John Kerry Gave Iran the Pass, is Russia Next?

Seems like any country demonstrating not only bad behavior, but those that are killing regimes are enjoying a new legitimacy by the entire Obama administration and it has Europe in the same camp. Russia is no different from Iran for the most part and yet with 7000 dead in Ukraine and the silent assassinations at the behest of Putin….Russia is getting a pass by the world.

Kerry Says Moves to Lift Russia Sanctions May Begin in `Months’

Bloomberg: The U.S. may be able to consider lifting sanctions it imposed on Russia over its involvement in violence in Ukraine later this year if the Kremlin complies with the Minsk peace deal, U.S. Secretary of State John Kerry said.

“With effort and with bone fide, legitimate intent to solve the problem on both sides, it’s possible in these next months to find those Minsk agreements implemented,” he told an audience in Davos, Switzerland. If this happens, it would “get to the place where sanctions can be appropriately — because of the implementation — be removed,” he said.

Kerry’s comments are all the more optimistic since as recently as last month the U.S. Treasury Department expanded sanctions related to Russia’s role in Ukraine.

Earlier this week, Ukrainian President Petro Poroshenko blamed Russia for delays in implementing the Minsk accord and said sanctions enacted by the U.S. and Europe over the conflict are working. The conflict has killed more than 9,000 people and continues to simmer in the country’s easternmost regions.

While the original peace accord, signed last February in Minsk, was due to be completed by 2015, a new deadline hasn’t been set. Russia blames Ukraine for the delays.

Now enter the matter and history of Russian and Europe

Britain’s KGB Sugar Daddy

Weiss/DailyBeast: To understand Britain’s cowardice in standing up to Vladimir Putin, just follow the money.

On Monday, a freelancer photographer called Steve Back snapped a photograph of a document being carried cavalierly in the open by British officials entering Downing Street. The document was a list of suggested countermoves by Westminster to play against the Kremlin for Russia’s recent invasion of the Ukrainian peninsula of Crimea. Some of the items tracked with what other European and American counterparts were thinking. Let’s not fuel up the NATO jets quite just yet; let’s send a monitoring team from the UN and/or OSCE to Crimea (Robert Serry, a UN envoy was nearly kidnapped earlier this week by armed gunmen in Simferopol); let’s draw up financial and energy contingency plans to help the embryonic new government in Kiev. But one item stuck out above the rest: “Not support, for now, trade sanctions… or close London’s financial centre to Russians.”

Two of Britain’s finer Russia-obsessed journalists, Ben Judah and Oliver Bullough, have dealt admirably with why London has all of a sudden gone wobbly on Putinist aggression in Europe. The flow of Moscow gold to the sceptr’d isle, they argue, has now become so steady, so dependable and so relied-upon that no act of geopolitical thuggery can ever again lead to a Churchillian showdown with the Kremlin.

The Cold War may be over in the Western imagination for a number of reasons, but the triumph of cold hard cash is one of them. Russians have bought nearly five percent of the premium London properties in 2013. They’ve kept the tills full at Harrods during an “austerity” economy. They’ve sent their children to elite boarding schools and Oxbridge colleges, paying full tuition fees. And they’ve shoved their questionably-gotten gains into British tax shelters or financial institutions. In return, the political establishment, be it Labour or Tory, has only asked for more.

Old, numerous and bipartisan are the tales that corroborate this dreary hypothesis. At meetings with his Russian counterpart, David Cameron is said to politely cough about the ongoing carnage in Syria before getting down to the real business of greater Anglo-Russian trade and energy cooperation. And wasn’t Cameron’s Chancellor of the Exchequer, George Osborne, once spotted dining aboard the Corfu-anchored “super-yacht” belonging to Oleg Deripaska, the billionaire Russian aluminum magnate who was allegedly considering ways to donate to the Conservative Party even though donations by foreigners are illegal under British electoral law?  The then-Shadow Chancellor of course denied that any chatter about creative campaign financing ever took place. But also aboard Deripaska’s Queen K was Lord Peter Mandelson, a serially-employed Blairite then inhabiting his role as the European Commissioner for Trade. He was reportedly chatting with the oligarch about relaxing E.U. aluminum tariffs. Mandelson refused to flat-out deny that that discussion took place, preferring instead to focus on the “media squalls” and “sensationalist headlines,” but in any event, the tariffs did get lowered, and Deripaska’s metals empire Rusal benefited from looser trade with the E.U. Did I mention that the man to put both Tory and Labour Brits on the mega-yacht was a Rothschild, and that Deripaska’s registered lobbyist in the United States to help with a sticky visa situation has been Russian Foreign Minister Sergei Lavrov (PDF)?

If you didn’t know any better, you’d start to think that the cousins would gladly pay for the pleasure of selling themselves to Moscow. One celebrated English author has gone that far already:

Plus another thing, Hector!” he barks. “What’s wrong, when you come down to it, with turning black money to white, at the end of the day? All right, there’s an alternative economy out there. A very big one. We all know that. We’re not born yesterday. More black than white, some countries’ economies are, we know that too. Look at Turkey. Look at Colombia, Luke’s parish. All right, look at Russia too. So where would you rather see that money? Black and out there? Or white, and sitting in London in the hands of civilized men, available for legitimate purposes and the public good?”

“Then maybe you should take up laundering yourself, Billy,” says Hector quietly. “For the public good.”

John le Carré is notorious for taking the establishment for which he once toiled as a spy at its lowest estimation.  But in Our Kind of Traitor, his penultimate novel published in 2010, he barely had to stray from the latest headlines in the Daily Mail to depict a credit-crunched nation heavily floated by what every Fleet Street hack has come to semi-affectionately refer to as the “Londongrad” or “Moscow-on-Thames” demimonde.

Dima, an ox-like Russian hood—“World Number One money-launderer”—wants to come in from the cold and set himself and his family up in the high English lifestyle to which so many of his compatriots have grown accustomed. In exchange for a little help from MI6, he promises to show Westminster where all the bodies are buried and where all the illicit assets of the Russian mob and the Russian state are being kept, a task made easier by the fact that the mob has now become the state under the leadership of the ultimate Russian hood, Vladimir Vladimirovich. But therein lies the problem for poor Dima, whose fate actually brings le Carré’s cynicism to new lows, even if the novelist’s grasp of empirical reality has never been less veiled or more vividly represented.  There’s even a scene in Our Kind of Traitor set aboard a yacht anchored off the coast of the Adriatic Sea featuring a Shadow Minister with the “haughty sub-Byronic gaze of sensual entitlement” (here’s a photograph of George Osborne.) And Billy, the apologist for money-laundering referenced above, is meant to be the Service’s “longest-standing and most implacable troubleshooter and left-hand man to the Chief himself.”

***

I lived in London for close to three years, from 2010 to the end of 2012. For the better part of half that period, I spent a great deal of time sussing out the connections between two elites: where the interests of those in positions of financial or political authority in Britain intersected with those of the Russian plutocracy. I left convinced that the reason Putin was able to get away with irradiating Alexander Litvinenko in broad daylight was that he understood that the brutality of Marxism-Leninism was more readily applied in the service of Mammon. Murder could now be weighed as a necessary price to pay for realpolitik. Western democrats became hypocrites in the face of consultancy contracts or low-cost oil and gas. Everyone wants to get rich, no one wants to fight money, however dirty or blood-soaked it may be. As the Economist phrased it during those frenzied months of tracing the source of a radioactive isotope through Piccadilly and beyond, “British diplomats’ biggest worry is not that Scotland Yard will be flummoxed, but that it might succeed” in identifying Litvinenko’s killers. This grim saga continued all through my time in England. The British Home Office last year, under a new administration, cited “international relations” in rejecting Litvinenko’s widow’s call for a public enquiry into her husband’s assassination seven years earlier. A British High Court judge has only just last month ordered the government to reconsider its decision. The siloviki, meanwhile, hug themselves with glee to watch as Scotland Yard reaches for the Geiger counter whenever a seemingly healthy Russian emigré is found dead in Surrey.

Still, there were those trying to end this sordid special relationship. Occasionally I’d get an email from, or have a meeting with, what was then known as the UK’s Financial Services Authority, a quasi-judicial regulatory body that has since cleaved into two separate organizations. The FSA—not to be confused with the anti-Assad rebels in Syria—were always interested in hearing what I’d come up with, but they’d confess immediately that they were hamstrung when it came to doing anything but keeping files on such-and-such finding. “We’re up against all of Downing Street, all of the City,” I remember one enforcement agent telling me, the City being the synecdoche for London’s financial centre, its Wall Street. He might have added a media that was itself hamstrung by Britain’s ludicrous libel laws.

More frustrating was the fact that the funny money was not so terribly obscure or recondite anymore thanks to Britain’s having become a favored jurisdiction for Russians looking to sue each other. As Oliver Bullough points out in the New Republic, “60 percent of the London Commercial Court’s workload now comes from Russia and Eastern Europe, and the pay-offs are huge.”

Alexey Navalny, the leader of the opposition in Russia as well as its foremost anti-corruption campaigner, published an op-ed in the London Times in 2012 in which he called for the Brits to adopt legislation similar to the U.S. Magnitsky Act, which aims to blacklist and sanction Russian officials guilty of gross human-rights violations. In Britain, such a law was needed even more urgently, Navalny wrote. “Local banks apply meagre ‘know your client’ procedures to vet applicants: a passport copy and a utility bill are all that is needed to open an account at any London-based private bank. Then, as if by magic, funds pour into the UK as clean capital, free from any taxation or further scrutiny. Getting the right to stay permanently in the UK with an investor visa is just as easy; all that is needed is a minimum of £2 million in personal assets.”

Moreover, where British banks weren’t doing the work, Russian ones were. I’d later work with Navalny’s Foundation for Fighting Corruption on a report it released on VTB Group, which is 60 percent state-owned by the Russian government. Originally Vneshtorgbank, which was formed in the 1990s following Mikhail Gorbachev’s breakup of the Soviet State Bank of Russia, or Gosbank, it was rebranded VTB in 2006. Today, the bank has a presence in over 20 countries, with assets amounting to $230 billion. In 2011, it took in upwards of $712 million in deposits in France and Germany, including from those countries’ pensioners. In 2007, as a brainchild of Putin, it inaugurated a “People’s IPO” designed to prompt ordinary Russians to become minority shareholders. Small business-owners to babushkas were encouraged to invest in what then-Prime Minister Putin called a “stable” growth vehicle; 130,000 lined up to buy at the offering price of 13.6 kopecks a share, making the IPO the largest in the world that year. Yet days after the IPO was launched, VTB’s stock price dropped; then it tanked, following the global economic crisis, driving the stock down to 1.9 kopecks. Putin tried to correct for this in 2012, by forcing VTB to buy back minority shares from only the IPO investors, at the original share price of 13.6 kopecks. Institutional investors were excluded from this act of czarist munificence and were rightfully furious for being cheated. Rinat Kirdan of Aton Capital told Bloomberg: “Over the years we have seen considerable evidence support in the view that VTB is more a state vehicle than a pro-oriented or shareholder-oriented business.”

The bank’s investment arm, VTB Capital, established a presence in London in 2008, in a building formerly occupied by Lloyds. Not longer thereafter, VTB went to court in London to reclaim losses. Another High Court Justice found in 2012 that “[i]t is not clear from the evidence presently available what, if any, due diligence was carried out by or on behalf of either VTB Moscow or VTB.” This case, involving the purchase of six Russian dairy farms, saw VTB issue a $225 million loan to a company whose collateral was worth less than $45 million. Moreover, the buyer of the farms, the bank later claimed to have discovered (though has not proven), was also the owner. The loan defaulted within a year. In January of this year, one of the defendants in the case, Konstanin Malofeev, filed a $600 million suit against VTB—also in London’s High Court.

Other allegations of rampant mismanagement or crony lending schemes designed to enrich bank executives continue to dog VTB. So have more serious charges that it has been keeping accounts for a mass murderer.

Last September, Senators Kelly Ayotte, Richard Blumenthal, John Cornyn and Jeanne Shaheen asked the U.S. Treasury Department to stop “Russian banks that have repeatedly undermined American, European Union and United Nations sanctions by helping the Assad regime in Syria.” VTB was one of them, although spokesmen for the bank denied that it had taken any deposits from either Assad or any other member of the “Syrian leadership.” A Syrian state-controlled newspaper disagreed; in 2011 it reported that the Syrian Central Bank did indeed have accounts with VTB, as well as Gazprombank—the financial arm of the Russian gas giant—and Vneshekonombank (VEB). Both of these banks are also owned by the Russian government.

Actually, Damascus has been a prominent third party in more recent Londongrad hiccups in the media. Consider the case of Vladimir Lisin, Russia’s second-wealthiest man, with a net worth of $15.9 billion, according to Forbes. Lisin was the vice president of Russia’s Olympic Committee for the 2012 London Games, a role that granted him temporary diplomatic status in Britain. In June 2012, I discovered that a Russian cargo ship called the Professor Katsman, which had already been accused by Western diplomats of running weapons to Assad via Syria’s Russian-maintained port at Tartus, was owned by Lisin through a series of multinational shell companies. As with a lot of Russian businesses, the ownership was concealed in a matryoshka dolls-like series of parents and subsidiaries. The boat was technically registered by a Maltese concern called Rusich 12 Ltd, which was owned by a Cypriot one called Russich-NW Shipholding (PDF), which belonged to North Western Shipping, a Russian entity, which was controlled by Universal Cargo Logistics (UCL) Holding, an international transportation group with corporate addresses in Moscow and Amsterdam. UCL Holding is widely acknowledged as Lisin’s shipping behemoth. Its Amsterdam address, as I noted at the time in the Telegraph, gave sufficient grounds for the Netherlands and other E.U. members-states, which had imposed an arms embargo on Syria, to investigate whether or not the Katsman had violated European law. Moreover, if the British government itself investigated this ship and found evidence that it had been shipping weapons to Syria, then what might be doable to any assets or properties owned by Lisin in the UK, such as his 3,300-acre Aberuchill Castle estate in Perthshire, Scotland?

After my story was published, and a more expansive follow-up appeared in the Sunday Telegraph, UCL Holdings issued a press release stating: “At the moment we don’t have any prove [sic] that Profesor [sic] Katsman had delivered to Syria anything of a military nature that can be used against civilians.” This was itself a curious way of phrasing the matter because the Russian Foreign Ministry back in 2012 liked to say that hardware such as refurbished attack helicopters or spare parts for them wasn’t being used against civilians in Syria (even though it plainly was); it was “defensive” in nature. Also, Lisin threatened to sue the Telegraph if it pursued this line of inquiry further, according to another journalist at the newspaper. As for Malta, the Netherlands, Cyprus and Britain, not a peep was heard about the Katsman’s cargo or its wealthy, Olympic-loving owner. Nor did the Syrian opposition get any joy when it took up the matter itself.

In some cases, the journey of dubious rubles through, past or straight into Blighty involves senior Russian officials who, no matter what accusations may be leveled against them with however much eyebrow-raising evidence, always remain senior Russian officials.

Igor Shuvalov is the first deputy prime minister in Dmitry Medvedev’s cabinet and Putin’s longtime economic consigliere. He’s also the Kremlin’s “sherpa” to three important international bodies: the World Trade Organization, which Russia joined over a year ago after much U.S. string-pulling on its behalf; the Davos World Economic Forum, where the oligarchs turn up each year; and the G8, from which the U.S., along with every other G7 nation, has now pulled its attendance at the forthcoming summit in protest of Moscow’s invasion of Crimea. Shuvalov won acclaim at home and abroad for being the man to lure the 2018 World Cup to Russia. As you might expect, then, he’s done very nicely for himself, but he’s had help.

In 2004, Alisher Usmanov had an idea. The Uzbek-born industrialist who would later become a percipient investor in Facebook, Groupon and Twitter, and as well as a major shareholder in Britain’s Arsenal Football Club, had decided to buy a 13 percent equity interest in an erstwhile Anglo-Dutch steel manufacturer called Corus Group, which was then a whisper away from bankruptcy. (Today, Corus Group has become Tata Steel, having been acquired by the Indian conglomerate; it’s also the second largest steel manufacturer in all of Europe.) To purchase this equity interest, Usmanov needed $319 million. And so the financing for this transaction, which drew the attention of U.S. Securities and Exchange Commission at the time, came by way of a Bahamas-registered company called Sevenkey Limited. The owner of that entity was one Olga Shuvalova, Igor Shuvalov’s stay-at-home wife and fellow former law school classmate. Olga’s declared income was $12 million in 2008, $20 million in 2009, and $10 million in 2010.

As Barron’s reported in 2011, the entirety of the $49.5 million was deposited in a Sevenkey bank account just weeks before the money was then transferred to Gallagher Holdings, a company registered in Cyprus, through which Usmanov bought up his Corus stake. The transfer of the money was arranged, Barron’s said, by a man called Eugene Shvidler, another billionaire oligarch who has both Russian and American citizenship.

Shvidler has since admitted in a separate British High Court  case that for the last 10 years he has managed all of the business interests of his dear friend Roman Abramovich, still another lucky enlistee in the nine-figure fortune club. Abramovich is today the ninth richest man in Russia, with a net worth of $12.1 billion, according to Forbes. Having formerly been successful in keeping head below the parapet or out of the spotlight, Abramovich has in the last decade become a conspicuous fixture in the tabloid press because of his ownership of the revered Chelsea Football Club in west London, the purchase of which in 2003 was rumored to have been personally sanctioned by Putin himself, as was Abramovich’s divorce from his second wife, a former Aeroflot stewardess, in 2007. So close are Abramovich and Shvidler that the latter is sometimes referred to as former’s “representative on earth;” so intimate are they that, in 2006, Abramovich “gifted” to Shvidler Le Grand Bleu, a luxury yacht that came with its speedboat, helicopter and indoor aquarium. Together, they also form the majority ownership of Evraz, a Britain-based steel and mining company that is traded on the FTSE 100 Index of the London Stock Exchange and employs 100,000 people worldwide.

But what’s interesting about the “loan” made by Olga Shuvalova’s Sevenkey Limited to Gallagher Holdings—apart from the obvious question of where the unemployed wife of Putin’s trusted economic advisor got $49.5 million to lend to anybody—was that the stated level of interest had been set to five percent per annum. And yet, Gallagher ended up reimbursing Sevenkey to the tune of $119 million from 2005 to 2007: a rate of return of more than 40 percent. In other words, Olga Shuvalova, and by extension her public servant husband, more than doubled their money in the space of three years.

What else was noteworthy about this deal?

Recall that Usmanov said he couldn’t raise money from banks to finance his purchase of 13 percent of Corus’s equity. Well, according to the 2006 audit of Gallagher Holdings, he could and did. In fact, that audit disclosed nothing about a $49.5 million loan coming from Sevenkey, but plenty about other loans Usmanov managed to secure, at the more gentlemanly rate of nine percent annual interest, to help finance his investment.

Sevenkey has altered its ownership structures over the years, but not its ultimate legal beneficiary who was and remained, as of 2011, Olga Shuvalova. Its current sole shareholder is a company called Severin Enterprises, which is registered in the British Virgin Islands, a dependent territory of the UK. Meanwhile,  Sevenkey’s corporate secretary is a man called Alastair Tulloch, a London-based attorney; its director is another Brit called Sean Hogan. When last I looked up Hogan on the UK Companies House website, I discovered that he has been a nominee for 782 companies registered in the Britain.

Prior to 2008, Sevenkey paid no profits to its owners; it was used to manage the assets of the Shuvalov family, which include or once included a Jaguar, a few Mercedes, two limos, apartments in Russia, Austria and London, and “District 4”—a giant villa once frequented by R&R-seeking members of the Soviet Politburo. Abramovich is a neighbor.

After news of the Shuvalov affair broke in the international financial press, the Russian General Prosecutor’s Office opened an investigation, then closed it, claiming it had found no evidence of any illegality or untoward behavior in this cozy arrangement between and amongst two prominent oligarchs and the Kremlin’s influential financial advisor. Moreover, the Office declared, the Shuvalovs were good and regular Russian taxpayers, having replenished the public coffers even on the money made from the Sevenkey-Gallagher transaction. It apparently mattered not at all that Shuvalov later served, from 2008 to 2009, as head of a state commission on stabilizing the distressed Russian economy, a commission which signed off on the issuance of stimulus subsidies to various private enterprises. One such recipient of $30 billion in state guarantees was Metalloinvest, Russia’s largest iron ore company. Metalloinvest is owned by Alisher Usmanov. In 2013, he was named not only the richest man in Russia by Forbes, but also the richest man in Britain by the TheSunday Times, which reckoned that his net worth currently hovers at around $22 billion.

To make matters even more intriguing (and incestuous) Shuvalov has insisted that he and his wife got the money for the Gallagher loan from dividends earned through a 0.5 percent stock option in Sibneft, an oil company created in the mid-1990s for the purpose of rapid privatization. Brits have grown quite familiar with Sibneft over the last few years. It was featured prominently and repeatedly in court room epic drama of “Berezovsky v Abramovich,” the most expensive civil litigation in British history, initiated by Boris Berezovsky, the now-deceased Russian oligarch who did more than any other person to facilitate Putin’s ascent to the presidency in 2000, then squandered his enormous wealth trying to unmake that disastrous decision.  Berezovsky had claimed that, because he’d fallen afoul of Putin in the early aughts and been driven from Russia, he’d been forced to sell his stake in Sibneft for much lower than what it had been worth at the time, and so Abramovich owed him $5 billion in damages. Still another High Court judge found otherwise and ruled in defendant Abramovich’s favor, lambasting Berezovsky as an “unimpressive, and inherently unreliable, witness,” not long after which the plaintiff committed suicide by hanging himself in his own bathroom in Surrey— at least according to the official coroner’s report, which many Russians in both London and Moscow are loath to believe. Meanwhile, Lord Sumption, Abramovich’s defense barrister, is said to have cleared a cool $5 million in legal fees and now has a seat on the British Supreme Court. It was in “Berezovsky v Abramovich” that Shvidler helpfully testified to managing all of Abramovich’s business affairs for the last decade.

But the notion that Shuvalov made a killing via a mystery stock option for a now vanished Russian oil company sounded fishy to many. “What’s the reason for giving an option to Shuvalov in that period of time when he was not an official [of Sibneft]?,” Navalny wrote in 2011, adding that any such stock option would have emerged in later corporate due diligence performed on the company for its merger in 1998 with Yukos, Mikhail Khodorkovsky’s subsequently confiscated oil giant. (Full disclosure: I work for the Institute of Modern Russia, a New York-based think tank, the president of which is Pavel Khodorkovsky, Mikhail’s son.)

Another Russian opposition figure, Natalia Pelevina, raised the Corus investment with both Britain’s Serious Fraud Office, citing Usmanov and Abramovich’s residency in the UK, and with the F.B.I, citing Shvidler’s American citizenship. Pelevina told me that neither agency has paid much attention to the case, although others clearly have done. She has received death threats in Moscow for kicking up a fuss about this affair. A little over a year ago, she said that she’d been passed messages from anonymous parties through her own lawyer informing her: “When we do you, it won’t be clean like [Anna] Politkovskaya. It’ll be a drunkard smashing your head in with a cinder block.” (I’ve obtained Pelevina’s permission to relay this threat publicly.)

Finally, even those with the ear of the British monarchy have benefited from life in Londongrad. Earlier I mentioned that Abramovich and Shvidler’s largest known investment in Britain is Evraz, the London Stock Exchange-traded steel and mining enterprise.  A “senior, independent non-executive” member of Evraz’s board of directors and a member of its Audit Committee is Sir Michael Peat, who was formerly Keeper of the Privy Purse—i.e. Queen Elizabeth’s treasurer—and the principal private secretary to Prince Charles. Sir Michael’s annual compensation for services rendered to Evraz is £250,000 or $418,000, which isn’t bad for a little independent, non-executive corporate advisement and accountancy. But there appear to be other perks to enjoying a close relationship with two of Russia’s most recognizable oligarchs.

On January 3, 2012, Shvidler was appointed (PDF) to the board of MC Peat & Co LLP, a boutique investment firm established by Sir Michael’s son, Charlie Peat, in order to develop “distribution contracts in Russia, the CIS and the Middle East,” as the company’s website has it. Two days later, on January 5, 2012, MC Peat & Co LLP took out a loan in the amount of £2.73 million, or $4.5 million. The issuer of the loan was an Aruba-based company known as Horizon Investments AVV, which, according to the Department of Civil Aviation in Aruba, formerly owned an EC-135 model Eurocopter. The base of operations for that aircraft, as of 2004, was listed as “United Kingdom—Embarked on the Motor Yacht ‘Le Grand Bleu.’” That yacht, as you may recall, was given as a present by Abramovich to Shvidler in 2006.

Charlie Peat denied to me by email that his investment house was lent any money from Roman Abramovich. However, when I asked if the £2.73 million loan for Charlie’s investment firm might have been provided by Abramovich’s representative on earth, I was referred to Shvidler’s press office. (That office never responded to my inquiries.)

Evraz’s 2011 annual report did disclose that its board of directors considered “an arm’s length business arrangement between one of the non-independent directors and the son of Sir Michael Peat…and satisfied itself that his arrangement has no impact on Sir Michael Peat’s independence.”   “Arm’s length” is a nice way of putting it, although Sir Michael and Shvidler may have recently found they needed still more length. In May 2013, Shvidler quit the board of MC Peat & Co LLP. The lending company of the £2.73 million loan is also no longer listed as a helicopter-owning shell in Aruba.

***

As a result of Russia’s invasion of Crimea, the Russian economy has taken a beating. The Russian Trading System indexed dropped 12 percent on Monday, though seems to have recovered somewhat over the last two days. Gazprom’s stock has sunk more than 18 percent since February 18; VTB’s stock is down 20 percent since the Ukraine crisis hit. With news today that Crimea’s parliament, led by a gangster known as “Goblin,” has just voted to join the Russian Federation, the market in Moscow dipped still further. The ruble, says VTB Capital, is as much as 8.5 percent behind the emerging market average index, with Ukraine accounting for 2.0-3.0 percentage points of that shortfall. Anders Aslund says that “[t]he Russian economy was earlier set to stagnate, but now it is likely to contract.”

Yet Putin is unfazed by all this gloom and doom. In the case of emergency, he cuts a cheque. His initial bribe to Viktor Yanukovych—naturally couched as a loan—was a unilateral $15 billion, to be disbursed in installments, for repudiating a modest Association Agreement with the E.U. in favor of Ukraine’s enlistment in Russia’s neo-Soviet protectionist Customs Union. Now, in order to compete with that sum, the U.S. has had to offer a post-Yanukovych government $1 billion in loan guarantees (more that it offered all the post-Arab Spring countries combined), while the E.U. has just floated $15 billion in aid over the next two years, broken up into loans, credits, and grants. Nevertheless, not a single E.U. country has announced sanctions or trade restrictions against Moscow or any of the Kremlin elite dispatched abroad to do Moscow’s bidding. Even the Czech Republic, which was formerly occupied by the Soviet Union, has ruled out such a contingency.

Will Putin really lose? His long-game (assuming he hasn’t gone mad, as Angela Merkel believes) has been twofold: wait for Ukraine’s economy to implode and then come rushing to the rescue, secure in the knowledge that no European power now crying foul over his actions will have the courage eject Russian lucre from its shores. In order for this gambit to work, he had to count on Britain, Russia’s foremost enemy apart from the United States during the Cold War which had lately transformed into a leading recipient of Russian foreign direct investment, to be first among equals in financial acquiescence. Britain has behaved exactly as Putin expected.

Lynch Wants $80 for More Control Control

AG Lynch: We Want $80 Million For Obama’s Gun-Control Plan

The price tag for implementing President Obama’s executive gun controls is $80 million, Attorney General Loretta Lynch declared during her January 20 testimony before the Senate Appropriations subcommittee.

Breitbart: Lynch said the administration will begin pushing for the money in Obama’s 2017 budget request, due next month, according to ABC News.

She’s already meeting some opposition. “This subcommittee will have no part in undermining the Constitution and the rights that it protects,” subcommittee chairman Senator Sen. Richard Shelby (R-AL)  told Lynch.

But another Republican lawmaker–Senator Shelley Moore Capito (R-W.Va.)– suggested she would support the program to expand of background checks on gun-purchasers.

In addition to expanding background checks, putting new requirements on federally licensed gun dealers, and co-opting a ban on gun ownership for some Social Security beneficiaries, Obama’s executive gun controls include the hiring of “more than 230 additional examiners and other staff to help process…background checks.”

Lynch tried to sell the gun-control plan to the subcommittee by claiming that a “glitch” in the background-check system allowed Dylann Roof to buy the gun he used to kill nine people in June 2015 at the Emanuel African Methodist Episcopal Church, in Charleston, S.C.

But this claim runs counter to a statement from FBI Director James Comey. Roof obtained his gun, not because of a problem with background check system, but because of a clerical error made by one of the FBI reviewers who was carrying out Roof’s background check, Comey said.

*** Lynch was recently at the Al Sharpton National Action Network speaking at a breakfast honoring Martin Luther King. If there any questions about who she really is and what she is up to, here are more clues:

Dr. King’s words and deeds – and those of the millions who stood with him – are not vestiges of history, but timeless calls to action.

That call – that mission – has animated the Department of Justice since the inception of this Administration and it fuels our ongoing work to ensure that everyone in this country can achieve the full blessings of American life.  Our revitalized Civil Rights Division – the conscience of the department, led by the outstanding Vanita Gupta – is committed to ensuring that access to the ballot box is as fair and unencumbered as Dr. King dreamed it would be.  Wherever the franchise is being diminished – whether through historical barriers or newly erected ones – we stand prepared to use every tool at our disposal to protect the sacred American right to vote.  The Civil Rights Division is making significant progress bringing criminal civil rights cases, as well.  Over the course of this Administration, we have filed more criminal civil rights cases and prosecuted and convicted more defendants on hate crimes charges than at any other point in the Justice Department’s history.  And we’re working to protect civil rights within criminal justice, in part by strengthening relationships between law enforcement and the communities we serve and ensuring constitutional policing across the country.  We have launched a variety of new programs and innovative efforts at the local level – including my own six-city listening tour – to promote community policing and to build the relationships of trust that are so vital to effective law enforcement.

More broadly, we are working to ensure the fundamental fairness of the criminal justice system.  At the federal level, we are continuing to implement the “Smart on Crime” initiative – a bold reorientation of our prosecutorial approach that Attorney General Holder initiated in 2013.  In its first two years, Smart on Crime has not only been a bipartisan rallying point, but also a resounding success, with federal prosecutors using their resources conscientiously to bring the most serious wrongdoers to justice and with the overall crime rate declining in tandem with the overall incarceration rate for the first time in four decades.  But for fairness to be consistent and to have meaning, we have to look at every stage of the criminal justice process.  That is why we are working to end the school-to-prison pipeline to keep our children on the right path and out of the criminal justice system.  That is why we are investing in diversion and treatment programs that take an evidence-based approach to public health and criminal justice.  And that is why we are making sure that formerly incarcerated individuals have the tools and resources they need to successfully rejoin society and contribute to their communities.  We recently partnered with the Department of Education to extend Pell Grant support to some incarcerated individuals so that they can pursue an education that will not only reduce their likelihood of recidivism, but also throw open doors to opportunity. For all the details on what Lynch said , go here.

*** Note she was hanging with Al Sharpton at the National Action Network, a corrupt organization that owes millions in delinquent income taxes…..

Hey John Kerry, Iran’s Khamenei is Calling you a Liar

People paying attention to the relationship between Iran and the United States, we tend to agree that John Kerry is a liar, but for much different reasons.

From Iran’s Ayatollah Khamenei, More Anti-American Rhetoric

WSJ: Less than a week after economic sanctions against Iran were lifted as implementation of the nuclear deal began, and the U.S. and Iran exchanged prisoners, Iran’s supreme leader resumed his anti-American rhetoric. In a letter to President Hassan Rouhani on Tuesday, Ayatollah Ali Khamenei warned the government against U.S. “deceptions” and sought to play down the significance of the nuclear agreement and its economic benefits for Iran.

The ayatollah’s tough talk fits the image he likes to project of the unwavering enemy of the world’s greatest power; but his remarks must be seen in context. Clearly, Iran’s supreme leader is not above compromises with the nation he calls the Great Satan. He allowed the nuclear negotiations to play out. His own “red lines” on these negotiations were crossed. The ayatollah supposedly barred Iranian officials from negotiating with the U.S. about anything but the nuclear issue, yet Iranian intelligence officials secretly negotiated a prisoner exchange with U.S. officials at the same time, and Iranian diplomats continue talking to their U.S. counterparts about Syria. A role for U.S. oil companies seems inevitable as Iran, released from sanctions, moves to develop its oil and gas industries.

Ayatollah Khamenei has voiced concerns about what he calls the American, or Western, “cultural onslaught.” He has warned that relations with the U.S. would have a considerable impact on Iranian society, particularly on youth.

On the economy, too, he wishes to project the image of the bulwark against the lure of Western investment or Iran’s integration into the world economy. In a tweet to his president, the supreme leader reverted to his oft-repeated theme that the Islamic Republic should rely on an “economy of resistance” and “self-sufficiency,” rather than on outsiders lifting sanctions, to achieve economic prosperity.

Here, too, reality is bound to intrude. Thirty-six years after the establishment of the Islamic Republic, Iran imports huge amounts of its food, machinery, and consumer goods, and it remains highly dependent on oil exports for earnings. The “economy of resistance” to which Iranian officials pay lip service remains beyond reach.

Ayatollah Khamenei’s attempt to retain the support of his hard-line constituency while adjusting to regional realities was evident elsewhere. Nearly three weeks after a mob ransacked and set fire to the Saudi embassy in Tehran, the ayatollah condemned the incident, calling it “very bad” and “detrimental to the country and Islam.” Apparently he felt the need to try to repair the damage the attack had inflicted on Iran’s relations with almost all other Arab countries. Taking his time to speak out is nothing new; it took Ayatollah Khamenei even longer to criticize the mobs who trashed the British embassy in Tehran in 2011. Still, these incidents should not be used to as an excuse to condemn “devoted, revolutionary, and [god-loving] youth,” he said.

Meanwhile, the ayatollah’s position on domestic politics has shifted very little. He gave a speech this week but said nothing about election supervisory councils disqualifying a large number of candidates, including many reformists, for parliamentary elections next month. Would-be reformers have complained that their candidates have been targeted, and President Rouhani has sharply criticized the disqualifications. “If only one faction is present in the vote, and the other is not, then why are we holding elections,” he reportedly said this week. The president has promised to take the matter up with the Council of Guardians, a 12-member body dominated by senior clerics that has final say on candidacies. The president and his supporters have been hoping the elections would give Mr. Rouhani a workable majority in parliament. Ayatollah Khamenei, while urging those opposed to the system to vote, has treated it as natural that opponents of the system should be barred from running for office. It is a mantra of Iranian hard-liners that many reformists are “seditionists” and enemies of the system.

On the other hand, the supreme leader has long regarded large-scale voter participation in elections as an important sign of the Islamic Republic’s legitimacy and acceptance by the people. After the 2009 presidential election, millions of Iranians poured into the streets, outraged that President Mahmoud Ahmadinejad was declared the winner. Those protests shook the regime to its foundation; their shadow has hovered over subsequent elections. To ensure a large turnout and to mute controversy, Ayatollah Khamenei may yet nudge the Council of Guardians into allowing a significant number of prominent reformist candidates to run in February.

France warns the entire European project is in ‘very grave danger’

EU leaders consider two-year suspension of Schengen rules

Leaders will consider emergency measures to reintroduce internal borders at meeting on Monday, as France warns the entire European project is in ‘very grave danger’

TelegraphUK: The Schengen system of free movement could be suspended for two years under emergency measures to be discussed by European ministers on Monday, as the French Prime Minister warned the crisis could bring down the entire European Union.

Manuel Valls said that the “very idea of Europe” will be torn apart until the flows of migrants expected to surge in spring are turned away.

On Monday, interior ministers from the EU will meet in Amsterdam to discuss emergency measures to allow states to reintroduce national border controls for two years.

The powers are allowed under the Schengen rules, but would amount to an unprecedented abandonment of the 30-year old agreement that allows passport-free travel across 26 states.

The measure could be brought in from May, when a six-month period of passport checks introduced by Germany expires. The European Commission would have to agree that there are “persistent serious deficiencies” in the Schengen zone’s external border to activate it.

“This possibility exists, it is there and the Commission is prepared to use it if need be,” said Natasha Bertaud, a spokesman for Jean-Claude Juncker.

Greece has been blamed by states for failing to identify and register hundreds of thousands of people flowing over its borders.

Other states that have introduced emergency controls are Sweden, Austria, France, Denmark and Norway, which is not in the EU but is in Schengen.

“We’re not currently in that situation,” Ms Bertaud added. “But interior ministers will on Monday in Amsterdam have the opportunity to discuss and it’s on the agenda what steps should be taken or will need to be taken once we near the end of the maximum period in May.”

Theresa May, the British Home Secretary, will attend the meeting.

in numbers

European refugee crisis

Pic: Action Press/REX Shutterstock

1 million

Refugees and migrants have arrived in Europe via illegal routes

38 percent

Proportion of migrants who are from Syria

1,200,000

Syrian refugees being housed in Lebanon – a country 100 times smaller than Europe

One in five

Proportion of people in Lebanon who are refugees

1 in 122

According to the head of the UN refugee agency, one in 122 people is a refugee

1.2 percent

Proportion of migrants who land in Italy and Greece, then get as far as Calais

100,000

Illegal migrants were stopped from entering Britain by UK Border Force officials in 2015

15 per cent

Proportion of female refugees from Syria who are pregnant in Turkey


Data as of November 2015

In a further blow, Mr Valls said that France would keep its state of emergency, which has included border checks, until the Islamic State of Iraq and Levant network is destroyed.

“It is a total and global war that we are facing with terrorism,” he said.

He warned that without proper border controls to turn away refugees, the 60-year old European project could disintegrate.

“It’s Europe that could die, not the Schengen area. If Europe can’t protect its own borders, it’s the very idea of Europe that could be thrown into doubt. It could disappear, of course – the European project, not Europe itself, not our values, but the concept we have of Europe, that the founding fathers had of Europe.

Migrants help children go over a fence as refugees waits to cross the Slovenian-Austrian border in Sentilj, Slovenia

“Yes, that is in very grave danger. That’s why you need border guards, border controls on the external borders of the European Union.”

He said Europe must tell refugees that they cannot expect to reach Europe.

“We cannot say or accept that all refugees can be welcomed in Europe,”

“Germany is faced with a major challenge. We need to help Germany. But the first message we need to send now is with the greatest of firmness is to say that we will not welcome all the refugees in Europe. Because a message that says come, you will be welcome, provokes major shifts,” he told the BBC.

Viktor Orban, Hungary’s Prime Minister, said that a fence should be erected on the Macedonian and Bulgarian borders with Greece to curb the inflow of migrants into Europe.

Stefan Lofven, the Swedish Prime Minister, Mark Rutte, the Dutch Prime Minister, and Donald Tusk, the president of the European Council, have each in the past week said that leaders have until March to save the Schengen zone.

Jean-Claude Juncker has warned that is the Schengen zone dies then the euro and the single market could follow.

The Schengen Agreement

What is it?

An agreement, signed in 1985 in the town of Schengen in Luxembourg, to remove border checks within Europe. It means anyone, regardless of nationality, can move freely between member states without showing a passport or visa

Who is a member?

Not the UK. But most EU states are in, as are Switzerland, Iceland and Norway. In total, 26 countries comprising 400 million people

Why is it under strain?

Terrorists and mass migration. Police checks have been brought in on the Italian border at the request of Bavaria, amid a wave of non-EU migrants attempting to reach Germany. Angela Merkel warns the system will be pulled apart unless countries share asylum seekers. And Belgium wants more ID checks on trains in the wake of the Thalys train terrorist attack

Are checks legal?

Police are allowed to make targeted ‘security’ checks on the border, and states can impose border controls in an emergency or for major events for up to 30 days. But permanent, systematic checks on passports are forbidden

What does the European Union say?

Jean Claude Juncker, the European Commission president, says the system is non-negotiable, irreversible, and the EU’s greatest achievement

What do Eurosceptics say?

“Schengen has now hit the buffers of the real world and is falling apart,” says Nigel Farage, Ukip leader

 

Austria announced on Wednesday that it planned to limit the number of people allowed to apply for asylum to 1.5 percent of its population over the next four years, or 37,500.

The move piles more pressure on Angela Merkel, who is facing intense demands from her conservative allies to follow suit.

EU border agency Frontex said on Friday some 108,000 migrants arrived in December in Greece.

That compares to 150,000 arrivals in November and puts the total for Greece and Italy at 1.04 million in 2015, or five times as many as in 2014, Frontex said.

Crossings have slowed due to the cold weather, and are expected to surge when the spring returns.

DHS is Not Deporting Visa Overstays

The numbers are staggering but just for the time period of 2015, 482,000 are residing in the United States illegally. This number is clearly worse than those numbers coming in from the southern border.

DHS admits it’s not deporting most visa overstays

WashingtonExaminer: A pair of Department of Homeland Security officials told the Senate Wednesday that the government does not search for most of the people who overstay their temporary visas, a day after DHS said that nearly 500,000 people were still in the U.S. after having overstayed their visas last year.

“I didn’t mean to imply that we’re actually out monitoring them,” Craig Healy, an assistant director at U.S. Immigration and Customs Enforcement, told Sen. Jeff Sessions, R-Ala., during Senate Judiciary subcommittee panel. Healy said that they review the universe of people who overstayed their visas and “prioritize” the deportation of people who went on to commit other crimes.

Their exchange came at the outset of a hearing on the federal government’s failure to implement a biometric system to track entries into and exits from the country, as required by a 2004 law. A Customs and Border Patrol official said the program couldn’t be implemented without causing “gridlock” at U.S. airports, a response that failed to allay bipartisan concern that the lack of this system is an ongoing national security threat.

“The biometric exit system is still not off the ground and that is unfortunate, very unfortunate, because it is a matter of national security,” New York Senator Chuck Schumer, the Democratic leader-in-waiting, said during the hearing.

John Wagner, deputy assistant commissioner of field operations for U.S. Customs and Border Patrol, said the program couldn’t be implemented without causing two-hour delays when boarding airplanes. “It’s the placement of the technology and how you collect it to ensure that the person actually departed the United States,” Wagner said. “There’s no zone to do that.”

These answers frustrated Democratic lawmakers who otherwise disagree with Sessions and other immigration hawks the issue of border security and deportations. “It’s hard for me to envision that we can’t figure out where to get a space to do this at an airport or seaport,” said Senator Al Franken, D-Minn. “If you can’t solve it in 11 or 12 years, how can we know it will ever be solved?”

DHS’s report saying hundreds of thousands of people remained in the United States after having overstayed their visas drew complaints from both parties, but Sessions in particular.

“That is a population of individuals that is larger than any city in Iowa, New Hampshire, or South Carolina,” Sessions said. Healy replied that about 3,000 of the people who had overstayed their visas were under investigation, a statistic Sessions cited to argue that President Obama’s team has made no effort to implement the system or to deport people who overstay their visas, as long as those people “keep their nose clean” and do nothing to draw the attention of law enforcement or counterterrorism officials.

He said the lack of a biometric exit system was part of a broader failure by the Obama administration to implement federal immigration law.

“Our executive branch is on strike against the will of the American people,” Sessions said. “Simply put, there is no border at all if we don’t enforce our visa rules.”

****

Hold on, there is more…

Administration eases visa rules for travelers visiting terror hotspots

FNC: The Obama administration on Thursday eased visa rules for certain European travelers who have visited terror hotspots in the Middle East and Africa, triggering a backlash from congressional lawmakers who sought the restrictions for security reasons.

Moments after the announcement, two key Republicans declared the administration is “blatantly breaking the law” – a law that President Obama signed – by implementing the changes.

“This is not a difference of opinion over statutory interpretation, it is a clear contradiction of the law and the agreement we reached with the White House,” House Homeland Security Committee Chairman Michael McCaul, R-Texas, and Rep. Candice Miller, R-Mich., author of the bill, said in a statement.

The revised requirements announced Thursday pertain to changes passed by Congress in the Visa Waiver Program.

Lawmakers had sought new restrictions to tighten up the program – which allows visa-free travel for residents of eligible countries — in order to prevent Europeans who have joined ISIS from entering the United States. Under the newly passed Visa Waiver Improvement and Terrorist Travel Prevention Act of 2015, nationals of Iraq, Iran, Syria and Sudan as well as other travelers who have visited those countries since Mar. 1, 2011 now must apply for a visa in order to travel to the U.S.

The administration implemented those changes Thursday — but with some changes of its own.

Under the revised requirements, some Europeans who have traveled to those four countries in the last five years may still be allowed to travel to the United States without obtaining a visa if they meet certain criteria.

The administration announced it will use its waiver authority — granted to it in the legislation — to give waivers to travelers who traveled to the terror hotspots as journalists, for work with humanitarian agencies or on behalf of international organizations, regional organizations and sub-national governments on official duty.

Further, an additional waiver was announced for people who have traveled to Iran “for legitimate business-related purposes” since the conclusion of the Iran nuclear deal in July. The administration offers waivers for individuals who have traveled to Iraq for business as well.

Republicans reacted angrily to the waivers, saying the Obama administration had exploited the limited authority and has compromised national security.

“President Obama and his administration’s decision to abuse their limited waiver authority and allow scores of people who have traveled to or are dual nationals of countries like Iraq and Syria flies in the face of reason and congressional intent,” House Judiciary Committee Chairman Bob Goodlatte, R-Va., said in a statement.

“The Obama Administration is essentially rewriting the law by blowing wide open a small window of discretion that Congress gave it for law enforcement and national security reasons,” Goodlatte said.

Under the visa program itself, citizens of 38 countries, mostly in Europe, are generally allowed to travel to the United States without applying for a visa. But they still have to submit biographical information to the Electronic System for Travel Authorization, or ESTA.

The Homeland Security Department said waivers for some ESTA applicants will be granted on a “case-by-case” basis. Those travelers who are denied visa-free travel can still apply for visa through a U.S. embassy in their home country.

The new restrictions had previously been criticized by the Iranian government which suggested the U.S. might be violating the nuclear deal by penalizing legitimate business travel to the country.