A warlord, a businessman, and a Russian banker walk into a bar… (Updated)
The testimony of Erik Prince can be best described as a matryoshka doll of lies: one lie inside another inside another.
Prince’s testimony before the House Intelligence Committee in November 2017 revealed a lot of what we’ve come to expect— shady business dealings, accusations of deep state conspiracy, scathing criticism of Obama, and, of course, intense denial of relations with Russia. The transcripts contain all of the above. But, more importantly, the testimony of Erik Prince reveals a man caught in a lie — at the time, unaware of what Mueller likely already knew about a meeting in the Seychelles no one was ever supposed to know about.
Three months after Prince’s initial testimony, the Washington Post reported Mueller now has evidence that the meeting in the Seychelles between Erik Prince, the crown prince of UAE Mohammed bin Zayed, and a Russian investment banker named Kirill Dmitriev, was indeed an effort to establish a back channel with the Kremlin. Now, with his testimony under renewed scrutiny, Prince finds himself in the crosshairs of a Russia investigation showing no signs of slowing down.
PRINCE: On or around January 11, 2017, I traveled to the Seychelles to meet with some potential customers from the UAE for the logistics business of which I am chairman. After the meeting, they mentioned a guy I should meet who was also in town to see them, a Kirill Dmitriev from Russia, who ran some sort of hedge fund…
I remember telling him that if Franklin Roosevelt could work with Josef Stalin to defeat Nazi fascism, then certainly Donald Trump could work with Vladimir Putin to defeat Islamic fascism.
“On or around January 11” Erik Prince traveled to the Seychelles, a remote island nation off the coast of Africa, in the middle of the Indian Ocean. According to his testimony, he flew alone and told no one else where he was going. When he returned, he told no one where he had been. On the same day Prince flew to the Seychelles, a Turkish-owned Bombardier Global 5000 charter plane flew Kirill Dmitriev, a close ally of Putin, to the same remote island, where he arrived at the same hotel (the name of which, Prince cannot remember). Eight months later, Prince testified that he was in the Seychelles “on business” where, according to him, he had a chance encounter with a Russian “hedge fund manager” who he barely remembered. Prince said the meeting lasted “about as long as one beer.”
PRINCE: I like the UAE. I lived there full-time for 3 years. My kids went to school there. And it’s a bit of an oasis, literally in the desert, of peace and tranquility, and I hope it can stay that way.
SCHIFF: And knowing what you do about the UAE, isn’t it also a fact that countries like the UAE, and in particular the UAE, in order to enhance its influence, like to put people together in a way that enhances their position and their prestige — in this case, someone with ties to the Trump campaign and the Russian banker?
PRINCE: Like I said, there was no formal introduction. It’s not like I was at a meeting and they invited this Russian guy to the meeting. It was a matter of “Hey, while you’re here, there’s a Russian guy that we’ve done some business with in the past, and it’d be interesting for you to meet him.”
In December 2016, weeks before the inauguration and shortly before Erik Prince would fly to the Seychelles, crown prince Mohammed bin Zayed (MBZ) and the UAE delegation made an unannounced visit to New York City to meet with senior advisers in the Trump campaign. Former national security adviser Susan Rice privately told House investigators that she unmasked the identities of those top officials to understand why MBZ was in New York and why the UAE delegation failed to mention that the prince was coming to the US, as is customary for foreign leaders upon arrival.
Prince was asked about the meeting in NYC during his testimony. He said that he had met with Steve Bannon at least twice at Trump Tower in the months after the election and before the inauguration, or as Prince vaguely put it: “It might have been in November. It might have been in December… not on Christmas Day and not on New Year’s Day or Thanksgiving.” He testified that Bannon discussed the NYC meeting with him before and after it happened.
MBZ arrived in New York in December 2016 in the transition period before Trump was sworn into office. The crown prince met with top administration officials, including Michael Flynn, Jared Kushner, and Steve Bannon. Representing MBZ at this meeting was George Nader, a Lebanese-American businessman and top adviser to the crown prince.
According to the Washington Post, Erik Prince and Nader — like MBZ — were longtime associates. Prince hired Nader to generate business from the Iraqi government in the years after the U.S. invasion. He worked as a consultant to Prince’s notorious private security firm, Blackwater. He reportedly visited Steve Bannon and Jared Kushner multiple times early in Trump’s presidency. And, he once helped broker a $4.2 billion Iraq-Russia arms deal after the war.
Nader also made the formal introduction between Prince and Dmitriev, despite the fact Prince testified there was “no formal introduction” and that he couldn’t remember who introduced him to the Russian “hedge fund manager.” But what’s most telling about the mysterious relationship between Prince and Nader is what isn’t said about it. His name is never mentioned once throughout the hearing. No one on the committee asks about Nader during the entire hearing.
UAE’s involvement in the Seychelles meeting also raises questions about Jared Kushner. According to a report in the Washington Post, officials in at least four countries have privately discussed ways they can manipulate the president’s son-in-law and senior adviser by taking advantage of his complex business dealings, his family’s company facing significant debt, and an overall lack of foreign policy experience. According to The Post, officials from the UAE identified Kushner as early as the spring of 2017 as someone particularly vulnerable to leverage because of his family’s search for investors in their real estate company.
SCHIFF: Did any of the participants in that reported meeting ever discuss with you whether they met with representatives of UAE in New York?
PRINCE: I don’t recall.
SCHIFF: Well, isn’t that something you would recall if it happened?
PRINCE: Well, I don’t recall specifically speaking to anyone about a meeting that happened with any Emirati officials in New York.
SCHIFF: Let me ask it this way. Did any Trump campaign or transition officials tell you that they met with representatives of the UAE in New York?
PRINCE: I think I remember Steve Bannon saying they had met with either Mohammed bin Zayed or someone like that and that he was a great guy. That’s all I recall of that conversation.
SCHIFF: And when did that conversation take place?
PRINCE: I don’t remember.
SCHIFF: Was that prior to your trip to the Seychelles?
PRINCE: I don’t remember.
Trump’s national security adviser called Prince about a secret meeting in NYC involving two people to whom he was deeply connected. But, according to Prince, he doesn’t remember any of the details. When he’s asked why the Seychelles was chosen by the UAE, Prince answers: “Because it’s cooler than the UAE?” Swalwell asks, is that what they told you? To which Prince replies: “Cooler, different temperature. I don’t know.” On January 11, 2017, the average temperature in the Seychelles was 80 °F. It was 68 °F in UAE.
SCHIFF: Are you refusing to testify any further, Mr. Prince?
PRINCE: I’d say the extent of the questions is so far outside the scope of what you’re actually looking for that I’m not here to indulge your fishing expedition any longer.
SCHIFF: Well, Mr. Prince, you have testified that you did business with the UAE, which you won’t tell us the nature of. You don’t hear from the UAE about doing further business for 6 years. Out of the blue, you are asked to have a meeting. You travel halfway around the world for the meeting, a third of which is with a Russian you didn’t know was going to be there. And you think it’s improper for us to ask you the nature of your business with UAE? Is that correct?
In light of new reporting, it’s now clear that the explicit purpose of this meeting was to facilitate a back channel between the Trump campaign and the Kremlin. It’s also clear that Nader, with his ties to Prince, the UAE, and Russia, was the one who brokered the meeting. According to the New York Times, Nader is now cooperating with the Special Counsel investigation and already offered testimony to the grand jury. It’s also worth noting that Nader’s testimony, reportedly, isn’t Mueller’s only evidence about the Seychelles.
One important question remains: who is Kirill Dmitriev, the mysterious Russian banker at the center of all this? You might be surprised by his origins (or maybe not). Like many alumni of the Trump administration — Gary Cohn, Steve Bannon, Dana Powell, Steve Mnuchin, and Anthony Scaramucci— Dmitriev was previously employed at Goldman Sachs.
SCHIFF: So, if you could tell us what happened when you arrived at the bar, how you identified Mr. Dmitriev.
PRINCE: Well, I remember Googling his name and found a picture and found the guy that looked like the picture.
SCHIFF: Does that mean that the prince or one of his delegation told you the name of the person they wanted you to meet?
PRINCE: Yeah. They did.
SCHIFF: And what did they tell you about him?
PRINCE: That he runs some kind of hedge fund in Russia.
SCHIFF: And what did you learn when you Googled him?
PRINCE: That he ran a Russian hedge fund.
SCHIFF: Is it a hedge fund, or is it a state-backed investment bank?
PRINCE: I don’t know. I just looked at the picture and found the guy. I was roaming, so data roaming is expensive when you’re overseas.
To recap, the Emiratis allegedly told Prince that he should meet with some Russian guy at the bar and he’s given almost no information aside from a name and a place. In fact, Prince said he had to Google him beforehand because he had no idea what Dmitriev looked like or what he does. Meanwhile, the Emiratis meet with Dmitriev and tell him that Prince will approach him at the bar that night. Which begs the question: why wouldn’t the Emiratis just introduce Prince and Dmitriev to each other? Why the subterfuge if there was nothing to hide? We now know there was a formal introduction, minus one important detail.
Nader is Lebanese-American. So, technically, Prince wasn’t lying in his testimony when he said no other Emiratis were present during the meeting. But he fails to mention there was a third party present — Nader — which is an egregious omission, to say the least. In fact, Prince testified that the only other person at the bar was Dmitriev’s wife, who left shortly after Prince arrived.
Schiff asks Prince an important question about who Kirill Dmitriev works for, specifically: Is it a hedge fund, or is it a state-backed investment bank? And he asked that question because the correct answer offers an important distinction. To be specific, Kirill Dmitriev oversees the Russian Direct Investment Fund (RDIF): a $10 billion state-backed investment fund created in 2011 under the leadership of then Prime Minister Vladimir Putin to address concerns of major investors who avoided Russia due to financial risk.
RDIF falls under the ownership of VEB (Vnesheconombank) — Russia’s state-owned “Bank for Development and Foreign Economic Affairs,” the second largest bank in Russia by assets. According to a report in Foreign Policy, Putin effectively runs VEB as his private slush fund:
“VEB’s board consists of Kremlin ministers and is chaired by Prime Minister Dmitry Medvedev. Its current head — just like its previous leaders — has strong ties to the KGB and its successor organization, the FSB. [CEO Sergey Gorkov] was educated at an FSB academy, and the bank sometimes collaborates with Russian security services by providing their operatives with cover.” (Foreign Policy)
Before his tenure at VEB, CEO Sergei Gorkov served as deputy chairman of the board at Sberbank — Russia’s largest bank. In 2013, one year before US sanctions, Sberbank was featured as the premier sponsor of Trump’s Miss America pageant in Moscow, where Trump was infamously seated next to Russian mobster and wanted fugitive Alimzhan Tokhtakhounov, who, coincidentally, had recently fled New York City after a Russian gambling ring was busted by the FBI in Trump Tower. A federal grand jury indicted more than 30 people, including Tokhtakhounov, who’s still a wanted man.
Two years later, in 2015, the FBI busted a New York City spy ring involving operatives from Russia’s SVR (foreign intelligence). One of them, a man named Evgeny Buryakov, posed as a banker working for VEB while trying to recruit sources. In 2013, Buryakov’s spy ring recruited Carter Page, who later served as a foreign-policy adviser to the Trump campaign in 2016. According to FBI transcripts, Page was characterized by the Russians as an “idiot”. Adding, “you get the documents from him and tell him to go fuck himself.”
In those same FBI transcripts, the Russians claimed Page was “hooked on Gazprom” (a reference to one of Russia’s energy jewels and the largest exporter of natural gas in the world). Gazprom owns the state-backed investment bank Gazprombank — Russia’s third largest bank by assets. It was created to provide banking services for the gas industry and oversaw the privatization of Rosneft. Unsurprisingly, Kirill Dmitriev sits on the board of Gazprombank. And, coincidentally, Carter Page flew to Moscow one day after the Rosneft deal was finalized (despite telling James Comey he sold his shares “at a loss”).
In March 2017, Sean Spicer stated that Kushner met with VEB’s Sergei Gorkov as part of his role in the transition team. VEB told Reuters in a written statement that they met “with a number of representatives of the largest banks and business establishments of the United States, including Jared Kushner, the head of Kushner Companies.”
According to the New York Times, in 2017, VEB’s debt was $17 billion and 40% of the bank’s loans were at risk of default. One month after the meeting with Kushner, VEB released a memorandum called “Strategy 2021”. According to the Times, the document suggested that the bank was expecting relief from foreign sanctions: “The forecasts for the term of the strategy predict certain decrease of geopolitical risk and gradual weakening of restricted access to global capital markets.”
According to the Washington Post, VEB claimed the meeting between Kushner and Gorkov was part of a new business strategy and was conducted with Kushner in his role as the head of the family’s real estate business, contradicting White House claims that Kushner’s role was strictly limited to foreign policy. Either way, it doesn’t look good.
“A diplomatic meeting would have provided the bank, which has been under U.S. sanctions since 2014, a chance to press for rolling back the penalties even as the Obama administration was weighing additional retaliations against Moscow for Russia’s interference in the U.S. election.
A business meeting between an international development bank and a real estate executive, coming as Kushner’s company had been seeking financing for its troubled $1.8 billion purchase of an office building on Fifth Avenue in New York, could raise questions about whether Kushner’s personal financial interests were colliding with his impending role as a public official.” (Washington Post)
RDIF’s portfolio incorporates over a dozen foreign partners, including Mubadala: a state-backed investment firm in UAE owned by Mohammed bin Zayed. In a joint partnership, the Abu Dhabi-based investment and development company launched a $2 billion co-investment fund to pursue opportunities in Russia. The Times reported that after MBZ met with Putin in 2013, investment arms of the UAE gave $6 billion to the RDIF. In a leaked email, Dmitriev was portrayed as a “messenger” to Putin by a UAE ambassador. According to his testimony, Erik Prince and Mubadala have also done business in the past.
Another foreign partner of RDIF is Qatar’s sovereign wealth fund QIA (Qatar Investment Authority), one of the major shareholders involved in the privatization deal of Russia’s state-owned oil giant Rosneft — a deal now notorious due to claims in the Steele dossier alleging Carter Page was promised a brokerage fee on the deal in exchange for helping to lift sanctions on Russia.
The privatization of Rosneft is an important chapter in the Russia investigation. But to explore it right now in-depth would only further complicate an already insanely complex narrative. That being said, it’s worth understanding within the context of Prince’s testimony. Prince is asked if he knows anything about the privatization deal and he replies, “Zero.” Which is surprising because Prince explicitly deals in natural resources and commodities. That’s his field of expertise and Rosneft is one of the largest oil companies in the world. Furthermore, the Rosneft deal was the the largest acquisition in the global oil and gas sector in 2016.
As part of his testimony, Prince submitted 23 pages of materials, primarily emails between himself and an individual named Christophe Charlier, chairman of the board at Renaissance Capital — an emergent market investment bank based in Moscow. Most of the emails date from before the inauguration. In one email, on November 23rd, 2016, Charlier congratulated Prince on his sister’s nomination to Secretary of Education. Prince testified that he also discussed doing business with Renaissance to help raise equity for a project in Africa in 2012–2013.
In the mid-2000s, Renaissance employed a string of former KGB spies and received millions of British pounds from a massive fraud scheme targeting UK investment firm Hermitage, once Russia’s largest foreign investor. More than £6 million was traced to a UK bank account held by Renaissance Capital during an investigation by Sergei Magnitsky, who was later arrested and found dead in a Russian jail in what the UK government has called an “atrocious murder”.
According to Reuters, important facts about the deal either have not been disclosed, cannot be determined from public records, or appear to contradict the straightforward official account of the stake being split 50/50 by Glencore and the Qataris. Glencore contributed only 300 million euros of equity to the deal, less than 3 percent of the purchase price. In addition, public records show the ownership structure of the stake ultimately includes a Cayman Islands company whose beneficial owners cannot be traced.
To recap, Prince is a self-described expert in the energy sector. Yet, he knew nothing about the Rosneft deal, nothing about Renaissance employing KGB officials, nothing about Kirill Dmitriev or RDIF, nothing about sanctions, nothing about the hotel, or who introduced him to Kirill, or even what day it was when he flew to the Seychelles.
The real underlying problem for Prince — in terms of his credibility — is that his testimony has already been proven false and purposely evasive. In turn, anything and everything he claims not to know about is — inherently — open to reasonable scrutiny. In fact, considering everything we now know, it’s logical to assume a majority of his testimony is — to some degree — a lie. And that, in itself, is why his testimony is so important. Why lie and obstruct if there’s nothing to hide? This has become the defining question for many in Trump’s inner circle who now find themselves a target in Mueller’s ongoing investigation.
Between the time RDIF was created and Putin was elected president, there was an initial power struggle over who would control the fund. In response, on June 2nd, 2016, Putin signed the Federal Law On the Russian Direct Investment Fund. In accordance with this law, the Russian Federation became the sole shareholder of the RDIF.
Government control of the company’s operations are now exercised through a special procedure, whereby the CEO and the board members are appointed by the president of Russia. In layman’s terms, the RDIF — like VEB — is Putin’s personal bank account. In 2018, RDIF manages over $30 billion in foreign capital from partnerships with over a dozen countries.
In 2011, prior to Russian sanctions, RDIF’s institutional investors included four of the largest investment firms in America: Goldman Sachs, Blackstone Group, Apollo Global, and TPG Capital. When it was founded, RDIF’s International Advisory Board included, among others, Stephen Schwarzman of Blackstone Group and Leon Black of Apollo Global.
Leon Black, a close associate of Kushner, co-founded Apollo Global with a man named Joshua Harris. According to the New York Times, Harris advised the Trump administration on infrastructure policy and met with Kushner on multiple occasions inside the White House.
During this time, Kusher and Harris discussed, among other things, a possible White House position. The job never happened but what did happen was Apollo Global gave Kushner Companies a $184 million loan. According to SEC filings, it was triple the size of the average property loan made by Apollo and one of the largest loans received by Kushner that year.
A bigger loan came from Stephen Schwarzman, the CEO of Blackstone Group: the world’s largest private equity firm and private real estate investor. Schwarzman initially declined to donate to Trump’s campaign or endorse him during the 2016 presidential race. But since the election, Schwarzman has emerged as one of Trump’s top donors, as well as an adviser with regular access to the president.
According to the Washington Post, after the GOP primaries, Schwarzman met privately with Trump and Jared Kushner. During this time, Blackstone’s real estate division did business with Kushner Companies, lending his family’s real estate business $312 million.
The Wall Street Journal reported that Schwarzman and Black’s names had disappeared from RDIF’s website in September 2014, but said that they still served on the board at that time. In 2015, the U.S. Treasury added RDIF to a list of Russian entities currently under sanctions. Any involvement of RDIF in a transaction within the U.S. financial sector or with American individuals or companies risks violating these sanctions.
During questioning, Prince testified he had contact with two officials in the Trump administration during the transition period. One, as we know, was Steve Bannon. The other, believe it or not, was Anthony Scaramucci.
HIMES: Can you describe contact or a relationship that you had with Anthony Scaramucci during the transition?
PRINCE: I think I met him passing in a hallway one time.
HIMES: During the transition?
PRINCE: Uh-huh.
HIMES: And when you say “met,” that’s when you made his acquaintance? You had no contact with him prior to that?
PRINCE: Correct.
HIMES: Okay. What was the subject of your conversation with him?
PRINCE: It was an exchange of names, and that was it. No other policy discussion in any way, shape, or form.
CNN reported in June 2017 that the Senate Intelligence Committee was focusing on a January 2017 meeting in Davos, Switzerland between Anthony Scaramucci and Kirill Dmitriev — one week after Prince met with Dmitriev in the Seychelles. The story cited one anonymous source. After facing public backlash from Scaramucci, CNN retracted the story and three journalists were forced to resign.
Almost a year later, a report by the New York Times —cited in this story — appears to corroborate CNN’s reporting. According to The Times, Scaramucci was quoted in an interview with Russia’s state-owned TASS news agency, criticizing the Obama administration's sanctions on Russia — which were enacted that month due to Russia’s interference in the 2016 election — claiming they were ineffective and detrimental to US-Russia relations. Again, this happened one week after Prince met with Dmitriev.
If you’re feeling confused and overwhelmed by all of this, don’t worry. You’re supposed to be. But you should find a small sense of relief in the fact that — despite ongoing obstruction — the investigation continues, showing no signs of slowing down. What’s most daunting is that there appears to be no limit to the pervasive, mind-numbing levels of corruption we’re currently witnessing.
It’s the same type of corruption that forced House Democrats to pursue their own prosecutions through the DOJ. It’s the same corruption that led Republican Chairman Conaway to make the assertion that the committee found no evidence of collusion (an assessment not shared by Democrats). He was later forced to walk back this initial summary, stating the committee was never explicitly tasked with investigating “collusion.”
When asked why the committee drew a conclusion if it had not investigated the matter, Conaway replied, “What we said is we found no evidence of it. That’s a different statement. We found no evidence of collusion.” On the contrary, Democratic ranking member Adam Schiff stated on the record that the committee has, in fact, found evidence of collusion.
*UPDATE* (May 17, 2018): As Mueller probes Seychelles meetings, details emerge about Russian plane: exclusive, NJ Advance Media
*UPDATE* (May 19, 2018): Trump Jr. and Other Aides Met With Gulf Emissary Offering Help to Win Election, New York Times
*UPDATE* (June 1, 2018): Jared Kushner close friend Rick Gerson now under scrutiny from Mueller, NBC News
*UPDATE* (June 25, 2018): Special counsel obtains Trump ally Erik Prince’s phones, computer, ABC News
*UPDATE* (July 16, 2018): Seychelles meetings probed by Mueller included several Russians: exclusive, NJ Advance Media
