Who Is Harry Sargeant III?
As a young journalist, I was taught to write what’s known in the trade as a “nut graf,” a brief summary of what my story was all about.
I regret to inform you that it is beyond my abilities to write a sentence or two that sums up Harry Sargeant III, whose name has surfaced in the congressional impeachment inquiry into Trump and Ukraine.
The best I can do is tell you that it would include the following: Ukraine, President Trump, Rudy Giuliani, CIA, a sex tape, straw donors, prostitutes in a golf cart, “war profiteering,” the CIA, the Jordanian royal family, and overseas bribery allegations.
Sargeant’s name was mentioned several times in the just-released testimony of Fiona Hill, President Trump’s former top advisor on Russia, who says Sargeant was involved in Giuliani’s Ukraine adventures on behalf of President Trump:
Hill goes on to say she learned that Sergeant was “bad news” after speaking with her colleagues in some organization whose name has been redacted, presumably because it’s related to intelligence or national security. And Sargeant had something to do with Hill’s feeling that the current Ukraine mess is her “worst nightmare.”
Q. Dr. Hill, you sajd in the last segment of your testimony that we’re now living your worst nightmare. Can you unpack that a little bit for us? What do you mean by that?
A Well, I was extremely concerned that whatever it was that Mr. Giuliani was doing might not be legal , especially after, you know, people had raised with me these two gentlemen, Parnas and Fruman. And also they’d mentioned this third individual who, I mean, I guess is actually on the list of names that you had because I didn’t recognize all the others of, Harry Sargeant and when I’d spoken to my colleagues who, you know, were based in Florida, including our director for the Western Hemisphere, and he’d mentioned that these people were notorious and that, you know, they’d been involved in all kinds of strange things in Venezuela and, you know, kind of were just well-known for not being aboveboard. And so my early assumption was that it was pushing particular individuals’ business interests.
Sargeant rarely speaks to reporters, but in a press release he put out last month, the former fighter pilot, oil billionaire, and GOP fundraiser, insisted that he “conducts no business of any kind in the Ukraine and has not visited Ukraine, even as a tourist, in well over a decade.”
Regular meetings with President Trump?
Sargeant was responding to was a report by The Associated Press that placed him inside a plot to install new management at the top of Ukraine’s massive state gas company, Naftogaz, and then steer lucrative contracts to companies controlled by Trump allies.
Also involved in the plan were Igor Fruman and Lev Parnas, two of Rudy Giuliani’s clients who were helping him dig up dirt in Ukraine on Joe Biden and his family. Parnas and Fruman were indicted in Manhattan on campaign-finance violations.
“In early March,” the AP wrote, “Fruman, Parnas and Sargeant were touting a plan to replace Naftogaz CEO Andriy Kobolyev with another senior executive at the company, Andrew Favorov, according to two individuals who spoke to the AP as well as a memorandum about the meeting that was later submitted to the U.S. Embassy in Kyiv, formerly known as Kiev.”
“Sargeant told Favorov that he regularly meets with Trump at Mar-a-Lago and that the gas-sales plan had the president’s full support, according to the two people who said Favorov recounted the discussion to them,” the AP wrote.
Sargeant conceded that he did attend a March 2019 dinner with Favorov, Fruman, and Parnas “to offer his views on the global oil and gas industry.” He denies discussing taking part in any venture in Ukraine. “Attending a single, informal dinner in Houston does not place Mr. Sargeant at the center of any Naftogaz or Ukrainian business plan,” Sargeant’s release states.
And what about his regular meetings with Trump at Mar-a-Lago?
Sargeant concludes his statement with a non-denial denial: “Mr. Sargeant is not a member of Mar-a-Lago and has never met there with Donald Trump since Mr. Trump has been President.”
The Sex Tape
But Ukraine is only the beginning of the intrigues that surround Sargeant, whose life is like something ripped from the pages of a spy novel.
Sargeant currently embroiled in a court case in London that involves “video material of a sexual nature” featuring Sargeant and a “successful businesswoman in a heavily regulated industry that is reputation sensitive,” according to court filings obtained by The Financial Times.
Sargeant has sued his brother, Daniel, for unlawfully obtaining sensitive photos and videos that were stored on a corporate server belonging to Sargeant Marine, a large family-owned asphalt company.
The explicit video found its way into the hands of Daniel Hall, who ran a business tracking down assets for wealthy clients. Hall obtained the sex tape as part of an effort to try and force Sargeant to pay a $28.8 million court judgement he owed to one of his former business partners.
Sargeant Marine’s name surfaced in Brazil’s “Car Wash” for allegedly paying bribes to local government officials, but Harry Sargeant says he had nothing to do with that. He was ousted from the business several years earlier amid a vicious dispute that spawned 14 lawsuits around the country He settled the case and walked away in 2015 with $56 million.
Straw Donors and Prostitutes in a Golf Cart
Harry Sargeant is also a major GOP donor and fund-raiser. Or he used to be.
Sargeant, who is close friends with former Florida Gov. Charlie Crist, donated more than $1.5 million for Florida politicians and the state Republican Party, according to campaign finance records. Sargeant raised more than $500,000 for the 2008 Republican presidential campaign of U.S. Sen. John McCain.
After he was elected governor in 2006, Crist asked Sargeant to become finance chair at the Florida Republican Party.
Sargeant resigned from the post in 2009 shortly before one of his employees was indicted for making a $5,000 illegal “straw donation” to Crist and $50,000 in illegal donations to three candidates running for president: McCain, Rudy Giuliani and Hillary Clinton.
The employee, Ala’a al-Ali, a citizen of both Jordan and the Dominican Republic, was a sales coordinator for Sargeant Marine. He remains a fugitive.
Allegations surfaced about a notorious 2009 men-only party in the Bahamas attended by Sargeant and Crist.
One former GOP official who attended the event testified that he saw a golf cart full of women driven by one of Sargeant’s employees at the event.
“I specifically saw a golf cart with young ladies drive by, the extent of why they were there I did not specifically know,” said the official, Delmar Johnson. “But I could presume they were prostitutes.”
The testimony came in the criminal case against former Florida GOP Party Chairman Jim Greer.
The Jordanian Royal Family
So far this story has mentioned Ukraine, Venezuela and Brazil, but there’s another country where Sargeant has major financial interests: Jordan.
Sargeant had deep ties to the Hashemite Kingdom. In 2007, Sargeant introduced his friend, then-Florida Governor Crist, to the King of Jordan.
Jordan was critical to valuable contracts Sargeant was awarded to supply fuel and oil to with the U.S. military. Not long after U.S.-led forces invaded Iraq, Sargeant emerged quickly set up a business and won a lucrative contract to provide oil, and later, jet fuel, to coalition troops in Iraq. Sargeant hired Marty Martin, formerly a senior CIA operative who ran Alec Station, the unit that hunted Osama bin Laden, for his oil business.
In 2008, not long after he introduced Crist to the King of Jordan, Sargeant was sued by Mohammed Al-Saleh, a member of the Jordanian royal family who is yet another of Sargeant’s disgruntled former business partners.
Al-Saleh, the brother-in-law of the King of Jordan, said he made the whole venture possible by arranging for the Jordanian government to issue a letter authorizing the transport of oil across Jordan.
In a complaint filed in Palm Beach Circuit Court, Al-Saleh claimed that Sargeant had “conspired to swindle” him out of one third of the profits from the Iraq jet fuel contracts. Sargeant, who gave Al-Saleh the nickname of “Crazy Mo,” testified that Al-Saleh tried to blackmail him.
A competitor, Supreme Fuels Trading FZE, filed a separate racketeering lawsuit in federal court claiming that the millions of dollars paid to Al-Saleh and other Jordanian officials were “bribes” meant to ensure that Sargeant’s company was the only bidder on the fuel contracts. (Supreme Fuels won a $5 million judgement against Sargeant.)
Sergeant was ordered to pay $28.8 million to Al-Saleh after a nearly three-week trial in 2011 that was “watched by note-taking men who said they worked for the federal government, included allegations of bribery of top Jordanian officials, shadowy work by a former CIA agent and Congressional claims of war-profiteering,” the Palm Beach Post reported.
By 2008, as the U.S. occupation of Iraq wore on, Sargeant’s Florida company, International Oil Trading Co., had earned profits of $210 million off military fuel deliveries in Iraq.
That eye-popping figure and Sargeant’s connection to GOP straw donors attracted the attention of Congressman Henry Waxman, chairman of the House Committee on Oversight and Government Reform.
In 2008, Congressman Waxman accused Sargeant of overcharging by 36 cents a gallon for jet fuel and engaging in a “reprehensible form of war profiteering.”
Between 2004 and 2010, Sargeant’s company won four contracts for the supply of fuel to U.S. troops in Iraq through Jordan valued at $3.1 billion.
An audit by the Defense Department’s Inspector General, initiated at Waxman’s request, found that the Pentagon paid Sargeant’s company “$160 [million] to $204 million (or 6 to 7 percent) more for fuel than could be supported by price or cost analysis.”
That, however, was not the final word. Sargeant sued the Defense Department and emerged with a settlement for $40 million.
Yet another Department of Defense internal investigation concluded “no fraud vulnerabilities were identified” in his company’s contracts to provide jet fuel in Iraq.
One thing is clear from all this: Where Sargeant goes, trouble follows.
Exclusive: Who is Sergey Yatsenko?
Anyone who has followed the story of Trump and Russia knows the name of Carter Page, the bullet-headed Trump campaign advisor who became the subject of a top-secret investigation into whether he was or was not a Russian agent.
Less well-known, in fact hardly known at all, is Page’s 59-year-old business associate, Sergey Yatsenko.
In his testimony before the House intelligence committee, Page described Yatsenko as an “old friend” and “an international advisory board member” of his New York-based firm, Global Energy Capital LLC. The Mueller report describes Yatsenko as a “senior advisor” working with Page on a contingency basis.
An examination of Yatsenko’s background reveals more: a wealthy, well-connected man with a past that suggests — but doesn’t prove — connections in Russian intelligence circles. Page didn’t respond to a message left seeking comment; Yatsenko could not be reached.
Page and Yatsenko met while Page was the deputy branch manager of Merrill Lynch’s office in Moscow from 2004-2007. At the time, Page was working on large deals involving the Russian gas giant, Gazprom, “such as buying of a stake in the Sakhalin oil and gas field in the Sea of Okhotsk,” Bloomberg reported.
(Interestingly, Page’s boss at Merrill’s Moscow office, Allen Vine, left in 2006 to work for Suleiman Kerimov, a Kremlin-connected tycoon and member of the upper house of Russia’s parliament who has been sanctioned by the U.S. Treasury.)
When he met Page, Yatsenko was then Gazprom’s deputy chief financial officer. He worked on large deals involving the takeover of Roman Abramovich’s oil giant Sibneft as well as a $200 million loan from Deutsche Bank.
Most interesting to me was Yatsenko’s position on the board of Gazprombank from 2008-2009. Gazprombank has backed projects by Dmitry Firtash, a Ukrainian billionaire, who was indicted in Chicago for bribery. Prosecutors have called Firtash an “upper echelon” associate of Russian organized crime. (Despite its name, Gazprom only holds a minority stake in Gazprombank.)
After leaving Gazprom in 2010, Yatsenko joined forces with Page and relocated to London. He also acquired a small fortune in European real estate.
A £3 million flat in fashionable Chelsea and a £6.2 million six-bedroom home in Kensington are held in the name of Yatsenko’s wife, a banker based in London who specialized in Russian energy deals.
According to sources, Yatsenko’s wife also holds property in the south of France, via a real estate investment company. The property is worth an estimated 3 million Euros.
Russian corporate records show Yatsenko holds a stake in the Severyanin (Northerner) Homeowners Association 31, a corporate town was built in 2006 for top Gazprom employees. Another co-owner is Mikhail Putin, a second cousin of the president, who had worked in Gazprom’s medical department.
Page, by contrast, is a man of limited resources. The Mueller report notes that he was forced to draw down his life savings to support himself and pursue his business. Page represented himself in his now-dismissed lawsuits against the Democratic National Committee and Yahoo! parent Oath Inc. He told the House intelligence committee that, in 2016-17, he was living off passive investments.
The mystery then is what drew Yatsenko into business with a nobody, a man few in the Russian energy sector had ever heard of before he joined the Trump campaign. “I can poll any number of people involved in energy in Russia about Carter Page and they’ll say, You mean Jimmy Carter?’” one veteran Western investor in Russian energy told Politco’s Julia Ioffe.
Could their relationship have something to do with the fact Page had attracted the attention from Russian spies like Alexander Bulatov in 2008 and Victor Podobnyy in 2013, who called Page an “idiot” who got “hooked on Gazprom“?
These links were part of the reason the FBI sought an October 2016 warrant to surveil Page. That warrant has been heavily criticized because it was also partly based on information provided by the former MI6 agent Christopher Steele, who was hired to gather dirt on the Trump campaign. Much of the warrant remains redacted.
An interesting detail is found buried in a Russian public disclosure filed by Gazprombank: Yatsenko graduated in 1984 from Singapore University with a degree in Chinese language.
To anyone who understands life in the former Soviet Union, Yatstenko’s education in Singapore leaps off the page. Studying abroad didn’t just happen for Soviet citizens the way it does in the West, not without approval from the highest circles of power.
Posing as a student was a cover employed by agents of the KGB. A CIA paper noted: “A substantial number of [KGB] students go for a year or more as exchange students or as trainees with Soviet organizations working abroad.”
The year Yatsenko joined Gazprom — 2002 — was a time when the Russian gas giant was heavily recruiting ex-spies. Even the company’s deputy chief executive, Valery Golubev, was an ex-KGB agent.
When Yatsenko left Gazprom in 2010, a curiously-worded report noted that his departure from the company “is most likely connected with the transfer to another job outside the Gazprom group and is not caused by any conflict.”
Yatsenko certainly maintained his influence after partnering up with Page. In December 2016, Yatsenko arranged meetings for Page and Kazakhstan’s ambassador to the United Kingdom, Page told the House intelligence committee.
Yatsenko told Bloomberg he worked with Page to help a Russian investor explore an oil investment in Iraqi Kurdistan, and advising a Chinese investor looking to buy Russian oil assets in Eastern Siberia. There were discussions about natural-gas-powered vehicles in Russia, possibly in partnership with Gazprom, but sanctions put an end to those talks.
“[Page] understands what’s going on in Russia,” Yatsenko told Bloomberg in 2016. “He doesn’t make strong judgments.”
Bit of Personal News
When I started this blog, I felt like nobody was paying attention to the Trump-Russia story and I felt the need to write something. I didn’t really know whether anybody was paying attention, but apparently people were.
I’ve just finished a history of Trump’s relationship with Russia that will be published later this year by Melville House Books in New York. I’ll have more details soon.
In the meantime, I’ll be back writing on this site, and there may be some other opportunities that open up as well. Thanks to everyone for reading.
Carter Page Mystery Solved?
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:
Anatomy of a Gas Price Spike – Why Are Gas Prices So High in California? Part II
In July 2015, gas prices in LA shot up overnight. Some stations downtown posted prices as high as $4.99 a gallon.
“I’m mad as hell,” one driver fumed to a reporter for the Los Angeles Times as he pumped $4.65 gas into his car. “What can you do? It’s crazy, man. It is crazy.”
They had right to be angry. Gas should have been cheap. Oil prices tumbled 50 percent over the previous 12 months and were down around $50 a barrel.
Nobody really seemed to have a clue what sent Los Angeles gas prices soaring 70 cents over that Fourth of July weekend. That’s just how things go in California, experts said.
The story of what happened in Los Angeles emerged at a hearing this month before the Petroleum Market Advisory Committee, which has been trying for two years to explain the nature of such price spikes.
The LA gas price spike offers a window into the hidden world of gasoline trading in California. The picture that emerges is of a thinly traded gasoline market that is not for the faint of heart. Rumors precede facts and whip up wild price swings that can turn a sure bet into a big money loser in an instant.
The LA gas spike is evidence that California’s gas market “is prime to being manipulated and is being manipulated,” said Bob Van Der Valk, senior editor of Baaken Oil Business Journal, who told the story to the Petroleum Market Advisory Committee.
The West Coast used to be one of the best markets in the world for gasoline importers. It was a huge market. It was the most populous state in the country after all. Almost everyone, especially in Southern California, got around by car.
But over the past 15 years, as California imposed more and more environmental rules, that has changed. Huge trading outfits with deep pockets and resources like Glencore, Vitol and Trafigura have walked away from California, said Dolores Santos, who traded fuel for nearly 40 years in the state before joining the Oil Price Information Service. Today, only a handful of gasoline traders are left.
There is a saying among traders: Buy on the rumors and sell on the facts. And the rumor in July 2015 was that the Exxon Mobil refinery in Torrance, California, just outside LA, was about to come back on line.
The Torrance refinery produces 1.8 billion gallons of gasoline per year, or about 8 percent of the state’s supply. A massive explosion had ripped through the refinery in February, instantly cutting off critical supplies of gasoline. The resulting shortage had sent Southern California prices soaring in successive waves.
To make up for the lost supply, traders had been buying up gas from refineries in Singapore or India, shipping it to California, and selling it on what is known as the “spot” market. A cargo full of gas had been arriving in the Port of Los Angeles every three days on average. That had helped alleviate some of the strain.
But the rumor making its way around California’s small gas trading community was that the big Exxon Mobil refinery would resume operations July 15. That would alleviate the strains in Southern California’s gas market. There would be no need for imports.
Except it wasn’t true. The Exxon Mobil refinery would not resume operations until September.
The rumor carried the day, however, not the facts. It chased away cargoes of gasoline even the spot price at the time was good enough to attract imports.
Supplies were pretty tight in Southern California around the Fourth of July. And that’s when some big gas refiners stepped in to do something that drove prices even higher.
Two big oil companies had gone out and bought every barrel of gasoline available on the spot market, Bob Van der Valk told the Petroleum Market Advisory Committee this month. Van der Valk, who got the story from gas traders he knows from years of covering the energy business, wouldn’t say which companies were responsible.
“The last desperate step for a major is to go out in the spot market,” he said. “They know full well when they do they’ll drive up prices.”
If this is true, then it confirms all the bad things that people say about oil companies. Consumer advocates have long believed believe that the players in the state’s gas market have used “market power” to drive up prices by curtailing supply in times of shortage. That’s exactly what happened in July.
The gas price spike allows refiners to make extraordinary profits but they don’t last long enough to prompt changes in demand. If gas remained at $5 or higher year after year, you would see a rise in the use of public transportation, fewer cars on the road, and higher sales of more efficient vehicles. But gas price spikes don’t last much longer than a few weeks, so all people can do is shake their fists and hand over their wallets.
There are two factors that give refiners enormous leverage in California:
- California’s gas market is isolated from the rest of the country. (See my previous post on Why Gas Prices Are So High in California – Part I)
- Whether you are rich or poor, whether gas is cheap or expensive, people still buy the same amount of gas.
There are nearly 29 million cars in California. Most people have to drive to get where they are going. In economic terms, it’s “inelastic” demand.
California’s gas market is an oligopoly, dominated by a few firms. Two companies produce half the gasoline in the entire state. In San Diego, where I live, Tesoro — through its USA Stations, Arco and some Shell stations — controls 40 percent of the market.
Keith Casey, Tesoro’s executive vice president of operations, told analysts and investors on Dec. 9 that the company had made millions on LA gas price spikes in 2015:
…in 2015 we had very strong product demand in California, and we move about 50,000 barrels a day of intermediates and blendstocks across our system, and through our movements of octane to support that demand in southern California from the rest of our system, we made about $15 million to $20 million being able to supply that and optimizing from the entire system.
Here Tesoro is effectively saying that we able to make $15 to $20 million selling gas quickly in Southern California during times of shortages. And of course the July shortage may have been made worse by the oil companies themselves.
Tesoro has built a business around these price spikes in Southern California. The company can quickly switch between gasoline and diesel production to take advantage of volatility:
And that’s why we believe flexibility and agility are really the key for competitive advantage. Importantly, our swing capability, which we have driven this 10% capability of our production to swing, is incredibly agile. We can often execute that in less than one 12-hour operating shift to meet the market demands.
Since 2010, this volatility has earned Tesoro $8 a barrel on average. During extreme price spikes Tesoro can earn as much as $60 a barrel, according to Casey. Since there are 42 gallons a barrel, this means Tesoro is earning as much as $1.42 per gallon of gasoline sold. That’s huge.
Whether Tesoro is artificially raising prices in California isn’t clear, but the company is certainly rewarded if it does. As Tesoro’s CEO Greg Goff put it, 2015 was “somewhat of an exceptional year, particularly in California.”