FBI to Pay Former Spy for Trump Intel

FBI Plan to Pay Ex-Spy for Trump Intel during Campaign Sparks Questions of Obama Admin’s Use of Federal Authorities for Political Gain

Mar 06, 2017
Author of unsubstantiated dossier was also researching Trump for Clinton campaign associates when FBI sought to hire him
WASHINGTON– Senate Judiciary Committee Chairman Chuck Grassley today is seeking details on the FBI’s reported plans to hire former British spy Christopher Steele to investigate Donald Trump during the presidential campaign, even though the FBI was aware that he was being paid by Democrat political operatives to conduct opposition research on Trump.  Steele is the author of the controversial dossier that includes unsubstantiated claims alleging ties between the Trump campaign and the Russian government.
In a letter today to FBI Director James Comey, Grassley is requesting a briefing on the agreement as well as the FBI use of the material in Steele’s memos.  Grassley also wants to know whether the FBI ever independently verified the memos’ claims.
“The idea that the FBI and associates of the Clinton campaign would pay Mr. Steele to investigate the Republican nominee for President in the run-up to the election raises further questions about the FBI’s independence from politics, as well as the Obama administration’s use of law enforcement and intelligence agencies for political ends.  It is additionally troubling that the FBI reportedly agreed to such an arrangement given that, in January of 2017, then-Director Clapper issued a statement stating that ‘the IC has not made any judgment that the information in this document is reliable, and we did not rely upon it in any way for our conclusions,’” Grassley said in the letter.
In the letter, Grassley is requesting records related to the reported agreement.  He is also seeking answers to a number of questions, including who was involved in decisions related to hiring Steele and using his memos, whether the FBI used materials in the memo as the basis for seeking warrants and other investigative tools, and if the FBI has been able to independently verify allegations made in the memos.
Full text of Grassley’s letter to Comey follows:
March 6, 2017
VIA ELECTRONIC TRANSMISSION
The Honorable James B. Comey, Jr.
Director
Federal Bureau of Investigation
935 Pennsylvania Avenue, N.W.
Washington, DC 20535
Dear Director Comey:
On February 28, 2017, the Washington Post reported that the FBI reached an agreement a few weeks before the Presidential election to pay the author of the unsubstantiated dossier alleging a conspiracy between President Trump and the Russians, Christopher Steele, to continue investigating Mr. Trump.[1]  The article claimed that the FBI was aware Mr. Steele was creating these memos as part of work for an opposition research firm connected to Hillary Clinton.  The idea that the FBI and associates of the Clinton campaign would pay Mr. Steele to investigate the Republican nominee for President in the run-up to the election raises further questions about the FBI’s independence from politics, as well as the Obama administration’s use of law enforcement and intelligence agencies for political ends.  It is additionally troubling that the FBI reportedly agreed to such an arrangement given that, in January of 2017, then-Director Clapper issued a statement stating that “the IC has not made any judgment that the information in this document is reliable, and we did not rely upon it in any way for our conclusions.”According to the Washington Post, the FBI’s arrangement with Mr. Steele fell through when the media published his dossier and revealed his identity.
The Committee requires additional information to evaluate this situation.  Please provide the following information and respond to these questions by March 20, 2017.  Please also schedule a briefing by that date by FBI personnel with knowledge of these issues.
  1. All FBI records relating to the agreement with Mr. Steele regarding his investigation of President Trump and his associates, including the agreement itself, all drafts, all internal FBI communications about the agreement, all FBI communications with Mr. Steele about the agreement, all FBI requests for authorization for the agreement, and all records documenting the approval of the agreement.
  1. All records, including 302s, of any FBI meetings or interviews with Mr. Steele.
  1. All FBI policies, procedures, and guidelines applicable when the FBI seeks to fund an investigator associated with a political opposition research firm connected to a political candidate, or with any outside entity.
  1. All FBI records relating to agreements and payments made to Mr. Steele in connection with any other investigations, including the reported agreements relating to his investigation of FIFA.
  1. Were any other government officials outside of the FBI involved in discussing or authorizing the agreement with Mr. Steele, including anyone from the Department of Justice or the Obama White House?  If so, please explain who was involved and provide all related records.
  1. How did the FBI first obtain Mr. Steele’s Trump investigation memos?  Has the FBI obtained additional memos from this same source that were not published by Buzzfeed?  If so, please provide copies.
  1. Has the FBI created, or contributed to the creation of, any documents based on or otherwise referencing these memos or the information in the memos?  If so, please provide copies of all such documents and, where necessary, clarify which portions are based on or related to the memos.
  1. Has the FBI verified or corroborated any of the allegations made in the memos?  Were any allegations or other information from the memo included in any documents created by the FBI, or which the FBI helped to create, without having been independently verified or corroborated by the FBI beforehand?  If so, why?
  1. Has the FBI relied on or otherwise referenced the memos or any information in the memos in seeking a FISA warrant, other search warrant, or any other judicial process?   Did the FBI rely on or otherwise reference the memos in relation to any National Security Letters?  If so, please include copies of all relevant applications and other documents.
  1. Who decided to include the memos in the briefings received by Presidents Obama and Trump? What was the basis for that decision?
  1. Did the agreement with Mr. Steele ever enter into force?  If so, for how long?  If it did not, why not?
  1. You have previously stated that you will not comment on pending investigations, including confirming or denying whether they exist.  You have also acknowledged that statements about closed investigations are a separate matter, sometimes warranting disclosures or public comment.  Given the inflammatory nature of the allegations in Mr. Steele’s dossier, if the FBI is undertaking or has undertaken any investigation of the claims, will you please inform the Committee at the conclusion of any such investigations as to what information the investigations discovered and what conclusions the FBI reached?  Simply put, when allegations like these are put into the public domain prior to any FBI assessment of their reliability, then if subsequent FBI investigation of the allegations finds them false, unsupported, or unreliable, the FBI should make those rebuttals public.
I anticipate that your responses to these questions may contain both classified and unclassified information.  Please send all unclassified material directly to the Committee.  In keeping with the requirements of Executive Order 13526, if any of the responsive documents do contain classified information, please segregate all unclassified material within the classified documents, provide all unclassified information directly to the Committee, and provide a classified addendum to the Office of Senate Security.  Although the Committee complies with all laws and regulations governing the handling of classified information, it is not bound, absent its prior agreement, by any handling restrictions or instructions on unclassified information unilaterally asserted by the Executive Branch.
Thank you for your prompt attention to this important matter.  If you have any questions, please contact Patrick Davis of my Committee staff at (202) 224-5225.
Sincerely,
Charles E. Grassley
Chairman
Committee on the Judiciary
cc:
The Honorable Dianne Feinstein
Ranking Member
Senate Committee on the Judiciary

[1] Tom Hamburger and Rosalind Helderman, FBI Once Planned to Pay Former British Spy Who Authored Controversial Trump Dossier, The Washington Post (Feb. 28, 2017).

Russian Relations Worse than you Think for Democrats and Trump

Both sides here need to be quite careful with regards of Russian relationship accusations. The work by the FBI, Congress or even independent counsel could blow things wide open in DC. This is going to be a long slog and wont fade from the headlines anytime soon.

Both articles below demonstrate more Russian relationships in the West on the political sides. The Kremlin has a long game for intrusion and influence and Putin is so far quite successful with installing geopolitical chaos across the globe. He is a master at framing his leadership abilities as rational, calm, measured and legal. Not so much when performing deeper dives. This post is a long read but essentially required reading to fully grasp the scope of Russian relationships.

Image result for pelosi hoyer russia

When it comes to investigations by Congress, outside counsel or by the FBI, it is going to be a long tedious process. This matter wont fade from the headlines anytime soon and details are going to be quite important.

***

No One Mentions That The Russian Trail Leads To Democratic Lobbyists

K Street lobbyists are the symbol of Washington influence-peddling as they push government for favors, subsidies, exemptions, and other special treatment for their clients. Their customers include, in addition to domestic clients, foreign governments, oligarchs, fugitive speculators, and a rogue’s gallery of questionable figures. Washington lobbyists trade on their access to power. Many are former administration officials or members of Congress. If Trump fulfills his promise to “drain the swamp,” these influence peddlers would have nothing to sell. They are under attack.

The media has focused not on K Street but on the Russian ties of President Donald Trump’s associates. They list the reprehensible Kremlin-associated figures for whom members of his inner circle worked, the most notorious being Viktor Yanukovich, the deposed president of Ukraine, and fugitive oligarch, Dymtro Firtash. But both of these “repulsive” figures were also advised by Democratic top dogs, who likely earned large multiples of what the “small fry” Trump associates took home.

In pushing its Manchurian-candidate-Trump narrative, the media fail to mention the much deeper ties of Democratic lobbyists to Russia. Don’t worry, the media seems to say: Even though they are representing Russia, the lobbyists are good upstanding citizens, not like the Trump people. They can be trusted with such delicate matters.

The media targeted former Trump campaign manager, Paul Manafort, for consulting for deposed Ukrainian president’s (Yanukovich’s) Party of the Regions. He also worked for billionaire oligarch, Firtash, who stands accused of skimming billions in the Ukraine gas trade in league with Russian oligarchs. The media also singled out Trump’s former national security advisor, General Michael Flynn, for attending a dinner with Putin and appearing on Russia’s foreign propaganda network RT. Trump’s own Russian ties were the subject of intense media coverage of an unverified opposition-research report purportedly prepared by an ex-British spy, who remains in hiding. It seems no enterprising reporter has tried to find him.

The media’s focus on Trump’s Russian connections ignores the much more extensive and lucrative business relationships of top Democrats with Kremlin-associated oligarchs and companies. Thanks to the Panama Papers, we know that the Podesta Group (founded by John Podesta’s brother, Tony) lobbied for Russia’s largest bank, Sberbank. “Sberbank is the Kremlin, they don’t do anything major without Putin’s go-ahead, and they don’t tell him ‘no’ either,” explained a retired senior U.S. intelligence official. According to a Reuters report, Tony Podesta was “among the high-profile lobbyists registered to represent organizations backing Ukrainian President Viktor Yanukovich.” Among these was the European Center, which paid Podesta $900,000 for his lobbying.

That’s not all: The busy Podesta Group also represented Uranium One, a uranium company acquired by the Russian government which received approval from Hillary Clinton’s State Department to mine for uranium in the U.S. and gave Russia twenty percent control of US uranium. The New York Timesreported Uranium One’s chairman, Frank Guistra, made significant donations to the Clinton Foundation, and Bill Clinton was paid $500,000 for one speech from a Russian investment bank that has “links to the Kremlin that was promoting Uranium One stock.” Notably, Frank Giustra, the Clinton Foundation’s largest and most controversial donor, does not appear anywhere in Clinton’s “non-private” emails. It is possible that the emails of such key donors were automatically scrubbed to protect the Clinton Foundation.

Let’s not leave out fugitive Ukrainian oligarch, Dymtro Firtash. He is represented by Democratic heavyweight lawyer, Lanny Davis, who accused Trump of “inviting Putin to commit espionage” (Trump’s quip: If Putin has Hillary’s emails, release them) but denies all wrongdoing by Hillary.

That’s still not all: Rep. John Conyers (D., Mich.) read Kremlin propaganda into the Congressional Record, referring to Ukrainian militia as “repulsive Neo Nazis” in denying Ukrainian forces ManPad weapons. Conyers floor speech was surely a notable success of some Kremlin lobbyist.

Lobbying for Russia is a bi-partisan activity. Gazprombank GPB, a subsidiary of Russia’s third largest bank, Gazprombank, is represented by former Sen. John Breaux, (D., La.), and former Senate Majority Leader Trent Lott (R., Miss.), as main lobbyists on “banking laws and regulations, including applicable sanctions.” The Breaux-Lott client is currently in the Treasury Department list of Russian firms prohibited from debt financing with U.S. banks.

In his February 16 press conference, President Trump declared in response to the intensifying media drumbeat on his Russian connections: “I haven’t done anything for Russia.” K-Street lobbyists, on the other hand, have done a lot to help Russia. They greased the skids for a strategic deal (that required the Secretary of State’s approval) that multiplied the Kremlin’s command of world uranium supplies. They likely prevented the shipment of strategic weapons needed by Ukraine to repulse well-armed pro-Russian forces. A fugitive billionaire who robbed the Ukrainian people of billions is represented by one of the establishment’s most connected lawyers.

Gazprombank GPB hired Breux and Lott to gain repeal of sanctions. That’s perfectly fine in Washington; they are playing according established “swamp rules” in their tailored suits and fine D.C. restaurants. General Flynn lost his job when the subject of sanctions was mentioned by the Russian ambassador in their telephone conversation, but that’s the way the media and Washington play.

No wonder that Trump’s’ “drain the swamp” and anti-media messages resonate so well with mainstream America.

*** Good above on reporting by Forbes but there is still more. No one has paid attention to Wilbur Ross, Trump’s pick for Commerce Secretary. Setting the table for the summary below, we need to remember the long game and historical actions of Trump, Cyprus and Russian ‘super-garchs’ as often managed by Putin and his wide yet so far successful global interests.

***

Trump’s Choice for Commerce Secretary Holds a Top Post With a Mysterious, Russian-Controlled Cyprus Bank

Wilbur J. Ross, Jr., the billionaire investor who is one of Donald Trump’s closest advisors on trade and economics, has extensive Russian financial ties that the Senate should thoroughly explore before voting on his nomination as Commerce Secretary.

Businessman Wilbur Ross, nominated to be Secretary of Commerce, has extensive ties to Russian oligarchs and associates of Russian President Vladimir Putin.

INTRODUCTION

In the midst of the Trump Administration’s many other Russian entanglements,[1] it turns out that  Wilbur J. Ross, Jr., the billionaire American investor who is one of Donald Trump’s closest advisors on trade and economics, has direct financial ties to several leading oligarchs from Russia and the Former Soviet Union or FSU.

The U.S. Senate should thoroughly investigate these ties before it votes on Ross’ nomination to be Commerce Secretary when it returns from recess next week.

Central to this inquiry is the question of Ross’s  role as Vice Chair and a leading investor in the Bank of Cyprus, the largest bank in Cyprus, one of the key offshore havens for illicit Russian finance. Ross has been Vice Chairman of this bank and a  major investor in it since 2014. His fellow bank co-chair evidently was appointed by none other than Vladimir Putin.

The Bank of Cyprus is just one of more than 100 direct and indirect investments that Ross listed on his U.S. Office of Government Ethics financial disclosure form last month. [2] He recently promised to resign as Vice Chairman of the Bank and disinvest from it within the next 90 days if his nomination is approved.[3]

Mere divestiture will not suffice here, even if it was immediate.  Exiting a brothel in a hurry doesn’t explain what you were doing there in the first place.

Ross’ involvement in the Bank of Cyprus raises many questions about his judgment, but also about the Trump Administration’s seemingly endless direct and indirect connections with friends and associates of Vladimir Putin, who all 17 U.S. intelligence agencies say conspired to interfere in the November 2016 U.S. election on behalf of Donald Trump.

Whether or not these connections involve any criminality, these are the kind of relationships that most American business people would not tolerate for 30 seconds.

After all, as discussed below, since the 1990s Cyprus has served as one the top three offshore destinations for Russian and former Soviet Union flight capital, most of it motivated by tax dodging, kleptocracy, and money laundering.[4]  As of 2013, just before the banking crisis, Russian deposits accounted for at least a third of all bank deposits in Cyprus. [5] As one leading newspaper put it, “Russian money is in fact at the heart of the island’s economy.”[6]

Nor is Ross’ Bank of Cyprus in particular –now probably at least half owned by Russians, as well see [7]—any stranger to money laundering,[8] tax dodging, or odious finance.  With a market share of 30 percent,  Bank of Cyprus has long been the market leader in Cypriot financial chicanery:[9]

  • As of 2013, for example, more than 81 percent of the bank’s deposits were accounted for by 21,000 mainly foreign depositors, up to half of them Russians, who each had at least €100,000 on deposit.[10]
  • By 2013, after a decade of rampant inflows of offshore capital and irresponsible lending, Bank of Cyprus alone had €11.5 billion of delinquent loans on its books – 60 percent of the country’s entire gross domestic product.[11]  At that point, it required €11.3 billion of Emergency Liquidity Finance from the Central Bank of Cyprus to survive. [12]
  • The top 20 Bank of Cyprus borrowers reportedly accounted for €3 billion of these non-performing loans. This is consistent with the patterns found in other recent credit booms—dodgy real estate projects, bust-out loans to insiders, and rampant control fraud. [13]
  • In March 2015, it was discovered that 19 of the Cyprus Parliament’s 56 Members of Parliament, owed BOC €51.2mm, including 13 MPs whose non-performing loans totalled €35.3m.[14] The following month, the Parliament adopted a new pro-bank law to accelerate foreclosures. Evidently the revelations increased the pressures to act.[15]
  • In a series of recent criminal trials in Nicosia, five former CEOs, Board Chairmen, and managers of Bank of Cyprus have been charged with a wide variety of financial misconduct pertaining to the pre-2013 period. The charges include conspiracy to defraud investors, forgery,[16] and market manipulation. [17]  No one has yet been convicted.

There are also disturbing reports of several recent high-profile money laundering cases in Cyprus.[18] There are also reports that attempts to clean up money laundering and improve financial transparency stalled, [19]  and that as of 2016, “Geldwasching” may be back, not only in Cyrus as a whole, but also at the Bank of Cyprus. [20]

So this is the fundamental question:

How did a prospective U.S. Commerce Secretary come to play a lead role in what turns out to be one of the world’s leading haven banks for laundering Russian money, precisely at a time when the U.S. Government and the EU have been trying so hard to enforce economic sanctions against Russia and Putin’s wealthy allies?

Before the U.S. Senate approves Ross’s  nomination, it is essential to get to the bottom of these curious relationships.  Unfortunately, no one bothered to ask Ross even a single question about them, the Bank of Cyprus, or dirty Russian money at his January 18 confirmation hearing before the Senate Commerce Committee, where he received unanimous approval along with a ringing endorsement from his Florida Senator. [21]

In “TrumpLand,” however, as we have recently come to appreciate, that was eons ago.  And there are now signs that the U.S. Senate may finally be waking up. [22]

THE ‘BANKRUPTCY KING’ SWOOPS IN

 In July 2014,  Ross became Vice Chairman of the Bank of Cyprus.[23] At that point the bank was in deep financial trouble, having nearly failed in 2013.

The Bank of Cyprus lists Wilbur Ross as an officer.

Ross, who specializes in buying troubled firms cheap and then reselling them, organized a group of U.S. and European-based investors to spend €1 billion (U.S. $1.3 billion then) to acquire 17 percent of the common stock of this deeply troubled bank, including Ross’ own 1.6 percent stake.[24]

Since then,  Ross has played an active role in recruiting and nominating its senior management team, especially its board chairman,  Josef Ackermann,  the long-time former Chairman of Deutsche Bank—one of the few banks in the world that would make loans to Donald Trump.[25]

THE ROOTS OF THE CYPRUS CRISIS

To understand Ross’s role in Bank of Cyprus, we  really have to start with what happened following the 1989 collapse of the Soviet Union, when state-owned enterprises and vast amounts of oil and gas reserves and mineral wealth were sold for a song to a new class of incredibly rich, politically well-connected oligarchs and their partners in the state security apparatus.

As we have recently explored elsewhere,[26] from the mid-1990s on, this massive reconcentration of wealth gave way to an extraordinary outflow of flight capital, and the proliferation of tax dodging and criminal enterprises.

Among the key beneficiaries of this economic crisis was Vladimir Putin, who rode it to power.  But the tsunami of illicit  Russian money also greatly benefited Donald Trump, who, as discussed in more detail in a previous article,[27]  simply could not have financed his bankrupt business empire in the early 2000s without it.

Of course, Trump has reiterated time and again—most recently at his White House press conference on Feb. 17—that he has no business deals with Russia. Significantly, Trump said nothing about Russians, investors from other former Soviet Union states like the Ukraine or Kazakhstan, or ventures with Russians outside of Russia and the former Soviet Union.

In the past, even Trump has boasted repeatedly about raking in many millions from Russian oligarchs who bought luxury Trump apartments and joined his golf clubs. Nor has he denied that he was paid $13 million to hold the 2013 Miss Universe pageant in Moscow.  His three oldest children also made 13 trips to Moscow over 18 months, in what the Trump Organization described at the time as business trips intended to recruit Russian investors.

Furthermore, as noted below, one Russian oligarch shelled out at least $95 million to Trump in one Florida real estate deal. [28]  This allowed Trump to more than double his $41 million investment in that property in four years. [29]  This profit were earned at a time,  when by Trump’s own account,  the U.S. real estate market was a “disaster”—so dead that he actually sued Deutsche Bank, his one remaining global creditor,[30]  in a failed effort to avoid repaying a $40 million real estate loan.[31]

DESIGNER HAVEN

In Ross, we see an indirect beneficiary of the 1990s Russian debacle. More suspicious money inundated Cyprus, and especially the Bank of Cyprus, than could possibly be put to work in that island nation. Ultimately this created a lucrative opportunity for Ross, his investment group, and the wealthy Russian investors in the Bank.

The Bank of Cyprus is certainly no ordinary bank.  At the time it nearly failed in March 2013,  it was the largest financial institution in Cyprus, a tiny island country that is strategically located in the eastern Mediterranean and is one of the EU’s newest members.

According to money laundering experts, the Bank of Cyprus also has a long history of being up to its ears in Russian flight capital.[32]  Indeed, Like Trump and Putin, Cyprus in general—and the Bank of Cyprus in particular—have been huge beneficiaries of Russia’s 1990s economic crisis and the extraordinary deluge of dirty money that it produced.   Especially since Cyprus was admitted to the EU in 2004 and the Eurozone in 2008,[33] the island has captured the bronze medal, just behind more venerable havens like the Switzerland and the UK. And,  as noted, the Bank of Cyprus was the market leader, as the island’s largest single financial institution, which for a time also had branches in Moscow, the Ukraine, Greece, and Rumania. [34]

Of course Russian flight capital might have landed in many places.  The interesting thing about Cyprus’ unusual success in capturing it is that it was by design. Since the 1980s, the Cypriot tax system, tax treaties, financial regulations, company laws, and residency requirements have all been carefully engineered to attract offshore money, especially from the Russia/FSU region. This was done at the urging of the island’s influential bank lobby and its nearly 2,000 lawyers and accountants. The Central Bank of Cyprus did its part by turning a blind eye to money laundering, unless it clearly involved terrorism.

So the island soon developed quite a reputation. Today, Cyprus-based holding companies and banks account for a majority of the world’s direct investments into Russia and a significant share of all Russian capital outflows. And the Bank of Cyprus has led the way. [35]

Much of this direct foreign investment into Russia from Cyprus involves “round-tripping,” where funds are channeled through offshore companies and then rerouted back as if it were foreign capital. The financial secrecy and special tax treaty provisions offered by Cyprus insulated the owners from pesky annoyances like taxes, creditors, exchange controls, and restrictions on money laundering.

By the mid-2000s, many affluent Russians had also decided to move their “human capital” to Cyprus.Thousands bought real estate on the sunny, relatively democratic isle and started living there at least part time. Up to 50,000 Russians now reside in Cypriot enclaves like “Limassol-grad,” which features Russian language newspapers, radio stations, schools, restaurants, films, law firms, and ice-cold bottles of Baltika. [36] Especially after Cyprus was admitted to the EU (2004) and the Eurozone (2008), they expected bank deposits to be guaranteed by the ECB and that the Euro would be relatively sound. Those who could afford to invest €5 million in real estate ($6.5 million back then) could also get EU passports, [37] which allowed them to move freely around Europe. It was a uniquely Cypriot combination – Mediterranean relaxation and Russian riches.

MORE MONEY THAN LEGITIMATE USES FOR IT

Sadly for many Cypriots, all this loose incoming Russian loot—combined with lax Eurozone bank regulation and the Cyprus banks’ increasing confidence  after 2008 that the ECB would bail them out, no matter how they misbehaved—led to a classic case of what economists now call “the finance curse.”

Eventually, the deluge of unregulated offshore deposits produced a gigantic financial bubble. Cyprus banks issued more than €160 billion of dodgy real estate loans and corporate loans and poured tens of €billions more into dodgy Greek bonds.

The result was a tandem debt crisis. Especially after the Greek debt crisis hit in 2011, Cyprus banks started to tremble. But no one wanted to slow lending and trigger a (much milder) recession, so they delayed facing reality as long as possible.

By  2013 the island’s two largest private banks, the Bank of Cyprus and Laiki, were on the verge of insolvency. Cypriot government debt soared to 125 percent of gross domestic product, as the overall economy and tax revenues tanked.  By 2012-13, private bank loans exceeded 800 percent of GDP. Even today, while the public debt ratio still hovers around 100 percent,[38]   an astounding 60 percent of Cyprus bank loans, or 150 percent of GDP, are classified as “non-performing” because they are not being paid back. For comparison, U.S. banks now class just 1.28 percent of their commercial loans as nonperforming.[39]

To this day, Cyprus is still paying a huge price for this boom-bust cycle and the failure to regulate its financial institutions.  While it is no longer in the acute care ward, and the IMF has recently praised the island – in contrast to Greece!—for being able to pay off the emergency loans and terminate the bailout program,[40] Cyprus still suffers from the enormous private debt overhang. And that, in turn, has yielded slow growth, 15 percent unemployment,  and a highly uncertain future—plus the pleasure of hosting 50,000 Russians.

For Wilbur Ross and his fellow private vulture capitalists, this Russian-flight induced crisis presented an irresistible investment opportunity. (Exactly who introduced Wilbur’s group to the island is an interesting question that the Senate should explore.)

The bank’s management and board spent the first year after the March 2013 crisis staving off bankruptcy with the help of €10 billion in ECB and IMF emergency assistance—including €6.5 billion for the Bank of Cyprus alone. In 2014  it decided to raise new capital. In July 2014, in exchange for €1 billion, Ross and his group were able to acquire 17 percent of the bank’s stock, the largest single ownership block, plus the Vice Chairmanship and significant management influence.[41]

The only trouble was that Ross and his group could not afford to be too discriminating about who their co-investors were. To this day, as noted, not only is Bank of Cyprus at least half owned by Russian investors, but several of the largest ones are “super-garchs” who have business and personal histories that are, to be polite, colorful.

Nor could Wilbur’s investment group afford to be too particular about the uses these co-investors made of the bank, or the fact that Bank of Cyprus’s new business model – apart from financial chicanery and more MP loans–requires an awful lot of hard work trying to collect money they don’t have from thousands of recalcitrant borrowers.

THE BANK AND THE  OLIGARCHS

 Under the terms of  Cyprus’ 2013 agreement with the ECB and the IMF, to qualify for for their €10 billion bailout—fully €7.3 billion of which went to bail out the Bank of Cyprus and other private banks[42]—the country was compelled to agree to “bail-in” “large depositors” – those  with over €100,000 on deposit.

In return for seizing 47.5 percent of their deposits, 21,000 of depositors – and especially a core group of about 560 – initially received 81.5 percent percent of the bank’s stock.  When the Ross group arrived this was slashed.  The Bank’s financial disclosures don’t permit us to say precisely how this ownership is distributed. But at least a third to fifty percent accrued to wealthy Russians who received stock in proportion their confiscated deposits.[43] In addition, our three leading identified Russian ‘garchs also ended up owning at least 14.3 percent of the bank.[44]

Another 9.6 percent of Bank of Cyprus shares is managed on behalf of Laiki’s former customers – many of whom were also Russian depositors—by Bank of Cyprus management, without direct board representation.[45] All told, as discussed in this footnote, even after the Ross group’s entry, at least 40 to 50 percent of the Bank of Cyprus’s voting power is now Russian-controlled.[46]

As for the largest Russian shareholders, we are only able to identify those who now own at least at least 3 percent of Bank of Cyprus’s shares. But even this subset includes several well-known oligarchs. All three maintain important connections to Russia, they all are on reasonably good terms with President Putin, and at least one is no stranger to Donald Trump.

As of now, Ross maintains a joint Co-Chairmanship in Bank of Cyprus with Maksim Goldman, who represents Lamesa Holding S.A. , a part of the  Renova Group, an aluminum and oil conglomerate that is majority-owned by Vekselberg.

As of 2014, Lamesa’s stake in the Bank was 5.5 percent; in 2015 it was increased to 6.2 percent  with the purchase of the 0.7 percent stake from Strzhalkovsky. In January 2017, it increased again to 9.3 percent, making Renova Group the bank’s largest single shareholder.

Russian-born, UCLA-educated Maksim Goldman (This photo appears on the Bank of Cyprus website.)

Together with his long-time business partner Leo Blavatnik, Vekselberg is a major aluminum and oil industries investor through Renova Group, their corporate umbrella group.  He also reportedly owns the world’s largest collection of Faberge eggs, and a yacht, the Odessa II,  that is valued at $150 million.

Vekselberg is the 7th wealthiest Russian, according to the Russian edition of Forbes magazine.[65]  He is reportedly also on reasonably good terms with President Putin. In fact, he reportedly delighted the “new Tsar” by spending millions to buy up the Faberge eggs and return them to a special museum he has created for them in Moscow. Vekselberg has denied reports of some tension between him and Putin.[66]  There have been some recent reports of tensions in the relationship, but VV has denied it. [67]

Here are a few questions that Senators should ask Ross in public hearings about Viktor Vekelsberg: 

  • When, where and under what circumstances have you ever met or communicated with Viktor Vekelsberg or his business partners? How frequently do you communicate directly or through Maksim Goldman or anyone else associated with Renova Group?
  • What business dealings, if any, have you had directly or indirectly with Vekelsberg and his various business enterprises? With his partner Len Blavatnik, directly or indirectly? What role has he and his family played in the bank? Do other members of his family do business with the Bank?  Do other members of his affiliated companies do business with the Bank or with other investors in the Bank?   To your knowledge, has he or his business partners done any business with the Trump Organization?
  • What has been Renova’s role at the Bank of Cyprus? How does Vekelsberg use the bank, as a depositor, investor or borrower? What loans or advances were extended to him or at his direction to others? Has Vekelsberg brought any new clients to the bank?  If so, who?
  • What can you tell us about business dealings between Vekelsberg and others associated with the Bank of Cyprus and Renova Group and Donald Trump, his organization and his family?
  • Were you aware that Vekselberg’s long time business partner is Len Blavatnik? Were you aware that on October 25 2016, AI ALTEP Holdings Inc., a company reportedly based in New York City and owned directly or indirectly by Vekselberg’s business partner Len Blavatnik, made a $1 million contribution to Senator Mitch McConnell’s “Senate Leadership Fund?”[68]

Dmitry Rybolovlev: Reportedly owned the largest stake in the Bank of Cyprus as of 2010 (9.7%); bought Donald Trump’s Palm Beach house in 2008 for $95 million, at the time the most expensive property in the U.S., more than doubling what Trump paid four years earlier; his personal jet’s flight pattern shows an odd coincidence of airports with Trump’s appearances on the fall campaign trail. (See the discussion below.)

Dmitry Rybolovlev

Wilbur Ross also has a direct link through the Bank of Cyprus to a third leading Russian oligarch who, as of 2010, was the bank’s largest single investor and appears to still own a significant position in the Bank.

This is Dmitry Rybolovlev, a 50-year old Russian once known as the country’s “potash king.” During the “Wild West” days of Russian privatization back in the mid-1990s, “Rybo” had acquired a two-thirds stake in a critical fertilizer company, Uralkali, which eventually supplied up to 30 percent of global potash sales.[69]  Beginning in June 2010, however, shortly before Rybolovlev invested €233 million in the Bank of Cyprus,  he rather wisely started to dispose of his 66% stake in UralKali, completing the divestiture in 2011.[70]  Since then potash prices have slumped, so in hindsight, this was an adroit move.

Even after an expensive divorce, in recent years Rybolovlev’s net worth has variously estimated at $5 to $13.8 billion, depending on the year and source, with $7.8 billion being the most popular guesstimate. [71] According to published reports, he has a very impressive €500 million art collection, although some of it was recently the subject of nasty litigation concerning provenance. [72] He has also reportedly acquired xCitbank CEO Sandy Weill’s $88 million penthouse in New York,[73] a $20 million mansion in Hawaii that used to belong to the actor Will Smith,[74] a waterfront property in Palm Beach that he purchased from Donald Trump,(see below), two luxury villas in Gstaad, two personal jets that are reportedly worth over $100 million, including a private Airbus A319 (see below), [75] a mansion on the Rue de l’Elysée in Paris that overlooks the Presidential Palace, the entire island of Scorpios, a $68 million 67-meter yacht, and the football club in Monaco.[76]

If this fellow had invented fertilizer, it is hard to believe that this collection of toys and lucre or his collection of invoices from divorce attorneys would be any more elaborate.

In addition to just being yet another fabulously rich Russian natural resources billionaire — for our purposes Rybolovlev is interesting for at least three other reasons.

First, as noted,  in 2010 Rybolovlev bought 9.7% of the Bank of Cyprus, becoming at that point by far its largest single investor. By 2013, just before the crash, he had reportedly increased that to 9.9 percent.  Even after the 2013 crash and refinancing that produced a “haircut” for existing Bank of Cyprus investors, he appears to have retained at least a 3.3% stake. Although this stake is larger than Ross’s 1.6 percent, Rybolovlev does not have a seat on the board of directors. [77]

Second, like many other hypertense members of the Russian elite, since the early 2000s Rybolovlev has been on of a crusade to diversify his wealth internationally. The potash mines were hard to relocate physically, so he sold off some his stake in it, and has focused since 2007 on purchasing foreign properties, joining the Russian émigré flood abroad.

In particular, in addition to all the other foreign properties described earlier, in June 2008 he purchased a Palm Beach waterfront property from Donald Trump for $95 million plus a sales commission, one that Trump had reportedly purchased himself in July 2004 for just $41 million.[78] The unusual nature of this transaction is only underscored by the fact that the property had been valued at just $59.8 million on Palm Beach County’s tax rolls as of 2013. Eight years later, in 2016, Rybolovlev had the 60,000 square foot mansion that Trump built torn down, subdivided the property in three, and sold off a 2.74-acre plot for $34 million – nearly $3 million per acre less than he had paid for it.[79]

This price gain is also especially interesting because in mid-2008, Trump was complaining loudly the American real estate market was “dead” and that many of his projects were cratering. Indeed, as we noted earlier, that same year he fought tooth and nail to avoid repaying a $40 million real estate loan to Deutsche Bank.

Now precisely at that crucial point in mid-2008,  just as the Great Recession was unfolding, this extraordinary  $50 million Russian cash injection into Donald Trump’s balance sheet may well have saved him from personal bankruptcy. On top of his six other corporate bankruptcies, that one, in turn, might well have been the beginning of the end for Donald Trump’s political ambitions.

Third, according to flight logs from FlightRadar24 and PlaneFinder, as well as photos of planes on the ground taken from Jetphotos.co and amateur photos taken at airports by amateur Twitter journalists, an Airbus A319-133X(CJ)  with the registration M-KATE that very much appears to belong to Dmitry Rybolovlev appears to have followed some very unusual flight patterns during the fall 2016 American presidential campaign.

When Rybolovlev still owned his potash company, he reportedly maintained an Airbus A319 that was outfitted for personal use. This plane, with the registration M-KATE, is registered to Sophar Property Limited, a British Virgin Islands company.[80] While this company was originally registered to UralKali, the potash company that he disposed of by 2011, apparently Rybo, as he is known, enjoyed this plane and another, a Falcon, so much that he retained ownership or at least use rights to the two planes, this Airbus and, a Falcon jet. The Airbus A319’s registration is reportedly named after one of his two daughters, Ekaterina. [81]

For our purposes, the intriguing thing is that this plane, normally based in Moscow and Switzerland, can be tracked. According the flight logs available from FlightRadar24,  it made numerous flights all over the U.S.  from August 2016 through November 2016, the peak season for the U.S. 2016 Presidential campaign – of course right at the moment when Moscow was supposedly trying to jack the election on Trump’s behalf.

Moreover, in at least three cases, Airbus A319M-KATE showed up at very same airports, where candidate Trump was – in the North Carolina cities of Charlotte and Concord and in Las Vegas, for example.   Indeed, in the case of Charlotte, local photographers took pictures of M-KATE and the Trump campaign jet at the very same airport on November 3, 2016. During a presidential campaign close aides often arrive before and after the candidate, times that overlap with the Rybolovlev jet in several cities.[82]

Local photographers took pictures of M-KATE and Trump’s Boeing 757 the Trump campaign jet at the same airport on November 3, 2016.

Indeed, earlier this month — on Friday, Feb. 10 2017 — Rybolovlev‘s Airbus A319 M-KATE flew all the way from Switzerland to Miami. That airport is near where the White House said that the president was partying with hedge fund mogul Steven Schwartzman in Palm Beach on Saturday night. Rybolovlev’s jet returned to Switzerland on February 12, flight records show.

There were also M-KATE flights to Westhampton, New York and Los Angeles in early August  2016 and October-November, 2016,  but the intersections with Trump’s travels are less clear. Why would Rybolovlev’s plane scurry back and forth from Moscow to odd destinations like Charlotte and Concord, as well as to Las Vegas, New York, Burbank,  and Miami, to arrive there precisely when Trump was there?  The obvious question: was Rybolovlev a Putin emissary?

These flight patterns that were first noted by observant ‘Twitter journalists” like @Observer14 and @AceInCharlotte back on Nov. 3, 2016, just as they were occurring. [83]

But what could Rybolovlev possibly have been carrying that couldn’t have been ported more efficiently and discretely by other methods? Furthermore, are we sure that relations between Putin and Rybolovev are all that good?  After all, in 2008,  Igor Sechin, Putin’s Deputy Prime Minister at the time  —  and now the  Executive Chairman of the fabled Rosneft, the world’s largest publicly-traded oil producer — reportedly threatened to prosecute Dmitry Rybolovlev’s potash company over a mine disaster, exposing it to huge fines.[84]  Soon after this threat, Rybolovlev’s potash company, UralKali, reportedly paid $250 million of “voluntary” compensation to the government. After that Rybolovlevalso accelerated his efforts to diversify abroad.  The Financial Times does say that relations between Putin and Rybolovlev are now fine. [85]  But this pattern also fits the standard Putin stratagem whereby oligarchs are pressured into becoming semi-feudal servants of the de facto modern Tsar.

In any case, these flights remain a genuine enigma.  We do yet not have any eyewitness reports or photos that show that Rybolovlev was actually on the planes or actually met with Trump or any of his staff. But these coincidences, combined with everything else we know about Rybolovlev’s connections to Trump and Ross,  certainly deserves further scrutiny.

This prompts still  more questions for Wilbur Ross, this time regarding Dmitry Rybolovlev:

  • How long have you known Dmitry Rybolovlev? How much of the Bank of Cyprus does he currently own? What role has he and his family played in the bank?  Do other members of his family do business with the Bank?  Do other members of his affiliated companies do business with the Bank or with other investors in the Bank?  What contacts have you or associates had with Dmitry Rybolovlev?
  • What attention did you and your team pay to Rybolovlev because of his 3.3 % (and at one time nearly 10%) stake in the Bank of Cyprus? What due diligence did you or your associates perform regarding Rybolovlev and Trump? What did you find?
  • When and how did you learn of the lucrative deal Trump made with Rybolovlev in 2008 to sell his Florida property at a huge profit? As a long-time Trump friend and associate, were you involved in that deal?  Did you meet Rybolovlev at the time? To your knowledge, has Donald Trump had any other business dealings with Rybolovlev or his associates? 
  • Have you or your businesses done any business with Rybolovlev or entities associated with him?
  • When and when if ever, have you or your team met or communicated by telephone mail, email or through intermediaries with Rybolovlev? Are you aware of any occasions where Dmitry Rybolovlev may have met with Donald Trump or other members of his staff?  Were you present at any occasions in the last year in the U.S. or elsewhere where Dmitry was present?  How do you account for the unusual flight patterns listed above?  Do you know who recently bought one-third of Rybolovlev’s Palm Beach property?  Did you attend the Schwartzman party in Palm Beach on February 11? Was Dmitry there? Did you meet Donald Trump or other members of his staff that weekend? If so, what was discussed?

Josef Ackermann: Chairman of the Board, The Bank of Cyprus since 2014; former Chairman of Deutsche Bank (2002-12) during period when it engaged in a wide range of corporate misbehavior, including laundering $10 billion of Russian money, incurred fines that nearly bankrupted the bank, which is the largest single lender to the Trump Organization; “Friend of Vlad” who reportedly knows Putin well.

When Wilbur Ross became Vice Chairman of The Bank of Cyprus in July 2014, one of his first acts was to nominate Josef Ackermann, who had headed Deutsche Bank from 2002 to 2012, to become Bank of Cyprus’s new board chairman. He assumed that role in November 2014 and still holds it. Even back in July 2014, it was difficult to make Ackermann’s decade running Deutsche Bank look like an achievement, to say the least. Since then, it has become even clearer that he presided over a period of spectacular chicanery at Germany’s largest bank. Given this, his nomination by Ross to head the Bank of Cyprus in 2014  seems peculiar, to say the least.

One possible explanation is that Wilbur Ross is a long-time financial ally of Donald Trump, dating back to an effort to restructure his casinos in 1990. From 2002 to 2012, under Ackerman, Deutsche Bank had become Trump’s largest bank creditor by far, with more than $650 million of loans to the Trump Organization and even more to other Trump partnerships, as of 2008. [86] Trump’s 2016 financial disclosures show that out of $650 million owed by him and his organization, $364 million was owed to Deutsche Bank.[87]

Meanwhile, ever since Trump failed to repay more than $900 million of bank loans in the early 1990s, other major U.S. and European banks had largely rejected him. He did not help his own cause by bragging in print that he had borrowed from the banks knowing full well that he would never repay.

To this day, why Deutsche Bank has continued lending to Trump and his organization remains a mystery.

Indeed, according to recent press reports, Deutsche Bank has recently been looking into allegations that the Russian Government may have guaranteed some of the bank’s  more generous loans to Trump during the Ackerman period, either directly, or through offshore banks and companies. [88]

This would resemble a similar approach that was used by Putin in France. In 2014  he helped secure €11 million for Marine Le Pen’s cash-starved National Front from the “First Czech-Russian Bank,”  a Moscow-based bank, as a reward for her support for Russia’s March 2014 invasion of Crimea and other Putin policies. [89]

In any case, as noted, during Ackermann’s tenure at Deutsche Bank, Deutsche Bank had indulged in an incredible range of financial misconduct, from sanctions-busting, interest rate rigging, and mortgage fraud to facilitating tax dodging, illicit trading, illegal foreclosures, rigging energy markets, and money laundering.[90] By no means were any of these full-blooded “white collar crimes” that were prosecuted to conviction and sentence; in most cases, they were disposed of by settlements and, at worst,  deferred prosecution agreements. But in many ways that is the point – leniency may explain why they kept recurring.

Since 2010 all this misconduct has finally caught up with the bank, if not its former senior executive. Although no one has gone to jail, Deutsche Bank has already had to pay nearly $20 billion in fines and settlement costs.

Those already booked include a  recent $7.2 billion U.S. Justice Department settlement for issuing fraudulent mortgage-backed securities in the 2008 financial crisis – the largest penalty of its kind to date.  [91]   This was also coupled with a $5.3 billion fine against Ackermann’s previous employer, Credit Suisse, for the same exact kind of toxic RMBSs. [92]  Another case led to a $650 million fine for laundering $10 billion of Russian money, by way of Deutsche Bank’s  offices in Moscow, New York, and Cyprus.

All these penalties were announced in January 2017. They all pertain to behavior that took root on Ackermann’s watch.  As a New York State financial regulator remarked when he announced the Russian money-laundering fine for Deutsche Bank in January,  “This Russian mirror-trading scheme occurred while the bank was on clear notice of serious and widespread compliance issues dating back a decade.” [93]

Since 2016, all this misbehavior has finally caught up with Deutsche Bank’s stock price. DB’s stock price has sharply underperformed other bank stocks because of the billions of litigation expense and penalties, to a large extent for offenses that originated during the Ackerman years. This, in turn, has led to huge job cuts, and even some serious concerns about whether Germany’s largest bank may soon require a bailout of its own. [94]

Meanwhile, Ackermann has moved on, bonuses and all, despite recent demands from shareholders to claw them back.

As the saying goes, however, “A shoemaker does not just make one shoe.” There are some reports from investigative journalists that Cyprus is still up to its old tricks, albeit on a smaller scale. As a German ZDF TV investigative program concluded last year after succeeding in laundering €15 million through the Bank of Cyprus and other Cyprus banks, “Money laundering in Cyprus is still possible.” [95]  If so, the mere force of competitive pressures mean that Bank of Cyprus cannot stay far behind.

This is especially irritating to money laundering experts. After all, one of the key conditions for the €7.3 billion bailout that Cyprus received from the ECB and IMF in 2013-2016 was that Cyprus banks would commit to much tougher programs for monitoring compliance with “anti-money laundering” rules and statutes.  As Ackermann acknowledged in a June 2016 interview, however, “There may still be individual cases…Money laundering had been the business model of Cyprus, and it is a difficult struggle.” [96]

Evidently, it is not a struggle for everyone.  In addition to becoming Chairman of the Board of the Bank of Cyprus, Ackerman has also joined the board of directors of Viktor Vekselberg’s Renova Group.  This is consistent with the fact that Ackermann also reportedly enjoys a long-standing, warm relationship with Vladimir Putin. While at Deutsche Bank,  he met with Putin  and other senior Russian officials frequently, served on Russia’s Foreign Investment Advisory Council and its “consultative committee” to form an “International Financial Center” in Moscow, and strongly endorsed Putin’s peculiar idea of a “free trade zone” between Russia and the EU.[97] In Putin’s own words, “It would take ages to describe everything that Deutsche Bank is doing in Russia.” [98]

Indeed I fear that it may.

So we also have a  few more questions that Senators should ask Ross, under oath, in public hearings, with respect to Josef Ackermann:

  • How long have you known Josef Ackerman? What loans or other business dealings have you had with Credit Suisse or Deutsche Bank? Do you have a private banking relationship with Deutsche Bank? With Credit Suisse? 
  • Are you aware of Deutsche Bank’s history with respect to Donald Trump? To your knowledge, does Josef Ackerman know Donald Trump? To your knowledge, was he involved  in the lending relationship between Deutsche Bank and the Trump Organization or between the private banking side of Deutsche Bank and Donald Trump or is family? Was this a factor in your decision to hire him?
  • What due diligence did you do with respect to Josef Ackermann? What questions did you ask Ackermann about his connections to Trump, Putin and Russian oligarchs? Are you aware that Josef Ackerman has a very cordial relationship with Vladimir Putin? Was that a factor in your decision to nominate him?  Does Vladimir Putin ever any banking relationships with The Bank of Cyprus? 
  • Given Ackerman’s track record, and in light of your own reputation for bank turn-around management, why did you hire Josef Ackerman to be Chairman of the Board of The Bank of Cyprus?  How confident should its shareholders be in his leadership?

 WILBUR ROSS – SUMMARY

At 79, Wilbur Ross’s energy level and sheer capacity to take on new challenges are impressive. If approved, he would be by far the oldest U.S. Commerce Secretary ever. But his nomination is actually not that surprising.

To begin with, Ross’ relationship with Trump goes back at least to the early 1990s, when he helped to finance one of Trump’s first Atlantic City casino deals. [99]  Ross has also been one of the most generous donors to Trump’s 2016 campaign. And he is widely reported to be one Trump’s most trusted advisors—in so far as Trump listens to anything other than the voices in his head.

Ross fits right in with the ruling financier elite, way more easily than the President. Of course, Trump campaigned against all these folks when he was courting the lumpen proletariat back in the fall, but when he realized for the first time on Election Eve that he might actually have to govern, he immediately began to invite the hard-working Ivy elite in to do a reverse takeover.

Most important, while Ross’ investment funds have had trouble raising money lately, reportedly out of concern about his age, [100] he does provide Trump with a certain degree of respectability in the investment community.  While Trump falsely claims a degree from the Wharton School (he actually attended Penn’s undergraduate real estate economics program), Ross has a degree from Yale and earned a Harvard MBA.[101]  While Trump has no record of public or community service of any kind, Ross serves on the boards of a dozen prominent non-profits, including the Japan Society (Chair), Brookings, and the Dean’s Advisory Board at the Harvard Business School.[102]  He also holds seats on the boards of 70 for-profit firms, including 7 banks and 19 offshore haven companies.

The January 15 “Ethics Agreement” Ross signed with federal Office of Government Ethics promises that he will divest up to 80 of these investments within 90 to 180 days and that he will resign from most of his board seats as well. [103]

Unfortunately, however, this does not put an end to potential conflicts of interest, especially in the Ross case.

First, from the standpoint of potential conflicts, as the Wall Street Journal recently reported, Ross still insists on retaining tens of millions of dollars in investments in non-transparent offshore entities. [104]

These include a major co-investment with the Chinese government, a stake in a shipping company that will probably be subject to Commerce Department regulations, and a Cayman Islands “fund of funds” whose underlying assets and co-investors are completely invisible — for all we know they include “friends of Putin.” Ross hasn’t been asked.  [105]

Second, the proposed terms of disinvestment are pretty slack. Three months is an eternity on Wall Street – plenty of time to alter their value if Ross were so inclined.

Third, there are no limits on Ross’ partners’ investments in the Bank of Cyprus or any other enterprises. They might decide to reward him in Heaven for favors done now,

Fourth, Ross is not required to unwind his extensive loan portfolio, including the very large sums that he and his group owe to big banks like JP Morgan. These banks may well be within the range of various federal government regulations that official actions by Ross could impact.

Fifth, If Mr. Ross were so inclined, an endless variety of murky dis-invest and buy-back deals might be constructed to offset his formal disinvestments. This is the essence of the problem with trying to enforce conflict of interest rules against extremely rich business people who have built up global networks of other rich business people over decades. Favors are discretely provided and reciprocated. Just ask Vladimir Putin.

Just for the sake of argument, however, let’s assume for the moment that Wilbur is too long in the tooth to take advantage of such loopholes or be motivated by selfish considerations. Let’s also stipulate that he really does believe that what he is serving the public good, as he sees it.

Even then,  there is still another valid concern—  the most important. From this angle, classic “conflicts of interest” analysis and Ross’s pledges to discontinue his investments and board seats both miss the point.

For just as with the President, the stench of dodgy associations lingers on. In other words, even if  Ross divested everything down to his garters,  there would still be this annoying puzzle:

Why, at the ripe old age of 77,  way back in 2014,  did Wilbur  Ross step in with a lot of his and his associates’ money to save this feral bank in Cyprus?  Why  did he  pursue all these associations with  dodgy  Russian “investors,” including “close associates of Putin?”

Before it confirms Mr. Wilbur Ross, the U.S. Senate needs to conduct a full investigation and demand public testimony to help us understand this glaring puzzle.

(For full citations and footnotes, click here, see bottom)

 

U.S. Military Footprint in Syria Expands

The hunt for ISIS leader Abu Bakr al-Baghdadi also continues in earnest. Raqqa is now surrounded by Kurdish and Free Syrian forces and Mosul is crumbling, a military official told ABC News, promising al-Baghdadi’s death at the hands of the U.S.-led coalition is “just a matter of time.”

In Syria, coalition military forces conducted eight strikes consisting of 11 engagements against ISIS targets:

— Near Abu Kamal, two strikes destroyed a wellhead and an oil inlet manifold.

— Near Raqqa, two strikes engaged an ISIS tactical unit, destroyed two vehicles, and suppressed an ISIS tactical unit.

— Near Dayr Az Zawr, two strikes destroyed four tactical vehicles, four ISIS-held buildings, two wellheads, two engineering equipment pieces and a tank.

— Near Manbij, two strikes destroyed a vehicle and an artillery system.

Related reading: US-backed forces in Syria have isolated ISIS’s last stronghold in the country

All strikes are conducted by fighter, attack, bomber, rotary-wing or remotely piloted aircraft; rocket-propelled artillery; and some ground-based tactical artillery when fired on planned targets, officials noted.

U.S. Special Forces have been on the move in northern Syria, deploying near the city of Manbij over the weekend to act as a buffer between American-backed Syrian militias and forces controlled by Turkey. Photos have emerged of U.S. Stryker vehicles configured for the U.S. Army’s 75th Ranger Regiment and specialized Humvees used by Special Forces moving near the city, and U.S. officials confirmed that the American presence around the city had been beefed up. The Ankara-backed Free Syrian Army militia — bolstered by Turkish special forces — moved on Manbij last week, as Turkish officials said they wanted to clear the Kurdish YPG out of the area. Local Syrian forces and the U.S. military deny that the Kurdish forces are near the city.

On a recent trip to northern Syria, FP’s Paul McLeary spent time with both U.S. Special Forces and their local allies near the city, and found the Syrians clearly worried about the Turkish threat. The view from Baghdad. Speaking with FP on Monday, spokesman for the U.S. military command in Baghdad Col. John Dorrian said the American troop presence in Syria and Iraq hasn’t grown, despite the movement of more U.S. troops to Manbij. “There are adequate forces in the area” to handle the situation and “reassure our allies and our partners,” he said. The Manbij Military Council has also said that it turned back a Russian convoy of armored vehicles and troops that tried to enter the area, but Dorrian said he hasn’t seen any increase in Russian troops or aircraft around the city.
“Until now, U.S. military commanders have ruled out anything beyond some artillery support and an advisory role for U.S. special operations forces. But some officials and administration advisors are open to at least considering the idea of using conventional forces in a full-fledged combat role.”

  US SOF base at cement plant between Manbij, Raqqa.

A Syrian MiG-23 crashed in Turkey and the pilot is now claiming he was shot down.  Reuters reports that the pilot, who was rescued by Turkish authorities, says he was downed while flying over Idlib. The Islamist rebel group Ahrar al-Sham has claimed responsibility for downing the aircraft although the assertion has yet to be independently verified. The rescue by Turkey marks yet another sign of the turnaround in relations between Ankara, the Assad regime, and its supporters. In November 2015, a Turkish F-16 shot down a Russian Su-24 carrying out operations over Syria after it violated Turkish airspace, leading to a lengthy and bitter dispute between Turkey and Russia.

***

On Sunday, Syrian forces pushed ahead with their military campaign against the Takfiri Jabhat Fatah al-Sham group, formerly known as al-Nusra Front, in the Dar’a al-Balad neighborhood of the southwestern city of Dara’a, managing to retake several blocks of buildings, Syria’s official news agency, SANA, reported.

Large groups of the militants were killed in the areas of al-Masri, al-Karak and al-Arba’een.

Separately, the Syrian government forces targeted Daesh (ISIL or ISIS) positions on the southern outskirts of al-Qassr village in the northeastern countryside of Sweida province, leaving dozens of the terrorists dead and injured.

Additionally, the Daesh militants suffered serious setbacks in the western city of Deir ez-Zor after the army and its allies shelled their positions in the areas of al-Bogheiliyeh, Hatla, al-Sannof, al-Rwad, al-Sinaa and al-Rushdiye in the province.

Syria has been gripped by civil war since March 2011 with various terrorist groups, including Daesh, currently controlling parts of it.

 

C’mon Trump, Don’t Backtrack on This

ALERT: Starting April 3, 2017, USCIS will temporarily suspend premium processing for all H-1B petitions. This suspension may last up to 6 months. We will notify the public before resuming premium processing for H-1B petitions. Read more here: USCIS Will Temporarily Suspend Premium Processing for All H-1B Petitions

Image result for h1b abuse 2017

US suspends expedited processing of H-1B visas

(CNN) The US is temporarily suspending expedited processing of H-1B visas, eliminating the option of shorter wait times for the program that helps highly skilled foreigners work at US companies.

Under the current system, companies submitting applications for H-1B visas for potential employees can pay extra for expedited processing, which is referred to as premium processing. Premium processing costs an additional $1,225 and ensures a response from the US Citizenship and Immigration Services in 15 days or the fee is refunded. Processing of standard H-1B applications — those that are not premium — takes between three to six months.
The suspension is effective April 3, and could last up to six months, according to USCIS.
The change comes as President Donald Trump is said to be drafting a new version of his court-halted executive order that banned travelers from seven Muslim-majority countries from entering the US. The new ban will exclude existing visa holders, sources familiar with the plan have told CNN.
Fierce competition
The H-1B visa program is the main pathway for highly skilled foreigners to work at US companies. Various industries, including tech, engineering, journalism, medicine and academia, vie each year for the program’s 85,000 visas.
The visas are doled out by a lottery, and the number of applicants continues to swell each year. Last year, the demand was three times greater than the quota.
Outsourcing firms flood the system with applicants, obtaining visas for foreign workers and then farming them out to tech companies. They take a sizable cut of the salary.
While the visas are used to fill the US skills gap, Trump has spoken out about abuse of the program.
Calls for reform
A bipartisan bill introduced this week in Congress calls for reform of visas for highly skilled workers.

Image result for h1b abuse

**** C’mon Donald…it is not enough as you said on the campaign trail.

ComputerWorld: In November, President Donald Trump said on his first day in office he would order an investigation of H-1B abuses.

That never happened, though critics held their tongues. After all, Trump had repeatedly campaigned for H-1B reforms, even inviting laid-off Disney IT workers to speak at his campaign rallies. Even so, patience is ending.

Sen. Dick Durbin (D-Ill), a long-time critic of the H-1B visa program and co-sponsor of a reform bill with Sen. Chuck Grassley (R-Iowa), accused Trump today of failing “to put American workers first by cracking down on H-1B visa abuse.

“I am disappointed that you have broken your campaign promise to take action on the first day of your Administration to reform foreign guest worker visas – especially the H-1B visa – to put American workers first,” Durbin wrote in a letter to Trump sent Friday.

The White House did not respond to a request for comment. Durbin’s letter could be dismissed by some as a partisan attack by a Democrat, but he is not alone. The IEEE-USA has also warned that Trump is in danger of “letting down American workers.”

A key issue is the upcoming April 1 H-1B visa lottery. Trump has voiced support for a merit-based distribution system. As it stands now, however, the H-1B visas for the 2018 fiscal year will be distributed by lottery, no different than any other year. As a result, the IEEE-USA has warned that unless Trump moves to change the lottery, thousands of visas will go to offshore outsourcing firms.

IT workers have long complained about training H-1B-holding replacements, and Trump has spoken of the problem.

“Companies are importing low-wage workers on H-1B visas to take jobs from young college-trained Americans,” Trump said at a campaign rally last fall for Millennial-age voters in Ohio.

It’s not clear how much authority Trump even has to change the lottery. There are three competing views.

The IEEE-USA believes Trump needed to make a regulation to change the annual H-1B distribution. But Trump needed to do so this week to meet a 30-day notice requirement. But an official from the American Immigration Lawyers Association believes the only way Trump can change the lottery is with legislation, which means he has to wait for Congress to act. A third view is that Trump can change the lottery right up to April 1 with an executive order.

The Trump administration has given no indication of what it will do about this year’s visa lottery.

“The American people deserve an explanation for your decision not to pursue H-1B reforms on your first day in office,” wrote Durbin.

“If you do not take action in the next few weeks, outsourcers will secure the right to import tens of thousands of low-wage foreign guest workers to replace American workers,” wrote Durbin. “This is in addition to hundreds of thousands of H-1B workers who are already employed by outsourcing companies in the United States.”

North Korea fires four ballistic missiles

Photo/IllutrationThe Asahi Shimbun

SEOUL, March 6 (Yonhap) — North Korea on Monday fired four ballistic missiles into the East Sea, Seoul’s Joint Chiefs of Staff said, in an apparent reaction to the ongoing joint military drills between South Korea and the United States.

The four projectiles were launched from an area near the North’s Dongchang-ri long-range missile site at 7:36 a.m. and flew about 1,000 kilometers before splashing into the East Sea, JCS said in a text message.

“We estimate the North fired four ballistic missiles. We are conducting an analysis (with the U.S.) on the missiles to determine their type and other specifications. It will take a while before we can come up with a final analysis (based on U.S. satellite data),” the JCS said.

South Korean and U.S. troops here will stay on high alert to counter any provocations by the North, the defense ministry said.

Acting President and Prime Minister Hwang Kyo-ahn convened a National Security Council meeting after the missile launches.

Military officials raised the possibility that the projectiles could be intercontinental ballistic missiles (ICBMs) capable of reaching the west of the U.S. mainland if launched at a high angle.

In this photo taken on March 6, 2017, two men watch a news report on North Korea's firing of ballistic missiles into the East Sea early Monday morning. (Yonhap) In this photo taken on March 6, 2017, two men watch a news report on North Korea’s firing of ballistic missiles into the East Sea early Monday morning. (Yonhap)

But experts say the projectiles could be short-range Scud with a range of 500-700 km or mid-range Rodong missiles with a range of 1,300-1500 km given the number of missiles.

“If North Korea test-fired a new long-range missile, it was not an ICBM as it’s not capable of launching multiple ones at the same time,” said Kim Dong-yub, an analyst at the Institute for Far Eastern Studies in Kyungnam University.

An ICBM with a range of more than 6,000 km could fly far less than 6,000 km if launched at a high angle. But as the long-range missile is still being developed and has yet to be deployed, the North could not have fired several missiles, he said.

The North test-fired a long-range ballistic missile at the Dongchang-ri or “Sohae” missile launch site in February last year. It launched seven ballistic missiles, including three Musudan intermediate-range missiles, during the Foal Eagle drills last year.

Japanese Chief Cabinet Secretary Yoshihide Suga reportedly said three out of four missiles fired by the North fell into Japan’s exclusive economic zone (EEZ), some 250 km west of Akita Prefecture.

The latest provocation comes a day after the U.S. said it may consider redeploying a tactical nuclear weapon to South Korea as a deterrent against growing nuclear and missile threats posed by the rogue regime.

On Friday, Pyongyang threatened to conduct more missile firings in response to the two-month-long Foal Eagle exercise between Seoul and Washington, which lasts through April.

The Rodong Sinmun, the ruling party’s official newspaper, said in a commentary that “new types of strategic weapons will soar” if Seoul and Washington continue their annual war drills, which the North claims to be a preparation for a war against it.

The communist state has staged a series of missile tests with increasing range, with the aim of eventually building long-range nuclear missiles capable of striking the U.S. mainland.

In its latest provocations, Pyongyang launched an intermediate-range ballistic missile into the East Sea on Feb. 12 to boast its military readiness and test the response from the new Donald Trump administration.

It was the first test-firing of a North Korean missile since Trump became U.S. president on Jan. 20. and the country’s first major provocation in 2017.

***

How worrisome is this North Korea missile program? It is in fact worrisome while U.S. cyber interference may have had a real impact on the effectiveness of the missile launch successes which are coordinated with Iran.

American cyberwarriors are trying to sabotage North Korea’s missile program — but analysts argue over whether the effort has had real results, a New York Times investigation found.

Soon after ex-President Obama ordered the secret program three years ago, North Korean missiles began exploding, veering off course or crashing into the sea, the newspaper said Saturday.

By most accounts, the North Korean missile failures were caused by US sabotage, the Times says. But it’s also likely many of the missile failures resulted from North Korean incompetence.

North Korean dictator Kim Jong-un may have been rattled by the US cyber effort. Last fall, he was widely reported to have ordered an investigation into whether the US was sabotaging his country’s missiles.

Kim has said his country is in the final stage or preparations of launching an intercontinental missile that could reach much of the world. It might be a bluff — or it might not.

Obama reportedly ordered the cyber sabotage in early 2014 after deciding that 60 years of US efforts to figure out how to shoot down incoming missiles had not yielded a system that would reliably defend against a missile attack.

Obama’s effort is now left to President Trump and his administration. According to a senior administration official, the White House is looking at pre-emptive military strike options, the Times said.

It’s also possible the US will move tactical nuclear weapons to South Korea. The weapons were withdrawn about 25 years ago.