‘Controlled nationalism’

In the early 2000s, Russian President Vladimir Putin was finishing his first presidential term when two colour revolutions struck nearby – the first in Georgia in 2013 and the second in Ukraine in 2014. Large crowds in Tbilisi and Kiev demanded democratic change and major political reforms. The possibility of a colour revolution erupting in Russia seemed too real.
It was then that the Kremlin looked to the right. Russian observers would later identify this strategy of employing nationalist forces as “controlled nationalism”.
“Controlled nationalism is about using nationalists in some [political] games. In some cases, [the authorities] would support nationalists in order to keep the regime alive, to fight the threat of a colour revolution,” says Anton Shekhovstov, visiting fellow at the Institute for Human Sciences in Austria.
“They thought that if they supported those ultranationalist movements, they would decrease the opportunity of nationalists becoming a force that would destabilise the regime,” he explains.
In early 2005, in response to the colour revolutions, the International Eurasian movement, headed by Alexander Dugin, a right-wing political scientist and ideologue (whom Western journalists eventually nicknamed “Putin’s Rasputin”) createda youth wing, the Eurasian Youth Union (ESM). Its aim was to whip up nationalist sentiment and mobilise young people against anti-government attitudes.
That same year, the Russian authorities decided to finally do away with the November 7 official holiday celebrating the October Revolution. They moved the allocated day off to November 4 – the day Moscow was liberated from the Poles in 1612, an official holiday in tsarist Russia until 1917.
The authorities named the new holiday “National Unity Day”, but there wasn’t much public enthusiasm for it and most Russians didn’t even know its history. So when the ESM requested to hold a right-wing march on that day, the local authorities readily obliged.
Other ultranationalist organisations and skinhead groups joined the ESM and the turnout that year surprised many: Some 3,000 people marched, chanting “Glory to Russia” and “Russians forward”, as young men made Nazi salutes in front of TV cameras.
In the years that followed, the ESM was pushed out of the organising committee of the march for being too pro-Kremlin and two other groups took the lead: the Movement Against Illegal Immigration (DPNI) and the Slavic Union (SS). The DPNI was led by Alexander Potkin, who changed his name to Belov (“bely” in Russian means white) and the SS was headed by Dmitry Dyomushkin. Both men are now in jail.
“Belov was my assistant in the Duma. He became an opportunist and has ended up in jail,” says Andrei Savelev, founder and leader of the “Great Russia” nationalist movement, who was elected to the Duma in 2003. At around the same time, Dyomushkin was an assistant to another member of the Duma during that period, Nikolay Kuryanovich from the pro-Kremlin ultranationalist Liberal Democratic Party of Russia.
“Аll these years Dyomushkin was surprisingly untouchable. He was doing things for which others would go to jail. For four to five years, the justice system did not touch him,” says Savelev.
According to him, Dyomushkin and Belov were coopted by the Russian authorities. He says this was why he withdrew his organisation from the Russian march.
Ivan Beletsky, a close associate of Dyomushkin who took over organising the march in 2016, rejects the idea of cooptation and claims that “Great Russia” is a pro-government group. He says that the authorities tried but failed to take control of the Russian march in the late 2000s and were compelled to permit it in order to “cool down popular agitation”.
“The Russian march is a protest march: against the government, against corruption, and for a change of power,” he says, speaking to Al Jazeera via Skype from a location outside of Russia that he refused to disclose.
In July 2011, Dyomushkin and Belov caused a stir within the ultranationalist movement for going to Chechnya and meeting with its president, Ramazan Kadyrov, a Kremlin loyalist, despite their anti-Chechen and anti-Muslim rhetoric. Dyomushkin subsequently went to Grozny a number of times.
In August 2011, DPNI was banned by the Russian government (the SS had been banned a year earlier). Nevertheless, the government allowed the Russian march to take place. On November 4, more than 10,000 nationalists, joined by opposition politicians like Alexei Navalny, marched in Lyublino with banners reading “Stop feeding Caucasus”. Over the years, the central government has been perceived as being quite generous in its budget allocation to the Chechen Republic in the North Caucasus and has been criticised by both nationalists and liberals for it.
In 2012, ultranationalist organisations participating in the Russian march backed anti-government protests. The merger between regular opposition and nationalists worried the government and the Federal Security Service (FSB) considered it a potentially “revolutionary situation”, says Beletsky.

Schism in the far right and crackdown

The events of 2014 in Ukraine caught the ultranationalist groups in Russia by surprise. On one hand, the Kremlin was employing strong nationalist rhetoric claiming Crimea was “rightfully” Russian and that ethnic Russians living in Ukraine had to be protected; on the other, fellow Ukrainian far-right groups were supporting the Maidan and opposing the annexation.
“In 2014, the Kremlin demanded full loyalty from all Russian nationalists,” says Shekhovtsov. “Some of them declined to become loyal to the Kremlin.”
The result was a “schism” in the nationalist movement with one camp supporting the annexation of Crimea and the breakaway regions of Donetsk and Luhansk, and the other opposing both and supporting the Ukrainian central government.
“We right-wing nationalists – we consider [the breakaway regions in Eastern Ukraine] Putin’s machinations. We stood up against this and we suffered fierce repressions,” says Beletsky.
On November 4, 2014, there were two events in Moscow that claimed to be the Russian march – one supporting the annexation of Crimea and the other rejecting it. In the following months, one by one leaders of ultranationalist groups supporting the latter were arrested on various charges.
In 2015, Belov was arrested and a year later convicted on charges of money laundering related to a Kazakh bank and spreading extremism among Russian-speaking Kazakh citizens. He was sentenced to seven and a half years in jail.
In 2016, Dyomushkin was arrested for posting a photo of a previous Russian march in which a banner saying “Russian power in Russia” was visible. He was accused of spreading “extremism” and handed two and a half years in prison. A previous court case against him on similar charges dating from 2011 ended in early 2014 without a sentence due to an expiration of the statute of limitations.
According to his lawyer, Dmitry Baharev, who also used to be a member of the SS, the case against him is politically motivated.
“Usually for pictures, they give suspended sentences, but Dyomushkin got prison,” he says. “In my opinion, this is connected with the events in Ukraine.”
Another close associate of Dyomushkin and Belov and a frequent Russian march attendee, Georgy Borovikov, а leader of the banned National Patriotic Front “Memory” was arrested and sentenced to seven and a half years in prison in 2014 for robbery and torture.
Other far-right leaders managed to escape before being arrested. Beletsky says he fled the country fearing arrest as he was questioned multiple times and briefly detained this year after organising nationalists to join Navalny for an anti-government protest in March.
Yury Gorsky, also an organiser of the Russian march and former member of various ultranationalist groups, was charged with spreading extremism and is currently in Lithuania. Igor Artyomov, the former leader of the banned Russian All-National Union, which also used to participate in the march, received political asylum in the US.
Prominent ultranationalist vlogger Vyacheslav Maltsev, who at some point was associated with “Great Russia” and also attended Russian marches, fled from Russia after being briefly detained and is currently in hiding in a European country. Maltsev called for a “revolution” on November 5. Many of his supporters had previously been or were subsequently arrested.
Human rights groups have been divided over whether or not to consider the detention and imprisonment of ultranationalists to be political prosecution. Human rights organisation “Memorial” considers that in the case of Belov, there are “signs of political motivation”.
“All of these big nationalist leaders are guilty, not necessarily of what they accuse them of, but there is a lot of other things they did. The authorities have not undertaken to sort out these things because it is too difficult or long, so they stuck on them whatever they could,” says Natalya Yudina, a researcher at “Sova Centre” which focuses on extremism and violations of human rights in Russia. She says that the centre does not consider Belov a political prisoner and that members of the organisations which he and Dyomushkin led committed violent attacks in the past.

Promoting destabilisation abroad, preempting it at home

While the Kremlin was cracking down on the far right at home, in the West, it was seeking its support.
According to Shekhovtsov, the Kremlin launched efforts to establish relations with ultranationalist groups in Europe as early as 2008.
“[In 2008,] many in the Russian elite circles believed that Russia may have won the war with Georgia in military terms but it failed to win the information war and convince the West or the international community that Russia’s actions were justified,” he says.
Russian national and international media sought to feature Western commentators sympathetic to Russia’s actions in Georgia, but could not find any in the mainstream; the ones that would openly express support were mostly on the far right, explains Shekhovtsov.
In the following years, the Kremlin invested a lot of effort into nourishing ties with far-right groups and parties in the West. The Russian authorities would organise ultranationalist conferences, back media initiatives, and establish formal agreements with far-right parties.
Currently, the ruling United Russia party has established cooperation agreements with the Northern League in Italy and the Freedom Party in Austria. In 2014, the National Front in France borrowed nearly $13m in Russian bank loans.
Various other ultranationalist groups in the EU are said to have ties to Russia: from the Alternative for Germany (AfD) to Ataka Party in Bulgaria.
Shekhovtsov, who wrote a book on the subject, points out that Russian efforts to court Europe’s far right have not rendered major victories, such as the suspension of sanctions against Moscow in place since the annexation of Crimea. But the growing strength of far-right groups has had a destabilising effect across Europe.
In Germany, the AfD, which hardly managed to clear the five percent threshold in the 2013 elections, this year won 12.6 percent and is the third-largest party in the Bundestag after the September elections. Some commentators have attributed that success to Russian backing.
At home, the Kremlin preempted such a scenario.
“[Today] the anti-Putin far-right movement is extremely small. You cannot compare this to any other period of time in Russia [since 1991] where you would have such a weak [ultranationalist] movement,” says Shekhovtsov.
According to him, some ultranationalist groups have already changed strategy to accommodate the regime. At the same time, since 2014, a number of “patriotic” and ultra-Orthodox organisations have emerged which have also been accused of attacks, but not on minorities or migrants; their victims have mostly been opposition activists, like Navalny, and liberals.
“The classical Russian nationalism, in its ethnic form, is a thing of the past. There are new movements that are appearing now, which are connected with the Kremlin ideologically,” says Yudina. “The main thing for them is patriotism, the praise of our state, and adopting conservative, Orthodox values.”
Yudina says that in recent years hate attacks on minorities and migrants have decreased tenfold – from a few hundred in the late 2000s to a few dozen in 2016. Yet attacks on the LGBT community have persisted, as the new “patriotic” and ultra-Orthodox groups consider them “freaks”.
“All this scares me. This it seems to me will be the future. Aggressive Orthodox organisations will be getting stronger,” she says.
Follow Mariya Petkova on Twitter: @mkpetkova

Fancy Bear – also known as APT28, Sofacy, Iron Twilight and Pawn Storm – has been linked to Russian intelligence.
The group played a key role in 2016’s attack on the US’s Democratic National Committee (DNC), according to security experts.
Indeed an internet protocol (IP) address that once belonged to a dedicated server hired via Crookservers was discovered in malicious code used in the breach

The spies who came in for milk

Early in 2012, Crookservers claimed to be based at the same address as a newsagent’s on an unassuming terraced road in Oldham, according to historical website registration records.
But after a short period, the listing switched to Pakistan. The BBC has seen no evidence the shop or its employees knew how the address was being used or that Crookservers had any real connection to the newsagent’s.
Crookservers was what is known as a server reseller. It was an entirely online business. The computers it effectively sublet were owned by another company based in France and Canada.
The BBC identified Crookservers’s operator as Usman Ashraf.
Social media and other online accounts suggest he was present in the Oldham area between 2010 and mid-2014. He now seems to be based in Pakistan.
Mr Ashraf declined to record an interview, but provided detailed answers to questions via email.
Despite his company’s name, he denied knowing he had had hackers as customers.
“We never know how a client is using the server,” he wrote.
When in 2015 he had been alerted to the hackers, he said, he had acted swiftly to close their accounts.
He said he had also carried out a “verification” process, culling 60-70% of the company’s accounts he had suspected of being misused.
“There is 0% compromise on abusive usage,” he said.

Joining the dots

Over three years, Fancy Bear rented computers through Crookservers, covering its tracks using bogus identities, virtual private networks and hard-to-trace payment systems.
Researchers at cyber-threat intelligence company Secureworks, who analysed information from Crookservers for the BBC, said it had helped them connect several Fancy Bear operations.
Senior security researcher Mike McLellan said the hackers had exhibited poor “tradecraft”.
One communication shows one hacker, using the pseudonym Roman Brecesku, had complained that his server had been “cracked”.
Crookservers was previously linked to an attack on the German parliament.
The server used to control the malware was hired through Crookservers by a hacker using the pseudonym Nikolay Mladenov who paid using Bitcoin and Perfect Money, according to records seen by the BBC.
The hacker used the server until June 2015, when it was deleted at Crookservers’s request following media reports of the attack.
This server’s IP address also appears in malware used to target some attendees at the Farnborough air show in 2014.
Fancy Bear malware used to attack a UK TV station and the DNC also contained this IP address, although the server was no longer in Fancy Bear’s control when these attacks occurred.
A financial account used by Mladenov was also used by another hacker, operating under the pseudonym Klaus Werner, to hire more computers through Crookservers.
One server hired by Werner received “redirected” traffic from a legitimate Nigerian government website, according to Secureworks analysis.

Apple attack

The financial account used by Mladenov and Werner was used by Fancy Bear hackers – including two using the names Bruno Labrousse and Roman Brecesku – to hire other servers from Crookservers.
One server and the email address used to hire it seem to have links to “advanced espionage” malware used to target iOS devices.
The malware was capable of turning on voice recording and stealing text messages.
Another email used to hire servers can be linked to an attack against Bulgaria’s State Agency for National Security.
But there are eight dedicated servers tied to the same financial information, whose use is unknown – suggesting there may be other Fancy Bear attacks that have not been publicly disclosed.

Follow the money

Fancy Bear spent at least $6,000 (£4,534) with Crookservers via a variety of services that offered an extra level of anonymity.
They included Bitcoin, Liberty Reserve and Perfect Money. Liberty Reserve was later closed after an international money laundering investigation.
The BBC asked a UK company called Elliptic, which specialises in identifying Bitcoin-related “illicit activity”, to analyse Fancy Bear’s Bitcoin payments.
Lead investigator Tom Robinson said his team had identified the wallet that had been the source of these funds. He said the bitcoins it contained were “worth around $100,000”.
Elliptic traced the source of some of the funds in that wallet to the digital currency exchange BTC-e.
In July, BTC-e was closed by the US authorities and its Russian alleged founder arrested in Greece accused of money laundering.
Although BTC-e is alleged to have been popular with Russian cyber-criminals, the BBC has no evidence its management was aware its clients included Fancy Bear.

Continuing operation

The financial and technical records link together several attacks previously tied to Fancy Bear.
And it is possible that following the financial trail further may yield additional revelations.
Crookservers closed on 10 October. Fancy Bear’s operations, however, have not.

[I]n terms of high-end product influx into the United States, Russians make up a pretty disproportionate cross-section of a lot of our assets; say in Dubai, and certainly with our project in SoHo and anywhere in New York. We see a lot of money pouring in from Russia.

All this helps to explain one of the most intriguing puzzles about Donald Trump’s long, turbulent business career: how he managed to keep financing it, despite a dismal track record of failed projects.⁴
According to the “official story,” this was simply due to a combination of brilliant deal-making, Trump’s gold-plated brand, and raw animal spirits—with $916 million of creative tax dodging as a kicker. But this official story is hokum. The truth is that, since the late 1990s, Trump was also greatly assisted by these abundant new sources of global finance, especially from “submerging markets” like Russia
This suggests that neither Trump nor Putin is an “uncaused cause.” They are not evil twins, exactly, but they are both byproducts of the same neoliberal policy scams that were peddled to Russia’s struggling new democracy.
A Guided Tour of Trump’s Russian/FSU Connections
The following roundup of Trump’s Russo-Soviet business connections is based on published sources, interviews with former law enforcement staff and other experts in the United States, the United Kingdom, and Iceland, searches of online corporate registries,⁵ and a detailed analysis of offshore company data from the Panama Papers.⁶ Given the sheer scope of Trump’s activities, there are undoubtedly other worthy cases, but our interest is in overall patterns.
Note that none of the activities and business connections related here necessarily involved criminal conduct. While several key players do have criminal records, few of their prolific business dealings have been thoroughly investigated, and of course they all deserve the presumption of innocence. Furthermore, several of these players reside in countries where activities like bribery, tax dodging, and other financial chicanery are either not illegal or are rarely prosecuted. As former British Chancellor of the Exchequer Denis Healey once said, the difference between “legal” and “illegal” is often just “the width of a prison wall.”
So why spend time collecting and reviewing material that either doesn’t point to anything illegal or in some cases may even be impossible to verify? Because, we submit, the mere fact that such assertions are widely made is of legitimate public interest in its own right. In other words, when it comes to evaluating the probity of senior public officials, the public has the right to know about any material allegations—true, false, or, most commonly, unprovable—about their business partners and associates, so long as this information is clearly labeled as unverified.
Furthermore, the individual case-based approach to investigations employed by most investigative journalists and law enforcement often misses the big picture: the global networks of influence and finance, licit and illicit, that exist among business people, investors, kleptocrats, organized criminals, and politicians, as well as the “enablers”—banks, accounting firms, law firms, and havens. Any particular component of these networks might easily disappear without making any difference. But the networks live on. It is these shadowy transnational networks that really deserve scrutiny.
Bayrock Group LLC—Kazakhstan and Tevfik Arif
We’ll begin our tour of Trump’s Russian/FSU connections with several business relationships that evolved out of the curious case of Bayrock Group LLC, a spectacularly unsuccessful New York real estate development company that surfaced in the early 2000s and, by 2014, had all but disappeared except for a few lawsuits. As of 2007, Bayrock and its partners reportedly had more than $2 billion of Trump-branded deals in the works. But most of these either never materialized or were miserable failures, for reasons that will soon become obvious.
Bayrock’s “white elephants” included the 46-story Trump SoHo condo-hotel on Spring Street in New York City, for which the principle developer was a partnership formed by Bayrock and FL Group, an Icelandic investment company. Completed in 2010, the SoHo soon became the subject of prolonged civil litigation by disgruntled condo buyers. The building was foreclosed by creditors and resold in 2014 after more than $3 million of customer down payments had to be refunded. Similarly, Bayrock’s Trump International Hotel & Tower in Fort Lauderdale was foreclosed and resold in 2012, while at least three other Trump-branded properties in the United States, plus many other “project concepts” that Bayrock had contemplated, from Istanbul and Kiev to Moscow and Warsaw, also never happened.
Carelessness about due diligence with respect to potential partners and associates is one of Donald Trump’s more predictable qualities. Acting on the seat of the pants, he had hooked up with Bayrock rather quickly in 2005, becoming an 18 percent minority equity partner in the Trump SoHo, and agreeing to license his brand and manage the building.⁷
Exhibit A in the panoply of former Trump business partners is Bayrock’s former Chairman, Tevfik Arif (aka Arifov), an émigré from Kazakhstan who reportedly took up residence in Brooklyn in the 1990s. Trump also had extensive contacts with another key Bayrock Russian-American from Brooklyn, Felix Sater (aka Satter), discussed below.⁸ Trump has lately had some difficulty recalling very much about either Arif or Sater. But this is hardly surprising, given what we now know about them. Trump described his introduction to Bayrock in a 2013 deposition for a lawsuit that was brought by investors in the Fort Lauderdale project, one of Trump’s first with Bayrock: “Well, we had a tenant in … Trump Tower called Bayrock, and Bayrock was interested in getting us into deals.”⁹
According to several reports, Tevfik Arif was originally from Kazakhstan, a Soviet republic until 1992. Born in 1950, Arif worked for 17 years in the Soviet Ministry of Commerce and Trade, serving as Deputy Director of Hotel Management by the time of the Soviet Union’s collapse.¹⁰ In the early 1990s he relocated to Turkey, where he reportedly helped to develop properties for the Rixos Hotel chain. Not long thereafter he relocated to Brooklyn, founded Bayrock, opened an office in the Trump Tower, and started to pursue projects with Trump and other investors.¹¹
Tevfik Arif was not Bayrock’s only connection to Kazakhstan. A 2007 Bayrock investor presentationrefers to Alexander Mashevich’s “Eurasia Group” as a strategic partner for Bayrock’s equity finance. Together with two other prominent Kazakh billionaires, Patokh Chodiev (aka “Shodiyev”) and Alijan Ibragimov, Mashkevich reportedly ran the “Eurasian Natural Resources Cooperation.” In Kazakhstan these three are sometimes referred to as “the Trio.”¹²
The Trio has apparently worked together ever since Gorbachev’s late 1980s perestroika in metals and other natural resources. It was during this period that they first acquired a significant degree of control over Kazakhstan’s vast mineral and gas reserves. Naturally they found it useful to become friends with Nursultan Nazarbayev, Kazakhstan’s long-time ruler. Indeed, State Department cables leaked by Wikileaks in November 2010 describe a close relationship between “the Trio” and the seemingly-perpetual Nazarbayev kleptocracy.
In any case, the Trio has recently attracted the attention of many other investigators and news outlets, including the September 11 Commission Report, the Guardian, Forbes, and the Wall Street Journal. In addition to resource grabbing, the litany of the Trio’s alleged activities include money laundering,bribery, and racketeering.¹³ In 2005, according to U.S. State Department cables released by Wikileaks, Chodiev (referred to in a State Department cable as “Fatokh Shodiyev”) was recorded on video attending the birthday of reputed Uzbek mob boss Salim Abduvaliyeva and presenting him with a $10,000 “gift” or “tribute.”
According to the Belgian newspaper Le Soir, Chodiev and Mashkevich also became close associates of a curious Russian-Canadian businessman, Boris J. Birshtein. who happens to have been the father-in-law of another key Russian-Canadian business associate of Donald Trump in Toronto. We will return to Birshtein below.
The Trio also turn up in the April 2016 Panama Papers database as the apparent beneficial owners of a Cook Islands company, “International Financial Limited.”¹⁴ The Belgian newspapers Het Laatste Nieuws,Le Soir, and La Libre Belgique have reported that Chodiev paid €23 million to obtain a “Class B” banking license for this same company, permitting it to make international currency trades. In the words of a leading Belgian financial regulator, that would “make all money laundering undetectable.”
The Panama Papers also indicate that some of Arif’s connections at the Rixos Hotel Group may have ties to Kazakhstan. For example, one offshore company listed in the Panama Papers database, “Group Rixos Hotel,” reportedly acts as an intermediary for four BVI offshore companies.¹⁵ Rixos Hotel’s CEO, Fettah Tamince, is listed as having been a shareholder for two of these companies, while a shareholder in another—“Hazara Asset Management”—had the same name as the son of a recent Kazakhstan Minister for Sports and Tourism. As of 2012, this Kazakh official was described as the third-most influential deputy in the country’s Mazhilis (the lower house of Parliament), in a Forbes-Kazakhstan article.
According to a 2015 lawsuit against Bayrock by Jody Kriss, one of its former employees, Bayrock started to receive millions of dollars in equity contributions in 2004, supposedly by way of Arif’s brother in Russia, who allegedly “had access to cash accounts at a chromium refinery in Kazakhstan.”
This as-yet unproven allegation might well just be an attempt by the plaintiff to extract a more attractive settlement from Bayrock and its original principals. But it is also consistent with fact that chromium is indeed one of the Kazakh natural resources that is reportedly controlled by the Trio.
As for Arif, his most recent visible brush with the law came in 2010, when he and other members of Bayrock’s Eurasian Trio were arrested together in Turkey during a police raid on a suspected prostitution ring, according to the Israeli daily Yediot Ahronot.
At the time, Turkish investigators reportedly asserted that Arif might be the head of a criminal organization that was trafficking in Russian and Ukrainian escorts, allegedly including some as young as 13.¹⁶ According to these assertions, big-ticket clients were making their selections by way of a modeling agency website, with Arif allegedly handling the logistics. Especially galling to Turkish authorities, the preferred venue was reportedly a yacht that had once belonged to the widely-revered Turkish leader Atatürk. It was also alleged that Arif may have also provided lodging for young women at Rixos Group hotels.¹⁷
According to Russian media, two senior Kazakh officials were also arrested during this incident, although the Turkish Foreign Ministry quickly dismissed this allegation as “groundless.” In the end, all the charges against Arif resulting from this incident were dismissed in 2012 by Turkish courts, and his spokespeople have subsequently denied all involvement.
Finally, despite Bayrock’s demise and these other legal entanglements, Arif has apparently remained active. For example, Bloomberg reports that, as of 2013, he, his son, and Rixos Hotels’ CEO Fettah Tamince had partnered to pursue the rather controversial business of advancing funds to cash-strapped high-profile soccer players in exchange for a share of their future marketing revenues and team transfer fees. In the case of Arif and his partners, this new-wave form of indentured servitude was reportedly implemented by way of a UK- and Malta-based hedge fund, Doyen Capital LLP. Because this practice is subject to innumerable potential abuses, including the possibility of subjecting athletes or clubs to undue pressure to sign over valuable rights and fees, UEFA, Europe’s governing soccer body, wants to ban it. But FIFA, the notorious global football regulator, has been customarily slow to act. To date, Doyen Capital LLP has reportedly taken financial gambles on several well-known players, including the Brazilian star Neymar.
The Case of Bayrock LLC—Felix Sater
Our second exhibit is Felix Sater, the senior Bayrock executive introduced earlier. This is the fellow who worked at Bayrock from 2002 to 2008 and negotiated several important deals with the Trump Organization and other investors. When Trump was asked who at Bayrock had brought him the Fort Lauderdale project in the 2013 deposition cited above, he replied: “It could have been Felix Sater, it could have been—I really don’t know who it might have been, but somebody from Bayrock.”¹⁸
Although Sater left Bayrock in 2008, by 2010 he was reportedly back in Trump Tower as a “senior advisor” to the Trump Organization—at least on his business card—with his own office in the building.
Sater has also testified under oath that he had escorted Donald Trump, Jr. and Ivanka Trump around Moscow in 2006, had met frequently with Donald over several years, and had once flown with him to Colorado. And although this might easily have been staged, he is also reported to have visited Trump Tower in July 2016 and made a personal $5,400 contribution to Trump’s campaign.
Whatever Felix Sater has been up to recently, the key point is that by 2002, at the latest,¹⁹ Tevfik Arif decided to hire him as Bayrock’s COO and managing director. This was despite the fact that by then Felix had already compiled an astonishing track record as a professional criminal, with multiple felony pleas and convictions, extensive connections to organized crime, and—the ultimate prize—a virtual “get out of jail free card,” based on an informant relationship with the FBI and the CIA that is vaguely reminiscent of Whitey Bulger.²⁰
Sater, a Brooklyn resident like Arif, was born in Russia in 1966. He reportedly emigrated with his family to the United States in the mid-1970s and settled in “Little Odessa.” It seems that his father, Mikhael Sheferovsky (aka Michael Sater), may have been engaged in Russian mob activity before he arrived in the United States. According to a certified U.S. Supreme Court petition, Felix Sater’s FBI handler stated that he “was well familiar with the crimes of Sater and his (Sater’s) father, a (Semion) Mogilevich crime syndicate boss.”²¹ A 1998 FBI report reportedly said Mogilevich’s organization had “approximately 250 members,” and was involved in trafficking nuclear materials, weapons, and more, as well as money laundering. (See below.)
But Michael Sater may have been less ambitious than his son. His only reported U.S. criminal convictioncame in 2000, when he pled guilty to two felony counts for extorting Brooklyn restaurants, grocery stores, and clinics. He was released with three years’ probation. Interestingly, the U.S. Attorney for the Eastern District of New York who handled that case at the time was Loretta Lynch, who succeeded Eric Holder as U.S. Attorney General in 2014. Back in 2000, she was also overseeing a budding informant relationship and a plea bargain with Michael’s son Felix, which may help to explain the father’s sentence.
By then young Felix Sater was already well on his way to a career as a prototypical Russian-American mobster. In 1991 he stabbed a commodity trader in the face with a margarita glass stem in a Manhattan bar, severing a nerve. He was convicted of a felony and sent to prison. As Trump tells it, Sater simply “got into a barroom fight, which a lot of people do.” The sentence for this felony conviction could not have been very long, because, by 1993, 27-year-old Felix was already a trader in a brand new Brooklyn-based commodity firm called “White Rock Partners,” an innovative joint venture among four New York crime families and the Russian mob aimed at bringing state-of-the art financial fraud to Wall Street.
Five years later, in 1998, Felix Sater pled guilty to stock racketeering, as one of 19 U.S.-and Russian mob-connected traders who participated in a $40 million “pump and dump” securities fraud scheme. Facing twenty years in Federal prison, Sater and Gennady Klotsman, a fellow Russian-American who’d been with him on the night of the Manhattan bar fight, turned “snitch” and helped the Department of Justice prosecute their co-conspirators.²² Reportedly, so did Salvatore Lauria, another “trader” involved in the scheme. According to the Jody Kriss lawsuit, Lauria later joined Bayrock as an off-the-books paid “consultant.” Initially their cooperation, which lasted from 1998 until at least late 2001, was kept secret, until it was inadvertently revealed in a March 2000 press release by U.S. Attorney Lynch.
Unfortunately for Sater, about the same time the NYPD also reportedly discovered that he had been running a money-laundering scheme and illicit gun sales out of a Manhattan storage locker. He and Klotsman fled to Russia. However, according to the New York Times, which cited Klotsman and Lauria, soon after the events of September 11, 2001, the ever-creative Sater succeeded in brokering information about the black market for Stinger anti-aircraft missiles to the CIA and the FBI. According to Klotsman, this strategy “bought Felix his freedom,” allowing him to return to Brooklyn. It is still not clear precisely what information Sater actually provided, but in 2015 U.S. Attorney General Loretta Lynch publicly commended him for sharing information that she described as “crucial to national security.”
Meanwhile, Sater’s sentence for his financial crimes continued to be deferred even after his official cooperation in that case ceased in late 2001. His files remained sealed, and he managed to avoid any sentencing for those crimes at all until October 23, 2009. When he finally appeared before the Eastern District’s Judge I. Leo Glasser, Felix received a $25,000 fine, no jail time, and no probation in a quiet proceeding that attracted no press attention. Some compared this sentence to Judge Glasser’s earlier sentence of Mafia hit man “Sammy the Bull” Gravano to 4.5 years for 19 murders, in exchange for “cooperating against John Gotti.”
In any case, between 2002 and 2008, when Felix Sater finally left Bayrock LLC, and well beyond, his ability to avoid jail and conceal his criminal roots enabled him to enjoy a lucrative new career as Bayrock’s chief operating officer. In that position, he was in charge of negotiating aggressive property deals all over the planet, even while—according to lawsuits by former Bayrock investors—engaging in still more financial fraud. The only apparent difference was that he changed his name from “Sater” to “Satter.”²³
In the 2013 deposition cited earlier, Trump went on to say “I don’t see Felix as being a member of the Mafia.” Asked if he had any evidence for this claim, Trump conceded “I have none.”²⁴
As for Sater’s pal Klotsman, the past few years have not been kind. As of December 2016 he is in a Russian penal colony, working off a ten-year sentence for a failed $2.8 million Moscow diamond heist in August 2010. In 2016 Klotsman was reportedly placed on a “top-ten list” of Americans that the Russians were willing to exchange for high-value Russian prisoners in U.S. custody, like the infamous arms dealer Viktor Bout. So far there have been no takers. But with Donald Trump as President, who knows?
The Case of Iceland’s FL Group
One of the most serious frauds alleged in the recent Bayrock lawsuit involves FL Group, an Icelandic private investment fund that is really a saga all its own.
Iceland is not usually thought of as a major offshore financial center. It is a small snowy island in the North Atlantic, closer to Greenland than to the UK or Europe, with only 330,000 citizens and a total GDP of just $17 billion. Twenty years ago, its main exports were cod and aluminum—with the imported bauxite smelted there to take advantage of the island’s low electricity costs.
But in the 1990s Iceland’s tiny neoliberal political elite had what they all told themselves was a brilliant idea: “Let’s privatize our state-owned banks, deregulate capital markets, and turn them loose on the world!” By the time all three of the resulting privatized banks, as well as FL Group, failed in 2008, the combined bank loan portfolio amounted to more than 12.5 times Iceland’s GDP—the highest country debt ratio in the entire world.
For purposes of our story, the most interesting thing about Iceland is that, long before this crisis hit and utterly bankrupted FL Group, our two key Russian/FSU/Brooklyn mobster-mavens, Arif and Sater, had somehow stumbled on this obscure Iceland fund. Indeed, in early 2007 they persuaded FL Group to invest $50 million in a project to build the Trump SoHo in mid-town Manhattan.
According to the Kriss lawsuit, at the same time, FL Group and Bayrock’s Felix Sater also agreed in principle to pursue up to an additional $2 billion in other Trump-related deals. The Kriss lawsuit further alleges that FL Group (FLG) also agreed to work with Bayrock to facilitate outright tax fraud on more than $250 million of potential earnings. In particular, it alleges that FLG agreed to provide the $50 million in exchange for a 62 percent stake in the four Bayrock Trump projects, but Bayrock would structure the contract as a “loan.” This meant that Bayrock would not have to pay taxes on the initial proceeds, while FLG’s anticipated $250 million of dividends would be channeled through a Delaware company and characterized as “interest payments,” allowing Bayrock to avoid up to $100 million in taxes. For tax purposes, Bayrock would pretend that their actual partner was a Delaware partnership that it had formed with FLG, “FLG Property I LLC,” rather than FLG itself.
The Trump Organization has denied any involvement with FLG. However, as an equity partner in the Trump SoHo, with a significant 18 percent equity stake in this one deal alone, Donald Trump himself had to sign off on the Bayrock-FLG deal.
This raises many questions. Most of these will have to await the outcome of the Kriss litigation, which might well take years, especially now that Trump is President. But several of these questions just leap off the page.
First, how much did President-elect Trump know about the partners and the inner workings of this deal? After all, he had a significant equity stake in it, unlike many of his “brand-name only” deals, and it was also supposed to finance several of his most important East Coast properties.
Second, how did the FL Group and Bayrock come together to do this dodgy deal in the first place? One former FL Group manager alleges that the deal arrived by accident, a “relatively small deal” was nothing special on either side.²⁵ The Kriss lawsuit, on the other hand, alleges that FLG was a well-known source of easy money from dodgy sources like Kazakhstan and Russia, and that other Bayrock players with criminal histories—like Salvatore Lauria, for example—were involved in making the introductions.
At this stage the evidence with respect to this second question is incomplete. But there are already some interesting indications that FL Group’s willingness to generously finance Bayrock’s peculiar Russian/FSU/Brooklyn team, its rather poorly-conceived Trump projects, and its purported tax dodging were not simply due to Icelandic backwardness. There is much more for us to know about Iceland’s “special” relationship with Russian finance. In this regard, there are several puzzles to be resolved.
First, it turns out that FL Group, Iceland’s largest private investment fund until it crashed in 2008, had several owners/investors with deep Russian business connections, including several key investors in all three top Iceland banks.
Second, it turns out that FL Group had constructed an incredible maze of cross-shareholding, lending, and cross-derivatives relationships with all these major banks, as illustrated by the following snapshot of cross-shareholding among Iceland’s financial institutions and companies as of 2008.²⁶

Cross-shareholding Relationships, FLG and Other Leading Icelandic Financial Institutions, 2008

This thicket of cross-dealing made it almost impossible to regulate “control fraud,” where insiders at leading financial institutions went on a self-serving binge, borrowing and lending to finance risky investments of all kinds. It became difficult to determine which institutions were net borrowers or investors, as the concentration of ownership and self-dealing in the financial system just soared.
Third, FL Group make a variety of peculiar loans to Russian-connected oligarchs as well as to Bayrock. For example, as discussed below, Alex Shnaider, the Russian-Canadian billionaire who later became Donald Trump’s Toronto business partner, secured a €45.8 million loan to buy a yacht from Kaupthing Bank during the same period, while a company belonging to another Russian billionaire who reportedly owns an important vodka franchise got an even larger loan.²⁷
Fourth, Iceland’s largest banks also made a series of extraordinary loans to Russian interests during the run-up to the 2008 crisis. For example, one of Russia’s wealthiest oligarchs, a close friend of President Putin, nearly managed to secure at least €400 million (or, some say, up to four times that much) from Kaupthing, Iceland’s largest bank, in late September 2008, just as the financial crisis was breaking wide open. This bank also had important direct and indirect investments in FL Group. Indeed, until December 2006, it is reported to have employed the FL Group private equity manager who allegedly negotiated Felix Sater’s $50 million deal in early 2007.²⁸
Fifth, there are unconfirmed accounts of a secret U.S. Federal Reserve report that unnamed Iceland banks were being used for Russian money laundering.²⁹ Furthermore, Kaupthing Bank’s repeated requests to open a New York branch in 2007-08 were rejected by the Fed. Similar unconfirmed rumors repeatedly appeared in Danish and German publications, as did allegations about the supposed Kazakh origins of FLG’s cash to be “laundered” in the Kriss lawsuit.
Sixth, there is the peculiar fact that, when Iceland’s banks went belly-up in October 2008, their private banking subsidiaries in Luxembourg, which were managing at least €8 billion of private assets, were suddenly seized by Luxembourg banking authorities and transferred to a new bank, Banque Havilland. This happened so fast that Iceland’s Central Bank was prevented from learning anything about the identities or portfolio sizes of the Iceland banks’ private offshore clients. But again, there were rumors of some important Russian names.
Finally, there is the rather odd phone call that Russia’s Ambassador to Iceland made to Iceland’s Prime Minister at 6:45 a.m. on October 7, 2008, the day after the financial crisis hit Iceland. According to the PM’s own account, the Russian Ambassador informed him that then-Prime Minister Putin was willing to consider offering Iceland a €4 billion Russian bailout.
Of course this alleged Putin offer was modified not long thereafter into a willingness to entertain an Icelandic negotiating team in Moscow. By the time the Iceland team got to Moscow later that year, Russia’s desire to lend had cooled, and Iceland ended up accepting a $2.1 billion IMF “stabilization package” instead. But according to a member of the negotiating team, the reasons for the reversal are still a mystery. Perhaps Putin had reconsidered because he simply decided that Russia had to worry about its own considerable financial problems. Or perhaps he had discovered that Iceland’s banks had indeed been very generous to Russian interests on the lending side, while—given Luxembourg’s actions—any Russian private wealth invested in Icelandic banks was already safe.
On the other hand, there may be a simpler explanation for Iceland’s peculiar generosity to sketchy partners like Bayrock. After all, right up to the last minute before the October 2008 meltdown, the whole world had awarded Iceland AAA ratings: Depositors queued up in London to open high-yield Iceland bank accounts, its bank stocks were booming, and the compensation paid to its financiers was off the charts. So why would anyone worry about making a few more dubious deals?
Overall, therefore, with respect to these odd “Russia-Iceland” connections, the proverbial jury is still out. But all these Icelandic puzzles are intriguing and bear further investigation.
The Case of the Trump Toronto Tower and Hotel—Alex Shnaider
Our fourth case study of Trump’s business associates concerns the 48-year-old Russian-Canadian billionaire Alex Shnaider, who co-financed the seventy-story Trump Tower and Hotel, Canada’s tallest building. It opened in Toronto in 2012. Unfortunately, like so many of Trump’s other Russia/FSU-financed projects, this massive Toronto condo-hotel project went belly-up this November and has now entered foreclosure.
According to an online profile of Shnaider by a Ukrainian news agency, Alex Shnaider was born in Leningrad in 1968, the son of “Евсей Шнайдер,” or “Evsei Shnaider” in Russian.³⁰ A recent Forbesarticle says that he and his family emigrated to Israel from Russia when he was four and then relocated to Toronto when he was 13-14. The Ukrainian news agency says that Alex’s familly soon established “one of the most successful stories in Toronto’s Russian quarter, “ and that young Alex, with “an entrepreneurial streak,” “helped his father Evsei Shnaider in the business, placing goods on the shelves and wiping floors.”
Eventually that proved to be a great decision—Shnaider prospered in the New World. Much of this was no doubt due to raw talent. But it also appears that for a time he got significant helping hand from his (now reportedly ex-) father-in-law, another colorful Russian-Canadian, Boris J. Birshtein.
Originally from Lithuania, Birshtein, now about 69, has been a Canadian citizen since at least 1982.³¹ He resided in Zurich for a time in the early 1990s, but then returned to Toronto and New York.³² One of his key companies was called Seabeco SA, a “trading” company that was registered in Zurich in December 1982.³³ By the early 1990s Birshtein and his partners had started many other Seabeco-related companies in a wide variety of locations, inclding Antwerp,³⁴ Toronto,³⁵ Winnipeg,³⁶ Moscow, Delaware,³⁷Panama,³⁸ and Zurich.³⁹ Several of these are still active.⁴⁰ He often staffed them with directors and officers from a far-flung network of Russians, emissaries from other FSU countries like Kyrgyzstan and Moldova, and recent Russia/FSU emigres to Canada.⁴¹
According to the Financial Times and the FBI, in addition to running Seabeco, Birshtein was a close business associate of Sergei Mikhaylov, the reputed head of Solntsevskaya Bratva, the Russian mob’s largest branch, and the world’s highest-grossing organized crime group as of 2014, according to Fortune.⁴² A 1996 FBI intelligence report cited by the FT claims that Birshtein hosted a meeting in his Tel Aviv office for Mikhaylov, the Ukrainian-born Semion Mogilevich, and several other leaders of the Russo/FSU mafia, in order to discuss “sharing interests in Ukraine.”⁴³ A subsequent 1998 FBI Intelligence report on the “Semion Mogilevich Organization” repeated the same charge,⁴⁴ and described Mogilevich’s successful attempts at gaining control over Ukraine privatization assets. The FT article also described how Birshtein and his associates had acquired extraordinary influence with key Ukraine officials, including President Leonid Kuchma, with the help of up to $5 million of payoffs.⁴⁵ Citing Swiss and Belgian investigators, the FT also claimed that Birshtein and Mikhaylov jointly controlled a Belgian company called MAB International in the early 1990s.⁴⁶ During that period, those same investigators reportedly observed transfers worth millions of dollars between accounts held by Mikhaylov, Birshtein, and Alexander Volkov, Seabeco’s representative in Ukraine.
In 1993, the Yeltsin government reportedly accused Birshtein of illegally exporting seven million tons of Russian oil and laundering the proceeds.⁴⁷ Dmytro Iakoubovski, a former associate of Birshtein’s who had also moved to Toronto, was said to be cooperating with the Russian investigation. One night a gunman fired three shots into Iakoubovski’s home, leaving a note warning him to cease his cooperation, according to a New York Times article published that year. As noted above, according to the Belgian newspaper Le Soir, two members of Bayrock’s Eurasian Trio were also involved in Seabeco during this period as well—Patokh Chodiev and Alexander Mashkevich. Chodiev reportedly first met Birshtein through the Soviet Foreign Ministry, and then went on to run Seabeco’s Moscow office before joining its Belgium office in 1991. Le Soir further claims that Mashkevich worked for Seabeco too, and that this was actually how he and Chodiev had first met.
All this is fascinating, but what about the connections between Birshtein and Trump’s Toronto business associate, Alex Shnaider? Again, the leads we have are tantalizing.The Toronto Globe and Mail reportedthat in 1991, while enrolled in law school, young Alex Shnaider started working for Birshtein at Seabeco’s Zurich headquarters, where he was reportedly introduced to steel trading. Evidently this was much more than just a job; the Zurich company registry lists “Alex Shnaider” as a director of “Seabeco Metals AG” from March 1993 to January 1994.⁴⁸
In 1994, according to this account, he reportedly left Seabeco in January 1994 to start his own trading company in Antwerp, in partnership with a Belgian trader-partner. Curiously, Le Soir also says that Mikhaylov and Birshtein co-founded MAB International in Antwerp in January 1994. Is it far-fetched to suspect that Alex Shnaider and mob boss Mikhaylov might have crossed paths, since they were both in the same city and they were both close to Shnaider’s father-in-law?
According to Forbes, soon after Shnaider moved to Antwerp, he started visiting the factories of his steel trading partners in Ukraine.⁴⁹ His favorite client was the Zaporizhstal steel mill, Ukraine’s fourth largest. At the Zaporizhstal mill he reportedly met Eduard Shifrin (aka Shyfrin), a metals trader with a doctorate in metallurgical engineering. Together they founded Midland Resource Holdings Ltd. in 1994.⁵⁰
As the Forbes piece argues, with privatization sweeping Eastern Europe, private investors were jockeying to buy up the government’s shares in Zaprozhstal. But most traders lacked the financial backing and political connectons to accumulate large risky positions. Shnaider and Shifrin, in contrast, started buying up shares without limit, as if their pockets and connections were very deep. By 2001 they had purchased 93 percent of the plant for about $70 million, a stake that would be worth much more just five years later, when Shnaider reportedly turned down a $1.2 billion offer.
Today, Midland Resources Holdings Ltd. reportedly generates more than $4 billion a year of revenue and has numerous subsidiaries all across Eastern Europe.⁵¹ Shnaider also reportedly owns Talon International Development, the firm that oversaw construction of the Trump hotel-tower in Toronto. All this wealth apparently helped Iceland’s FL Group decide that it could afford to extend a €45.8 million loan to Alex Shnaider in 2008 to buy a yacht.⁵²
As of December 2016, a search of the Panama Papers database found no fewer than 28 offshore companies that have been associated with “Midland Resources Holding Limited.”⁵³ According to the database, “Midland Resources Holding Limited” was a shareholder in at least two of these companies, alongside an individual named “Oleg Sheykhametov.”⁵⁴ The two companies, Olave Equities Limited and Colley International Marketing SA, were both registered and active in the British Virgin Islands from 2007–10.⁵⁵ A Russian restaurateur by that same name reportedly runs a business owned by two other alleged Solntsevskaya mob associates, Lev Kvetnoy and Andrei Skoch, both of whom appear with Sergei Mikhaylov. Of course mere inclusion in such a group photo is not evidence of wrongdoing. (See the photo here.) According to Forbes, Kvetnoy is the 55th richest person in Russia and Skoch, now a deputy in the Russian Duma, is the 18th.⁵⁶
Finally, it is also intriguing to note that Boris Birshtein is also listed as the President of “ME Moldova Enterprises AG,” a Zurich-based company” that was founded in November 1992, transferred to the canton of Schwyz in September 1994, and liquidated and cancelled in January 1999.⁵⁷ Birshstein was a member of the company’s board of directors from November 1992 to January 1994, when he became its President. At that point he was succeeded as President in June 1994 by one “Evsei Shnaider, Canadian citizen, resident in Zurich,” who was also listed as director of the company in September 1994.⁵⁸ “Evsei Schnaider” is also listed in the Panama registry as a Treasurer and Director of “The Seabeco Group Inc.,” formed on December 6, 1991,⁵⁹ and as treasurer and director of Seabeco Security International Inc.,” formed on December 10, 1991. As of December 2016, both companies are still in existence.⁶⁰ Boris Birshtein is listed as president and director of both companies.⁶¹
The Case of Paul Manafort’s Ukrainian Oligarchs
Our fifth Trump associate profile concerns the Russo/Ukrainian connections of Paul Manafort, the former Washington lobbyist who served as Donald Trump’s national campaign director from April 2016 to August 2016. Manafort’s partner, Rick Davis, also served as national campaign manager for Senator John McCain in 2008, so this may not just be a Trump association.
One of Manafort’s biggest clients was the dubious pro-Russian Ukrainian billionaire Dmytro Firtash. By his own admission, Firtash maintains strong ties with a recurrent figure on this scene, the reputed Ukrainian/Russian mob boss Semion Mogilevich. His most important other links are almost certainly to Putin. Otherwise it is difficult to explain how this former used-car salesman could gain a lock on trading goods for gas in Turkmenistan and also become a lynchpin investor in the Swiss company RosUrEnergo, which controls Gazprom’s gas sales to Europe.⁶²
In 2008, Manafort teamed up with a former manager of the Trump Organization to purchase the Drake Hotel in New York for up to $850 million, with Firtash agreeing to invest $112 million. According to a lawsuit brought against Manafort and Firtash, the key point of the deal was not to make a carefully-planned investment in real estate, but to simply launder part of the huge profits that Firtash had skimmed while brokering dodgy natural gas deals between Russia and Ukraine, with Mogilevich acting as a “silent partner.”
Ultimately Firtash pulled out of this Drake Hotel deal. The reasons are unclear—it has been suggested that he needed to focus on the 2015 collapse and nationalization of his Group DF’s Bank Nadra back home in Ukraine.⁶³ But it certainly doesn’t appear to have changed his behavior. Since 2014 there has been a spate of other Firtash-related prosecutions, with the United States trying to extradict from Austria in order to stand trial on allegations that his vast spidernet “Group DF” had bribed Indian officials to secure mining licenses. The Austrian court has required him to put up a record-busting €125 million bail while he awaits a decision.⁶⁴ And just last month, Spain has also tried to extradite Firtash on a separate money laundering case, involving the laundering of €10 million through Spanish property investments.
After Firtash pulled out of the deal, Manafort reportedly turned to Trump, but he declined to engage.Manafort stepped down as Trump’s campaign manager in August of 2016 in response to press investigations into his ties not only to Firtash, but to Ukraine’s previous pro-Russian Yanukovych government, which had been deposed by a uprising in 2014. However, following the November 8 election, Manafort reportedly returned to advise Trump on staffing his new administration. He got an assist from Putin—on November 30 a spokeswoman for the Russian Foreign Ministry accused Ukraine of leaking stories about Manafort in an effort to hurt Trump.
The Case of “Well-Connected” Russia/FSU Mobsters
Finally, several other interesting Russian/FSU connections have a more residential flavor, but they are a source of very important leads about the Trump network.
Indeed, partly because it has no prying co-op board, Trump Tower in New York has received press attention for including among its many honest residents tax-dodgers, bribers, arms dealers, convicted cocaine traffickers, and corrupt former FIFA officials.⁶⁵
One typical example involves the alleged Russian mobster Anatoly Golubchik, who went to prison in 2014 for running an illegal gambling ring out of Trump Tower—not only the headquarters of the Trump Organization but also the former headquarters of Bayrock Group LLC. This operation reportedly took up the entire 51st floor. Also reportedly involved in it was the alleged mobster Alimzhan Tokhtakhounov,⁶⁶who has the distinction of making the Forbes 2008 list of the World’s Ten Most Wanted Criminals, and whose organization the FBI believes to be tied to Mogilevich’s. Even as this gambling ring was still operating in Trump Tower, Tokhtakhounov reportedly travelled to Moscow to attend Donald Trump’s 2013 Miss Universe contest as a special VIP.
In the Panama Papers database we do find the name “Anatoly Golubchik.” Interestingly, his particular offshore company, “Lytton Ventures Inc.,”⁶⁷ shares a corporate director, Stanley Williams, with a company that may well be connected to our old friend Semion Mogilevich, the Russian mafia’s alleged “Boss of Bosses” who appeared so frequently in the story above. Thus Lytton Ventures Inc. shares this particular director with another company that is held under the name of “Galina Telesh.”⁶⁸ According to the Organized Crime and Corruption Reporting Project, multiple offshore companies belonging to Semion Mogilevich have been registered under this same name—which just happens to be that of Mogilevich’s first wife.
A 2003 indictment of Mogilevich also mentions two offshore companies that he is said to have owned, with names that include the terms “Arbat” and “Arigon.” The same corporate director shared by Golubchik and Telesh also happens to be a director of a company called Westix Ltd.,⁶⁹ which shares its Moscow address with “Arigon Overseas” and “Arbat Capital.”⁷⁰ And another company with that same director appears to belong to Dariga Nazarbayeva, the eldest daughter of Nursultan Nazarbayev, the long-lived President of Kazakhstan. Dariga is expected to take his place if he ever decides to leave office or proves to be mortal.
Lastly, Dmytro Firtash—the Mogilevich pal and Manafort client that we met earlier—also turns up in the Panama Papers database as part of Galina Telesh’s network neighborhood. A director of Telesh’s “Barlow Investing,” Vasliki Andreou, was also a nominee director of a Cyprus company called “Toromont Ltd.,” while another Toromont Ltd. nominee director, Annex Holdings Ltd., a St. Kitts company, is also listed as a shareholder in Firtash’s Group DF Ltd., along with Firtash himself.⁷¹ And Group DF’s CEO, who allegedly worked with Manafort to channel Firtash’s funding into the Drake Hotel venture, is also listed in the Panama Papers database as a Group DF shareholder. Moreover, a 2006Financial Times investigation identified three other offshore companies that are linked to both Firtash and Telesh.⁷²

Anatoly Golubchik’s Panama Papers Network Neighborhood

Of course, all of these curious relationships may just be meaningless coincidences. After all, the director shared by Telesh and Golubchik is also listed in the same role for more than 200 other companies, and more than a thousand companies besides Arbat Capital and Arigon Overseas share Westix’s corporate address. In the burgeoning land of offshore havens and shell-game corporate citizenship, there is no such thing as overcrowding. The appropriate way to view all this evidence is to regard it as “Socratic:” raising important unanswered questions, not providing definite answers.
In any case, returning to Trump’s relationships through Trump Tower, another odd one involves the 1990s-vintage fraudulent company YBM Magnex International. YBM, ostensibly a world-class manufacturer of industrial magnets, was founded indirectly in Newtown, Bucks County, Pennsylvania in 1995 by the “boss of bosses,” Semion Mogilevich, Moscow’s “brainy Don.”
This is a fellow with an incredible history, even if only half of what has been written about him is true.⁷³Unfortunately, we have to focus here only on the bits that are most relevant. Born in Kiev, and now a citizen of Israel as well as Ukraine and Russia, Semion, now seventy, is a lifelong criminal. But he boasts an undergraduate economics degree from Lviv University, and is reported to take special pride in designing sophisticated, virtually undetectable financial frauds that take years to put in place. To pull them off, he often relies on the human frailties of top bankers, stock brokers, accountants, business magnates, and key politicians.⁷⁴
In YBM’s case, for a mere $2.4 million in bribes, Semion and his henchmen spent years in the 1990s launching a product-free, fictitious company on the still-badly under-regulated Toronto Stock Exchange. Along the way they succeeded in securing the support of several leading Toronto business people and a former Ontario Province Premier to win a seat on YBM’s board. They also paid the “Big Four” accounting firm Deloitte Touche very handsomely in exchange for glowing audits. By mid-1998, YBM’s stock price had gone from less than $0.10 to $20, and Semion cashed out at least $18 million—a relatively big fraud for its day—before the FBI raid its YBM’s corporate headquarters. When it did so, it found piles of bogus invoices for magnets, but no magnets.⁷⁵
In 2003, Mogilevich was indicted in Philadelphia on 45 felony counts for this $150 million stock fraud. But there is no extradition treaty between the United States and Russia, and no chance that Russia will ever extradite Semion voluntarily; he is arguably a national treasure, especially now. Acknowledging these realities, or perhaps for other reasons, the FBI quietly removed Mogilevich from its Top Ten Most Wanted list in 2015, where he had resided for the previous six years.⁷⁶
For our purposes, one of the most interesting things to note about this YBM Magnex case is that its CEO was a Russian-American named Jacob Bogatin, who was also indicted in the Philadelphia case. His brother David had served in the Soviet Army in a North Vietnamese anti-aircraft unit, helping to shoot down American pilots like Senator John McCain. Since the early 1990s, David Bogatin was considered by the FBI to be one of the key members of Semion Mogilevich’s Russian organized crime family in the United States, with a long string of convictions for big-ticket Mogilevich-type offenses like financial fraud and tax dodging.
At one point, David Bogatin owned five separate condos in Trump Tower that Donald Trump had reportedly sold to him personally.⁷⁷ And Vyacheslav Ivankov, another key Mogilevich lieutenant in the United States during the 1990s, also resided for a time at Trump Tower, and reportedly had in his personal phone book the private telephone and fax numbers for the Trump Organization’s office in that building.⁷⁸
So what have we learned from this deep dive into the network of Donald Trump’s Russian/FSU connections?
First, the President-elect really is very “well-connected,” with an extensive network of unsavory global underground connections that may well be unprecedented in White House history. In choosing his associates, evidently Donald Trump only pays cursory attention to questions of background, character, and integrity.
Second, Donald Trump has also literally spent decades cultivating senior relationships of all kinds with Russia and the FSU. And public and private senior Russian figures of all kinds have likewise spent decades cultivating him, not only as a business partner, but as a “useful idiot.”
After all, on September 1, 1987 (!), Trump was already willing to spend a $94,801 on full-page ads in the Boston Globe, the Washington Post, and the New York Times calling for the United States to stop spending money to defend Japan, Europe, and the Persian Gulf, “an area of only marginal significance to the U.S. for its oil supplies, but one upon which Japan and others are almost totally dependent.”⁷⁹
This is one key reason why just this week, Robert Gates—a registered Republican who served as Secretary of Defense under Presidents Bush and Obama, as well as former Director and Deputy Director of the CIA—criticized the response of Congress and the White House to the alleged Putin-backed hacking as far too “laid back.”⁸⁰
Third, even beyond questions of illegality, the public clearly has a right to know much more than it already does about the nature of such global connections. As the opening quote from Cervantes suggests, these relationships are probably a pretty good leading indicator of how Presidents will behave once in office.
Unfortunately, for many reasons, this year American voters never really got the chance to decide whether such low connections and entanglements belong at the world’s high peak of official power. In the waning days of the Obama Administration, with the Electoral College about to ratify Trump’s election and Congress in recess, it is too late to establish the kind of bipartisan, 9/11-type commission that would be needed to explore these connections in detail.
Finally, the long-run consequence of careless interventions in other countries is that they often come back to haunt us. In Russia’s case, it just has.

Kuchma: “Have you found Mogilevich?”
Derkach: “I found him.”
Kuchma: “So, are you two working now?”
Derkach: “We’re working. We have another meeting tomorrow. He arrives incognito.
Later in the discussion Derkach revealed a few details about Mogilevich.
Derkach: “He’s on good terms with Putin. He and Putin have been in contact since Putin was still in Leningrad.”
Kuchma: “I hope we won’t have any problems because of this.”
Derkach: “They have their own affairs” (The transcript appears in the forthcoming book by J.V. Koshiw, The Politics of Kuchma – the Melnychenko Recordings August 1999 to September 2000).

A second key to the puzzle lies in the alleged relationship between Firtash and Mogilevich in the Eural Trans Gas and RosUkrEnergo, companies involved in the strategically important transit of natural gas from Central Asia to Ukraine which worked closely with Gazprom, the Russian state-owned gas company apparently controlled by Putin.
In December 2005, a confidential Austrian police report noted that:

In August 2005 the FBI gave their Austrian counterparts a confidential report on frauds committed by the SMO (Semion Mogilevich Organization) in connection with gas deliveries from Turkmenistan to the Ukraine and the illegal kickback payments to [a] member of the organization… According to the FBI the actual control of ETG and RUE is held by Ivan Fursin and Oleg Palchikov. Hungarian police reported about an April 2005 meeting in Vienna between Ivan Fursin, Oleg Palchikov and Dmitri Firtash The FBI described Ivan Fursin, Oleg Palchikov and Dmitri Firtash as senior members of the SMO (Austrian Federal Criminal Investigation Agency Report on the Semion Mogilevich Criminal Organization, December 1, 2005).

Another document linking Mogilevich to Andras Knopf, the executive director of Eural Trans Gas, the Hungarian gas intermediary company created by Firtash to act as the middleman in the transit of Turkmen gas to Ukraine, is a letter allegedly written by MVD Major-General Alexander Mordovets on November 14, 1998 to the former first Deputy Head of the Department for the Struggle Against Organized Crime of the Russian Ministry of Internal Affairs, in which Mordovets described the close criminal relationship between Knopf and Mogilevich. However, on September 16, 2004, six years after this letter surfaced, Mordovets suddenly recanted. In an affidavit sent to Mark J. MacDougall, a lawyer working for the law firm Akin Gump in Washington, DC., Mordovets claimed that he never wrote this letter implying that it was a forgery.
Mogilevich was arrested in late January 2008 on charges of abetting a tax evasion scheme by Vladimir Nekrasov, the owner of “Arbat Prestige,” a chain of Russian cosmetic stores and has remained in jail while the investigation continues to this day. The Russian police insisted that they had been unable to find and arrest Mogilevich in Moscow earlier – yet his photograph, attending services in a Moscow Synagogue appeared on the front page of Izvestia on December 7, 2004.
The official Kremlin version of Mogilevich’s role in tax evasion is difficult to believe and it could well turn out to be that Mogilevich was arrested as part of a cover up operation by the Kremlin designed to distance Putin from Firtash and Mogilevich. Putin has remained silent on his links to Firtash and Mogilevich and this might prove to be an opportune moment for western intelligence agencies to shed some light on this murky and far reaching affair.

Jason Maloni, a spokesman for Manafort, called that allegation “false,” saying that Manafort “never – ever – worked for the Russian government.” He also denied that Manafort ever recommended Ukrainian opposition to NATO, saying he “was a strong advocate” of closer relations with the western military alliance while advising political parties there.
“Paul Manafort did not collude with the Russian government to undermine the 2016 election,” Maloni said. “No amount of wishing and hoping by his political opponents will make this spurious allegation true.”
Maloni declined to say whether, while in Moscow, Manafort met with any Russian government officials.
Land of the oligarchs
The trail of Manafort’s decade of dealings 5,000 miles from America’s capital is murky. But the previously unreported flight records, spanning from late 2004 through 2015, reflect a man seemingly always on the move. Over those years, Manafort visited Ukraine at least 138 times. His trips between Ukraine and Moscow all occurred between 2005 and 2011 and were mostly in 2005 and 2006.
Prosecutors have charged that Manafort and associate Rick Gates funneled through a maze of foreign accounts at least $75 million in consulting fees from an array of Kremlin-leaning clients: Russian billionaire Oleg Deripaska, who secretly paid them $10 million annually for several years; a second Ukrainian oligarch; and the ruling Party of Regions, which supported Yanukovych until corruption allegations and bloody protests led to his overthrow in February 2014.
Maloni said Manafort’s trips to Russia were “related to his work on behalf of Oleg Deripaska’s commercial interests.”
The further unmasking of Manafort’s relationship with Deripaska in recent months, however, has heightened suspicions about Manafort.
In July 2016, weeks after he was named Trump’s campaign chairman, Manafort crafted an unusual, eyebrow-raising proposal for Deripaska, a member of Putin’s inner circle. In emails first reported by the Washington Post, Manafort offered in seemingly coded language to provide “private briefings” on the U.S. presidential race for the Russian aluminum magnate. Manafort directed a trusted associate, Konstantin Kilimnik, to relay his message to Deripaska, remarking that it could be a way to make himself “whole” — possibly an allusion to a multimillion-dollar legal action Deripaska had filed against Manafort. Kilimnik, a Ukrainian citizen, once attended a Russian military academy known for training spies.
Deripaska, who did not respond to a request for comment, has denied seeing Manafort’s proposal and says it went nowhere. Kilimnik did not respond to emailed questions, but he has denied in published reports having any connection to Russian intelligence services.

California Rep. Adam Schiff, the lead Democrat in the House Intelligence Committee’s inquiry, told McClatchy: “It certainly looks like Mr. Manafort viewed his position on the campaign as a way of further profiting personally from the work that he was doing on behalf of Russian interests.”
Manafort’s proposal to Deripaska “shows a certain willingness to trade information in the hope of obtaining financial rewards from pro-Russian interests,” Schiff said in a phone interview. “If accurate, that’s a dangerous quality to have in a campaign chairman for a presidential campaign.”
Two former U.S. government officials with knowledge of the way Putin operates said three of the oligarchs with whom Manafort had contacts – Deripaska, Dmitry Firtash, who helped finance the party behind Yanukovych, and Medvedchuk – were potential conduits with the Kremlin.
“All three of those guys are able to pass messages directly to Putin, as well as to his subordinates and aides within the Russian presidential administration,” said one of the ex-officials, who spoke on condition of anonymity because of the sensitivity of the matter. “So they all have access and Manafort knew all three or their close associates fairly well.”
No evidence has surfaced that Manafort used any of them to pass messages between the campaign and the Kremlin.
During Manafort’s five-month tenure with the campaign, Russian emissaries made at least two behind-the-scenes offers to deliver “dirt” about Clinton to Trump’s campaign, including at a June 9, 2016 meeting in Trump Tower three weeks after Manafort was promoted to campaign chairman; he attended the meeting along with Donald Trump Jr., Trump son-in-law Jared Kushner and a Russian lawyer. Trump’s aides say nothing came of that discussion, or a similar offer conveyed in April 2016 to foreign policy adviser George Papadopoulos; Manafort was copied on an email relaying that offer, which said the Russians had “thousands” of emails from Democrats.
In July, days before the Democratic National Convention, the British transparency group WikiLeaks began publishing thousands of embarrassing emails stolen from the Democratic National Committee. U.S. intelligence agencies have concluded that Russia was behind the hacking, and also was responsible for the social media dissemination of a blizzard of fake and harshly critical news about Trump’s opponent, Hillary Clinton.
Schiff, emphasizing he could only discuss what’s on the public record, said “these are some of the communications and interactions that are of deep interest to us, because obviously the timing is highly suggestive. It’s one of the reasons why Manafort is such a key figure in all of this.”

Globe-trotting consultant
Manafort first began to establish connections in Ukraine – ground zero in the geopolitical struggle between Putin’s Russia and the West – in late 2004. His reputation as a masterful political strategist and fixer was earned over decades hopping planes to the Congo, Philippines and elsewhere to advise authoritarian rulers friendly with the United States.
By the end of that year, the former Soviet republic of Ukraine was paralyzed by widespread protests amid allegations that Yanukovych, the prime minister in a government rife with corruption, had won the presidency in a rigged election. What became the Orange Revolution persisted until another, internationally monitored vote was held and rival Victor Yushchenko was declared the winner.
Manafort and a partner formed Davis Manafort Partners Inc. in early 2005 and opened offices in Kiev.

Manafort’s first client in Ukraine was Rinat Akhmetov, the country’s richest man and a key funder of Yanukovych’s Party of Regions. Deripaska introduced Manafort to Akhmetov, who hailed from Russia-leaning Eastern Ukraine. In the summer of 2005, Akhmetov tapped Manafort to help Yanukovych and his party in the 2006 elections, according to an American consultant based in Kiev, who spoke on condition of anonymity to avoid damaging relationships.
The multimillion-dollar political consulting deal was sealed at a meeting in an elite Moscow hotel attended by Manafort, Akhmetov and a half dozen other wealthy Ukrainians.
Manafort spent the next several years advising Deripaska, Akhmetov and other Ukrainian oligarchs and giving the gruff-talking Yanukovych a makeover down to his hair style and attire. Yanukovych won the presidency in 2010.

In 2014, however, Manafort’s business took a hit when Yanukovych fled to Russia, days before Kremlin-backed forces invaded Eastern Ukraine. He was quickly hired by the Opposition Bloc, which leaned even more toward Moscow.
His work drew rave reviews from one Oppo Bloc leader, Nestor Shufrych, whom multiple people in positions to know described as a close ally of Medvedchuk. Shufrych told a Ukrainian publication that Manafort urged the new party to take an anti-NATO stance and be the “voice of Russians in (Ukraine’s) East.”
Calling Manafort “a genius,” Shufrych said the party had paid him about $1 million, and the investment “paid off.”
Philip Griffin, a former associate of Manafort’s who consults in Kiev, said he could not imagine Manafort opposing NATO. “Paul Manafort is a Reagan Republican,” Griffin said. “He would never betray that legacy by doing Russia’s bidding.”
Maloni said Manafort argued strongly that “Ukraine was better served by having closer relations with the West and NATO.”
He also said Manafort succeeded in pushing “a number of major initiatives that were strongly supported by the U.S. government and opposed by Russia,” including the denuclearization of Ukraine and the expansion of NATO exercises in the region.

Some former U.S. government officials, though, are skeptical.
Despite Ukraine’s popular uprising against Yanukovych that led to at least 75 deaths, “Paul Manafort maintained ties to the Opposition Bloc party and Viktor Yanukovych’s former cronies, thus choosing to associate himself with crooks and kleptocrats rather than Ukraine’s pro-Western reformers,” said Mike Carpenter, who focused on Russia matters as a top Pentagon and National Security Council official during the Obama administration. “This speaks volumes about his character and lack of respect for democratic values.”
One of Shufrych’s and Oppo Bloc’s behind-the-scenes allies was Medvedchuk, who is so close to Putin that the Russian president is the godfather of his daughter.
Partial transcripts from tape recordings of then-Ukrainian president Leonid Kuchma, published in 2002, show Kumcha saying: “Well, we know about it, that he was a KGB agent, 100 percent.”
Details of Manafort’s contacts with Medvedchuk could not be learned. But Medvedchuk, who is under U.S. sanctions, has acknowledged meeting Manafort once in 2014.
Flights of interest
Several of the trips in Manafort’s flight records could draw investigators’ interest.
In April 2014, for instance, Manafort traveled to Vienna. Ukrainian oligarch Firtash had been arrested there the prior month on U.S. charges that he helped orchestrate an $18.5 million bribery scheme involving the government of India, a U.S. firm and a Firtash company in the Virgin Islands. A former U.S. government official, who declined to be identified because of the sensitivity of the matter, said Manafort met with Firtash in Vienna, where he is awaiting extradition to the United States.
Another Manafort trip that could interest investigators took place in July 2013 when Manafort and Kilimnik flew to Frankfurt on a private plane owned by Andrey Artemenko, a pro-Moscow Ukrainian legislator.
American experts on Russia said privately they suspect the trip was a prelude to a broader Russian influence effort to dissuade Yanukovych’s government from signing an agreement to associate with the European Union. That decision, experts say, opened the door to Russia’s 2014 invasion of eastern Ukraine. This year, Artemenko was expelled from the Ukrainian legislature and his citizenship was revoked after disclosures he and a Trump attorney had pitched a “peace plan” for Ukraine and Russia widely seen as favoring Moscow.
Pro-Russia stances
Some of Trump’s most remarked-upon statements about foreign policy that directly or indirectly implicated Russia occurred on Manafort’s watch in the 2016 campaign. For example, Trump launched broadsides against NATO allies for not contributing enough money and suggested the United States might rethink its commitment to the European mutual defense alliance credited with deterring Russian military ambitions.
Trump also raised doubts about whether he would stand behind U.S. sanctions that President Barack Obama imposed in December 2014 in retaliation for the Crimean invasion.
As the GOP platform committee drew up party positions a week before the Republican National Convention, a plank calling for the United States to provide “lethal weapons” for Ukraine’s defense wasaltered in a controversial and mysterious move. The American consultant in Ukraine said that Manafort aide Kilimnik had boasted he played a role in easing the language to recommend only “appropriate assistance” to Ukraine’s military.

Charlie Black, a onetime partner of Manafort’s, says he remains baffled by the change.
“It was inexplicable to me that a majority of platform members would have taken a pro-Russian position on Ukraine,” he said. “They must not have known this was a pro-Russia provision.”

In late July after FBI Director James Comey said he would not back prosecution of Clinton over her use of a private email server to conduct State Department business, Trump took a bizarre step. He publicly beseeched Russia to help unearth 30,000 emails that Clinton said she had deleted because they dealt with personal matters.

During the summer, a U.S. group supporting Ukraine asked both presidential candidates for a letter recognizing the country’s 25th year of independence since the fall of the Soviet Union. Clinton obliged. But the Ukrainian Congress Committee of America was unable to wrest a letter from the Trump campaign, said a person familiar with the matter. The group’s president did not respond to phone messages.
Manafort resigned from the campaign on Aug. 19, 2016 after The New York Times disclosed a secret Ukrainian ledger indicating he was to receive more than $12 million in off-the-books payments from Yanukovych’s party from 2007 to 2012.
Schiff said he found an intriguing symmetry between Trump’s Russia stances and Manafort’s work in Kiev that might explain their mutual attraction.
“Whether he was attracted to the Trump campaign or the campaign was attracted to him on the basis of his Russian contacts,” Schiff said, “the fact of the matter is, he did bring those Russian contacts and pro-Russian prejudices with him to the campaign and apparently found a welcome home there.”
Kevin G. Hall, James Whitlow and the Organized Crime and Corruption Reporting Project contributed to this story. Peter Stone is a McClatchy special correspondent.