Oleg Deripaska Background

The Washington Post article highlighted Paul Manafort’s relationship with Russian billionaire Oleg Deripaska. The article brought to light new information about just how eager Manafort was to strengthen his (and Trump’s) ties with Russia. In light of this, let’s take a closer look at who exactly Oleg Deripaska is:

Deripaska is wealthy, determined, and very close to Putin.

• He controls Rusal, a Russian aluminum company, through his holding company Basic Element. His holdings are valued at more than $14 billion.
• He was a key figure in Russia’s infamous “Aluminum Wars” of the 1990s, during which businessmen fought for control over Russia’s vast aluminum industry. An estimated “100 [aluminum] executives were murdered" as a result of these feuds.
• He emerged from this fray as the unrivaled leader of the Russian aluminum world. His righthand man is reportedly Valery Pechenkin, a former high-ranking KGB and FSB member.
• He has been described in U.S. diplomatic cables as “among the 2-3 oligarchs Putin turns to on a regular basis” and “a more-or-less permanent fixture on Putin’s trips abroad.” This raises the question of whether Manafort had hoped to use Deripaska as a direct conduit to Putin.

U.S. officials have had their eye on Deripaska for years.

• After Deripaska emerged as the heir apparent to the Russian aluminum industry, allegations of his connections to Russian organized crime led to the U.S. State Department to refuse to issue him a business visa.
• The FBI interviewed Deripaska numerous times, and reports suggest that in 2009 he traveled to the US twice under “secret arrangements made by the Federal Bureau of Investigation.” Although these trips may have been related to his suspected links to Russian organized crime (which he has denied), details of the FBI’s interest in Deripaska are scarce.

Deripaska’s business ties with Manafort run deep.

• The relationship between Deripaska and Manafort didn’t start with the 2016 election, nor is this the first time that Manafort has possibly connected a U.S. presidential candidate to Deripaska.
• In 2008, one of Manafort’s business partners arranged for Deripaska to meet John McCain when he was running for president. Deripaska emailed Manafort directly to thank him for helping to arrange this meeting.
• In 2006, Manafort signed a $10 million annual contract with Deripaska based on a strategy plan reportedly indicating that Manafort would work to influence western politics to benefit Putin’s government.
• The work completed by Manafort under this contract is unclear, although it raises the question of whether Manafort should have registered as a foreign agent with the U.S. Justice Department during this time.

Manafort reportedly owes $19 million to Deripaska after business failure.

• Manafort and Deripaska continued their direct business relationship by establishing Pericles Emerging Market Partners, a private-equity firm in the Cayman Islands, in 2007.
• Deripaska backed this firm, which was established to invest in telecommunications assets in Eastern Europe. The firm attempted to buy assets in the Yanukovych-linked Ukrainian company Black Sea Cable.
• The Black Sea Cable deal failed, and led to litigation filed in the Cayman Islands claiming that Manafort owes Deripaska $19 million. Deripaska accused Manafort of being dishonest about how the funds intended for the deal were actually used, and of not returning them. Although Manafort indicated in August 2016 that the matter was closed, the most recent Washington Post article states, "there are no signs in court documents that the case has been closed." Manafort has not made any public statements regarding the outcome of this case, and in March 2017 his attorney did not respond to requests for an update on this case. Several of the emails reported in the Washington Post article appear to reference a code used between Manafort and his employee, Konstantin Kilimnik. These emails mention “black caviar,” stating,“Kilimnik wrote in the July 29 email that he had met that day with the person ‘who gave you the biggest black caviar jar several years ago,’ according to the people familiar with the exchange.” One theory posits that “black caviar” may refer to the Black Sea Cable Company, as further support that these coded emails are about Deripaska.

The extent of Deripaska’s involvement remains to be seen.

• In May 2017, Deripaska sued The Associated Press for libel over its reporting on his relationship with Paul Manafort. The suit alleges that the AP falsely implied that Deripaska paid Manafort in exchange for his work that advanced the goals of the Russian government and Vladimir Putin, and that Deripaska’s relationship with Manafort was related to Manafort’s work on the Trump campaign. This lawsuit is ongoing.
• Deripaska allegedly offered to cooperate with the congressional committees that are investigating the Russian hacking of the 2016 elections. He offered this assistance in exchange for a grant of full immunity. His offer was reportedly declined due to concerns that an immunity deal could “create complications for federal criminal investigators.”