rybolovlev

The buyer of the 6-acre property was a Russian fertilizer magnate named Dmitry Rybolovlev. The sale took place in July 2008, a time when the overheated U.S. real estate market was showing signs of distress and the supply of luxury homes exceeded demand.

Rybolovlev overpaid. Five years after the sale, Palm Beach County officials appraised the house at less than $60 million.

To be fair, no one has accused Trump or Rybolovlev of bribery, but the similarities between the sale of Cunningham’s property and Trump’s are striking. Not unlike the defense contractor who bought Cunningham’s Del Mar home, the Russian fertilizer king showed little interest in Trump’s mansion before or after he bought it. He never lived in it and is said to have visited it only once.

The home was plagued by mold, and, amazingly, a lawyer for Rybolovlev’s ex-wife told the Palm Beach Post he found no evidence that the Russian billionaire had hired anyone to inspect the property before he paid Trump a $50 million premium for it. In 2015, Rybolovlev got permission to demolish the 61,744-square-foot home, and is now selling off the land underneath it.

Other coincidences link Rybolovlev and Trump. Reporters have tracked the Russian billionaire’s private plane to cities where Trump was traveling during the 2016 presidential campaign and into his presidency. Both men say they have never met.

It could be that the sale of the Palm Beach mansion is an example of Trump’s ballyhooed deal-making skills. And it is also possible that it was something else: that the purchase of the mansion known as Maison de l’Aimitié (House of Friendship) was a covert form of payment from friends unknown in Russia or elsewhere.

The major difference between the two transactions is that at the time of the sale of the Palm Beach mansion, Trump was not a public official. But now that he occupies the most powerful office in the world, the FBI, Senate and House intelligence committees who are examining the president’s ties to Russia should learn the lessons of the Cunningham scandal and give the enormous premium paid for Trump’s moldering mansion — purchased sight unseen — the close scrutiny it deserves.

Hettena, a former military writer, is a freelance writer based in San Diego.

The Godfather Goes to Washington (Updated)

 

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Reputed Russian mob “godfather” at the 2016 NRA convention in Louisville, Ky.

How did a suspected Russian mob “Godfather” (update: and Kremlin emissary) nearly make it to a private meeting in February with President Trump? With help from friends in the NRA.

Dramatis Personae

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The “Godfather” Alexander Torshin

The Godfather: Spanish police investigating the Moscow-based Taganskaya crime syndicate laundering ill-gotten gains through banks and properties in Spain learn that Alexander Torshin, while serving as  a deputy speaker of the upper house of parliament in Russia, instructed members how to launder criminal proceeds. Wiretaps recorded Torshin talking in 2012 and 2013 to the alleged Taganskaya leader in Spain, Alexander Romanov. An internal document from the Spanish Civil Guard Information Service, explains Torshin’s central role in the criminal plot.

“As a consequence of the phone tapping carried out in the aforementioned inquiries it has been ratified that, above Romanov, on a higher hierarchical level, is Alexander Torshin. In the numerous phone conversations and with different contact persons, Alexander Romanov himself recognized his subordination before someone who he describes as ‘the Godfather’ or ‘the boss’ … which in itself is telling when it comes to situating their relationship.”

Torshin also has longstanding ties to the FSB, successor agency to Russia’s KGB.

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Maria Butina

The Honeypot: Maria Butina. In 2011, this tall redhead was involved in sales of appliances and furniture in the Altai region of Siberia, A year later, she was rubbing elbows with Torshin and putting together Право на Оружие (translated as “Right to Bear Arms”) in Moscow, an international gun rights organization.

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David Keene

The Useful Idiot: David A. Keene is a political consultant, longtime director of the American Conservative Union, past president of the National Rifle Association, and currently the opinion editor of The Washington Times. Although not the power broker he once was, Keene still wields influence. He takes a liking to Torshin and Butina and opens doors for them in Washington and introduces them to influential people.

Our Story Begins

It’s election day in America, 2012. Barack Obama is running for a second term against Mitt Romney. Enter Torshin.

Nov. 6 2012: Torshin travels to Nashville, Tennessee where the NRA an American friend has granted him special status as an observer for the 2012 presidential election. Tweet below reads: “Standing in line at the polling place. As an ordinary American. 6:45 a.m.” At the time, Torshin is a senator in Putin’s United Russia in the upper house of Russia’s parliament.

Nov. 8, 2012: Torshin visits the Russian ambassador’s residence in Washington and NRA headquarters in Washington, DC.

May 2013: Torshin attends the NRA’s annual meeting in Houston, Texas.

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Torshin photographed in 2013 with then NRA president David Keene at the NRA’s annual convention in Houston.

August 21, 2013: Torshin decides not to attend a birthday celebration for Taganskaya leader in Spain, Alexander Romanov, as planned. Spanish authorities believe he was warned by the Russian prosecutor that if he stepped onto Spanish soil he would be arrested.

November 2013: NRA president David Keene travels to Russia for a conference hosted by The Right to Bear Arms. Keene speaks at the conference, with Torshin in attendance.

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David Keene and Maria Butina in Moscow. (Source: Facebook)

January 2, 2014: David Keene publishes an op-ed piece in the Washington Times by his friend, Alexander Torshin. “Last year, I had the pleasure of attending the National Rifle Association’s annual meeting in Houston,” he writes. Torshin says he has been a “life member” of the NRA for years.

April 2014: Torshin and Butina attend the NRA’s annual meeting in Indianapolis, where they are given the red carpet treatment. Butina attends the annual NRA Women’s Leadership Luncheon as a guest of former NRA President Sandy Froman and participates in general meetings over the weekend as a guest of former NRA President David Keene. She also presents the then-NRA president Jim Porter with a plaque. Butina is given the “rare privilege” of ringing a Liberty Bell replica.

May 5, 2014: Maria Butina visits NRA headquarters in Washington, DC. and meets with David Keene.

May 6, 2014: Butina and her organization are profiled by conservative website Townhall.

We are a young organization. We are three years old. And we invited David Keene. He made a speech at our annual meeting. And so it’s like an answer from one side. The next side is the life member of our organization. He is our Russian senator. His name is Senator Alexander Torshin. He is a life member of NRA too, and he’s usually a participant of such events, and every annual meeting of NRA. But now the situation between (our) two countries is very difficult. And we have to go here together with Senator Torshin. He is a great gun lover, he supports our organization and he’s a friend of the NRA.

September 3, 2014: Paul Erickson, NRA member, GOP operative, campaign manager for Pat Buchanan’s 1992 presidential run, attends an open forum in Moscow organized by Right to Bear Arms.

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Butina and Erickson in Moscow

January, 20 2015: Torshin is named deputy governor of the Central Bank of Russia, responsible for liaison with the Federal Assembly chambers, and also federal and regional state executive bodies. Torshin selects Maria Butina as his special assistant.

April 2015: Torshin and Butina both attend NRA’s annual meeting in Nashville.

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April 10, 2015: Butina, Torshin and Keene meet future  Republican presidential candidate and Wisconsin governor Scott Walker during an event in Tennessee.

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July 11, 2015: Maria Butina attends Trump Freedom Fest rally in Las Vegas and poses a question to the Republican candidate: “I’m from Russia. My question will be about foreign politics. If you will be elected as president, what will be your foreign politics, especially in the relationships with my country? Do you want to continue the policy of sanctions that are damaging both economies? Or [do you] have any other ideas?”

Trump replies: “I know Putin, and I’ll tell you what, we’ll get along with Putin. … I would get along very nicely with Putin, I mean, where we have the strength. I don’t think you’d need the sanctions. I think we would get along very, very well.”

July 13, 2015: Butina attends the official launch of Wisconsin Gov. Scott Walker’s run for governor.

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December 2015:  An NRA delegation travels to Moscow to meet with Dmitry Rogozin, the deputy prime minister in charge of Russia’s defense industry who is a subject of US sanctions. The delegation consists of David Keene, Paul Erickson, and Milwaukee County, Wisconsin sheriff David A. Clarke. Right to Bear Arms pays $6,000 for Clarke’s meals, hotel, transportation, and entertainment. (Daily Beast story)

Feb. 7, 2016: Torshin attends National Prayer Breakfast in Washington, D.C.

February 10, 2016: Paul Erickson forms a limited liability corporation with Maria Butina called Bridges, LLC., based in South Dakota. What this company does is a mystery.

May 2016: According to The New York Times, Torshin tries to meet with Trump during the NRA comeeting between Trump and Vladimir Putin. Torshin Rick Clay, an advocate for conservative Christian causes, to Rick Dearborn, a Trump campaign aide.

May 2016: Paul Erickson, Marina Butina’s friend and business partner, writes an email to a Trump campaign aide, The New York Times reports.

Subject: “Kremlin Connection.”

Russia, Erickson writes, was “quietly but actively seeking a dialogue with the U.S.” and would use the NRA’s annual convention in Louisville, Kentucky, to make “first contact.”

“Putin is deadly serious about building a good relationship with Mr. Trump,” Erickson writes to Trump aide Rick Dearborn. “He wants to extend an invitation to Mr. Trump to visit him in the Kremlin before the election. Let’s talk through what has transpired and Senator Sessions’s advice on how to proceed.” Sessions says he does not recall the outreach.

“The Kremlin believes that the only possibility of a true reset in this relationship would be with a new Republican White House,” Erickson writes. “Ever since Hillary compared Putin to Hitler, all senior Russian leaders consider her beyond redemption.”

By “happenstance” and the reach of the NRA, Erickson says he had been put in position to “slowly begin cultivating a back-channel to President Putin’s Kremlin” in recent years.

“Russia is quietly but actively seeking a dialogue with the U.S. that isn’t forthcoming under the current administration.”

May 20, 2016: Torshin attends NRA convention in Louisville, Kentucky. He shares a table with Donald Trump, Jr. at a private dinner. According to The New York Times, Torshin had tried and failed to meet with candidate Trump in Louisville to pitch a “backdoor meeting” with Putin. In the picture below, David Keene is in the background and Torshin is wearing a button that reads “I’m the NRA and I Voted.”

May 2016: Taganskaya mafia boss Alexander Romanov is sentenced to almost four years in a Spanish prison, after pleading guilty to illegal transactions totaling 1.65 million euros ($1.83 million) and $50,000.

August 8, 2016: Bloomberg reveals Torshin’s connections to organized crime.

Nov. 12, 2016: Butina celebrates her birthday with a costume party in Washington, DC. attended by several Trump’ campaign consultants.

January 15, 2017: Torshin tweets that he brought a gift for NRA President Allan D. Cors.  President Cors loves tanks.

 

January 20, 2017: Maria Butina and Paul Erickson attended the invitation-only Freedom Ball to celebrate Donald Trump’s swearing in as President of the United States.

Feb. 2, 2017: Torshin and Butina are excited to meet newly-elected President Donald Trump at the National Prayer Breakfast. Their hopes are dashed at the last minute when a White House national security aide notices Torshin’s name and flags him as a figure who had “baggage,” a reference to his suspected ties to organized crime, according to Yahoo News.

Butina told Yahoo:

“Late the night before, we were told that all meet and greets were off,” Butina wrote in an email. “There were no specific questions or statements that Mr. Torshin had in mind during what we assumed to be a five-second handshake. We all hope for better relations between our two countries. I’m sure there will be other opportunities to express this hope.”

Fin.

Unwitting Agents, Useful Idiots, Donald Trump and other dupes

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In his excellent testimony March 30 before the Senate intelligence committee, Thomas Rid, a professor in the Department of War Studies at King’s College London, explains how Russia has perfected the art of exploiting unwitting agents.

Unwitting agents are fools who are doing the bidding of another person or country without realizing it. Another term for them is “useful idiot,” a phrase supposedly used by Lenin to describe liberals and Social Democrats who helped advance the Communist cause outside the Soviet Union.

Rid said three different types of unwitting agents stand out from the chaos of the 2016 election:

Unwitting agent #1: Wikileaks.

The US intelligence community concluded with a high degree of confidence that Russia’s foreign military intelligence service, the GRU, was the source for the reams of stolen Clinton campaign emails published by Wikileaks.

Wikileaks has repeatedly denied that Russia was the source for the leaked DNC emails, which shows why an unwitting agent is so useful.

Wikileaks clings to the moral high ground because it believes it acted in the name of justice or goodness, not in the name of a Russian intelligence agency.

So when Wikileaks insists that the emails were leaked to them by an insider, it does so with considerable conviction that has taken others such as the influential Fox commentator Sean Hannity.

Unwitting Agent #2: Twitter

Twitter was hugely influential among opinion leaders in the 2016 election, foremost among them the Twitterer-in-chief, Donald Trump. But it’s very hard to tell what on Twitter is real and what is fake.

A recent study by computer scientists at Indiana University and USC tried to tackle the question of how many Twitter accounts are bots. These are automated and semi-automated software applications that mimic human behavior and can be used to drive grassroots political support, spread rumors, or bully opponents.

The researchers conclude that as many as 15 percent of all Twitter accounts are bots, and given the increasing sophistication of bots, this may be a conservative estimate. Twitter claims it has 313 million “active” monthly users. If the study is correct, 47 million Twitter users are not human.

Twitter for its part could easily inform the public how many of its accounts are bots, whether influential accounts during the 2016 election were human or not, or how many Twitter trends began overseas.

But it is not in the company’s interest to do so. The inflated numbers make it appear that Twitter has active users than its published numbers claim it has. Pulling back the curtain on bots would depress Twitter’s value as a publicly-traded company.

Unwitting Agent #3: Journalists

The Soviet Union excelled at planting stories. Operation INFEKTION planted the devastatingly rumor that AIDS had been created by US scientists seeking new and potent biological weapons that still echoes around the globe.

But planting these stories was hard work, as this CIA history shows. It took time to craft believable forgeries and build relationships with newspapers. A CIA study estimated that the Soviets spent $3 billion annually influencing world perceptions through its “active measures” campaigns.

That was then. Now, Rid says, it’s much easier:

Cold War disinformation was artisanal; today it is outsourced at least in part — outsourced to the victim itself. American journalists would dig deep into large dumps, sifting gems, mining news, boosting ops.

The hours and reams of newsprint that reporters devoted to hacked emails — with little thought to the who, what or why of their appearance — made American journalism an unwitting agent of Russian intelligence.

Unwitting Agent #4: Donald Trump

Trump is not part of Rid’s testimony, but I felt the need to add him. Donald Trump is the biggest unwitting agent of them all.

He has professed his love for Wikileaks and for Twitter, as well as for rumors that originate with Russia. He has allowed himself to used and manipulated by people with questionable motives.

In an op-ed in The New York Times, former acting CIA Director Michael Morrell summed it up this way:

President Vladimir V. Putin of Russia was a career intelligence officer, trained to identify vulnerabilities in an individual and to exploit them. That is exactly what he did early in the primaries. Mr. Putin played upon Mr. Trump’s vulnerabilities by complimenting him. He responded just as Mr. Putin had calculated.

Mr. Putin is a great leader, Mr. Trump says, ignoring that he has killed and jailed journalists and political opponents, has invaded two of his neighbors and is driving his economy to ruin. Mr. Trump has also taken policy positions consistent with Russian, not American, interests — endorsing Russian espionage against the United States, supporting Russia’s annexation of Crimea and giving a green light to a possible Russian invasion of the Baltic States.

In the intelligence business, we would say that Mr. Putin had recruited Mr. Trump as an unwitting agent of the Russian Federation.

Fake News as a Weapon: Trump, Russia and the World of Rumors

Have you heard the rumor that Donald Trump is mentally ill? Did you hear that President Obama wiretapped Trump Tower? With the help of British intelligence?  Or that a child-sex ring connected to Democrats was being run out of a Washington, D.C. pizza restaurant?

boston-herald-rumor-clinic-dont-spread-rumours-war-poster

via New England Historical Society

American society is being bombarded by rumors. Fake news websites push stories like the aforementioned “Pizzagate.” Russian has an army of Twitter trolls who blast out all sorts of wild rumors. Even Donald Trump’s own tweets deluge us with confusing and contradictory information.

It seems awful hard to know what’s true and what’s not these days. Where is the antidote for the epidemic of fake news? Many of us may feel like we can’t even trust our own judgment. And maybe, that’s the point.

The post-truth era, as it’s been called, might feel very familiar to American spies operating behind enemy lines in World War II. Back then, U.S. operatives were coming up with creative ways to damage morale and divide the leadership of Nazi Germany. One of their best weapons was the use of carefully crafted, well-timed rumors.

Rumors were a specialty of the Morale Operations Branch of the Office of Strategic Services (OSS), the predecessor of today’s CIA. One of the most famous of the OSS’ rumor campaigns was “Where Is Hitler?” The OSS would broadcast a fake report that Hitler was supposed to appear at an upcoming rally.  When Hitler inevitably failed to show, the OSS would float rumors that Hitler was ill or suffering from a mental breakdown. These rumors spread so widely that they became the subject of articles in American newspapers, including The New York Times.

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Creating a loss of confidence in leaders was just one was just one the tricks dreamed up by the OSS Morale Operations branch. Others are spelled out in a now declassified field manual, which is a guide on how to use rumors, forgeries, blackmail and bribery to destabilize a country. What the OSS called “subversive rumors” could be used to cause enemy populations to distrust their own news sources, create division among racial, political and religious lines, to create confusion and dismay with a welter of contradictory reports, and to tip the balance when public opinion was in a precarious state, among other things.

Viewed in this light, fake news seems less a nuisance and more like something that would trouble our intelligence community. And indeed, they do appear concerned. The U.S. intelligence community recently concluded that Russia mounted an “influence campaign” during the 2016 presidential election that blended covert intelligence operations with overt efforts by Russian Government agencies, state-funded media, third-party intermediaries, and paid social media users or “trolls.” Russia influence campaign sought to undermine faith in U.S. democracy and denigrate Hillary Clinton’s campaign.

In essence, Russia has created a modern version of the OSS Morale Operations branch. Social media gives the modern operative powers the likes of which his or her OSS forerunner could only have dreamed. Whereas the OSS had to send operatives into enemy territory to plant rumors, the modern influence campaign can without leaving home harness the power of social media sites. Facebook, Twitter and YouTube are machines for the rapid transmission of rumors.

While the technology behind rumor campaigns has evolved, the nature of rumor itself hasn’t changed much in the 74 years since the OSS wrote its field manual. The OSS defined a rumor as “an unauthenticated, unofficial story or report, represented and transmitted as fact.” This distinguishes it from propaganda, which stamps its authorship on its message. Anybody can start a rumor. Crafting a good one is an art form.

via New England Historical Society

The old OSS characteristics of what makes a good rumor still hold true: A good rumor still must be simple, consisting of a single idea. It must be plausible. It is tied to some known facts, yet is impossible to completely verify. It frequently appears as an “inside” story.  The best rumors to spread are existing ones. “In many cases, the most effective rumor policy will be to spread further rumors that have arisen spontaneously in enemy territory,” the field manual advises.

A good rumor must also be vivid. Rumors with “strong emotional content” are extremely effective. (Case in point: the unforgettable, unverifiable story of Trump cavorting in a Moscow hotel room with prostitutes.) A suggestive rumor was well adapted to spreading fear and doubt, by doling out limited but tantalizing bits of information that allow the audience to formulate conclusions (“FBI Director James Comey made an unexpected trip to the White House.”)

Robert Knapp, who developed the section of the OSS’ Field Manual on rumors and wrote academic papers on the subject, likened a rumor to a torpedo. “Once launched, it travels of its own power,” he wrote. Knapp had an insight into what gave rumors their power: They expressed and gratified the emotional needs of the community, just as daydreams and fantasies expressed the needs of the individual. Rumors gave sense and direction to fears, resentments or hopes. ”No rumor will travel far unless there is already a disposition among those who hear it to lend it credence,” he wrote in a 1944 paper.

Among the many coincidences involving Russia and Donald Trump, one that goes unnoticed is their mutual grasp of the power of rumor. Trump used rumors to stunning effect in his campaign, beginning with the suggestion that President Obama was born in Kenya. This rumor tapped into deeply-held beliefs about President Obama that many people were not comfortable expressing publicly. Outright racism is unacceptable to most Americans. However, many found the disguised racism of a rumor about the African-American president’s birthplace more palatable. There is frequently a racist undertone to many of Trump’s rumors: Muslims celebrating Sept. 11 in New Jersey, illegal immigrants voting, terrorist incidents that didn’t happen, and so on.

Rumors may also help explain Trump’s appeal. In a recent interview, Time magazine’s Michael Scherer pressed Trump on his use of rumors. “What am I going to tell you? I tend to be right,” the president told him. “I’m an instinctual person, I happen to be a person that knows how life works.” In other words, Trump’s rumors feel true to him, even if they can’t be verified. Trump’s words also feel true to his supporters, almost like an article of faith. He is making a connection on a deep emotional level that, once established, is difficult to break.

However, Trump’s predilection for rumors over facts is dangerous, for it leaves him wide open to manipulation. Unwittingly or not, Trump has spread rumors that originated in Russia. The story spread by the White House that President Obama used British intelligence to spy on Trump and his associates started as a story on RT, the Kremlin-backed propaganda outlet.  On the campaign trail, Trump quoted a report that appeared to originate on Sputnik, another Kremlin-backed media outlet.  At a March 30 Senate intelligence committee hearing, Clint Watts, a former FBI agent and an expert on Russian disinformation, explained  in striking terms the problem with having a rumor-monger for a president:

Rumors do work on the campaign trail, but they are toxic to the presidency. Credibility is one of the president’s strongest assets, never more so than in moments of crisis. Trump seems not to understand that, as president, he is the authority, and the White House is the place where rumors end, not where they begin. If President Trump truly wants to make America great again, he must stop spreading rumors.

If Trump won’t quash rumors, others must do it for him. Many news organizations are now regularly refuting the president’s rumors. This effort harkens back to World War II, when rumors were an even bigger problem then they are now. Robert Knapp, the OSS’ rumor expert, founded a “rumor clinic” in Boston that collected rumors and sought to put and end to them. A column first published in the Boston Herald in 1943 quoted the rumor in italics followed by the word FACT. Rumor clinics opened in many cities, but quickly faded following a clash with the Roosevelt administration’s Office of War Information. Government bureaucrats wanted to smother rumors with facts, rather than call attention to them by singling them out for disproof. (For more on this click here.)

Knapp proposed that rumors could serve as an “index of morale.” They may be a better gauge of the true state of public opinion than any poll or survey. Rumors allow expression of the deeply held beliefs and fears that won’t be repeated to a stranger. A look at the rumors prevalent in American society show we are a deeply divided along racial, political, and religious lines. Many Americans have little or no confidence in our elected leaders. We distrust our own news sources.

In sum, American morale has been deeply wounded. We are much weaker than we think we are.

Obama and GCHQ tale is Russian disinformation

Note: This piece has been updated.

It anyone surprised that the allegation that President Obama used Britain’s GCHQ intelligence agency to eavesdrop on Donald Trump was first broadcast on RT, the Kremlin’s international propaganda outlet?

This allegation has gone in a few days from being a crackpot theory on social media to an international dispute. Britain was furious when White House spokesman Sean Spicer cited the GHCQ story as part of his defense of Trump’s claim that he was “wire tapped” by President Obama. The GHCQ, Britain’s version of the National Security Agency, issued a rare denial.

That this GHCQ allegation was first given life by RT shows the influence of the Kremlin-backed network, which has found a sympathetic ear in the White House. According to the U.S. intelligence community that Trump so openly distrusts, RT has the goal of undermining its viewers’ trust in US democratic procedures.

On March 5, the day after Trump tweeted that “Obama had my ‘wires tapped’ in Trump Tower,” RT broadcast an interview with Larry C. Johnson, once an analyst with the CIA.

In the clip, linked above, Johnson said “very good friends” had told him that information  gathered by GHCQ on Donald Trump was illegally disseminated within the US government in an effort to destroy his candidacy.  Obama, Johnson said, “gave the green light” to distribute the information from GHCQ in an improper way.

On his blog, Johnson goes into more detail about his sourcing. (Update: Johnson’s blog was taken off line shortly after this piece was published).

No one involved with the Trump campaign reached out to me and asked me to get involved with this. I spoke three months ago with a source that, if the source’s name was revealed, would be known and recognized as a reliable source of information. Based on that contact I reached out to friends in the intel community and asked them about the possibility that a back channel was used to get the Brits to collect on Trump associates. My sources said, “absolutely.” I later confirmed this via a cut out with a person who is a Senior Intelligence Service executive in the CIA.

Assuming that’s true, why would Johnson, a former CIA analyst, would go on a Russian propaganda network that presents anti-American views?  CNN’s Brian Stelter put that question to Johnson on his show, Reliable Sources.

STELTER: Why is it appropriate for any American to appear on a Kremlin propaganda network?

JOHNSON: Well, it’s not a Kremlin propaganda network. … What I found the difference with Russia Today is they don’t do pre-interviews. I’ve done pre-interviews with your people. I’ve done pre-interviews in the past when I appeared on other networks.

Just two days ago, I did a pre-interview with BBC. They were going to have me on air. But once they heard what I had to say, they came back and said, oh, no, we don’t need to use you now. So, I’m —

Johnson’s point is that RT doesn’t censor its guests. Stelter’s point, which he presses later in the interview, is that anyone can go on RT and say whatever they want without bothering about details like sourcing and verification.

Johnson theories about GHCQ are likely to prove false: officials in Britain and Washington have called it ridiculous.  For RT’s purposes it doesn’t matter whether Johnson is telling the truth, only that his information serves its broader goals.

RT’s GHCQ story is the textbook definition of disinformation:

false information deliberately and often covertly spread (as by the planting of rumors) in order to influence public opinion or obscure the truth.

So back on March 5, while former Director of National Intelligence James Clapper was knocking down Trump’s claims on Meet the Press, RT was quickly building a counter-narrative that besmirched the United States with Johnson’s help.

An outfit like Meet the Press needs a big audience to deliver ad dollars; since it strives to be objective, it has to present credible sources. That means it has guests like Clapper who as insiders know whether Obama really “wire tapped” Trump or not.  If Meet the Press had people like Larry Johnson or RT’s Illuminati correspondent sitting around talking about what their friends supposedly told them, the audience would find something better to do and the ad dollars would dry up pretty quickly.

RT, on the other hand, is funded by the Russian government. It doesn’t need a big audience. So it can quickly disseminate poorly sourced, unverified information that drives home the message that Russia is not the bad guy and America isn’t so great, anyway.

Johnson sought to minimize his role in the GHCQ affair by telling Stelter that nobody watched RT.

STELTER: You’re saying Russia today is not that influential?

JOHNSON: I’m telling you that’s the truth. I mean, who watches it?  The fact that I spoke about it two weeks ago and it didn’t even surface — it wasn’t even a blip anywhere in the U.S. news media. And so, I guarantee, if people like yourself who were very informed, very up to speed on things, don’t pick up on something like that, you expect a coal miner in Pennsylvania, an auto worker in Michigan, that they’re going to be on top of Russia Today?

But information warfare, as Johnson surely knows, doesn’t need a big audience to work.

It has just to plant a false idea that contradicts the conventional narrative. Johnson made a big fuss about how it took so long for his story to spread, but that’s how rumors work. And that’s what makes them so effective. They are spread person-to-person by social media and word-of-mouth  until they reach a critical mass. If you wanted to drive a wedge between allies, there’s no way to do it better. It’s cheap, bloodless, and stunningly effective.

Johnson’s unsupported allegation was rebroadcast on right-wing Internet on blogs and websites until March 14 when it jumped into mainstream media. Fox contributor Andrew Napolitano repeated the allegation on the talk show “Outnumbered” and then repeated it again on Fox News. Johnson told The New York Times he was one of Napolitano’s sources.

On Friday, Trump refused to back down from the allegation, telling reporters, “All we did was quote a very talented legal mind.”

Did the president realize he was also quoting Johnson via Russian media?

Johnson, who is almost always referred to as a former CIA analyst, worked for the spy agency in the 1980s. After four years in the State Department’s Office of Counterterrorism, Johnson left government service in 1993.

Since then, he gotten embroiled in controversy such as his claim that Republican operatives possessed a tape of Michelle Obama railing against “whitey.” (Johnson claims he was manipulated by Clinton confidant Sidney Blumenthal.) Or that Bush White House advisor Karl Rove had been indicted.

Johnson has been a member of Veteran Intelligence Professionals for Sanity (VIPS), a group of intelligence professionals formed in 2003 to protest the use of faulty intelligence that was used as a grounds for the invasion of Iraq.

VIPS and Johnson have been critical of the US intelligence community’s findings that Russia hacked the U.S. election. On Dec. 15, Johnson co-signed a VIPS letter that stated the hacking allegations “have no basis in fact” and suggested an “inside leak,” not hacking, was behind the release of DNC emails. Not surprisingly, RT publicized the letter.

It’s worth noting here that Ray McGovern, a former CIA analyst and founding member of Veteran Intelligence Professionals for Sanity attended the now infamous 2015 RT 10th anniversary dinner in Moscow, where he sat at the same head table with President Vladimir Putin and former Gen. Michael Flynn. (link) It seems McGovern makes an annual pilgrimage to Moscow where we find him pontificating in RT’s studios.

Napolitano for his part has also peddled Kremlin disinformation before. On May 6, 2016, he reported that “there’s a debate going on in the Kremlin between the Foreign Ministry and the Intelligence Services about whether or not they should release the twenty thousand of Mrs. Clinton’s emails that they have hacked into and received and stored.” (archived link)

Now, mind you, this was days before hacked emails from the Clinton campaign began appearing on the Internet.

According to Malcolm Nance’s informative book, The Plot to Hack America, Napolitano’s source this go-around appeared to be a conspiracy website called Whatdoesitmean.com.

It appears that the source of the story emanated from a mythical figure, a journalist named Sorcha Faal. Sorcha Faal is widely believed to be a pseudonym for David Booth. Booth hosts a wild-eyed conspiracy theory website called Whatdoesitmean.com. Usually websites like this and the more popular and crazier Infowars.com are easily dismissed as tinfoil hat crowds who see government conspiracy everywhere. Yet in this case “Sorcha Faal” appears to be so well wired into the Kremlin that “her” work at this website was often copied by mainstream Russian information propaganda like Russia Insider’s Svobodnaya Pressa (“ Free Press”). This site pushes wild conspiracy theories such as the proposition that the US trains and directs ISIS, and writes op-eds about the dangers of European multiculturalism. It is a core component of the Russian propaganda system, and such news organs as Ren TV (a large, private, pro-Putin Russian television channel) and Sputnik News (a multinational propaganda organ of the Russian government)

We might as well learn the Russian word for this, folks.

Dezinformatsiya.

The Yuge Trump-Russia Timeline

Here it is: All the publicly-available evidence that suggests collusion between Trump, his campaign, and Russia.

It stretches over three years and comprises the contacts, meetings, tweets and revelations involving Christopher Steele, Michael Flynn, Jeff Sessions, Roger Stone, Paul Manafort, Sergei Kislyak, and others.

I’ve been working on this timeline for weeks and will continue to update it as more information becomes available.

If you know of something that should be in here but isn’t drop me an email.

The link below is an embedded Google sheet with sources hyperlinked. If anyone has a better idea how to display this in a form that is more easily accessible please let me know. I am not very handy with Google scripts.

Sergey Kislyak Timeline

Sergey Kislyak

Sergey Kislyak, Russian ambassador to the United States, is emerging as a key point of contact for members for the Trump campaign and Russia, and a reminder of the president’s ties to Vladimir Putin.

CNN reports that Kislyak is known to US intelligence officials as a spy recruiter. And that’s why he’s a touchy subject for Trump’s people.

Here’s a timeline of what we know about contacts between the Trump campaign and Kislyak:

 

Michael Cohen’s Ukraine business

Michael Cohen

Michael Cohen

Josh Marshall of Talking Points Memo called my attention to the fact that President Trump’s personal lawyer, Michael Cohen, once founded an ethanol business in Ukraine.

As Marshall relates, Cohen’s ethanol business was revealed as a side note in a Feb. 19 story in The New York Times. The focus of the Times story was how Cohen became an intermediary for a Ukrainian “peace plan” pitched by a renegade Ukrainian politician named Andrii Artemenko.

And if that’s not strange enough, Artemenko’s meeting with Cohen also involved Felix Sater (whose shady Mafia connections were described in my previous post).

So what was Cohen’s ethanol business?

Some answers are found in a Feb. 24 story in the English-language daily Kyiv Post by Josh Kovensky.

Michael Cohen’s ethanol business initially involved an ethanol processing plant in the town of  Zolotonosha, southeast of Kyiv, the Ukrainian capital. To be clear, this plant was to produce bioethanol, the stuff that can power internal combustion engines, not the stuff that we like to drink (which has spawned a large black market in the Ukraine).

According to the Kyiv Post, Cohen visited the Ukraine “in the mid-2000s.”  His brother, Bryan, accompanied him on the trip.

Update: Cohen told Yahoo News’s Hunter Walker that he had visited Ukraine “twice,” in “either 2003 or 2004,” because his “brother’s father-in-law lives in Kiev.”

The timing of that Ukraine trip is interesting as it relates back to Artemenko’s peace plan. In an interview with strana.ua (see English translation here), Artemenko says  he has known Michael Cohen for years, ever since he founded the family ethanol business.

What Artemenko, a member of the Kyiv City Council at the time, had to do with the Zolotonosha plant isn’t clear. Update: The Cohen family has said Artemenko is full of shit.

A family ethanol business it was. The Cohens were brought into the Ukraine deal through Alex Oronov, a Ukranian-born American businessman who has invested in Ukrainian agriculture.  Michael Cohen’s brother, Bryan, is married to Oronov’s daughter. Cohen’s wife is also of Ukrainian descent.

According to the Kyiv Post:

The question of the extent of Cohens’ involvement comes down to the ownership of two companies: International Ethanol of Ukraine Ltd. and Ukrethanol LLC.

The Cohen brothers founded International Ethanol in April 2006 with Oronov, according to the New York State Corporate Registry. International Ethanol does not appear in Ukrainian registries as ever having done business here, despite the company’s name and timing of its founding.

Ukrethanol acquired half of [Alex Oronov’s business] Harvest Moon in 2008, and continues to manage part of Oronov’s Ukraine business, according to financial disclosures.

Ukrethanol is registered to an address on Long Island, care of Bryan Cohen. The address belongs to a law firm that Michael Cohen is reported to have formerly worked at.

screen-shot-2017-02-25-at-7-30-42-pmUkrethanol LLC was founded in July 2007, just months after Michael Cohen joined the Trump Organization. Prior to that Cohen was a partner at the New York law firm of Phillips Nizer.

Interestingly, the Kyiv Post notes, it’s not clear who provided financing for the plant. (The plant’s cost estimates vary from $90 million to 110 million euros.) According to this article in Vox Ukraine, the plant has been idle for several years, as expectations of state support never materialized.

The deal to build the plant was being put together by Viktor Toplov, a former Ukrainian deputy coal minster, who was on the board of a state-owned bank.  A Feb. 20 Kyiv Post story reports that Toplov acquired the ethanol plant in 2010.

There’s a interesting little note to this story. Ukrainian media reported that billionaire Vadim Novinksy was involved in the ethanol plant deal, although the Kyiv Post reported in its Feb. 20 story that it could not independently confirm that fact.

If there is a Novinsky connection to this story, that loops us back to Trump. Novinsky is a Russian who was granted Ukrainian citizenship in 2012 by former President Yanukovych.  Soon thereafter, Novinsky was elected to the Ukrainian parliament as member of Yanukovych’s Party of Regions. Paul Manafort, Trump’s former campaign manager, worked for the Party of Regions.

Exactly what role the Cohens played in the plant isn’t clear. Did the Cohen family provide some of the financing for the ethanol plant?  They sure seemed to be invested a lot of capital around that time. As Josh Marshall notes in a follow-up post, Michael Cohen his parents, his business partner, and his Ukrainian in-laws, purchased at least 11 apartment units in Trump buildings between 2001 and 2007.

In 2009, Oronov joined forces with a group of businessmen from Sweden and Ukraine to found Grain Alliance, a Ukraine farm operator. A Swedish property company bought out Harvest Moon’s agribusiness.

Grain Alliance’s annual report notes that it still does business with UkrEthanol, but it’s business has almost nothing to do with ethanol.

“When the customs procedures in Ukraine often are too complicated for the company’s U.S. suppliers of used equipment, purchases are made by a related party, UkrEthanol LLC, who has knowledge and experience to handle customs declaration,” the annual report states.

Russian Mafia in Trump Tower … and the Mogilevich connection

Since it opened in 1983, Trump Tower has been home to celebrities and billionaires, and the occasional Russian Mobster or those connected to them. And those Russian Mobsters were connected in some way to Semion Mogilevich, who is considered the most dangerous Mobster in the world.

Coincidence? Here’s a look:

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Felix Sater

Felix Henry Sater: Born in the Soviet Union in 1966, Felix H. Sater immigrated with his family to the US at age of 7. Felix became a Wall Street stock broker. Convicted of assault in 1991 for stabbing another broker in the face with a broken piece of a margarita glass. Spent a year in prison. Pleaded guilty in 1998 for his role in a $40 million “pump and dump” penny stock fraud at a Mafia-linked brokerage firm. Avoided prison by becoming a government informer. Provided U.S. federal authorities with “information crucial to national security and the conviction of over 20 individuals, including those responsible for committing massive financial fraud and members of La Cosa Nostra,” former U.S. Attorney General Loretta Lynch wrote during her Senate confirmation hearing. Permanently barred from trading stocks, Sater went into real estate. Began working in Trump Tower around 2002 for Bayrock (exact date is unclear). Tried to develop deals for Trump in Russia, where he watched Trump’s children during a 2006 visit. Under oath, Trump said he didn’t believe Sater was in the Mob. Recently involved in a Ukrainian “peace plan” with the help Trump’s personal lawyer, Michael Cohen that was delivered to the White House.

the Mogilevich connection: Sater’s father, Mikhail, is a convicted criminal and, according to US Supreme Court petition, a “Mogilevich crime syndicate boss.” (Update: After further reporting for my book, I no longer believe there is any credible evidence to support the claim that Sater is connected to Mogilevich.)

alimzhan-tokhtakhounov

“Vor” Alimzhan Tokhtakhounov

Anatoly Golubchik and Vadim Trincher: Russians serving  five years in prison for running an illegal sports betting ring in Trump Tower that catered primarily to Russian oligarchs. Trincher, a professional poker player, had a $5 million condo on the 63rd floor of Trump Tower. (A co-defendant of Golubchik and Trincher’s, Hillel (Helly) Nahmad, paid more than $21 million for the 51st floor of Trump Tower, where he ran a high stakes poker game that catered to millionaire and billionaire clients. Nahmad was sentenced to a year in prison.) According to an 84-page indictment, Trincher and Golubchik’s sports betting operated under the protection of “Vor” Alimzhan Tokhtakhounov, a Ukrainian-born Mafia Don who was a VIP guest at the 2013 Miss Universe pageant Trump hosted in Moscow. Tokhtakhounov,who lives in Russia, is also wanted for bribing Olympic officials in 2002 in Salt Lake City.

…the Mogilevich connection: Tokhatkhounov is described as close to Mogilevich by Interpol and other authorities.

vyacheslav-ivankov

Vyacheslav Ivankov

Vyacheslav Kirillovich Ivankov: Born in the Soviet Republic of Georgia, Ivankov was a top Russian mob boss who arrived in New York in 1992. According to the FBI, he became one of the most powerful Russian Mafia bosses in America. The FBI tracked him down in a luxury apartment in Trump Tower, according to journalist Robert I. Friedman’s expose Red Mafiya. Invakov disappeared and then turned up again in Trump’s New Jersey casino, the Taj Mahal. Ivankov’s phone book included a working number for the Trump Organization’s Trump Tower residence, and a Trump Organization fax machine, according to Friedman. Ivankov was arrested in 1995 and sent to prison  for conspiring to extort $3.5 million from two Russian emigres who ran an investment advice company in lower Manhattan. After his release he returned to Russia where he was assassinated.

… the Mogilevich connection: Ivankov had a close relationship with Mogilevich, who paid a Russian judge for Ivankov’s early release from a Siberian prison where he was being held for robbery and torture, according to Alan A. Block’s study, All is Clouded by Desire.

David Bogatin: Russian native who was identified by law-enforcement officials as a member of Russian organized crime. In the early 1980s he ran a gasoline bootlegging scheme that was so lucrative that he spent nearly $6 million to buy five separate condos in Trump Tower. Trump personally sold him the condos, according to an investigation by journalist James S. Henry.  Bogatin worked with members of the Colombo family, according to Senate testimony.  Pleaded guilty to evading taxes on gasoline but jumped bail before he could be sentenced to prison. (Before he fled, he turned over the mortgages on his Trump Tower condos to a Genovese crime family associate, Friedman writes in Red Mafiya. The mortgages were liquidated and moved through a Mafia controlled bank in New York.) Bogatin surfaced in Poland as the owner of a bank and was extradited back to the United States. Sentenced to prison in 1992.

… the Mogilevich connection: the FBI considered Bogatin a key member of Mogilevich’s crime family.

Why Putin Hates America

The New Tsar: The Rise and Reign of Vladimir Putin by Steven Lee Myers

Russia, as a country, punches far above its weight.

Its economy — kleptocracy, really — is smaller than that Italy, Korea or Brazil. And it is mired in a recession, dragged down by rampant corruption, and the imposition of sanctions by the European Union and the United States. And yet, rather than focus inward, reassess or attempt to rebuild, Russia focuses outward at its many perceived enemies — foremost among them the United States.

As everyone but President Trump acknowledges, Russia launched an audacious campaign to influence the 2016 U.S. presidential election. According to U.S. intelligence, that campaign was ordered by none other than Russia’s president, Vladimir Putin. And it succeeded beautifully. Russia managed to undermine faith American democracy, denigrate Hillary Clinton and diminish her chances of winning, all for virtually no cost at all.

And now we learn that Russia, to help its preferred candidate, Donald Trump, provided assistance that may have been even more direct. Top Trump campaign aides were in constant and repeated contact with Russian intelligence officials. A leaked dossier compiled by a former British spy suggests that Moscow has scandalous and compromising material on Trump (kompromat) that make him susceptible to blackmail. Trump’s own behavior — his blasé attitude about Russia’s meddling, his nonstop praise for Putin — lend credence to these allegations.

Trump denies all.  “It’s all fake news,” Trump cried in his press conference Feb. 16. But worries are mounting in Congress and in the US intelligence community, and the president knows it.

The concern of this website and many others that Trump is not acting in the best interests of America when he says he wants to strike some kind of grand bargain with Russia, as he has signaled he intends to do. “I would love to be able to get along with Russia,” Trump said in his Feb. 16 news conference. “Now, you’ve had a lot of presidents that haven’t taken that tack. Look where we are now. Look where we are now.”

So let’s take a look at where we are now and how we got here. What drove Putin to meddle in the U.S. election? Why does Putin hate Hillary Clinton so much that he would hack a US election? Is this the action of a rational man?

In The Last Tsar, an excellent political biography of Putin by Steven Lee Myers, a veteran Moscow correspondent for The New York Times, we get an answer of sorts: Russia sees itself as a nation under siege from the West. After a quarter-century of relative openness since the collapse of the Soviet Union, since 2014, most Russians have once again to come to view the outside world as “an enemy at the gates, to be feared and resisted.”

Russia’s bellicose foreign policy is a reflection of the autocratic Putin himself, who has been fighting his whole life. As a youth growing up in a rough section of Leningrad (today’s St. Petersburg), he became (and remains) an accomplished judo practitioner. He brawled in the streets. “I was a real thug,” he once said, and he was unable to back down from a challenge, even when he knew better or should have. While attending a prestigious KGB academy, Putin got into a fight with some hooligans on the Metro. He returned with a broken arm, and his KGB career suffered for it. Putin never got a glamorous foreign posting in the United States or Western Europe, serving instead in dreary East Germany.

bush-putin-2001-ranch-crawford-dw-vermischtes-crawford-jpg

On the ranch

It’s easy to see the Russia-United States relationship as just another fight Putin won’t back down from, but things weren’t always this bad between the two former Cold War adversaries. It was a different Putin who was the first foreign leader to telephone Bush after the attacks of Sept. 11, 2001 and offer any assistance. Bush invited Putin to spend three days at his ranch in Crawford. The U.S. president famously said he looked Putin in the eye and got a sense of his soul. He liked what he saw: a man deeply committed to his country.

The 2003 invasion of Iraq was a turning point. For Putin, the Iraq war revealed the true intentions of the United States: it wanted to impose “freedom” on the rest of the world, with force if necessary. By the end of his presidency, Bush realized he had misjudged the man. “Vladimir,” Bush told him, “you’re cold-blooded.”

It sure seems that way. His critics have been silenced with blackmail, arrests, beatings and murder. And not just bullet-in-the-head-drop-the-gun-at-the-scene assassinations, but grotesque, baroque murders that seem to almost gleefully make a public example of the victim’s suffering. Poisoning seems to Russia’s signature style.

putin-boy-kissAlexander Litvinenko, a former Russian secret service operative who became a outspoken Putin, was famously poisoned in 2006 with radioactive Polonium 210, shortly after he had publicly accused Putin of being a pedophile shortly before his death.

Litvinenko’s interest was piqued by a photo of Putin kissing a boy’s stomach and a long-rumored videotape of Putin himself in a sexual tryst, Myers notes. (Litvinenko wrote that the tape showed Putin having sex with young boys.) If Putin didn’t order the murder of Litvinenko and many others, he, at the very least, “created a climate that made political murder grimly ordinary,” Myers writes.

Putin formally broke with the United States in 2007 in a speech at the Conference on Security Policy in Munich, Germany. He said the world was being plunged into “an abyss of permanent conflicts” because of one nation’s  “almost uncontained hyper use of force — military force.” And in case anybody didn’t get the message, Putin went on to call out the United States by name:

“We are seeing a greater and greater disdain for the basic principles of international law. And independent legal norms are, as a matter of fact, coming increasingly closer to one state’s legal system. One state and, of course, first and foremost the United States, has overstepped its national borders in every way. This is visible in the economic, political, cultural and educational policies it imposes on other nations. Well, who likes this? Who is happy about this?

Putin gave up the presidency in 2008 to his long-time factotum Dmitry Medvedev, and took the post of prime minister. It was during the Medvedev era that the United States attempted to “reset” relations with Russia. The United States saw in Medvedev, a liberal reformer, an opportunity to build bridges.

At his Feb. 16 press conference, Trump brushed off this effort as a jokereset. “Hillary Clinton did a reset, remember? With the stupid plastic button that made us all look like a bunch of jerks. Here, take a look. He looked at her like, what the hell is she doing with that cheap plastic button?” Trump said.

But it wasn’t a joke. There was progress. Russia allowed U.S. forces to pass through Russian airspace on their way to Afghanistan and President Obama dropped plans to build a missile shield over Eastern Europe. In March 2010, the United States and Russia agreed to reduce their nuclear arsenals, which President Trump reportedly denounced as a bad deal during his phone conversation with Putin on January 28.

In 2011, the United States began pushing for a military intervention in Libya. Medvedev, at Secretary Clinton’s urging, agreed not to use Russia’s veto on the U.N. Security Council to thwart an intervention. Putin was furious. “The resolution is defective and flawed. It allows everything,” he said. “It resembles medieval calls for crusades.”

It was in 2012, when Putin returned to the presidency, that things really went downhill for the United States and Russia. He and Medvedev switched jobs in what became known as the rokirovka, the Russian word for castling in chess, where the castle and king exchange places to protect the king.  

Mikhail Khodorkovsy, the former head of the Yukos oil company who had been thrown in jail and watched his company seized by the government, wrote in an open letter that Putin was dragging Russia down with him.

“[Putin] is incapable of tearing himself away from the already unliftable ‘oar’ of the monstrous ‘galley’ he himself has built. A galley that apathetically sails right over people’s destinies. A galley over which, more and more, the citizens of Russia seem to see a black pirate flag flying.”

Many Russians were furious over the rokirovka, which they saw as a cynical political manipulation. Thousands took the streets, chanting “Putin is a thief.” That the protests were peaceful made them even more terrifying to the Kremlin, Myers writes. Putin refused to see that protesters wanted a Russia without Putin; instead he blamed Secretary Clinton in language lifted out of the Cold War. “She set the tone for some actors in our country and gave them a signal,” Mr. Putin continued. “They heard the signal and with the support of the U.S. State Department began active work.” Putin cracked down hard on the opposition, and ramped up anti-American voices on state media. Any critic of Putin now risked being tarred as a US agent.

Things went from bad to worse later  that year, when President Obama signed into law the Magnitsky Act, named for an auditor who was beaten to death in a Russian prison after investigating Russian tax officials. The law was intended to punish those responsible for Magnitsky’s death. The Russian Duma responded by, among other things, banning the adoption of Russian children by Americans, essentially punishing their own children out of spite.

Many in the US intelligence community saw it as no coincidence that Edward Snowden, the National Security Agency whistleblower, found refuge in Russia. Many in US intelligence are convinced that Snowden all along was a Russian spy. Putin called his arrival in the summer of 2013 a “Christmas present,” and he uses Snowden to mock and belittle the CIA.

In 2014, right after the Winter Olympics in Sochi, Russian forces invaded Ukraine and swiftly annexed Crimea. As Myers observes, the man who had once decried the United States’ “uncontained hyper use of force” now seemed to be saying, “Well, if you can do it, why can’t we?”  The United States and the European Union responded by imposing ruinous economic sanctions on Russia. In response, Snowden was quickly granted him asylum, yet another act of Russian nose-thumbing.

And so, today, US-Russia relations have returned to their familiar Cold War roots, just as they were in Putin’s days as a young man in the KGB. Putin sees the influence of the United States everywhere — in Ukraine, in Georgia, in the Arab Spring, to name a few — and Russia sees NATO as an existential threat, just as it did in Soviet days. It’s siege mentality: enemies are closing in; we must fight back. And Russia has chosen to fight back, not with the awesome strength of the nuclear arsenal it possess, but in the more covert “active measures” it employed in Soviet days. Russia has cleverly exploited modern technology to use what are really old tricks of propaganda, subterfuge and funding of foreign pressure groups.

Domestically, Russia is a mess. The ruble has crashed. The price of oil, which accounts for nearly 70 percent of Russia’s exports, has fallen, which Putin blames on a conspiracy between Saudi Arabia and the United States. Russia plunged into an economic crisis. Despite all this, Putin remains enormously popular. His dark, paranoid vision of the world, thanks to his effective control of Russia media, has become his country’s vision of the outside world.

“When a Russian feels any foreign pressure, he will never give up his leader,” said Russia’s first deputy prime minister Igor Shuvalov. “Never. We will survive any hardship in the country — eat less food, use less electricity.”

Wrapping themselves in the flag may not be enough to keep Russians warm during this Cold War, however.

Unless Donald Trump has his way.

Trump Dossier Timeline

screen-shot-2017-01-11-at-102210For sourcing click following link:

Jun 18, 2013: Donald Trump tweets: “Do you think Putin will be going to The Miss Universe Pageant in November in Moscow – if so, will he become my new best friend?”

Nov 9, 2013 Trump visits Moscow for Miss Universe pageant.

Nov. 9, 2013 Interviewed in Moscow, Trump is asked by MSNBC whether he has a relationship with Vladimir Putin. “I do have a relationship, and I can tell you that he’s very interested in what we’re doing here today.”

Nov. 9, 2013 Trump tells Tass news service that he plans to build a Trump Tower in Moscow and was in negotiations with billionaire Aras Agalarov’s Crocus Group. During his Moscow visit, Trump also meets with Herman Gref, CEO of state-controlled Sberbank PJSC, Russia’s biggest bank, which is under US sanctions. Sberbank and Crocus sponsor the beauty contest.

Nov 12, 2013 Trump tells Real Estate Weekly that the pageant was a good networking opportunity. “The Russian market is attracted to me. I have a great relationship with many Russians, and almost all of the oligarchs were in the room.”

May 27, 2014 At National Press Club lunch, Trump says, “I was in Moscow recently and I spoke, indirectly and directly, with President Putin, who could not have been nicer.”

June 2016: Fusion GPS, a Washington research firm run by former journalists, hires Christopher Steele, a respected former MI6 officer who once served in Moscow, to gather opposition material on Donald Trump’s ties to Russia. Steele reportedly paid 200,000 pounds for his work.

June 20, 2016: Steele reports that Russian intelligence has videotapes of “perverted conduct” of Trump and prostitutes recorded in a Moscow hotel suite in 2013 during Miss Universe pageant. Trump’s behavior in Russia has “compromised him sufficiently to blackmail him.” Steele reports that Russian authorities have been “cultivating, supporting and assisting” Trump for years and he has accepted a regular flow of intelligence on his Democratic rivals.

Early July 2016: Steele, the former MI6 officer, acting on his own initiative, sends material he has gathered on Trump to the FBI.

July 7, 2016: Trump campaign adviser Carter Page travels to Moscow to give speech critical of U.S. policy. According to Reuters, Page declines to say whether he was planning to meet anyone from the Kremlin, the Russian government or Foreign Ministry during his visit.

July 19, 2016: Steele reports that Carter Page had held a secret meeting with Igor Sechin, head of the Rosneft state-owned oil company who is considered Vladimir Putin’s “defacto deputy.” Sechin and Page discuss lifting US sanctions against Russia. Sechin offered Page the “brokerage” on a 19 percent stake in Rosneft if sanctions lifted. According to Steele, Page also met Igor Divyekin, an internal affairs official with a background in intelligence, who warns Page that Moscow had kompromat on Trump

August, 2016: FBI asks Christopher Steele, the former MI6 officer, for all information in his possession and asked him to explain how the material had been gathered and to identify his sources.

August, 2016: A retired spy tells the BBC’s Paul Wood that he had been informed of videotapes of compromising material on Trump by the head of an East European intelligence agency.

Aug. 5, 2016: Steele’s memo identifies Dmitry Peskov, Kremlin spokesman, as the “chief protagonist” in Russia’s campaign to aid Trump and harm Clinton. Chief of staff Sergei Ivanov, longtime friend and top Putin lieutenant, said to be angry that Peskov’s team had gone too far.

Sept. 25, 2016: Carter Page sends letter to FBI Director James Comey saying that he is subject of a “witch hunt” and has not met with any “sanctioned official” in Russia in the past year.

Oct. 30, 2016 Sen. Harry Reid reveals in public letter that FBI Director James Comey possesses “explosive information of close ties and coordination between Donald Trump, his top advisors and the Russian government” and urges him to share it with the American people.

Oct. 31, 2016: Mother Jones interviews Christopher Steele, and publishes article, without naming him, that reveals existence of Steele’s memos, reporting in vague terms that Russian intelligence had “compromised” Trump during his visits to Moscow and could “blackmail him.”

Nov. 4, 2016: Newsweek reports that the Kremlin has both video and audio recordings of Trump in a kompromat file.

Nov. 8, 2016: Donald Trump elected president

Nov. 18, 2016: Sir Andrew Wood, a British ambassador to Russia, speaks with Sen. John McCain at a conference in Halifax, Canada. Wood tells McCain “how Mr Trump may find himself in a position where there could be an attempt to blackmail him with Kompromat and claims that there were audio and video tapes in existence.”

Dec. 7, 2016: Rosneft sells 19.5 percent ($11B) stake to Glencore Plc and Singapore’s sovereign wealth fund

Dec. 8, 2016: Carter Page revisits Moscow

Dec. 9, 2016: Sen. John McCain, who had also acquired Steele’s memos, turns them over to FBI Director James Comey.

Dec. 26, 2016: Oleg Erovinkin, a former general in the KGB and its successor the FSB, described as a key aide to Igor Sechin, found dead in the back of his car in Moscow.
2017

Jan. 6, 2017: Heads of US intelligence agencies brief PEOTUS and POTUS and leaders of House and Senate intelligence committees on Steele’s kompromat material on Trump. Kompromat material not included in public portion of report.

Jan. 10, 2017: CNN reveals that PEOTUS and POTUS were briefed on kompromat material and were given a two-page summary of allegations.

Jan. 10, 2017: Buzzfeed.com publishes 35 pages of Steele’s dossier. Included are allegations that Trump had a golden shower party with prostitutes in the Ritz Carlton hotel in 2013. Steele’s sources also say that Russia has an alliance with Trump that goes back several years.

Jan. 10, 2017: Donald Trump derides kompromat dossier as “FAKE NEWS!”

Jan. 11, 2017: DNI James Clapper says the U.S. Intelligence Community “has not made any judgement that the information in the document is reliable, and we did not rely on it in any way for our conclusions. However, part of our obligation is to ensure that policymakers are provided with the fullest possible picture of any matters that might affect national security.”

Jan. 11, 2017: Trump tweets, “Intelligence agencies should never have allowed this fake news to ‘leak’ into the public. One last shot at me. Are we living in Nazi Germany?”

Jan. 11, 2017: Former MI6 agent Christopher Steele, author of the Trump kompromat memos, goes into hiding.

Jan. 12, 2017: Yedioth Ahranoth reports that at post-election meeting US intelligence officials warned Israeli counterparts that Russia had “levers of pressure” on Donald Trump and that information passed to the White House could be relayed to Russia and Iran.

Jan. 15, 2017: The Guardian reports that UK intelligence officials have sought assurances from the CIA that the identity of British agents in Russia will be protected because of the Trump team’s closeness to Russia.

Jan. 17, 2017: At news conference, Vladimir Putin says kompromat file was a fake used to smear Trump. “Why would he run to a hotel to meet up with our girls of limited social responsibility? Although they are, of course, the best in the world. But I doubt that Trump fell for it.”

Jan. 20, 2017: Trump inaugurated as 45th US president

Jan. 23, 2017: Steve Hall, retired CIA chief of Russia operations, tells NPR that there is a “live question” now at the CIA about what to do if President Trump asks for the source of information on something that puts Vladimir Putin in a bad light.

Jan. 24, 2017: The Wall Street Journal identifies Sergei Millian, a Trump associate and supporter, as an indirect source for Christopher Steele’s dossier, including existence of compromising videotapes

Feb. 10, 2017: CNN reports that, for the first time, US investigators say they have corroborated some of the communications detailed in Steele’s kompromat dossier. Confirmations were made with SIGINT (foreign intercepts) and relate to conversations with foreign nationals, not the the salacious “golden showers” allegations in the dossier. Confirmations give intelligence officials “greater confidence” in Steele dossier.

Report: FSB Helped CIA Pinpoint Election Hacks

Two Russian FSB officers recently arrested on treason charges helped US intelligence agents pinpoint Russian hacking during the presidential election and spied for the CIA for seven years, according to a story on the Russian Rosbalt news agency.

Sergei Mikhailov, deputy director FSB’s Centre for Information Security (see my previous post), and Dmitri Dokuchayev, said to be an ex-hacker named “Forb” who joined the FSB under threat of prosecution, were paid to pass secret data, Rosbalt reported.

Ruslan Stoyanov (via Securelist.com)

Ruslan Stoyanov (via Securelist.com)

The FSB officers relayed their secrets to Ruslan Stoyanov, a manager from the cybersecurity and anti-virus company Kaspersky Lab and an unnamed representative of another cybersecurity company. The information was then transferred to “acquaintances abroad who worked closely with foreign special service.”

“This is not a one-off story, this activity was carried out for a minimum of seven years and caused substantial harm to the interests of the Russian Federation,” the source told Rosbalt.

Rosbalt reportedly has good connections to Russian intelligence. Its editor in chief,  Natalia Cherkesova, is the wife of Viktor Cherkesov, a former KGB operative who served under Vladimir Putin in the FSB. Sunday’s report in Rosbalt was picked up today by the reputable Times of London.

Stoyanov, Mikhailov, and Dokuchayev all face 20 year prison terms for treason.

The question of how this allegedly long-running spy operation was exposed remains unclear, and the timing of the arrests raises troubling questions given the Trump administration’s ties to Russia.

As noted in an earlier post, the U.S. Director of National Intelligence reported Jan. 6 that “further information has come to light since Election Day” that helped increase the U.S. intelligence community’s assessments of Russia’s motivations and goals in the election hacking.

One month later, Mikhailov was led out of an FSB with a bag over his head.  Again we ask: Is there a mole in the White House?

Rosbalt also reported that in an unrelated case, Mikhailov also gave a representative of the foreign intelligence services “counterintelligence materials.”

 

Today in Trump-Russia

Sanctions

  • The Treasury Department made some limited exceptions to sanctions imposed against Russia’s Federal Security Service (FSB) that affected the sale of cell phones and other electronics that use encryption.
  • House Minority Leader Nancy Pelosi issued a statement calling the easing of sanctions a “thank you” from President Trump for Russia’s meddling in the 2016 election. “I have been asking the same question for a while:  what do the Russians have on President Trump?” Pelosi stated.
  • Russia’s state news agency TASS celebrated the easing of sanctions as a thaw in relations. Nikolai Kovalyov, a member of the Duma and a former director of the FSB, said the move paves the way for an anti-terrorism coalition.
  • At the United Nations, US Representative Nikki Haley said sanctions will remain in place until Russia returns control over the Crimean Peninsula to Ukraine. Haley also condemned Russia for an upsurge of violence in Eastern Ukraine.

A New Investigation

  • The US Senate Judiciary Subcommitee on Crime and Terrorism announced investigation of Russian efforts to influence democratic elections, both in the US and abroad. “Our efforts will be guided by the belief that we have an obligation to follow the facts wherever they may lead,” subcommittee chairman Lindsey Graham wrote in a statement. This is the third Congressional investigation into Russia’s election meddling.

War in the Ukraine

  • During a press conference with the Hungarian prime minister, Vladimir Putin falsely accused the Ukrainian government of stoking violence the country’s east in a bid to win support from Donald Trump

“Certain oligarchs, certainly with the approval of the political leadership, funded this candidate, or female candidate, to be more precise. Now they need to improve relations with the current administration, and using a conflict to do so is always a better, easier way to draw the incumbent administration into addressing Ukrainian problems and thus establish a dialogue.”

A Mole in the White House?

We now have a confirmation of sorts that the Russian FSB agents arrested last month were working for the CIA.

Today’s news, via the private Russian news agency, Interfax, concerns the arrest of Sergei Mikhailov and others on charges of treason. Mikhailov was serving as deputy director FSB’s Centre for Information Security (see my earlier post for background on this agency).

He reportedly was arrested in December during an FSB meeting and led out with a bag over his head.

Also arrested was Dmitry Dokuchayev, a former hacker going by the pseudonym Forb who agreed to work for the FSB, and Ruslan Stoyanov, a senior researcher at a prominent Russian computer security company, Kaspersky Lab.

Interfax reports that a fourth suspect has also been arrested, and the spy ring involves a total of eight people a total of eight people are under suspicion.

Based on a reading of the scant information in the public record, some inferences can be drawn that raise troubling questions about the speed of these arrests.

In its Jan. 6 report, the U.S. Intelligence Community was able to state with “high confidence” that Russian President Vladimir Putin had ordered a campaign to influence the 2016 U.S. election, including the hacking of Democratic party computer networks and email accounts. Russia’s goal was to undermine confidence in American democracy and help Donald Trump get elected.

Until then, the U.S. Intelligence Community had only expressed  its “confidence” that Russia had hacked the election. In an Oct. 7 statement, the U.S. Director of National Intelligence stated that the releases of hacked Democratic Party documents and emails were “consistent with the methods and motivations of Russian-directed efforts.” The IC was silent about the goal of helping Trump.

There’s an important distinction between “high confidence” and just plain “confidence” that reflects the quality of the intelligence underlying the analysis. These are not academic distinctions. The United States can and does go to war over intelligence, as in Iraq in 2003. In fact, the failure to find weapons of mass destruction in Iraq led to the use of these levels of analytic confidence.

What changed? What gave the DNI “high confidence” in its conclusions that Russia hacked the election?

This sentence from the Jan. 7 DNI report is telling:

Further information has come to light since Election Day that, when combined with Russian behavior since early November 2016, increases our confidence in our assessments of Russian motivations and goals. (emphasis added)

The report did not spell out this new source of information in any detail. However, a few days later, The New York Times, filled in some of the blanks. This further source of information was human intelligence or HUMINT.

But one current and one former United States official, speaking about the classified recruitments on condition of anonymity, confirmed that human sources in Russia did play a crucial role in proving who was responsible for the hacking.

Let’s connect these dots:

  1. By its own admission the U.S. Intelligence Community gained valuable information after Trump’s election on Nov. 8.
  2. If — and this is a huge if — that information came from Mikhailov, the treasonous FSB officer, then he and his co-conspirators were exposed in little more than a month.

A month. Exposing a spy ring in a month is pretty darn fast. The FBI spent years investigating the network of Russian “illegals” — deep cover secret agents — before arresting them in 2010.

The question Langley must be asking itself is: How was Mikhailov exposed?  And even more troubling: Is there a mole in the White House?

This is not (complete) lunacy. Steve Hall, former CIA chief of Russia operations, told NPR that there is a “live question” now at the CIA about what to do if President Trump asks for the source of information on something that puts Vladimir Putin in a bad light. Can the CIA tell him they don’t trust him?

Rumors are swirling around the world’s intelligence communities that Russia holds a thick folder of kompromat, or blackmail on President Trump. There are reports of multiple videotapes of Trump’s dalliances with Russia prostitutes who, as Putin himself boasted, are “the best in the world.” Trump’s own strange relationship with the Russian president (see Trump-Putin Timeline) take some of the starch out of his denials that this is all, as he put it, “fake news.”

Then, there are reports that American spies have reached out to their Israeli colleagues and told them to be careful what information they share with the Trump administration because there was a back channel to Moscow. Her Majesty’s Secret Service is said to be nervous as well.

Before we go too deep down this rabbit hole, let’s consider that it’s quite possible that Mikhailov and company were not working for the CIA, and the whole story is Russian disinformation meant to further weaken our increasingly fragile democracy by continuing to focus interest on this story. This is not only possible, but highly plausible.

Another possibility: Assuming Russia did hack the U.S. election to elect Trump, is it possible that Trump’s denials that he has nothing to do with Russia are true?  Maybe there is another Aldrich Ames running around the CIA feeding secrets back to Moscow?

Question is: Who?

What Is Russia’s Centre for Information Security?

The New York Times reports on a series of arrests involving Russia’s FSB, the successor agency to the KGB that may be connected to the hacking of the 2016 U.S. Election.

According to the Times, one of those arrested, Sergei Mikhailov, was serving as deputy director FSB’s Centre for Information Security. He was arrested on a charge of treason. Earlier in the month, the head of the Centre, Andrei Gerasimov, was dismissed.

What is the FSB’s Centre for Information Security?

Some answers come from Jeffrey Carr, a security consultant out of Seattle who runs the consulting firm TAIA Global and published Inside Cyber Warfare. Carr describes the FSB’s Centre for Information Security (also known as Military Unit 64829) as the organization in charge of protecting Russia’s Internet.

“In sum, any Internet operation originating in Russia are almost certainly monitored and probably overseen by the FSB ISC,” Carr wrote in this analysis. “Current Russian press covers Russian intentions to implement further restrictions on RuNet to counter foreign attempts to wage “information warfare” against Russian and ideologically subvert the Russian population. Whatever final form the new restrictions take, the FSB ISC will be heavily involved.”

In his book, Inside Cyber War, Carr goes a bit further.  The Centre not only defends the Russian Internet (RuNet) it can also attack.
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Also arrested was Dmitry Dokuchayev, a former hacker going by the pseudonym Forb who agreed to work for the FSB in exchange for dropping charges of credit card fraud. In an interview with a Russian newspaper, (or here in the original Russian) Dokuchayev/Forb said he had carried out a successful cyberattack on the US government.
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I would be wary of any reports that claim the Centre hacked the U.S. election. Cyberwarfare like conventional warfare is a confusing picture, with many different groups carrying out different but overlapping missions.

Different FSB components are responsible for attacks outside Russia. One is the FSB’s 16th Center, also known by the Orwellian name of the FSB Center for Electronic Surveillance of Communications, according to TAIA Global Another is the FSB’s 18th Center. Another is the FSB’s Fifth Directorate. All three were blamed for cyberattacks and propaganda during the Russian invasion of the Crimean Peninsula.

And President Obama’s executive order imposing sanctions in response to the hacking of the 2016 U.S. Election names both the FSB and the GRU, the main intelligence directorate. It’s believed that the GRU hacks were passed along to Wikileaks and other media outlets during the election.

There’s no evidence yet that the Centre for Information Security had a hand in the 2016 U.S. election hacking, but with their complete command of the Russian Internet they almost certainly would have known about it.