Tech investor Masha Drokova took an unusual path to Silicon Valley. First, she was a true believer in Vladimir Putin. Then she went to work for Jeffrey Epstein.
There are numerous Russian women who are making substantial contributions in Silicon Valley. Only one can claim to have kissed Vladimir Putin, as Drokova famously did in 2009, and to have received a medal from Putin himself for “contributions to the fatherland.”
The 31-year-old Drokova has been very open about this and many other aspects of her life with one glaring exception: She will not discuss her work as a PR consultant for convicted sex offender Jeffrey Epstein. (Drokova did not respond to a request for comment for this article.)
Update: After this post was published, Drokova told me she did some PR work for Epstein as a favor but was never paid by him. See note at the end of this story.
But the secret was spilled by Jeffrey Mervis, a writer for Science magazine, who received an email from Drokova in August 2017 asking whether he wanted to interview Epstein, her client. No doubt there are others who received similar pitches who have not been so forthcoming.
It’s this Epstein-Putin connection — and Drokova’s ties to a figure of interest to the Senate’s Russia investigation — that has me wondering whether her life is following the whims of fate or someone’s directions. Because let’s face it, Epstein was an intelligence goldmine. He collected dirt on his rich and powerful friends, who over the years have included Bill Clinton, Donald Trump, Prince Andrew, Bill Gates, and Apollo Global founder Leon Black, who has his own connections to both Trump, Epstein and Russia. He had cameras in his house monitoring private moments. From an intelligence officer’s point of view, Epstein presented endless opportunities for blackmail.
Is Drokova’s life just a series of astonishing coincidences? Or might she be another Maria Butina or Anna Chapman, the sort of Russian woman who uses sex and charm to cozy up to powerful and connected American men in pursuit of information or influence? As I’ve written before, there’s a rich tradition of this Russia, going back to the KGB’s red sparrows.
It’s impossible to say for certain, but what is clear is that Drokova has a knack for showing up in places she doesn’t quite belong. First, she was the Putin superfan who befriended Putin’s critics. Then, she stunned many in her home country when she revealed that she is a proud permanent resident of the United States. She did public relations for Jeffrey Epstein and others despite a poor to middling command of English. Now, people entrust her with millions of dollars to invest in Silicon Valley based despite an investing philosophy — and I’m not making this up — that involves love and sex.
Let’s start at the beginning. In 2005, then 16-year-old Drokova joined Nashi, the Kremlin-sponsored youth group and rose to the rank of commissar, or core activist. Her spontaneous decision to plant a kiss on Putin’s cheek caught the eye of Danish filmmaker Lise Pedersen who chronicled Drokova’s time in the organization in the 2012 film, Putin’s Kiss.
Drokova was the softer face of an ugly movement. The writer Peter Pomerantsev described Nashi as “the Russian equivalent of the Hitler Youth, who are trained for street battles with potential pro-democracy supporters and burn books by unpatriotic writers on Red Square.”
Drokova didn’t beat people up but she did call for burning books and organized a campaign to throw shoes at then President Bush. (“A stupid action,” she told the Wall Street Journal years later, and one that led to her leaving the group.)
Her mentors included Vladislav Surkov, Nashi’s creator and the Kremlin’s former top political strategist. Drokova attended a 2009 conference organized by Surkov to work out a strategy for information campaigns on the Internet, Jeffrey Carr writes in Inside Cyber Warfare. In Putin’s Kiss, Drokova quotes Surkov’s famous line: “Putin was sent to Russia by God.”
She also worked closely with Konstantin Rykov, who went on to become the Kremlin’s “chief troll” as well as a figure of interest in the Senate’s investigation of Russian interference in the U.S. election. Drokova became a producer and presenter on Rykov’s Internet channel, Russia.ru. (More on him later)
Drokova’s departure from Nashi in 2010 came after she befriended a group of liberal journalists, the kinds of people Nashi marched through the streets to publicly denounce.
Opposition journalist Oleg Kashin, the film’s narrator, praises her bravery for supporting him in a protest after he is beaten within an inch of his life.
Others in Kashin’s circle, however, remained wary of “the girl with the big breasts [who] was sent to talk to liberals,” as one put it in Putin’s Kiss.
After leaving Nashi, Drokova put her propaganda skills to use in PR. Within a few years, she moved to the United States and began investing in Silicon Valley. It was a path that, as I’ve written, had been trailblazed by Russian oligarch Alisher Usmanov and Yuri Milner.
“Is She A Traitor? Nyet”
In 2017, the new and improved Drokova revealed on Instagram that she was a permanent resident of the United States. The news of Drokova’s U.S. green card caused a sensation in Russia, with many blasting her as a turncoat.
If you look closely at the photo of her visa above, you’ll see Drokova was granted an E16 visa. This is meant for “aliens of extraordinary ability” — aka the “Einstein visa.” (This is the same pathway through which Trump’s wife, Melania, gained U.S. citizenship.) It’s a category that, in theory, is reserved for people who are highly acclaimed in their field; the government cites Pulitzer, Oscar, and Olympic winners as examples.
Tech investor Esther Dyson, who sits on the board of Russian search engine giant Yandex NV, supported her visa application, according to Drokova. (Dyson also has a connection to Epstein. She traveled to Russia in the 1990s with Epstein where they posed for a photo outside the home of Soviet dissident Andrei Sakharov. She also attended the “Billionaire’s Dinners” that Epstein attended and helped pay for. )
While many in Russia mocked and derided Drokova, one notable figure rose to her defense: Konstatin Rykov, her former boss and the Kremlin’s “chief troll.”
One has to wonder whether Rykov was speaking for himself only. In Vol. 5 of its report on Russia, the Senate Intelligence Committee found that “Rykov has played a significant role in the Kremlin’s foreign and domestic influence efforts.” He also has ties to people outside the Kremlin who are associated with Russian intelligence services or pro-Kremlin political parties, the report noted.
Rykov was an early supporter of Trump and featured prominently in a Washington Examiner story headlined: “Putin loves Donald Trump.” (Trump tweeted out a link to this story in 2015, saying “Russia and the world has already started respecting us again!”) After Trump’s surprise victory, Russian elites congratulated Rykov, the Senate’s report notes.
On Election Day, Rykov hosted a party in Moscow that was attended by pro-Kremlin propagandist Maria Katasonova, and Jack Hanick, an American media consultant who is associated with U.S.-sanctioned oligarch Konstantin Malofeev and his pro-Kremlin propaganda media outlet Tsargrad TV.
Included in a list of guests Rykov invited to the election party in Moscow was Masha Drokova. (Drokova’s social media posts suggest she was in California at the time.)
The VC of Love
Next to Drokova’s name on Rykov’s election party guest list was the co-founder of NtechLab, Alexander Kabakov.
NtechLab is the creator of FindFace, which it bills itself as the best facial recognition algorithm in the world. NtechLab recently built a massive surveillance system in Moscow. Russia has also licensed the technology to the United Arab Emirates.
NtechLab was the first in a string of investments that Drokova started making in 2016 in early-stage tech companies. (The size of her investment has never been disclosed.) Another early stage investor in the company was Impulse VC, a firm based in Moscow that was backed by the Russian oligarch Roman Abramovich.
Other Drokova investments included StealthWorker, a service that connects employers with cybersecurity personnel. She invested more than $4 million in artifical intelligence startup DigitalGenius.
It’s yet another mystery how she came to invest millions at the same time she did PR work for Epstein and others. Why would a successful VC investor do PR? Whose money was she investing?
But it was only the start.
In 2017, Drokova started raising money for a Silicon Valley venture capital fund she founded, Day One Ventures. She has raised more than $70 million to date.
SEC filings show that Day One Ventures is backed by a small group of high-net-worth individuals, most likely from Russia.
Drokova had professional and expensive help setting up her fund, such as her New York lawyer from the firm of Willkie Farr. But it all seemed out of step for a carefree, almost childlike woman who said things like “Meditation is my Netflix.”
In 2018, Business Insider ran a remarkable article about Drokova’s VC fund headlined: This 28-year-old Silicon Valley investor builds businesses by helping entrepreneurs fall in love.
“Everyone is more productive when they fall in love,” Drokova explained. Really?
The article noted she sometimes recommends “sexual energy retreats,” or sets founders up on dates.
“It’s not necessarily matchmaking,” Drokova told the reporter, Zoe Bernard. “I just introduce them to my friends.”
Why anyone would entrust large sums of money to a person who says things like this is beyond me, but people have.
Twenty-five people invested more than $19 million in Day One Ventures Fund I. A total of 33 people have invested more than $52 million in her latest fund, Day One Ventures Fund II, according to a November 2020 filing.
One company receiving Day One Ventures money is a legal app called Do Not Pay. Its founder is Joshua Browder, the son of Bill Browder, one of Putin’s fiercest critics.
It’s one of the many absurd coincidences in Drokova’s life that render the word coincidence itself meaningless.
Drokova: “I never worked for Epstein”
Not long after this story ran, I called up Masha Drokova. To my surprise she answered.
Drokova told me she met Epstein once and agreed to do some work for him as a favor, without knowing about his sordid past. “I quickly find out I shouldn’t be connected with this person,” Drokova told me over the phone. “I didn’t do research in the beginning, which I very much regret.”
“I met him and he asked me, ‘I need connections with the media,'” Drokova told me. “I introduced him to some people. I dig deeper. Oh fuck, it’s a very bad story.”
She admitted she did send a pitch to Jeffrey Mervis, the writer for Science magazine. She also sent similar pitches to some of her friends. “Some of my friends told me: Do you know this person?” she said.
But Drokova was insistent that she was never paid by Epstein. There are bank statements that will show this, she told me. She added that she asked about hiring a lawyer to correct the record about the nature of her work for Epstein. She was told it would cost $50,000 and there was no guarantee of success so she gave up.
Drokova got off the phone before I could ask her a report that banking regulators in New York published about Epstein’s relationship with Deutsche Bank.
The report notes that the Deutsche Bank team monitoring Epstein’s accounts received an alert “about payments to a Russian model and Russian publicity agent.” (The bank’s monitoring team ignored the alert after a member of the team stated “[s]ince this type of activity is normal for this client it is not deemed suspicious.”)
If this wasn’t Drokova, then who was it? How many Russian publicity agents were working for Epstein?
Much has been written about how Russia used Facebook to influence U.S. voters in the 2016 election. Few people realize that Facebook was built with the help of Russian money.
Alisher B. Usmanov, an Uzbek-born mining magnate, poured nearly $900 million into Facebook before it went public in 2012. For a time, he was one of the social media giant’s biggest investors.
Usmanov is one of the world’s richest men with a fortune estimated at $18.4 billion. He’s a metals tycoon. He’s also closely connected to the Kremlin. So why did he invest in Facebook?
Henry Foy of The Financial Times put this question to him:
Usmanov is a convivial luncher. But I had been warned that his charm can quickly dissipate and I get a flavour of this when I ask how he shifted from Russian industrial assets into Silicon Valley start-ups. “You are a British journalist, representing a very high-level newspaper,” he snaps. “And you cannot believe that somebody from Tashkent can find these investments? “I knew this company would turn the world on its head,” he says of his early investment in Facebook. He tells me he invested $460m directly into the social media company and another $420m through a fund managed by his partner Yuri Milner, now seen as Russia’s most influential tech investor. At one point Usmanov says he controlled almost 8 per cent of the company’s stock. His return was “more than five-fold,” he says.Henry Foy, “Alisher Usmanov: ‘I was never what you could call an oligarch,'” Financial Times, 4 January 2020.
So, by Usmanov’s own admission, he invested $880 million in Facebook. Put a pin in that for a moment.
CEO Mark Zuckerberg said at the time that Facebook carried out “extensive due diligence” on this investment. That means the company would have had to have known that that its biggest outside investor was a man viewed in business, diplomatic, and intelligence circles as a gangster.
Such information wasn’t hard to come by. In 2007, two years before Usmanov invested in Facebook, Craig Murray, a controversial former UK ambassador to Uzbekistan, denounced the metals tycoon as a “vicious thug, criminal, racketeer, heroin trafficker and accused rapist.” Murray made these charges in a blog post on his website (see copy here), that was subsequently removed under legal threat from the UK firm Schillings. Similar allegations were made a few days later on the floor of the European Parliament.
Facebook’s crack due diligence team clearly didn’t see Usmanov as a risk. But Megafon, a Russian mobile phone company in which Usmanov had invested, did. Take a look at this disclosure in Megafon’s initial public offering in 2012:
Gafur Rakhimov was sanctioned by the U.S. Treasury in 2012. “Rakhimov is one of the leaders of Uzbek organized crime with a specialty in the organized production of drugs in the countries of Central Asia. He has operated major international drug syndicates involving the trafficking of heroin,” the Treasury Department stated.
Rakhimov, a man Usmanov has known for years, is a heroin kingpin. Sorry, an alleged heroin kingpin.
Usmanov’s ties to Rakhimov were no secret. The Observer of London reported in 1998 that Usmanov “admitted that he had known Rakhimov for 20 years, and had met him regularly in Tashkent and London, but denied that they have a business relationship and that Rakhimov was involved in drugs.” In 2007, Usmanov gave The Guardian another explanation of his Rakhimov ties. “I only knew him since he was a neighbor of my parents,” he said.
Alexander Litvinenko, a former Russian spy who defected and was famously poisoned with radioactive polonium, did some digging into Gafur Rakhimov. This is from a file made public during an official UK inquiry into Litvinenko’s death.
Komsomol was a Soviet Communist youth league. (When the Soviet union fell, former Komsomol bosses like Mikhail Khodorkovsky used their connections to acquire ex-Soviet assets.) The Solntsevo gang is Moscow’s most powerful organized crime group. (Usmanov has long denied any ties to organized crime groups.)
Litnvinenko goes on to note that Usmanov has connections with three former KGB officers, one of whom “saved” Usmanov from a “violent confrontation with Chechnian crime bosses.”
Testimony given in a German criminal case in 2007 identified Usmanov as a representative of the Solnestsevo Mafia.
Even so, Usmanov shrewdly assessed that, in the West, even a reputed gangster can buy respectability. “Putin’s Kremlin had accurately calculated that the way to gain acceptance in British society was through the country’s greatest love, its national sport,” Catherine Belton writes in her excellent book, Putin’s People. In 2007, Usmanov did just that by acquiring a large stake in London’s Arsenal football club.
If buying a football club was a ticket into British society, investing in a Silicon Valley unicorn like Facebook may have been a way for Usmanov to gain respectability in the United States.
Usmanov told Forbes that he got a call in 2009 from his associate, Yuri Milner, who asked him whether he had ever heard of Facebook.
“No,” Usmanov replied. “[But] my nephews know it.”
Milner ran Digital Sky Technologies (DST) Global, an investment firm backed with Usmanov’s money.
Born in Moscow, Milner attended the Wharton School of Business in the 1990s. After a stint at the World Bank, he returned to Russia to work at Bank Menatep, which was founded by former Komsomol boss Mikhail Khodorkovsky. Milner ran Menatep’s investment banking division, Alliance-Menatep, and rose to the position of deputy chairman.
Menatep rang alarm bells at the CIA in the 1990s because the bank was said to be “one of the main conduits for the transfer of Communist Party wealth abroad,” Belton wrote in Putin’s People. A leaked CIA report obtained by The Washington Times in 1994 stated that senior Moscow officials believed that Menatep was “controlled by one of the most powerful crime clans in Moscow.”
The bank collapsed in 1998 and Milner began investing in Russian Internet companies. Milner founded Digital Sky Technologies in 2005.
Usmanov acquired a large stake in DST in 2008 and helped finance investments in major Internet companies in Russia, including VKontakte, Russia’s version of Facebook. “Usmanov is interpreted as a person who, on the Kremlin’s instructions, buys up various Russian [Internet] properties,” a Russian executive told The Atlantic’s Julia Ioffe.
In 2008, Milner came calling in Silicon Valley looking for a place to invest Usmanov’s money. Goldman Sachs introduced him to Mark Zuckerberg and a deal was struck.
“We were not asking for board seats and even assigned our voting rights to Mark, which sent a strong message that we are not seeking any influence over Facebook’s operations,” Milner told Forbes. “We started to invest in Facebook in 2009 and continued through 2011.”
It was an offer than would have been hard for Zuckerberg to refuse. Milner’s offer valued Facebook at $10 billion, above what other investors were willing to pay at the time. And Milner demanded little in return, something he has pointed to when reporters started to question Russia’s investment in Facebook. “If this had all been an influence operation,” Milner wrote later, “we would surely have sought some control over the companies.”
Milner sold off all of his firm’s Facebook holdings after the IPO. Usmanov also invested his own money in Facebook, and it remains unclear whether he has completely closed his position. (A 2014 Bloomberg article noted Usmanov made a “gradual reduction” in his Facebook holdings.)
Perhaps Usmanov’s Facebook investment was just a shrewd, well-researched bet. In 2017, however, new information surfaced that suggested there were other factors at play.
The Paradise Papers, a secret trove of documents leaked from an offshore law firm, revealed that Kremlin cash was financing Usmanov’s investments.
The money came from Gazprom Investholding, a subsidiary of the Russian gas giant, Gazprom, which has been sanctioned by the U.S. Treasury Department. Usmanov was CEO of Gazprom Investholding from 2000 until 2014.
In his censored blog post, Craig Murray, the former UK ambassador to Uzbekistan, wrote that Gazprom Investholding was a main conduit to export Russian corruption:
Alisher Usmanov had risen to chair of Gazprom Investholdings because of his close personal friendship with Putin. He had accessed Putin through Putin’s long time secretary and now chef de cabinet, Piotr Jastrzebski. Usmanov and Jastrzebski were roommates at college. Gazprom Investholdings is the group that handles Gazprom’s interests outside Russia. Usmanov’s role is, in effect, to handle Gazprom’s bribery and sleaze on the international arena, and the use of gas supply cuts as a threat to uncooperative satellite states.
Murray claimed in another 2007 blog post that “It was Usmanov who engineered the 2005 diplomatic reversal in which the United States was kicked out of its airbase in Uzbekistan and Gazprom took over the country’s natural gas assets. Usmanov, as chairman of Gazprom Investholdings paid a bribe of $88 million to Gulnara Karimova [the daughter of Uzbekistan’s president] to secure this.”
Russian opposition leader Alexei Navalny also has accused Usmanov of bribing Dmitry Medvedev, a former Russian president and prime minister with an $83 million mansion. (Usmanov succesfully sued Navalny for libel.) Navalny’s representatives recently called for the West to sanction Usmanov.
Remember that $880 million Usmanov said he invested in Facebook?
Well, in 2009, Gazprom Investholdings loaned $920 million to Kanton Services Ltd., Usmanov’s British Virgin Islands-registered firm. A large chunk of that money arrived three months before Facebook announced its deal with Milner. (Usmanov has denied using state funds to invest in Facebook.)
Two years later, Kanton took a majority stake in DST USA II. When Facebook went public in 2012, DST USA II sold 25 million shares of Facebook for more than one billion dollars.
Did Usmanov’s influence over Facebook end there?
We can only hope. But consider what happened to VKontakte, Russia’s version of Facebook. In 2014, Usmanov forced the founder of VKontakte, Pavel Durov, to resign. Durov said he believed he was forced out because he refused to cooperate with the FSB, the successor agency to the KGB. VKontakte is now a tool of Russian government influence operations, according to the Senate Intelligence Committee.
Interestingly, Volume 5 the Senate Intelligence Committee’s report on Russia noted that VKontakte reached out to the Trump campaign in 2016, asking whether Trump wanted to put a campaign page on the site. The ensuing discussion is heavily redacted, although Usmanov’s name lights up a few footnotes.
Facebook is many times more powerful than VKontakte. Alisher Usmanov should never have been allowed anywhere near it.
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.
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 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, “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?
Note: On December 23, 2019, I was notified that a criminal complaint (see English summary here) had been filed against me with the Bulgarian prosecutor general’s office by the subject of this piece, Krassimir Ivandjiiski. I was given a deadline of December 31 to take down this piece. I refuse to do so.
For my lastest story in The New Republic magazine, I tried to figure out where conspiracy theories come from. The answer took me on a strange reporting journey that led to the Smoky Mountains of Tennessee. It’s a long read, but a good one, and you can read it here.
The story mentions Zero Hedge, a popular financial blog. There wasn’t room in the TNR piece to get into it, but Zero Hedge and What Does It Mean have a lot in common. They have both found that Russia and conspiracies are good for business.
Zero Hedge, with its mix of gloom-and-doom financial analysis, current events, conspiracies, and pro-Russia commentary, is one of the most popular sites on the Internet. It ranks in the top 2,000 of all Internet sites worldwide, meaning that it pulls in more than a million views every day.
Zero Hedge says its mission is “to widen the scope of financial, economic and political information available to the professional investing public” and it does that by refusing to follow what it calls the “pro-US script.”
Instead it follows the pro-Russia script.
It runs stories that hew the Kremlin line, such as how the poisoning of a double agent in England was staged by British intelligence operation or how the Steele Dossier was created by Internet trolls. Throw in commentary from a self-described “Kremlin troll” and writings from Russia Insider (which the Trump State Department describes as “an English-language publication linked to pro-[Russian] government oligarchs”) and you see how many think Zero Hedge is some kind of Russian disinformation operation.
Despite its pro-Russia leanings, or perhaps because of them, Zero Hedge a critical part of the right-wing conspiracy ecosystem. This became clear when Facebook temporarily blocked Zero Hedge in March, prompting howls of outrage from people in President Trump’s circle like his son, Don Jr., Nigel Farage, and Katie Hopkins. (The ban was lifted, and Facebook told Breibart that it was the result of a “mistake with our automation to detect spam.”)
A few days later, Australian Internet providers blocked customer access to Zero Hedge after a gunman killed 51 people in a New Zealand mosque.
The Australian ISP ban had less to do with the site and more to do more with the people who read it.
Zero Hedge readers were sharing links to the shooter’s live-streamed video of the massacre, which many of them thought was a hoax.
Yes, these are people who are so narcissistic that they think the mass slaying of 51 unarmed people in a mosque is all about them.
Who is behind Zero Hedge?
All posts on Zero Hedge are written under the pseudonym of Tyler Durden, the character played by Brad Pitt in the film Fight Club. “Anonymity is a shield from the tyranny of the majority,” reads the Zero Hedge “manifesto.”
Of course, anonymity is also a shield for someone who has something to hide.
In a 2016, a former Zero Hedge employee named Colin Lokey, who wrote much of the site’s political content, told Bloomberg that he felt pressure to frame issues on the site in a way that felt disingenuous.
“I tried to inject as much truth as I could into my posts, but there’s no room for it,” Lokey explained. “Russia=good. Obama=idiot. Bashar al-Assad=benevolent leader. John Kerry= dunce. Vladimir Putin=greatest leader in the history of statecraft.”
Lokey identified the other Durdens at Zero Hedge as Dan Ivandjiiski, a Bulgarian-born financial analyst banned from the industry in 2008 for insider trading, and Tim Blackshall, a credit derivatives strategist in San Francisco. In a telephone interview, Ivandjiiski told Bloomberg that he and Blackshall had been “on the payroll.”
Neither Ivandjiiski nor Blackshall own Zero Hedge directly. The site is owned by ABC Media Ltd. In one lawsuit, ABC Media was identified as a Bulgarian company.
Indeed, ABC Media Ltd. is listed on Bulgaria’s corporate registry.
Founded in 2011, ABC Media (АБЦ Медия) is a single member LLC. The sole proprietor is Daniel’s father Krassimir Ivandjiiski (Красимир Иванджийски).
If you can read Bulgarian, here’s the company’s corporate filing.
In addition, Zero Hedge’s domain name is registered under Krassimir’s name at an address in Sofia, Bulgaria.
Who is Krassimir Ivandjiiski?
Krassimir Ivandjiiski has an interesting background.
Born in Bulgaria in 1947, he was educated at the First English Language School in Sofia and the Warsaw School of Economics.
As a young man, Ivandjiiski worked in the Bulgarian the Ministry of Foreign Trade, before leaving to join the military and begin a career as a journalist. He became a “special envoy before 1990 to the most important political and military conflicts.” He spent more than 12 years abroad as a foreign in Prague, Warsaw and Vienna, then in Africa — Harare and Addis Ababa.
That is an intel operative’s CV with probability 1. Probability 1. Every one of those jobs was a classic cover. There is no doubt in my mind whatsoever—none—that Mr. Ivandjiiski senior was a member of the Bulgarian Committee for State Security (Държавна сигурност or DS for short)—the Bulgarian equivalent of the KGB. And remember that Bulgarian DS was the USSR KGB’s most reliable allied service during the Cold War. It carried out wet work in western countries, notably the “umbrella murder” of Georgi Markov in London. It was linked to the plot to assassinate the Pope; although in the topsy-turvy world of intelligence, it is also alleged that the CIA fabricated the case against the DS. Regardless of the truth about the links to the attempt on John Paul II, it was a very, very, very nasty operation. (The African stops in Ivandjiiski’s resume makes it highly likely that his path intersected that of another charmer, Igor Sechin, who was a “translator” in Africa.)
On his website, Krassimir Ivandjiiski assures us that he had nothing to do with the KGB and he will sue anyone who says otherwise. Zero Hedge has attacked Pirrong as “the world’s favorite finance ‘expert’ for Wall Street hire.”
In 1994, after the Soviet Union collapsed, he began publishing a Bulgarian tabloid, Strogo Sekretno (Top Secret), which describes itself as the country’s only independent newspaper. Strogo Sekretno is published by a separate company, Primex-7 Ltd., also owned by Ivandjiiski, senior.
I found out about Strogo Sekretno because it often runs the fake conspiracy stories created by What Does It Mean. Krassimir Ivandjiiski also published Bulgaria Confidential which has run stories that have nothing to do with Bulgaria such as drug trafficking in Montana.
The site is also filled with pro-Putin, anti-Semitic garbage:
- “The US dollar is built on the so-called ‘Jewish Mafia’. This is not some racial prejudice, but a proven truth.” Source
- Millions of people in Russia and around the world were stunned to see Israeli Prime Minister Netanyahu in the Victory Parade in Moscow on 9 May. This hideous spectacle let the genie out of the bottle: “What is it? What’s going on with the Zionist Netanyahu and at whose expense?” Source
- “Chabad is a “racist, criminal Jewish supremacist doomsday cult.” Source
- “It doesn’t take a genius to recognize that Talmudic behavior is the real cause of Anti-Semitism.” Source
Zero Hedge, for the most part, steers clear of such outright anti-Semitism, but is nevertheless very popular with the sort of people who like the hatred Krassimir Ivandjiiski likes to spew.
Just look at the Zero Hedge comments section: a lot of racists and crackpots are reading. Don’t believe me? Do a search for the n-word or “joo” in the Zero Hedge comments section.
What Is This All About?
In a word, money.
“They care what generates page views. Clicks. Money,” Colin Lokey, the former Zero Hedge employee, told Bloomberg.
Zero Hedge says they have nothing to do with the Russian government or any government. “We have also never accepted a dollar of outside funding from either public or private organization – we have prided ourselves in our financial independence because we have been profitable since inception,” the site wrote.
As my story on What Does It Mean shows, this may very well be true. It would be nice if Vladimir Putin were secretly running things, but the sad truth is sites like Zero Hedge don’t need to take marching orders from Russia; they gravitate to it on their own because it keeps the audience happy.
And keeping the audience happy is what really matters. An audience comprised of racists, anti-Semites, extreme right-wingers, and conspiracy wingnuts is a valuable one. They are all credulous fools, and, as all dime-store preachers know, the credulous are easily monetized.
Krassimir Ivandjiiski, who did not respond to emails sent to ABC Media and Strogo Sekretrno, wrote on his site that the only reason his name is connected to Zero Hedge is because “they even did not have $30 for the initial registration.”
That may have been true at one time, but the web domain registration fee is spare change for Zero Hedge today. Dan Ivandjiiksi, who didn’t respond to questions, lives in a multi-million dollar mansion.
It’s possible that Zero Hedge is registered in Bulgaria because it’s somehow connected to a Kremlin disinformation operation. It’s also possible that Zero Hedge is registered in Bulgaria for financial (tax?) reasons.
The bottom here is the bottom line. Conspiracies are big business.
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.”