Tagged: Paul Manafort
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.
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.
Is Robert Mueller Examining Trump’s Links to Mogilevich?
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:”
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.