UK Money-laundering $2.9 Billion Linked to Azerbaijan

May, 2017:

The largest bank in Azerbaijan has halted its foreign debt payments and will start restructuring talks with creditors after a currency crisis in the Caspian Sea nation drove the lender to the brink of collapse.

Under a restructuring plan published on Friday, the International Bank of Azerbaijan said its “designated financial indebtedness” was at $3.3 billion as of April 18. It missed a principal and interest payment on a $100 million subordinated loan on May 10, according to an emailed statement from the government-owned lender on Thursday. More here.

What is the Azerbaijani Laundromat?

A scheme to curry influence, pay lobbyists, apologists and European politicians and to launder cash. The $2.9bn (£2.2bn) operation ran between 2012 and 2014 – meaning that on average $3m was channelled out of Azerbaijan every day. The source of money isn’t always clear, but it comes from companies linked to Azerbaijan’s president, Ilham Aliyev, state ministries and the International Bank of Azerbaijan, the country’s largest bank, which recently filed for bankruptcy protection. The cash was transferred into four offshore-managed UK companies. From there, it was spent in various countries, including Germany, the UK, France, Turkey, Iran and Kazakhstan.

How was it done?

By clever use of the west’s financial system. Danske, Denmark’s largest bank, handled the payments via a small branch office in Estonia. It noticed nothing amiss. The organisers of the scheme exploited Britain’s weakly regulated company system. They registered four firms at Companies House in London. These were Hilux Services, Polux Management, Metastar Invest and LCM Alliance. The first two were incorporated in Glasgow, the third in Birmingham and the fourth in Hertfordshire. The beneficial owner of the firms is a secret. More here.

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UK Companies at the heart of $2.9 billion money-laundering circle

UK failing to end its complicity in global corruption

4th September 2017, London – A new investigation has shown UK registered companies to be at the centre of laundering $2.9 billion out of Azerbaijan, highlighting that the UK is failing to end its complicity in global corruption. These funds was used to pay-off politicians, purchase luxury goods and act as a slush fund for those close to the Azeri regime using money that appears to have been stolen from the International Bank of Azerbaijan, which is currently restructuring its debt because of funding problems.

The investigation found that four UK registered companies were at the centre of this scheme and essential to its success. These four companies formed a core part of over 16,000 transactions made by the ‘Azerbaijani laundromat’ between 2012 and 2014. Although registered in the UK, previous research by Transparency International UK found that these four companies were ultimately controlled in secretive offshore havens, where the real owners of companies are hidden from public view.

In recent years successive UK governments have made promises to close the loopholes that have left the UK, and its overseas territories, complicit in the laundering of corrupt money around the world. Over two years since the Government first outlined its intention to target corrupt money flowing through the UK, many of the promises have yet to be turned into action.

All four of these companies are either Scottish Limited Partnerships (SLPs) and Limited Liability Partnerships – forms of company that can be controlled by secretive companies based in offshore havens like the British Virgin Islands. Although new rules rushed in earlier this year require SLPs to report who they’re ultimately controlled by, and similar rules apply to LLPs, there are growing concerns that in practice these are not being enforced effectively. 

Duncan Hames, Director of Policy Transparency International UK, said:

“Knowing that UK registered companies were at the heart of a scheme that saw $2.9 billion stolen from Azerbaijan underlines just how damaging it is to be complicit in global corruption. These sums of money can be the difference between life and death for people around the world, and to know that they are instead being used to purchase luxury goods, line the pockets of corrupt politicians and improve the image of dictators, is particularly galling.”

“We are increasingly concerned that action on the promises made by successive governments to close the loopholes that make the UK attractive to money laundering, appears to have stalled. We have seen some regulatory change but it has gone from a core government mission to uncoordinated and piecemeal efforts.” 

“We’re calling on the UK Government to immediately enforce new laws to end the use of British companies as the getaway vehicle for corrupt individuals and organised criminal gangs. Much more than lip service is needed to fight global corruption. If a success is to be made of Brexit, the UK must uphold the highest standards of commerce and not end-up reducing itself to an offshore centre exposed to the risk of serving corrupt and repressive regimes from across the globe.” 

The UK Government is yet to deliver on its promise to introduce greater transparency around anonymous corporate ownership of luxury UK property, a key destination for laundered money, or produce a comprehensive anti-corruption strategy that sets out how it intends to end the UK’s role as a safe haven for corrupt wealth.

Notes:

The four UK companies at the heart of the Azerbaijani laundromat were Hilux Services LP, Polux Management LP, Metastar Invest LLP and LCM Alliance LLP. More details about the offshore companies controlling them are provided in the table below. Hundreds of businesses with similar secretive corporate structures are registered at the same addresses as these four companies.

 

UK Company Address Controlled by
Hilux Services LP Suite 1105 111 West George Street, Glasgow, G2 1QX Solberg Business Ltd (British Virgin Islands) and Astrocom AG (Seychelles)
Polux Management LP Suite 1098 111 West George Street, Glasgow, G2 1QX Solberg Business Ltd (British Virgin Islands) and Astrocom AG (Seychelles)
Metastar Invest LLP 175 Darkes Lane, Suite B, 2nd Floor, Potters Bar, Hertfordshire, EN6 1BW Advance Developments Limited (Belize) and Corporate Solutions Limited (Belize)
LCM Alliance LLP Cornwall Buildings 45-51 Newhall Street, Office 330, Birmingham, B3 3QR Astrocom AG (Seychelles) and Exponet GMBH (Seychelles)

 

The Slow Death of Britain and Europe

There have been a number of terror attacks in recent weeks in Britain and across Europe. No one is willing to discuss the causes for fear of retribution by migrant groups, religious organizations and government leaders.

The most recent attack occurred when Darren Osbourne, originally from Whales rented a van and ran into several people outside the Finsbury Park mosque killing one and injuring several others. He is being charged with terror activities. Islamists have been waiting for this reckoning and the powder keg continues to smolder.

The Finsbury Park mosque has a nasty history.

*** Moving on to yet another secret in Britain…

Why Did British Police Ignore Pakistani Gangs Abusing 1,400 Rotherham Children? Political Correctness

A story of rampant child abuse—ignored and abetted by the police—is emerging out of the British town of Rotherham. Until now, its scale and scope would have been inconceivable in a civilized country.  Its origins, however, lie in something quite ordinary: what one Labour MP called “not wanting to rock the multicultural community boat.”

Imagine the following case. A fourteen-year old girl is taken into care by the social services unit of the town where she lives, because her parents are drug-addicted, and she has been neglected and is not turning up in school. She is one of many, for that is the way in Britain today. And local government entities—Councils—can be ordered by the courts to stand in for parents of neglected children. The Council places the girl in a home, where she is kept with others under supervision from the social services department. The home is regularly visited by young men who try to entice the girls into their cars, so as to give them drugs and alcohol, and then coerce them into sex.

***

The girl, who is lonely and uncared for, meets a man outside the home, who promises a trip to the cinema and a party with children of her age. She falls into the trap. After she has been raped by a group of five men she is told that, if she says a word to anyone, she will be taken from the home and beaten. When, after the episode is repeated, she threatens to go to the police, she is taken into the countryside, doused in petrol, and told that she is going to be set alight, unless she promises to tell no one of the ordeal.

Social workers tell girls they cannot help them

Meanwhile she must accept weekly abuse, in return for drugs and alcohol. Soon she finds herself being taken to other towns in the area, and hired out for sexual purposes to other men. She is distraught and depressed, and at the point when she can stand it no longer, she goes to the police. She can only stutter a few words, and cannot bring herself to accuse anyone in particular. Her complaint is dismissed on the grounds that any sex involved must have been consensual. The social worker in charge of her case listens to her complaint, but tells her that she cannot act unless the girl identifies her abusers. But when the girl describes them the social worker switches off with a shrug and says that she can do nothing. Her father, his drug habit notwithstanding, has tried to keep contact with his daughter and suspects what is happening. But when he goes to the police, he is arrested for obstruction and charged with wasting police time.

Over the two years of her ordeal the girl makes several attempts on her own life, and eventually ends up abandoned and homeless, without an education and with no prospect of a normal life.

Impossible, you will say, that such a thing could happen in Britain. In fact it is only one of over 1,400 cases, all arising during the course of the last fifteen years in the South Yorkshire town of Rotherham, all involving vulnerable girls either in Council care or inadequately protected by their families from gangs of sexual predators. Almost no arrests have been made, no social workers or police officers have been reprimanded, and until recently the matter was dismissed by all those responsible as a matter of no real significance. Increasing public awareness of the problem, however, led to complaints, triggering a series of official reports. The latest report, from Professor Alexis Jay, former chief inspector of social work in Scotland, gives the truth for the first time, in 153 disturbing pages. One fact stands out above all the horrors detailed in the document, which is that the girl victims were white, and their abusers Pakistani.

 ***
Sociologists convinced government that the police are racist

Fifteen years ago, when these crimes were just beginning, the Stephen Lawrence Inquiry into the conduct of the British police was made by Sir William Macpherson a High Court judge. The immediate occasion had been a murder in which the victim was black, the perpetrators white, and the behaviour of the investigating police lax and possibly prejudiced. The report accused the police – not just those involved in the case, but the entire police force of the country – of ‘institutionalised racism’. This piece of sociological newspeak was, at the time, very popular with leftist sociologists. For it made an accusation which could not be refuted by anyone who had the misfortune to be accused of it.

However well you behaved, however scrupulously you treated people of different races and without regard to their ethnic identity or the colour of their skin, you would be guilty of ‘institutionalised racism’, simply on account of the institution to which you belonged and on behalf of which you were acting. Not surprisingly, sociologists and social workers, the vast majority of whom are professionally disposed to believe that middle class society is incurably racist, latched on to the expression. MacPherson too climbed onto the bandwagon since, at the time, it was the easiest and safest way to wash your hands in public, to say that I, at least, am not guilty of the only crime that is universally recognised and everywhere in evidence.

Police more concerned with political correctness than crime

The result of this has been that police forces lean over backwards to avoid the accusation of racism, while social workers will hesitate to intervene in any case in which they could be accused of discriminating against ethnic minorities. Matters are made worse by the rise of militant Islam, which has added to the old crime of racism the new crime of ‘Islamophobia’. No social worker today will risk being accused of this crime. In Rotherham a social worker would be mad, and a police officer barely less so, to set out to investigate cases of suspected sexual abuse, when the perpetrators are Asian Muslims and the victims ethnically English. Best to sweep it under the carpet, find ways of accusing the victims or their parents or the surrounding culture of institutionalised racism, and attending to more urgent matters such as the housing needs of recent immigrants, or the traffic offences committed by those racist middle classes.

Americans too are familiar with this syndrome. Political correctness among sociologists comes from socialist convictions and the tired old theories that produce them. But among ordinary people it comes from fear. The people of Rotherham know that it is unsafe for a girl to take a taxi-ride from someone with Asian features; they know that Pakistani Muslims often do not treat white girls with the respect that they treat girls from their own community. They know, and have known over fifteen years, that there are gangs of predators on the look-out for vulnerable girls, and that the gangs are for the most part Asian young men who see English society not as the community to which they belong, but as a sexual hunting ground. But they dare not express this knowledge, in either words or deed. Still less do they dare to do so if their job is that of social worker or police officer. Let slip the mere hint that Pakistani Muslims are more likely than indigenous Englishmen to commit sexual crimes and you will be branded as a racist and an Islamophobe, to be ostracised in the workplace and put henceforth under observation.

Rotherham Town Hall. (Wikipedia) Rotherham Town Hall, Wikipedia

No One Will Be Fired

This would matter less if fear had no consequences. Unfortunately political correctness causes people not merely to disguise their beliefs but to refuse to act on them, to accuse others who confess to them, and in general to go along with policies that have been forced on the British people by minority groups of activists. The intention of the activists is to disrupt and dismantle the old forms of social order. They believe that our society is not just racist, but far too comfortable, far too unequal, far too bound up with fuddy-duddy old ways that are experienced by people at the bottom of society – the working classes, the immigrants, the homeless, the illegals – as oppressive and demeaning. They enthusiastically propagate the doctrines of political correctness as a way of taking revenge on a social order from which they feel alienated.

Ordinary people are so intimidated by this that they repeat the doctrines, like religious mantras which they hope will keep them safe in hostile territory. Hence people in Britain have accepted without resistance the huge transformations that have been inflicted on them over the last thirty years, largely by activists working through the Labour Party. They have accepted immigration policies that have filled our cities with disaffected Muslims, many of whom have now gone to fight against us in Syria and Iraq. They have accepted the growth of Islamic schools in which children are taught to prepare themselves for jihad against the surrounding social order. They have accepted the constant denigration of their country, its institutions and its inherited religion, for the simple reason that these things are theirs and therefore tainted with forbidden loyalties.

And when the truth is expressed at last, nobody is fired, no arrests are made, and the elected Police and Communities Commissioner for Rotherham, although forced to resign from the Labour Party, refuses to resign from his job. After a few weeks all will have been swept under the carpet, and the work of destruction can resume.

 

 

 

Media of The Strange Death of Europe

The Strange Death of Europe is a highly personal account of a continent and culture caught in the act of suicide. Declining birth-rates, mass immigration and cultivated self-distrust and self-hatred have come together to make Europeans unable to argue for themselves and incapable of resisting their own comprehensive change as a society. This book is not only an analysis of demographic and political realities, but also an eyewitness account of a continent in self-destruct mode. It includes reporting from across the entire continent, from the places where migrants land to the places they end up, from the people who appear to welcome them in to the places which cannot accept them. Told from this first-hand perspective, and backed with impressive research and evidence, the book addresses the disappointing failure of multiculturalism, Angela Merkel’s U-turn on migration, the lack of repatriation and the Western fixation on guilt. Murray travels to Berlin, Paris, Scandinavia, Lampedusa and Greece to uncover the malaise at the very heart of the European culture, and to hear the stories of those who have arrived in Europe from far away. In each chapter he also takes a step back to look at the bigger issues which lie behind a continent’s death-wish, answering the question of why anyone, let alone an entire civilisation, would do this to themselves? He ends with two visions of Europe – one hopeful, one pessimistic – which paint a picture of Europe in crisis and offer a choice as to what, if anything, we can do next. – See more at: http://www.bloomsbury.com/uk/the-strange-death-of-europe-9781472942241/#sthash.LFXH2Clt.dpuf

Germany’s Secret Bundeswehr

The secret German army, with soldiers from other countries has a variety of duties. There is a growing concern in Europe, but what about NATO? That question goes to President Trump. The secret is, no one is talking about it openly, further there was no real reason given on why VP Pence travel to meet top NATO officials to calm the nerves regarding the viability of NATO due to President Trump. Article 5 remains a large question with European leaders.

Image result for secret army bundeswehr

The original Bundeswehr has a scandalous history. Nazi Veterans Created Illegal Army

First, there will be cyber soldiers

The German military (Bundeswehr) on Wednesday is launching a brand new “cyber army” to fight against digital attacks on networks and weapons systems. But some are concerned about how this new unit might engage in cyber assaults itself.

Defence Minister Ursula von der Leyen will announce the new unit in Bonn on Wednesday afternoon. The ministry wants to deploy around 13,500 soldiers and civilian workers by 2021 to protect the Bundeswehr’s networks and weapons systems, but the unit must also be capable of launching their own attacks against hackers.

The Chief of Staff of the new cyber army is Lieutenant-General Ludwig Leinhos, who is an expert in electronic warfare.

Cyber attacks are a growing concern in Germany, with the Federal Office for Information Security (BSI) reporting last year that the government’s computer networks are hit by around 20 highly specialized attacks per day.

German intelligence agencies and the BSI last year began work on setting up their own special cyber response teams.

According to broadcaster N-tv, the Bundeswehr’s new cyber soldiers will be on equal ranking with their colleagues in the army, air force and marines – and their new beret colour will be grey.

Parliamentary ombudsman for the Bundeswehr, Hans-Peter Bartels (SPD), warned that the new cyber unit should be kept under parliamentary control, though, as part of their work would entail launching cyber attacks of their own.

Bartels told the Neue Osnabrücker Zeitung on Wednesday that the cyber army must seek permission from the Bundestag (German parliament) before launching such assaults.

“Every offensive measure of our constitutionally enshrined parliamentary army needs to have the explicit mandate of the Bundestag,” Bartels said, adding that this policy goes for not only military assaults, but also virtual attacks on the data network of an adversary.

Bartels stressed that the cyber army was desperately needed to protect the Bundeswehr’s computer and weapons systems. But he also criticized the fact that the new unit is only now being created.

“Germany is not a pioneer here,” he said. “One can already learn from the experiences of other countries, like the USA or Israel.”

Second, the conventional forces

Germany is to increase the size of its armed forces amid growing concerns over the security of Europe.

Troop numbers in the Bundeswehr will be raised to almost 200,000 over the next seven years, under new plans announced on Wednesday.

The move comes days after Mike Pence, the US vice-president, called on Nato’s European members to increase military spending.

President Donald Trump has repeatedly demanded Europe pay more towards the cost of its own defence.

The move also comes amid growing concern in European capitals over Mr Trumps’ commitment to Nato, after he described the alliance as “obsolete”.

Under the new plans, Germany will recruit 20,000 more troops by 2025, bringing its total service personnel to 198,000.

That is slightly more than the British armed forces’ current strength of 196,410.

In a statement announcing the plans, Ursula von der Leyen, the defence minister, said: “The Bundeswehr has rarely been as necessary as it is now.

“Whether it is the fight against Isil terrorism, the stabilization of Mali, continuing support of Afghanistan, operations against migrant smugglers in the Mediterranean or with our increased Nato presence in the Baltics.”

The announcement came as Germany deployed tanks and hundreds troops to Lithuania as part of a Nato force to deter Russian aggression.

During the Cold War, West Germany was considered the first line of defence against a Soviet invasion and at its height the Bundeswehr had 500,000 active service personnel.

But in the years following the fall of the Berlin Wall and German reunification defence spending dropped sharply.

Germany ended conscription in 2011 and troop numbers fell to an all-time low of 166,500 in June last year.

Cold War historians described West Germany’s army as “perhaps the best in the world”.

But in more recent years it has been better known for embarrassing equipment shortages that saw soldiers forces to use broomsticks instead of guns on Nato exercises, and use ordinary Mercedes vans to stand in for armoured personnel carriers.

The German air force was forced to ground half of its ageing Tornado fighters last year over maintenance issues, including six that are deployed on reconaissance missions against Islamic State in Iraq and the Levant (Isil) in Syria.

There are growing calls for Europe to do more to secure its own defence after Mr Trump described Nato as “obsolete” in an interview in January, and earlier this month Angela Merkel’s government was forced to take the unusual step of denying that it is interested in becoming a nuclear power.

Mr Trump has repeatedly accused Nato’s European members of not paying enough towards the cost of their defence and during the US presidential campaign Mr Trump warned the US may not necessarily come to the aid of Nato allies if they are attacked.

German Bundeswehr Soldiers of the 'battalion of armored infantryman' called 'Panzergrenadierbataillon 122' sit on a wrecker called 'Bueffel' during vehicles wait to be loaded onto a train in Grafenwoehr, Germany, 31 January 2017, before being deployed as part of a NATO force in Lithuania
German Bundeswehr Soldiers of the ‘battalion of armored infantryman’ called ‘Panzergrenadierbataillon 122’ sit on a wrecker called ‘Bueffel’ during vehicles wait to be loaded onto a train in Grafenwoehr, Germany, 31 January 2017, before being deployed as part of a NATO force in Lithuania Credit: LUKAS BARTH/EPA

Mr Pence sought to reassure jittery European allies in a speech at Nato headquarters in Brussels on Monday in which he said the US’ “commitment to Nato is clear”. But he demanded “real progress” in increased European defence spending.

Ms von der Leyen has been attempting to reverse the decline of Germany’s armed forces, and already announced a smaller increase in troop numbers last year. Those targets were revised upwards with Wednesday’s announcement.

It is estimated the increases will cost Germany between around €900m (£760m) a year. But the amount is still far short of the extra €25.4bn Germany would have to spend on defence each year to meet Nato’s annual target of 2 per cent of GDP.

The UK is one of only five Nato members to meet the target at present, along with the US, Greece, Estonia and Poland.

Despite boasting the largest economy in Europe, Germany lags far behind, spending only 1.19 per cent of its GDP on defence in 2016.

 

European Union’s Attention and Dollars on Failing Africa

Image result for sahel region

The European Commission has launched an “Emergency Trust Fund for stability and addressing root causes of irregular migration and displaced persons in Africa”, made up of €1.8 billion from the EU budget and European Development Fund, combined with contributions from EU Member States and other donors. The Trust Fund will benefit a wide range of countries across Africa that encompass the major African migration routes to Europe. These countries are among the most fragile and those most affected by migration. They will draw the greatest benefit from EU financial assistance. The countries and regions are:

The Sahel region and Lake Chad area: Burkina Faso, Cameroon, Chad, the Gambia, Mali, Mauritania, Niger, Nigeria and Senegal.

The Horn of Africa: Djibouti, Eritrea, Ethiopia, Kenya, Somalia, South Sudan, Sudan, Tanzania and Uganda.

The North of Africa: Morocco, Algeria, Tunisia, Libya and Egypt.

Neighbouring countries of the eligible countries may benefit, on a case by case basis, from Trust Fund projects with a regional dimension in order to address regional migration flo ws and related cross- border challenges. Read the full document here.

EU Economic and Military Investments in Africa Increase
Africa faces a number of security challenges, from terrorist groups such as Boko Haram and al Shabaab, to civil wars and violent conflicts in South Sudan and Libya, to severe droughts causing hunger crises in Somalia and Yemen.

This instability contributes to migration from Africa to Europe. In addition, a demographic boom is taking hold in Africa, stoking concerns about future mass migration. “Today, Africa is twice the population of Europe. In 2050, it will be four times the population of Europe, and it is projected at the end of this century to be 10 times the population of Europe. … There is a sense in many political circles in Europe that what’s happening today is just the beginning of a much bigger movement that could reach Europe tomorrow,” Philippe Fargues, founding Director of the Migration Policy Centre at the European University Institute in Italy, told The Cipher Brief.

The European Union is intervening. On the migration front, the EU is engaged in Partnership Framework Agreements with several African countries to stem the flow of migrants. “This was followed up with the setting up of the EU Emergency Trust Fund for Africa (a €2 billion aid program aimed at securing African countries’ cooperation in tackling irregular migration), leading to the initial signing of bilateral agreements with Niger, Nigeria, Mali, Senegal and Ethiopia” says the Abuja, Nigeria-based Director of the Centre for Democracy and Development, Idayat Hassan.

Niger, for example, is receiving €610 million to keep migrants from reaching Europe, Hassan says, and German Chancellor Angela Merkel has pledged €17 million to Niger to help develop the Agadez region, a major route for West African migrants.

Germany seems to be leading European action in Africa. Last year, German Development Minister Gerd Müller unveiled a “Marshall Plan” for the continent. “Germany and Europe have an interest to save people’s lives, to limit the effects of climate change and avoid ‘climate refugees,’ to prevent mass migration and to help create a future for Africa’s youth,” said Müller.

Asmita Parshotam, a researcher under the Economic Diplomacy Programme at the South African Institute of International Affairs, tells The Cipher Brief that this plan is intended to “cover a broad range of issues such as trade, increased private investment, bottom-up economic development, entrepreneurship, and job creation and employment.”

In addition to Germany’s unilateral aid to Africa, the EU recently announced its EU External Investment Plan that will help expand Africa’s private sector, with €3.35 billion in funding until 2020 and €88 billion if EU member states fully match that contribution.

The European Development Fund and African Investment Facility also provide economic development assistance from the EU to Africa.

In the development-security aid realm lies the EU Sahel Strategy, launched in April 2015. “The enhancement of security in the region through the fight against terrorism, illicit trafficking, radicalisation and violent extremism, remains the key objective of the EU,” according to a memo on the EU Sahel Strategy from the Council of the European Union.

EU member states also host a number of military bases in Africa. France, Germany, Italy, and Spain all have boots on the ground in Djibouti. France’s presence there is now around 1,700 personnel.

About 3,500 French troops operate in Burkina Faso, Chad, Mali, Mauritania, and Niger, and Gabon is a key base that France has used to send troops to interventions in the Central African Republic. France last year boosted its military presence in Cote d’Ivoire to about 900 men to serve as a forward operating base for West Africa.

The French, along with the Germans, are also in Niger. Germany has an air transport base at the Niamey international airport that supports its increasing troop contribution to the UN’s peacekeeping mission in Mali, a country that underwent a rebellion and coup in 2012 and a serious deterioration in the security environment in January 2013 when terrorist groups – Ansar Dine and the Movement for Unity and Jihad in West Africa, in addition to al Qaeda in the Islamic Maghreb – advanced south.

A majority of UN peacekeeping missions, in which many Europeans are involved, are in Africa.

The question remains, will the EU’s economic and military investment in Africa work in stabilizing a continent plagued by terror, war, drought and famine, extreme poverty, and inadequate governance?

Müller’s “Marshall Plan” acknowledges that African governments must take responsibility for fighting corruption, ensuring good governance, and improving opportunities for women.

The EU has made much of its development aid contingent on African governments’ cooperation in addressing the EU’s security concerns. For example, on migration, Parshotam notes that an EU-Mali deal will give Mali aid in exchange for Mali taking back all citizens whose asylum claims were rejected.

But with African countries that have no stable government to work with, it becomes harder for the EU to invest in and create stability. “Libya is a failing state – there’s no central authority,” Leonard Doyle, Spokesperson of the Director General at the International Organization for Migration, told The Cipher Brief. “So the Europeans have not been able to reach a coherent agreement with Libya [on migration]. Although there is a lot of pressure now, especially militarily, to stop the smugglers, and economically as well, to help Libya get back on its feet,” he said.

“I think we are completely wrong in our policies,” said Fargues. “The amount of money contributed to African development is too small, but also in the short term and medium term, development will not curb migration,” he said, because the African population continues to grow, while Europe’s continues to shrink. “We have to get prepared for migration.”

 

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)