Alfa Oligarch Mikhail Fridman

A billionaire with ties to Putin and organized crime.

In reading about the list of oligarchs handed out by the US Treasury last week, I came across a Reuters story about Mikhail Fridman’s response to the list. Given Fridman’s companies’ featured role in the Trump Russia saga, I figured it was time for a mini-explainer of how he ties in to the organized crime spiderweb.

So, who is Mikhail Fridman? He’d like us to think he’s a straight up capitalist business man. A profile in the Financial Times from 2015 called him a “fierce corporate fighter.” But there’s a dark side to capitalism in Russia: organized crime. Russia is a Mafia State.

Fridman has had ties to the Solntsevskaya Bratva mafia since the 1990’s, according to a document prepared by Stratfor. The Stratfor document was leaked by Wikileaks (which is now known to be a front for Russian Inteligence Service). I have not linked directly to the document due to concerns about malware on Wikileaks’ site; I have linked to an article by League of Ukrainian Canadians which links to the Stratfor document hosted by Wikileaks. The Solntsevskaya Bratva is tied to Semion Mogilevich, whose name was spelled out letter by letter by Glenn Simpson in his testimony to the Senate Judiciary Committee about the Steele Dossier.

A brief bio of Fridman’s early life can be found in the excellent book, Bandits, Gangsters, and the Mafia, by Martin McCauley; the basics are: Fridman was born in 1964 in Western Ukraine. While in school studying steel and alloys, Fridman “established his first monopoly,” in theater tickets at his university, and his barter and trading skills grew from there. When he finished school, he parlayed his black market activities into a better job placement than the one assigned, and moved to a steel plant outside Moscow. His black market activities continued, until “Gorbachev legalised cooperatives in 1988 and this stimulated Fridman and his friends to go legal.” They established a cooperative, and, after acquiring “a license to export oil,” they were “dollar millionaires by 1990,” with most of their money stored outside of Russia. Their trading firms became the Alfa Group Consortium.

Fridman’s ties to corruption and scandals are vast; so rather than delving into them, I’ll list some of them with brief summaries & links to articles so you can learn more.

1991: Fridman established Alfa Bank (25 years later, in 2016, the world would learn of a server in Trump Tower that was “pinging” Alfa Bank-and that the FBI was investigating the links)

1996: Fridman and Aven were part of the group of oligarchs who decided in 1996 that Boris Yeltsin would be re-elected.

1997: Fridman partnered with Len Blavatnik (who later funnelled $7.35M into GOP political accounts and became partners with Mnuchin) and Viktor Vekselberg to purchase Tyumen Oil Company (TNK).

2003: British Petroleum (BP) created a 50–50 joint venture with TNK.

2006: Fridman’s Alfa Group was sued by IPOC International Growth Fund, which accused Alfa of money laundering and fraud. IPOC accused Alfa of attempting to steal IPOC’s stake in a Russian mobile operator, MegaFon. Fridman’s Alfa Group co-owner, Pyotr Aven was named in the suit. Also named in the suit was Leonid Rozhetskin, a founding banker of Russian investment bank, Renaissance Capital. Renaissance Capital was involved in the Russian government’s tax scam described by Bill Browder in Red Notice. Rozhetskin disappeared from his home in Latvia in 2008, and his body was discovered in the woods nearby in 2012.

2011: Fridman and his TNK-BP partners, Viktor Vekselberg, Len Blavatnik and German Khan filed suit to stop BP’s “alliance with state-controlled Rosneft.”

2012: Fridman, Vekselberg, Blavatnik, and Khan sold their TNK-BP stake to Rosneft (which was mentioned in the Steele dossier).

2013: Using proceeds from the sale of their TNK-BP stake, the partners founded LetterOne, which was based in Luxembourg, and which Fridman would later use to “skirt Russian sanctions to invest abroad.”

2016: VimpelCom, which Fridman’s LetterOne held a large stake in, agreed to pay an $835 Million settlement to the US and the Netherlands. The settlement was paid due to charges VimpelCom had paid large bribes to break into Uzbekistan’s telecom market. In 2014, one of Trump’s largest financial backers, Robert Mercer, bought shares in VimpelCom via his hedge fund, Rennaissance Technologies.

2017: In January, BuzzFeed released the Steele Dossier. Fridman and Aven were mentioned (see below). They sued Buzzfeed and Fusion GPS for slander later in 2017.

source: Buzzfeed

In December 2017, The Netherlands’ financial crimes prosecutor said Alfa Bank subsidiary, Amsterdam Trade Bank, was raided on suspicion of money laundering. (h/t @stephaniefishm4 in Twitter for reminding me of this!)

Given Fridman’s extensive ties to Putin and organized crime, and the Alfa Server’s location in Trump Tower, I have a feeling we’ll be hearing more about him. We’ll also be hearing more about Alfa Group connections to data laundering and Russia’s hacking of the US election. Keep Fridman’s name in the back of your mind. His time in the news cycle is coming.