By Askold Krushelnycky
The following commentary originally appeared in the online news publication Reaction on March 10.
Several weeks ago I reported here that
at the core of US President Donald Trump’s perplexing defense of Russian
dictator Vladimir Putin might be that most banal of motives – greed and the
desire to turn a quick buck; Perhaps hundreds of millions of them.
As Trump’s Russian morass deepens recurring elements in allegations involving
the US president, some of the colorful characters connected to him, and to
Russia are bound up with large sums of money and property deals.
Many dubbed “oligarchs” from Russia and other parts of the former Soviet empire
have sought to transform vast piles of dirty dollars, sometimes amassed through
crime and corruption, into legitimate property assets in Western countries.
Many Russian oligarchs, despite professing undying love for it, don’t want to
live in their largely impoverished, primitive, oft-brutish, country where they
might lose their wealth at the whim of a kleptocratic, repressive regime. They
– and these include many Putin cronies – want luxury homes in the West, their
children educated in the US or UK, and their wives and mistresses to be able to
shop in New York, London and Paris, not Moscow, Minsk or Ashgabat.
The tried and tested way to exfiltrate their money is to buy property abroad –
the more outrageously expensive, the better.
And it’s not important to turn a profit on that asset. Say you have paid
$200 million stolen from your country for a collection of overpriced Manhattan
or London flats and can sell it for only $150 million. It doesn’t matter
because for a commission of $50 million, that wasn’t yours anyway, you now have
a freshly-laundered $150 million embedded in the pukka western fiscal system.
US intelligence agencies are already investigating Kremlin computer hacking
intended to influence last November’s presidential election in favor of Trump
and looking at allegations – some in a report by a former British MI6 agent –
that Moscow holds compromising material exposing Trump to blackmail.
Intriguing financial information and connections, some of which were known
before Trump ran for president and others now coming to light, will need to
come within the ambit of any investigations if Trump hopes to be cleared of the
Russia- related allegations swirling around him.
Democrat Congressional members don’t trust the committees of inquiry currently
being mooted as their composition will reflect the Republican majority in the
Senate and House of Representatives. Democrats are skeptical Republicans will
pursue rigorously enough a president from their own party and fear some
damaging evidence may remain secret.
That fear mirrors concerns in the former administration of President Barrack
Obama that information relating to Russian electoral interference and ties to
Trump might be buried by the incoming administration. For that reason, Obama’s
administration in its last weeks, it has emerged, distributed, declassified and
leaked information so that it would become public. Similarly the Democrats are
pressing for a high-powered, politically independent inquiry that will make its
findings public.
Trump has repeatedly tried to make it appear there are no financial connections
between him and Russia. He chooses his words very carefully saying he has no
investments or properties in Russia or loans from there. But his statements
don’t exclude Russian investments into Trump businesses. And they certainly
don’t exclude past business dealings with Russia.
Indeed, Trump and family members have made many trips to Russia seeking
investors there. And they have met with success, as the president’s son, Donald
Jr, boasted in 2008 when he said: “Russians make up a pretty disproportionate
cross-section of a lot of our assets…. We see a lot of money pouring in from
Russia.”
Helping to enable Russian oligarchs to clean their money by providing
opportunities to buy very expensive properties and not asking awkward questions
about the source of the money may not be in the same territory as being a
money-launderer. Many western countries and financial institutions, including
Europe’s largest financial center, the City of London, have been accused of
profiting from and being tainted by billions of dollars in corruptly-generated
Russian funds.
But the sparse undergrowth on the no-man’s land between the two territories may
not provide sufficient cover for an American president seeking to preserve an
unimpeachable reputation.
If there is an independent inquiry it might strip Trump of the camouflage about
his business dealings provided by his refusal – unprecedented in modern times
for presidential candidates – to open up his tax returns for perusal.
More information about his Russian dealings may figure in those tax records.
Many are already known about. One or two such transactions might be explained
away. But add to that the fact that so many others linked to Trump have Russian
financial connections and a disturbing pattern emerges revolving around Russian
money, with much of that, in turn, linked to Putin and his cronies.
Some examples:
One of Trump’s business partners was chairman of a company called Bayrock: a
Kazakh emigre called Tevfik Arif. Kazakhstan, nominally independent after the
1991 disintegration of the Soviet Union, is still largely controlled by Moscow
and Arif was closely tied to its oppressive elite of corrupt politicians and
businessmen looking for safe havens to invest in.
Another former senior Bayrock member is Russian born, now US citizen, Felix
Sater, who was a middleman for investments into Trump’s property business and
says he guided Donald Trump Jr on visits to Moscow and made a large money
donation to Trump’s presidential campaign.
Sater was convicted of assault in 1991 and in 1998 he pled guilty to stock
racketeering in a Russian gangster-connected fraud. Around 2000 Sater was
indicted on a $40 million stock fraud. He struck a deal where he provided the
CIA and FBI with information about national security in return for not having
to serve jail time.
There were allegations, denied, that Bayrock was involved in a large fraud with
an Icelandic-based investment fund. More than a decade ago US intelligence
uncovered links of huge amounts of Russian money, including large sums of
Putin’s personal loot, in companies with opaque ownership structures in Iceland
– a country previously not known as a haven for dodgy money.
In 2008 Trump purchased for $40 million a luxury property in Florida. Two years
later a Russian oligarch, Dmitry Rybolovlev, with extremely close ties to
Putin, bought it for $100 million.
Rybolovlev partly owned the Bank of Cyprus, one of the largest conduits for
Russian oligarch money. Wilbur Ross, Trump’s Commerce Secretary, invested $400
million in the bank in 2014 – an 18 percent holding. He also appointed a former
Deutsche Bank chief executive Josef Ackermann, to be BoC chairman.
After Trump suffered financial problems, including bankruptcies, and few
serious western financial institutions would lend to him, Deutsche Bank loaned
hundreds of millions of dollars. For a long time DB was dogged by allegations
that it had helped Russian clients launder money. Earlier this year the US and
UK fined DB $630 million for Russian money-laundering.
One of Trump’s chief campaign advisers was professional political operative
Paul Manafort who had to leave the Trump campaign last summer after allegations
he had received undeclared millions from Ukraine’s former pro-Putin President,
Viktor Yanukovych. Manafort had worked for years grooming the corrupt and
repressive Yanukovych. Yanukovych was driven out in a 2014 revolution after his
security forces shot dead 100 unarmed protesters. Manafort continued to advise
the pro-Russian remnants of Yanukovych’s party.
Manafort has worked for quite a few unsavory characters. Those include
Ukrainian oligarch Dmitry Firtash, who was the key figure in a scheme
laundering billions of dollars siphoned off by Putin and his coterie from the
country’s main revenue source, gas. Firtash is now awaiting extradition to the
US on financial bribery charges.
Ukraine’s pro-western former Prime Minister, Yulia Tymoshenko, who was jailed
by Yanukovych, began court proceedings in the US in 2011, which included
allegations Manafort helped Firtash launder large sums of money by sham
investments in New York property. That case was dismissed in 2014. But it is
likely Tymoshenko will be asked by US authorities to support the prosecution against
Firtash.
Manafort claims he did not work for Moscow but his close assistant in Ukraine
was Konstantin Kilimnik, a former member of Soviet military intelligence, GRU,
who some suspect never completely severed his ties with Russian intelligence.
Manafort’s efforts helped keep Yanukovych, Putin’s puppet, in power and thus
helped to stifle democracy and moves to integrate with the West.
And so the list goes on.
The Trump camp has already suffered casualties because of Russian connections.
The most important so far has been Trump’s National Security adviser, General
Michael Flynn, in February. He was forced to resign for lying about talks with
the Russian ambassador in Washington, Sergey Kislyak. It was illegal for him to
discuss with Kislyak possibly easing US Ukraine-related sanctions against
Russia prior to Trump’s inauguration.
Now Trump’s Attorney General, Jeff Sessions, is facing calls for his
resignation because, in testimony under oath to the Senate, he failed to
mention meetings with Kislyak last year when Sessions was a leading member of
Trump’s campaign team.
Wilbur Ross is now also under pressure. Many honorable people have vouched for
Sessions and Ross. And they may well be wonderful people. But the financial
links are troubling not just because the president and some of his influential
and powerful associates must (unless they haven’t been paying attention to the
news since the fall of the USSR) suspect they are involved with tainted Russian
money, but because Putin might be trading political considerations in return
for allowing access to the Russian oligarchs.
Two of Putin’s priorities are the lifting of US sanctions imposed after
Russia’s 2014 invasion of Ukraine. Flynn was discussing that in his secret
conversations with the Russian ambassador, it is alleged.
Another Putin priority was that the US should not provide lethal weapons to
Ukraine’s military for use against Russian forces. Last year both Republicans
and Democrats in Congress overwhelmingly voted to supply such weapons to Ukraine
and probably would have if another Republican candidate had become president or
even Clinton.
Manafort, during his time as Trump adviser, is credited with watering down the
Republicans’ support for Ukraine and eliminating from party policy the provision
about lethal weapons. All in all? A magnificent triumph for Putin.
Askold
Krushelnycky is a British citizen and freelance
journalist whose parents were refugees from Ukraine. He is the author of “An
Orange Revolution – A Personal Journey Through Ukrainian History”, which was
published in 2006 by Random House/Harvill Secker. He is working on a second
book that will focus on the turbulent events in Ukraine since the fall of 2013,
when mass demonstrations turned into revolution and, ultimately, the present
conflict between Russia and Ukraine.
