The Kremlin’s Weaponization of Organized Crime and Corruption in Ukraine, Western Europe, Israel, and the Anglosphere (1991–2015)
This article covers how Vladimir Putin and the Kremlin weaponized corruption to spread influence abroad, both close to home in Ukraine and further abreast in Western Europe, Israel and the United States. It is the eleventh article in the series “Putin’s Russia, Global Corruption, and the Road to the 2016 American Election.” While it is not necessary to read earlier entries, it is recommended.
The first article provides a brief history of Russia’s intelligence services and a definition of “Disinformation” and “Active Measures.”
The second article describes Vladimir Putin’s early life and his experiences as a KGB Officer in Russia and East Germany.
The third article describes how elements of the KGB laundered billions of dollars of Communist Party money into the West as the USSR collapsed.
The fourth article describes the rise of the post-Soviet oligarchic system and the role Eurasian organized crime played in facilitating it.
The fifth article covers Putin’s tenure as Deputy Mayor of St. Petersburg and his enduring relationship with organized crime.
The sixth article covers the organized crime and intelligence service links to the Bank of New York money laundering scandal.
The seventh article covers Vladimir Putin’s rise to the Russian Presidency and the mysterious and controversial September 1999 Moscow Apartment Bombings.
The eighth article covers the mysterious series of political assassinations and terrorist attacks that convulsed Putin’s early reign.
The ninth article covers how Putin consolidated the “vertical of power” at home through taming the oligarchs and controlling televised media.
The tenth article covers how Putin seized control over Russia’s strategic resources and uses them to pursue his interests abroad.
This article is an excerpt from my book, While We Slept: Vladimir Putin, Donald Trump, and the Corruption of American Democracy, available here.
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
Russia and the Weaponization of Corruption in pre-Orange Revolution Ukraine
The Kremlin uses energy resources and weaponized corruption to pursue its strategic interests abroad. Nowhere was this more true than in pre-Orange Revolution Ukraine.
The basic political and economic contours of post-Soviet Ukraine developed during the tenure of its second president, Leonid Kuchma.
Read my in-depth description of the Kuchma administration, its relationship with organized crime, and the road to the Orange Revolution, here.
A defining feature of independent Ukraine has been corruption in the natural-gas trade, where its most powerful oligarchs have traditionally made the bulk of their fortunes. This economic power translated into political influence.
The system is simple, Russian natural gas was purchased by intermediaries such as ITERA, ETG or RUE at artificially low, state-regulated prices and then sold at higher prices shielded by state imposed monopolies.
The Kremlin selected corrupt Ukrainian beneficiaries such as Dmytro Firtash, an alleged high-level associate of Russian organized crime, who then funded political parties that became corrupted by, and financially beholden to, the Kremlin.
Firtash later engaged in business dealings with Donald Trump’s campaign manager Paul Manafort.
He was also a central figure in Rudy Giuliani’s machinations in Ukraine on behalf of the Trump campaigns during the 2020 campaign.
Read my description of Dmytro Firtash’s relationship with Paul Manafort here.
The vast Soviet system of pipelines was designed and constructed by Communist bureaucrats operating in a geographically enormous but politically unified entity. With the collapse of the Soviet Union, suddenly these pipelines found themselves traversing multiple different countries with competing and often conflicting interests.
Ukraine is strategically located between Russia and the energy hungry economies of the Eurozone. In 2010, 80% of Russia’s natural gas exports to Western Europe flowed through pipelines that cross Ukrainian territory, representing 56% of Gazprom’s total profits.
As described in the previous article, much of the natural gas that made its way to Ukraine came from Turkmenistan.
Intermediaries such as ITERA served to enrich corrupt officials in Gazprom, connected insiders in the Turkmen dictatorship and politically-connected oligarchs in Ukraine.
Lingering in the shadows was the influence of organized crime, with the name Semyon Mogilevich appearing repeatedly.
The chief Ukrainian beneficiary in both ETG and RUE was the mob-linked oligarch and head of the “gas lobby” Dmytro Firtash, who would become one of the most politically influential figures in Ukraine after being showered with Russian money.
Kuchma’s flagrant corruption and criminality were placed in stark relief on November 28th, 2000 with the release of a series of tape recordings of Kuchma’s conversations made by Major Mykola Melnychenko, an officer in the Directorate of State Protection.
While the so-called Tape Affair, or Kuchmagate, is a rather baroque and complex scandal unto itself, an FBI lab examined a portion of the tapes and determined that they were authentic.
Read my description of the tape affair here, in the context of an article about Republican political operatives Roger Stone and Michael Caputo’s involvement in the 2007 Ukrainian parliamentary elections.
The tapes purportedly reveal that Kuchma’s intermediaries with organized crime were Ihor Bakay and his business partner Oleksandr Volkov.
Bakay was a business partner of Dmytro Firtash and was later wanted by Ukrainian authorities for defrauding the state of $300 million. Bakay fled to Russia, where he was granted citizenship by Putin for his contributions on “behalf of Russian culture and art.”
Volkov, a close aide of Kuchma’s, was a representative of the company Seabeco, owned by Boris Birshtein and associated with the first wave of KGB money laundering of CPSU funds.
Birshtein’s (now former) son-in-law, Alexander Schnaider, later partnered with Donald Trump on Trump Tower Toronto.
Kuchma placed Birshtein in charge of a company called Ukraina AG, which was allowed to purchase Ukrainian steel and fertilizer at depressed prices and sell them abroad for a substantial mark-up.
Birshtein hired Leonid Veselovsky, an ex-KGB officer involved in the KGB’s laundering of Communist Party money into the West during the dying days of the Soviet Union, as the company’s Vice President and Belgian prosecutors have traced payments of at least $5 million dollars to members of Kuchma’s inner circle.
Seabeco has been accused of funding Kuchma’s 1994 Presidential campaign, along with Nordex.
Based out of Vienna, Nordex is owned by Grigori Luchansky (AKA Grigori Louthcansky).
Its Ukrainian representative was for a time the oligarch Vadim Rabinovich.
A confidential report by the Swiss Federal Office of Police stated Luchansky had been recruited by the KGB to set up international business interests in the same way Seabeco had.
The Swiss Connection — Russian Corruption, Bank Secrecy, and the Global Commodities Market
The penetration of Russian money into the Swiss banking system began in the late 80s and early 90s, when Swiss authorities estimate that between $40 billion to $50 billion worth of Russian flight capital was deposited into the country.
The Swiss initially welcomed the infusion of money, as the country was struggling to compete with new offshore tax haven competitors, American banks and stronger tax evasion laws in Western Europe.
By the mid-90s, Russians with means were moving into the country in droves, acquiring expensive property and sending their children to Swiss schools. By 1996, Switzerland was issuing 70,000 visas a year to Russians.
Switzerland, with its ironclad banking secrecy laws and distaste for extradition, was also home to the infamous billionaire, international commodities trader and fugitive from US law enforcement Marc Rich.
Born in 1934 in Antwerp Belgium, Marcell David Reich and his family fled to the United States in 1941 to escape the Nazis.
Rich was considered by many a genius for his invention of the spot trading market for oil. The commodities trading company he founded is today known as Glencore, and is one of the largest corporation in the world.
In 1983 he and his partner Pincus (Pinky) Green were indicted in New York on 65 criminal counts including tax evasion, wire fraud, racketeering and illegally trading with Iran during the hostage crisis.
At that time, it was the biggest tax evasion case in the history of the United States. Instead of remaining to face justice, Rich fled and settled in Switzerland which refused to extradite him back to the US.
As a fugitive living in Switzerland, Rich developed a relationship during the last days of the USSR with the Soviet Import-Export monopoly Raznoimport.
In the late 80s, he was an early pioneer of the later oft-repeated scheme of buying Russian state owned resource commodities like oil and aluminum at artificially lowered prices and then selling them for an enormous mark-up on international markets.
While his actions were illegal according to Soviet law, Rich developed secret arrangements with insiders in Russia and complex payment schemes.
“Russian traders would perform the same operation repeatedly in the 1990s,” wrote Paul Klebnikov, a former editor of Forbes Russia, “but Rich had the distinction of doing it first and doing it big.”
Klebnikov, noted for his aggressive investigations into Russian oligarchs and organized crime, was assassinated in Moscow in 2004.
Following the collapse of the USSR, Rich was the most active Western trader in Russia. The Swedish economist and consultant to the Yeltsin government Anders Aslund has stated that Rich was behind over 100 front companies in Russia.
Thus, the business model that would ultimately be adopted by the early Russian oligarchs was initially devised by a fugitive businessman living in Switzerland.
Rich had a strong connection to Israel and its intelligence service Mossad. The head of his security team was an ex-Mossad officer.
According to Haaretz, Rich’s offices around the world were used many times for operational camouflage by Mossad officers with his consent.
In the 70s and 80s, Rich illegally bought Oil from the Khomeini regime in Iran and sold much of it back to Israel. He also was a sanctions buster and traded oil with Apartheid South Africa.
He had assisted Mossad evacuate Jews from Ethiopia and Yemen in the 80s and 90s.
The Mossad referred to Rich as sayan, meaning “helper” in Hebrew. Rich provided Mossad with insider information on what was happening inside Russia, Iran and Syria.
US President Bill Clinton, in one of his last and most controversial actions in office, issued a pardon for Rich just hours before he left office after heavy pressure from the then current and several former Israeli Prime Ministers Ehud Barak, Shimon Peres and Ehud Olmert.
In 1996, Sergei “Mikhas” Mikhailov, the head of one of Moscow’s most powerful criminal syndicates, the Solntsevskaya Bratva, was arrested in Geneva, Switzerland.
Mikhailov had at one time boasted of receiving a wrist-watch from Vladimir Putin, an assertion the Kremlin denied. He is also a business partner of the aforementioned Boris Birshtein.
Following his arrest, Swiss authorities grew alarmed and, uncharacteristically for a country with such tight banking secrecy laws, increased their anti-money laundering enforcement activities.
During the trial, a former FBI Special Agent testified that Mikhailov was not a businessman but rather a member of an international criminal organization that was active in Houston, Los Angeles, Miami and New York City.
Mikhailov was acquitted of money laundering charges for lack of evidence. Swiss officials subsequently complained about a lack of cooperation from Russian authorities.
Post-Soviet Corruption in Italy, Germany, and Austria
In August 2005, Putin hosted Italy’s wealthiest man and Prime Minister Silvio Berlusconi at his private residence in Sochi. Putin and Berlusconi had developed a personal friendship.
Putin had stayed at Berlusconi’s private villa in Sardinia in 2003 and Putin’s daughters, who he is famously protective of, were also known to have stayed at the villa.
Putin wore suits made by Berlusconi’s tailor and the pair were known to exchange lavish gifts. American diplomats in Rome quickly grew concerned that there was something more to nefarious the relationship between Putin and the flamboyant Italian leader.
“Berlusconi admires Putin’s macho, decisive and authoritarian governing style, which the Italian PM [Prime Minister] believes matches his own,” wrote the American Ambassador in Rome, Ronald P. Spogli, in a cable released by Wikileaks.
Spogli explained to Washington in the cable that, “Berlusconi determines Italy’s policy on Russia single-handedly, neither seeking nor accepting counsel.”
Individuals within both Berlusconi’s own party as well as the center left opposition told American diplomats they, “believe that Berlusconi and his cronies are profiting personally and handsomely from many of the energy deals between Italy and Russia.”
Spogli was told by the Georgian Ambassador in Rome, whose country was at odds with Russia, that his government believed that Putin had personally promised Berlusconi a percentage of the profits from Gazprom pipelines developed in coordination with the Italian energy giant Eni. Following the leak, Berlusconi denied the changes.
Earlier that year, in May of 2005, members of the Italian Parliament launched an investigation into a deal between Gazprom and Eni that selected a company registered in Vienna called Central Energy Italian Gas Holding (CEIGH) as a partner to deliver Russian natural gas to consumers in Italy.
The investigation uncovered that Bruno Mentasti-Granelli, a close friend of Berlusconi’s, owned 33% of CEIGH.
The ensuing outcry derailed that particular deal, but was hardly even speed bump in Russia’s growing energy influence in Italy and across Europe.
Putin and Berlusconi had long been discussing plans for a major pipeline to transport natural gas to Italy and the entire region of Southern Europe.
A week after his visit with Berlusconi in Sochi, Putin flew to Berlin to visit with Germany’s Chancellor Gerhard Schröder. Putin and Schröder were close, so close that Putin had personally expedited the Schröder family’s adoption of a Russian orphan.
Germany was Russia’s number one customer for natural gas in Europe and Schröder was facing a difficult upcoming election.
On October 24th, 2005, a month before the election ended Schröder’s second term, he penned a deal with Gazprom for the construction of a €5 billion natural gas pipeline that would directly link Russia and Germany via the Baltic Sea, bypassing countries in Eastern Europe that had traditionally been along the transit route.
To sweeten the deal, Schröder offered a €1 billion financial guarantee for the project, the largest such guarantee in German history.
Mere weeks after losing to Angela Merkel and stepping down as Chancellor of Germany, Schröder was selected by Gazprom to head the shareholders committee at Nord Stream AG, the very pipeline he had just signed into existence as Germany’s head of state.
Schröder was paid €250,000 a year for his troubles.
The President of Poland contemptuously referred to the deal as “the Putin-Schröder Pact,” in reference to the infamous Molotov-Ribbentrop Pact of 1938 that briefly allied the Soviet Union with Nazi Germany.
The Washington Post editorial page denounced Schröder’s cynical move in an editorial entitled, “Gerhard Schoeder’s Sellout.”
Nord Stream AG’s CEO was a man named Mattias Warnig. A former STASI member and friend of Putin’s during his KGB days in Dresden, German press reports claimed that Warnig had collaborated with Putin on recruiting West Germans to work for the KGB.
Germany’s neighbor, Austria, has even closer ties to Putin.
Following the end of WWII, Austria was occupied by the Soviet Union for ten years until they pulled out of the country following the promise that it would remain neutral in the Cold War.
From that point forward, Austria’s capital Vienna served as a meeting place where Cold Warriors from the East and West could meet in secrecy and splendor whenever the need arose.
In 1968, the first Western European firm to reach an agreement to directly import Soviet gas was Austria’s state-owned energy company OMV.
As a result of this history, OMV is a major, long-term strategic partner of Gazprom. Numerous former Austrian politicians sit on the boards of Gazprom-related subsidiaries. OMV is also closely tied to the conservative ÖVP, the political party of the former Austrian Chancellor Sebastian Kurz.
Under his leadership, Austria supported the construction of the Nord Stream 2 pipeline directly connecting Russia to Central European energy markets, while simultaneously opposing the application of EU market rules on its offshore section.
Following the collapse of the Soviet Union, Russia and Austria maintained their close relations and by the early 90s Vienna had reprised its role as the meeting place of choice, except this time it wasn’t just spies arranging the meetings but international organized criminals.
In 1994 a meeting took place at the Vienna Marriott between Russian, Italian and Columbian crime syndicates to discuss the cooperation in the drug trade and the laundering of profits.
The meeting, which was attended by Solntsevskaya leaders Sergei Mikhailov and Viktor Averin, was an early example of the globalized nature of transnational organized crime.
Vienna has also emerged as a money laundering center. Thousands of Austrian companies have been set up for the purpose of funneling money either to neighboring Switzerland or Liechtenstein or into the global offshore network.
Grigori Luchansky’s Nordex is registered in Vienna.
In 2006, it was revealed that Austria’s second largest bank, Raiffeisen, held a 50% interest in RosUkrEnergo on behalf of Dymtro Firtash and Ivan Fursin.
Diplomats at the US State Department at the time believed that Raiffeisen was acting as a front for Semyon Mogilevich and that high level bribes were being paid by RosUkrEnergo to a Raiffeisen executive.
Raiffeisen later partially financed the Trump Tower Toronto deal.
In 2014, in the face of the Maidan Revolution in Ukraine and an indictment and extradition request from the US government, Firtash fled to Vienna, where he currently resides as a fugitive from US justice.
Firtash maintains a tightly knit group of supporters among Austrian officials and society.
His personal lawyer, Dieter Böhmdorfer, was a former Austrian Justice Minister and a member of the far right Austrian Freedom Party (FPÖ).
Firtash’s Austrian media advisor, Daniel Kapp, previously served as the press secretary to the former ÖVP party leader Josef Pröll, who runs an investment firm that is part of Raiffeisen Holding.
Putin travelled to Austria for vacations as early as the 1990s and is personally involved with many Austrian politicians.
He danced with Austria’s Foreign Minister Karin Kneissl at her 2018 wedding and gave Thomas Klestil, a former Austrian president, two puppies as a gift.
Much as it has done elsewhere, Russia under Putin has courted the Austrian far right, in particular the FPÖ.
In 2019, a video emerged of Austrian FPÖ leader and Vice Chancellor Heinz-Christian Strache discussing illegal party donations in return for government contracts with a Russian woman who claimed to be the daughter of Igor Makarov, the President of ITERA.
The ensuing scandal led to Strache’s resignation and the collapse of the Austrian governing coalition.
In May of 2014, the Russian far right ideologue Aleksandr Dugin, along with an Orthodox Russian oligarch Konstantin Malofeev hosted an closed-door, invitation-only meeting in Vienna with many of luminaries of Europe’s far right movements, including the FPÖ’s Heinz-Christian Strache and the French National Front’s Marion Maréchal-Le Pen.
The purpose of the meeting was to exhibit solidarity with Russia during a time in which it was facing isolation following the annexation of Crimea.
In December of 2016, Strache and other FPÖ officials travelled to Moscow where they signed a 10-year “cooperation agreement” with Putin’s political party United Russia.
Prior to the collapse of the coalition government after the recordings of Strache were released, the FPÖ head of the Austrian Interior authorized a police raid on Austria’s own domestic intelligence service after it refused to hand over the name of informants who had infiltrated the country’s far right scene.
As Vienna had been the longtime residence of Adolf Hitler, such practices had long been accepted by Austrians.
Another important role Vienna has played was as a transit point for Soviet Jews immigrating to either the United States or Israel.
Russian Corruption and Organized Crime in Israel
The movement to provide Soviet Jews with the right to leave the country dates back to the 1970s. Within Russia, this consisted of Jewish dissidents and intellectuals who became known as the refuseniks, some of whom gained international notoriety.
In the United States, American Jewish activists lobbied for the Jackson-Vanik Amendment, which pushed the Soviets through coercive trade penalties to allow their Jewish residents to leave the country.
The enormity of what became a mass exodus wasn’t felt in Israel until the 1990s and had a major impact on Israeli society and the global reach of Eurasian organized crime.
By the late 1980s, Mikhail Gorbachev needed American loan guarantees to allow him to pursue his reform packages and was preparing to allow Soviet Jews to emigrate en masse should they wish.
Israeli Prime Minister Yitzhak Shamir became aware of these developments and acted to ensure the majority of those leaving the USSR ended up in Israel.
At the time, with the notable exceptions of the Arabs and Palestinians, there was a desire across the political spectrum in Israel to increase the Jewish population.
Shimon Peres believed that strengthening the Jewish population would provide Israel with enough confidence to launch peace negotiations with the Palestinians.
According to Israeli scholars Lily Galili and Roman Bronfman, Israel’s Ashkenazi middle class hoped to counter the increasing “Levantization” of the country through the mass injections of highly educated, white immigrants.
The vast majority of immigrants to Israel from the former-Soviet Union were law abiding citizens. An unintended consequence of the mass relocation of peoples was the infiltration of Eurasian organized crime into Israel.
While Jews consisted of approximately 2.5% of the population of Russia and Ukraine in the period before mass emigration, they were disproportionately represented within the ranks of the oligarchs and organized crime.
Anti-semitism in the Soviet Union and prevented its Jewish residents from ascending the official ladders of power within Soviet institutions.
That, coupled with the fact that by outlawing all private commercial activity the Soviet Union criminalized large sectors of its society, led to a situation in which Jews and other minorities such as Ukrainians, Georgians, Chechens and Uzbeks were over-represented in organized crime.
An early immigrant to Israel from the USSR was Shabtai Kalmanovich.
Born in Lithuania, Kalmanovich joined the Red Army after completing university. After the KGB discovered that Kalmanovich’s family was attempting to move to Israel, he was recruited as a spy in return for the fast tracking of his family’s emigration papers.
Kalmanovich arrived in Israel in 1971 as a full fledged KBG asset. His handlers instructed Kalmanovich to infiltrate Nativ, an israeli government program that encouraged aliyah among Jews behind the Iron Curtain.
Kalmanovich advised Prime Minister Golda Meir’s Labor government on how to absorb Jews from Communist Eastern Europe and the Soviet Union.
The KGB provided funds for his Israeli investments and within a few years Kalmanovich had become a wealthy businessman.
He used his newfound wealth to establish contacts in Israeli society, including with generals and intelligence officers in the Israeli Defense Force. Kalmanovich befriended IDF Brigadier General Dov Tamari and took him on a trip to Africa as his security consultant.
Kalmanovich had major business interests, particularly in the diamond trade, in Sierra Leone and the South African bantustan Bophuthatswana.
Kalmonovich was a partner in the diamond trade with Marat Balagula, a Brighton Beach, Brooklyn-based mobster whose daughter introduced Michael Cohen, Donald Trump’s personal attorney and later a negotiator on the Trump Tower Moscow project, to his wife.
On May 22nd, 1987, Kalmanovich was arrested in London by Scotland Yard on charges related to $2.7 million worth of fraudulent checks in a scheme to defraud Merrill Lynch.
The British extradited Kalmanovich to the US to stand trial, but he promptly fled back to Israel after posting bail. Upon his return to Tel Aviv, Kalmanovich was arrested on charges of being a KGB spy.
His numerous trips to East Germany and the Soviet Union had aroused the suspicions of Israeli authorities, who also believed that the Soviets had passed the information Kalmanovich had provided over to the Syrians and hostile Arab countries.
Kalmanovich’s early release was heavily lobbied for by the late Joseph Kobzon. Often referred to as the Russian Sinatra, Kobzon was one of the soviet era’s most famous crooners.
In the post-Soviet era he became a politician and Duma member. In 1995, the FBI alleged that Kobzon was a high-level member of Eurasian organized crime and operated an organization involved in racketeering, international arms trading and drug trafficking.
In 2003, Swiss authorities froze and confiscated $750,000 worth of Kobzon’s assets after alleging it had been laundered by a criminal organization.
Kalmanovich was subsequently released after five years for good behavior, at which point he returned to Russia where he prospered as a businessman until he was assassinated on November 2nd, 2009, the victim of a professional hit.
In addition to being a Russian intelligence asset, the FBI believed that Kalmanovich was a high level associate of the Solntsevskaya and the Semyon Mogilevich Organization.
In the mid-1990s, an Israeli police sting codenamed Operation Romance identified a senior Interior Ministry official who was receiving bribes from Kalmanovich and Solntsevskaya boss Sergei Mikhailov to issue passports to dozens of members of Eurasian organized crime syndicates.
During the mass Aaliyah of hundreds of thousands of Jews out of the former Soviet Union to Israel that took place during the 1990s, dozens of high level members of Eurasian organized crime syndicates, including notably members of the Solntsevskaya and Izmailovskaya, received Israeli passports.
Among them were Semyon Mogilevich, Grigori Luchansky, Vadim Rabinovich, Anton Malevsky, Mikhail Chernoy and others.
Russian oligarchs also received Israeli passports, including Boris Berezovsky, Roman Abramovich, Lev Leviev and Vladimir Gusinsky.
Even gentiles received Israeli passports, most infamously Sergei Mikhailov, who was involved in the bribery scheme with Kalmanovich. After the scheme was unearthed, Mikhailov’s citizenship was revoked.
Another gentile mafioso who received an Israeli passport was the Uzbek Alimzhan Tokhtakhounov.
Tawianchik, as Tokhtakhounov is known, was involved in an illegal gambling that operated out of Trump Tower and attended the Trump-owned 2013 Miss Universe Pageant in Moscow.
Counterfeit Russian birth certificates showing a Jewish mother could be purchased in Cyprus for $5,000.
Within Israel, sensitivities about the treatments of Russian immigrants and around definitions of Jewishness made these issues fraught with controversy.
Eurasian organized criminals chose to take advantage of Israel’s Right to Return laws for many reasons. Jews in Russia were often subject to anti-semitism, while in Israel they were treated with respect as successful businessmen.
Israel also offered a safe harbor from the brutal gang wars that raged across Russia in the early 90s.
At a 1995 meeting in Tel Aviv’s Panorama Hotel, which was attended by top level members of Eurasian organized crime including Sergei Mikhailov, it was agreed that no violence was to take place in Israel in order to avoid alienating the Israeli government.
According to a leaked FBI Intelligence Section report dated August, 1996: “[Semyon] Mogilevich attended a summit meeting of Russian OC [Organized Crime] figures in Tel Aviv, Israel, from October 10–19, 1995. Participants included Sergei Mikhailov, Viktor Averin, Boris Birshstein, Vadim Rabinovich, Leonid Bilounov, and Arnold Tamm.”
“The subjects met in Boris Birshstein’s office in the diamond center of Tel Aviv. The subject of the meeting was the sharing of interests in Ukraine. While in Israel, the group traveled around the country, including a visit to a shooting range.”
“The INP [Israeli National Police] obtained telephone coverage of the hotel rooms, detecting telephone calls to Russia, Hungary and Paris.”
Another factor that made Israel appealing was its lack of money laundering laws. Some number of Jewish immigrants who make their way to Israel come from countries that make it difficult or outright ban taking their assets with them.
As a result, the law in Israel is set up to make it easy to move money into the country. Throughout the 1990s this was taken advantage of by criminal syndicates and billions of dollars were laundered through the Israeli financial system.
Israel is also one of the global centers for the diamond trade, a largely unregulated industry that is prone to money laundering.
Over the course of the 1990s, Israeli police estimated that Eurasian gangsters laundered $4 billion through the economy, though estimates range as high as $20 billion.
While Israel has made some improvements to its anti-money laundering enforcement, it has been estimated that 20–25% of its economy remains off the books.
The arrival of so many immigrants from the former Soviet Union had profound implications for Israeli electoral politics, in particular because the nature of Israel’s parliamentary system often means that small parties emerge as important elements of governing coalitions and exercise outsized influence.
One of the early parties formed to represent the interests of newly arrived immigrants was Yisrael Ba-Aliya, founded by the famous Soviet Refusenik Natan Sharansky.
In 1999, a highly controversial book entitled Sharansky Unmasked was published in both Hebrew and Russian, authored by Dr. Yuli Nudelman. Nudelman, a former chief surgeon at Rambam Hospital, had throughout the 1960s been involved in the movement to allow Soviet Jews to emigrate to Israel or the United States.
In the book, Nudelman claimed that Sharansky had been an agent of the KGB. He further claimed that Sharansky had worked with the CIA, Mossad, the Palestine Liberation Organization, and Russian organized crime. Sharansky furiously denied these claims and later successfully sued Nudelman for libel in Israeli court.
Nonetheless, Sharansky has admitted to accepting campaign contributions from Grigori Luchansky, despite the fact that he was warned by members of the US Congress, State Department and CIA that Luchansky was tied to organized crime.
In an affidavit Luchansky claimed that he had given Sharansky $100,0000 and that they had met five times in Israel and abroad to discuss “the setting up of a political party to represent the Russian immigrants in Israel.”
Sharansky went as far as to introduce Luchansky to Benjamin Netanyahu before Israel’s 1996 elections. It was reported in the Israeli press that Netanyahu received $1.5 million from Luchansky, a claim Netanyahu has denied.
In 1997, Sharansky admitted that he had also received $100,000 from the Russian organized criminal Gregory Lerner.
Born to a Jewish family in Moscow, Lerner became heavily involved with the Soviet black market in the 1980s. In 1982, he was arrested and spent five years in a labor camp.
Upon his release, Lerner met the wife of the high level Russian mobster Sergey “Sylvester” Timofeev. Lerner and Timofeev became business partners.
In 1989, Lerner fled to Vienna after Russian authorities accused him of fleecing a Moscow bank. From there, he immigrated to Israel in 1990. The law caught up with Lerner yet again when Swiss police arrested him on a Russian warrant and extradited him back to Moscow.
After serving an 18-month sentence, Lerner again returned to Israel.
Lerner operated out of a heavily fortified compound in Ashkelon, Israel and changed his name to Zvi Ben-Ari.
After Sergey Timofeev was killed by a car bomb in Moscow, his widow and child came to live with Lerner in Israel.
The FBI recorded Lerner speaking on a number of occasions with the feared vor Vyacheslav Ivankov and claimed he was one of the only individuals they ever heard speak to Ivankov as an equal.
Ivankov had at one point lived in Trump Tower and was a high roller at the Trump Taj Mahal casino in Atlantic City.
In 1995, Lerner partnered with Russia’s Promstroi Bank and founded the Israeli-Russian Finance Company. The Bank of Israel eventually granted Lerner permission to handle security transactions with overseas funds controlled by non-residents.
Lerner approached numerous banks in Russia and coaxed them into providing tens of millions of dollars with him for him to invest in Israel.
A formal investigation into Lerner was only opened in Israel after one of Lerner’s former partners filed a complaint against him in Russia. It was discovered that he had been involved in a fraud involving tens of millions of dollars.
With the assistance of British and American law enforcement, the Israelis were also able to uncover a wide array of offshore shell companies and accounts held in Panama, Islands throughout the Caribbean, Mauritius and Luxembourg. Lerner had also established a bank in Cyprus, arguably the number one destination for Russian money laundering in the world.
Money from Russia was being filtered through Lerner’s vast network of shell companies and then returning to Russia via his bank in Cyprus, which was also providing money laundering services to Italian organized crime and Colombian cartels.
Lerner was arrested and after a few months entered into a plea bargain with Israeli authorities in which he confessed to having defrauded a Russian bank of $37 million, establishing numerous shell companies for illegal purposes, committing multiple forgeries, having defrauded none-other-than Semyon Mogilevich and having attempted to bribe numerous senior Israeli politicians.
Lerner had joined the Israeli right-wing Likud Party and had spent a great deal of time attempting to make connections among senior Israeli officials.
Lerner had become friends with Sofa Landver, a Soviet-born, politically-connected Israeli speech therapist who had taught Shimon Peres Russian. Landver was also the head of the Association for Immigrants from the Soviet Union and a Knesset member for the Labor Party.
Landver arranged for Lerner to meet with high level Labor officials Benjamin Ben-Eliezer and Ehud Barack, who were later warned by law enforcement to keep their distance.
Lerner had promised Landver a major contribution to her association but was arrested before it could be made. A witness who had met with Lerner and Landver later told investigating authorities that Lerner had expressed a desire to buy the Bank of Israel.
Following Lerner’s arrest, there was outrage within the Russian-Israeli community who interpreted it as a sign of discrimination by the older guard of Israeli society.
In 1998, a large-scale protest that had been fanned by several Russian language newspapers and Russians in the Knesset took place in Ashkelon. Sofa Landver attended and spoke at the demonstration.
Over the course of the investigation, Sofa Landver, Natan Sharansky and a Soviet-born Israeli politician named Avigdor Lieberman would all be called in for questioning.
Lieberman later founded Yisrael Beiteinu, originally a secular-nationalist party for Russian speaking Israelis.
Landver, who later left Labor and joined Yisrael Beiteinu, used her position in the Knesset to lobby for Lerner’s parole and he was released from prison in 2003 over the objections of Israel’s attorney general.
Upon his release, Lerner briefly worked at a company called Global Connections, which had been founded by a former director general of Yisrael Beiteinu and a former advisor to Lieberman.
Lerner then became an “advisor” to an energy commodities trading company dealing with oil and gas from the former Soviet Union that he secretly controlled called Pacific Petroleum.
Sofa Landver acted as a go between for Pacific Petroleum and Israel’s other energy companies.
In 2004, Lerner was arrested again for fraudulent activities. Over the course of the investigation it was discovered that he had sent $1 million from a Swiss bank account to Solntsevkaya head Sergei Mikhailov.
Yisrael Beiteinu later entered into a coalition government with Netanyahu’s Likud Party, a political merger masterminded by a legendary Republican political consultant named Arthur Finkelstein.
Finkelstein had managed Netanyahu’s first successful campaign to become Israeli Prime Minister.
Finkelstein was a mentor to numerous individuals intimately associated with the later Trump campaign, including Roger Stone and the pollster Tony Fabrizio.
Finkelstein also later advised Hungarian Prime Minister Viktor Orbán, and has been credited with running vicious political attacks against the financier and activist George Soros, the subject of innumerable anti-Semitic conspiracy theories.
Sofa Landver later served as Minister of Aliyah and Integration.
Avigdor Lieberman has served as the Israeli Foreign Minister from 2009–2012 and 2013–2015 as well as its Defense Minister from 2016 to 2018 and is noted for his close relationship with Vladimir Putin.
In 2010, the head of the economic crimes department of the Israeli state prosecutor’s office, Avia Alef, was investigating Lieberman for alleged financial improprieties.
Over the course of her investigation, Israeli prosecutors came to believe that bank accounts linked to Lieberman had received millions of dollars from five international businessmen: Mikhail Chernoy, Martin Schlaff, Robert Novikowksy, Daniel Gitenstein and Ben Gertler.
In April of 2001, $500,000 was transferred from a company owned by Chernoy to a British Virgin Islands registered company that belonged to Lieberman’s driver Igor Shneider.
Mikhail Chernoy (AKA Michael Cherney) is an Uzbek-Israeli businessman who played a key role in the violent privatization of Russia’s aluminum industry in the 1990s. According to Spanish prosecutors, he is a leader of the Izmailovskaya Bratva criminal syndicate.
He is also believed to have collaborated with the Solntsevskaya and the infamous Uzbek gangster Alimzhan Tokhtakhounov, who later operated a gambling ring out of Trump Tower.[2]
Read my in-depth article about the violent and organized crime-ridden privatization of the Russian aluminum industry, which involved Chernoy.
Martin Schlaff is an Austrian-born billionaire. He made his fortune through his connections to the East German Government and its secret police force, the Stasi.
In 1986, Schlaff met with three Stasi officials in Croatia, where it was agreed that he would build a computer hard disk plant in East Germany. At the time East Germany was under a Western trade embargo. The Stasi officers were reportedly impressed with Schlaff and provided him with the codename Landgraf.
In 1998, a German Bundestag committee of inquiry looked into the disappearance of funds from East Germany. Over the course of the investigation, the committee confirmed that Schlaff had received tens of millions of marks from the East German Government in return for embargoed goods.
The committee found that the safehouse in which Markus Wolf, the head of the Stasi’s forieign intelligence service, had sheltered in after the fall of the wall had been paid for by Schalff. The safehouse was located in Dresden, notably where Vladimir Putin was stationed as a young KGB officer.
Robert Novikowsky, also Austrian, is a co-founder of Centrex Europe Energy and Gas AG (CEEGAG), one of three partners with Gazprom on developing the Vienna-based Central European Gas Hub (CEGH).
One of Novikowsky’s founding partners at CEEGAG is a Swiss-lawyer named Hans Baumgartner, who is also a member of the board of directors at RosUkrEnergo, one of several organized crime-linked intermediaries affiliated with Gazprom.
Schlaff and Novikowksy share the same press officer in Vienna and through a blinding array of shell companies are linked to Gazprom.
Both were also implicated in a bribery case involving former Israeli Prime Minister Ariel Sharon’s sons.
“Martin Schlaff and Robert Novikowsky are figures that are connected to Putin. They work on behalf of a Russian company, Gazprom,” said former Israeli deputy state prosecutor Yehuda Sheffer.
“This case involves connections that go far beyond the focus of the criminal allegations that were investigated. These are people and processes and phenomena that it’s not always easy to discover the full truth about.”
Avia Alef and her colleagues faced an unprecedented pattern of harassment, including being followed, surveilled by private investigators, attacked in the press and witness intimidation.
In a variety of instances key witnesses changed their testimony and in some cases mysteriously died.
In December of 2012, Israeli Attorney General Yehuda Weinstein closed the Lieberman case against the wishes of his own prosecutors.
On May 30th, 2019, Benjamin Netanyahu’s son Yair tweeted that his father had appointed Weinstein in 2009 at Lieberman’s request on the understanding that he would shut the case against Lieberman.
In Weinstein’s private practice he represented both Netanyahu and the Izmailovskaya-linked oligarch Oleg Deripaska.
“[T]here are crossroads in the history of a state where a person doesn’t necessarily have to be corrupt in order to make a decisive contribution to the entrenchment of political corruption,” Alef wrote in a Hebrew language book about her experience. “In my personal assessment, in 2012, it was my lot to stand dumbstruck at such a crossroads.”
Another country infiltrated by Eurasian organized crime and Russian intelligence is the United Kingdom.
Post-Soviet Corruption in the Anglosphere: Britain and the United States
The City of London, the heart of Britain’s global financial hub, enjoyed a close relationship with the Soviet Union as far back as the 1950s. Following the Second World War and the Bretton Woods Conference, the US Dollar was made the reserve currency of the world.
As the Cold War worsened, the Soviet’s decided to keep its dollar reserves invested primarily in London so as to avoid being vulnerable to American political pressure. London quickly became a “eurodollar” hub, that is British banks traded in dollars and yet were not subject to the tight Depression-era American financial regulatory laws.
This loophole allowed London to maintain its privileged position in the global financial system and also contributed toward the establishment of the Anglo-American global offshore financial secrecy system.
By 1986, financial liberalization in the UK led to the establishment of numerous unregulated offshore financial centers in the nearby Channel Islands, the Isle of Man, Malta and Cyprus, and locations further afield located in former British overseas territories in the Caribbean and Pacific, Dubai, Singapore and Hong Kong.
These disparate new offshore financial hubs were all former British territories which enjoyed the rule of law, stringent financial secrecy regulation and the widespread use of anonymous corporate ownership vehicles.
As the Soviet Union fell apart, the Anglo-American offshore system was first used by the KGB to launder Communist Party money abroad and then eventually by Eurasian organized crime and the oligarchic elite to stash their ill-gotten gains away in the relative safety and stability of the West.
In 2016, the UK’s Office for National Statistics estimated that Russian investors held £25.5 billion in assets in the UK. However, that number is dwarfed by the £68 billion that flowed out of Russia and into Britain’s offshore financial satellites in the period between 2006 and 2016.
According to a study 2018 by Deutsche Bank, which itself has been fined for involvement in multiple Russian money laundering scandals, an additional £67.5 billion in hidden Russian cash might be stashed away in the British financial system. These figures have yet to be updated in light of the ongoing war in Ukraine and the sanctions that followed in its wake.
London’s white hot property market became a perennial favorite sink for Russian’s looking to park money in the West.
While Russia’s oligarchs were buying up all of the choicest properties in London and hobnobbing the British elite, a campaign of political murder was unfolding on the streets of the British capital.
An exhaustive, two-year investigation performed by BuzzFeed News identified as many as 14 murders on British soil that US intelligence believed to be linked to Russia.
In every single case, investigations were prematurely cut short by British law enforcement.
Most were related to the group that surrounded Boris Berezovsky and the FSB whistleblower Alexander Litvinenko, who was later assassinated after ingesting the radioactive poison.
In 2009, three years after Litvinenko’s assassination, the Conservative British Tory party wished to “normalise” relations with Moscow.
The links between the Tories and Russian interests did not go unnoticed by MI5. In 2010, the British domestic intelligence service “vetoed” the appointment of Baroness Pauline Neville-Jones to the cabinet position of National Security Advisor to the Prime Minister in David Cameron’s new government because of her links to Dmytro Firtash and Mikhail Chernoy.
It was revealed that the Baroness received £20,000 a year from Robert Shetler-Jones, the British-based overseer of Firtash’s assets.
The Baroness also sat on executive council of the Intelligence Summit, a Washington, DC-based right-wing anti-terrorism conference primarily funded by Chernoy.
As in Austria, Firtash has cultivated a network of wealthy and politically connected members of the British elite to promote his interests in the UK.
A key figure in this network is the onetime CEO of Firtash’s holding company Group DF, Robert Shetler-Jones.
In 2007, Firtash founded the British Ukrainian Society (BUS) alongside Shetler-Jones and Richard Spring, better known as Lord Risby. Lord Risby was made BUS chairman and received payments through a subsidiary of a British Virgin Islands company owned by Shetler-Jones.
BUS headquarters is located in the same London office building as yet another Shetler-Jones-owned company called Scythian Limited.
Scythian was used to make donations to Baroness Neville-Jones and to the Tory Party, including £62,500 to the Conservative MP Robert Halfon.
Among the prominent Britons in Firtash’s orbit is the Tory Member of Parliament John Whittingdale, who in 2015 was appointed as Secretary of Culture.
Whittingdale made numerous all expenses paid trips on behalf of BUS to Vienna, Ukraine and other locations.
Whittingdale, who was later revealed to frequent a dominatrix, was also known for his affinity for Eastern European women and for once dating the daughter of a Soviet military officer.
Another is Raymond Asquith, the Earl of Oxford and a member of the House of Lords, who sits on the board of Group DF.
Remarkably, Asquith was formerly the head of MI6’s Moscow station and personally drove KGB Colonel and MI6 asset Oleg Gordievsky out of Russia after his superiors had became worried his status had been blown.
In 2005, Firtash invested $1 million in a company set up by Asquith, who later alongside Shetler-Jones lobbied the US Department of Justice on Firtash’s behalf.
Prior to receiving his peerage, Asquith ran a lobbying firm called Asquith & Granovsky alongside Vladimir Granovsky, a consultant for the Kremlin-backed Ukrainian leader Viktor Yanukovych.
On August 21st, 2012, a lobbying group called Conservative Friends of Russia (CFoR) was launched in the home of Russia’s Ambassador to Britain Alexander Yakovenko during a party that was attended by over 250 prominent British Tories.
A month later, four representatives from CFoR went on a trip to Moscow in which they met with members of Putin’s United Russia Party. The visit was arranged by the Russian state cultural agency Rossotrudnichestvo, which the FBI once investigated for its links to Russian intelligence.
It was later discovered that the Russian Embassy contact for CFoR, Sergey Nalobin, was the son of a prominent KGB general, and that Nalobin was acting under the instructions of the Kremlin to promote links between United Russia and the British Tory party.
Nalobin had tweeted pictures of himself with then Mayor of London and future Prime Minister Boris Johnson, who he described as a “good friend.”
In 2019 it was revealed that the Russian-British citizen Lubov Chernukhin, the wife of a former Russian finance minister, donated £450,000 to the Conservatives, making her at that point the largest female political donor in British history at the time.
Chernukhin’s husband Vladimir had been elevated by Putin as finance minister before being made the chairman of Vnesheconombank (VEB), a financial institution with close historical ties to the Russian security establishment.
Lubov spent over £160,000 at an auction that went towards the Conservative party to play tennis matches with current and former Prime Ministers Boris Johnson and David Cameron. Sergey Nalobin was present at the event where she did so.[3]
Former British Prime Minister Boris Johnson is friends with a former Russian arms magnate Alexander Temerko.
Since he became a British citizen in 2011, Temerko has donated over £1 million to the Conservative party.
In an interview with Reuters, Temerko praised the leaders of many of Russia’s security agencies, including former-FSB head Nikolai Patrushev.
Sources informed Reuters that Temerko had established relationships with the Russian security services in the 1990s as the head of the Russian state arms company Russkoye Oruzhie.
Russian Corruption, Organized Crime, and Intelligence Operations Targeting the US Congress
Russian energy interests, some with links to organized crime and the Russian security services, have attempted to make inroads into the American political system since at least the late-90s.
In August, 1997, Republican House Majority Whip Tom DeLay, his wife and four top aides went on a seven-day, all-expenses-paid trip to Moscow to play golf, meet with church leaders and speak with Viktor Chernomydrin, the founder of Gazprom and then Prime Minister of Russia.
DeLay gave no advance notice to either the State Department or the American Embassy, which was unusual given his meeting with the Prime Minister. To avoid running afoul of House ethics rules, Delay claimed the $57,238 cost of the trip was covered by a Washington-based non-profit.
In fact, the trip was arranged by the lobbyist Jack Abramoff and paid for by a Russian oil company with large holdings in Gazprom named Naftasib. Abramoff would later achieve infamy in the US for his activities ripping off various Native American tribes that he was lobbying on behalf.
In the 1980s, Abramoff was involved hard right and anti-Communist political activities and organizations. He founded the International Freedom Foundation, which lobbied on behalf of South Africa’s Apartheid government. The group was almost exclusively financed by South African military intelligence and sought to color all opponents of Apartheid as allies of Soviet Communism.
The group provided Abramoff with funding that allowed him write a produce Red Scorpion, a film starring action star Dolph Lundgren that loosely glorified the struggle against communism by the warlord Jonas Savimbi in Angola. Savimbi was also a client at Black, Manafort and Stone.
Years later, however, Abramoff welcomed business from Putin’s Russia.
Using a shell company based in the Bahamas, Naftasib had paid two high-powered Washington lobbying firms $440,000, and as part of their campaign Abramoff had arranged to bring his old friend DeLay to the Russian capital.
During their stay, the Republican entourage was escorted around Moscow by Naftasib executives Marina Nevskaya and Alexander Koulakovsky, along with their machine gun toting security guards.
After meeting with Chernomydrin, the Republican Majority Leader enjoyed a “fancy dinner” with Abramoff, Nevskaya and Koulakovsky.
Also in attendance was Ed Buckham, DeLay’s former chief-of-staff and organizer of the U.S. Family Network, a public advocacy group with close ties to DeLay that claimed to support, “economic growth and prosperity, social improvement, moral fitness, and the general well-being of the United States.”
At this writing, Buckham is the chief-of-staff to the Republican Congresswoman Marjorie Taylor-Greene.
During the dinner, Nevskaya and Koulakovsky expressed an interest in contributing money to DeLay. Koulakovsky went as far as to ask, “what would happen if the DeLays woke up one morning” and found a luxury car parked in their driveway?
The Americans present at dinner claimed that they told their Russian hosts such an act would end up with all of them in jail.
Nine months later on June 25th, 1998, a single check for $1 million was passed along to the U.S. Family Network via the London-based law firm James & Sarch.
Christopher Geeslin, a pastor and the former President of the U.S. Family Network explained to The Washington Post that the money had actually come from Naftasib and was meant to influence DeLay’s vote on legislation related to an IMF bailout of Russia after the market crash in 1998.
Many House Republican’s opposed appropriating any further money the IMF, decrying it as a bail out. The IMF was hoping to push the Russians to increase taxes on energy companies like Gazprom as a condition to receive the loan.
DeLay came out for the loan and against the increased taxes.
“They are trying to force Russia to raise taxes at a time when they ought to be cutting taxes in order to get a loan from the IMF,” DeLay said on Fox News Sunday, 12 days after the Russian government defaulted on its treasury bills. “That’s just outrageous.”
The IMF loan was approved, DeLay voted to fund the IMF and the Russians never raised their taxes. Much of the funding provided by the IMF to Russia vanished upon arrival.
Jack Abramoff, who brought DeLay into contact with Naftasib, had been working with Russians since the mid-90s.
Between 2001 and 2004, Abramoff was paid $2.1 million by a Dutch shell company named Voor Huisen, which recorded no activity or assets.
Several of Abramoff’s former partners who had also lobbied for Voor Huisen told The Boston Globe that the company was connected to Naftasib.
J. Michael Waller, Vice President of the Center for Security Policy and a former colleague of Abramoff’s, told The Globe that Abramoff approached him to organize the Moscow trip for DeLay.
Waller, who refused the offer, said that he had been told by two of Abramoff’s colleagues that Abramoff understood that if he performed well for Naftasib, the Russian government would retain him.
“In my estimation, Naftasib and its agents were running what appeared to be an aggressive political intelligence operation against the United States,” Waller said in an interview in 2019.
“All the indicators were consistent with the pattern of a Russian state-sponsored entity working to corrupt elected American officials and I had warned people of this possibility and that was my position more than a decade ago and that remains my position today.”
In its promotional materials, Naftasib claimed to be a major shareholder in Gazprom and listed its largest clients as the Russian Ministry of Defense and Ministry of Interior.
Marina Nevskaya, Vice President of the company, was listed as an instructor at a school for Russian military intelligence officers.
50% of the company is owned by Mikhail Khimich, a billionaire who lives part time in New Zealand and is known to regularly take Nevskaya out on his super yacht.
Khimich’s former business partner Alexander Kirichuk told local press that Nevskaya was a “colonel-lieutenant in the GRU.”
There is little public information about Sibneft’s other 50% owner Alexander Koulakovsky other than a 1994 dispatch from the Russian news agency TASS that claims that he was, “arrested by authorities of Hatichoe, Northern Honshu, Japan,… for illegal storage of a handgun and 150 rounds of ammunition.”
This dearth of public information didn’t seem to raise any red flags Pennsylvania Republican House member Curt Weldon.
“I rise today to pay tribute to Mr. Alexander Koulakovsky and his company [Naftasib],” Weldon stated before the House of Representatives on February 4th, 1999 in a statement that was entered into the Congressional record.
Weldon, who majored in Russian studies and speaks the language, had visited Russia over 30 times and was a noted advocate for closer relations between first the Soviet Union and then Russia with the U.S. He also enjoyed the distinction of having been made an honorary member of the Russian Academy of Sciences.
Why Weldon decided to enter a “tribute” to Koulakovsky into the Congressional record remains unknown.
Three years later in May, 2002, Weldon was part of a Congressional delegation that accompanied President Bush on a visit to Moscow.
Weldon visited and toured the Moscow offices of ITERA, a shadowy, Gazprom-linked intermediary company that had been used to transport Turkmen gas to Ukraine.
Two months earlier in March, the U.S. Trade and Development Agency had withdrawn a grant from the company over concerns that the company was affiliated with organized crime.
According to a press release issued by ITERA, during his visit Weldon praised the company, describing it as “a strong and well-established company” that would serve as a “great source” for American companies seeking partners.
Upon his return to Washington, Weldon denounced the decision to withhold the grant.
On September 5–6, Weldon’s accommodation in New York was covered by ITERA where he was interviewed on Russian radio to discuss energy matters.
Weldon hosted a lavish dinner for ITERA’s chairman Igor Makarov on September 24th that was attended by over 30-members of Congress.
Six Days later ITERA signed a $500,000 contract with the lobbying firm Solutions North America, Inc. Solutions was owned by Weldon’s eldest daughter Karen.
In 2003, officials at the U.S. Embassy in Belgrade were surprised to receive an invitation to a luncheon in honor of Weldon sponsored by Bogoljub Karic, a wealthy Serbian businessman who had been denied a visa to the U.S. due to his ties to the murderous Serbian leader Slobodan Milosevic.
The embassy staff came to understand that Weldon was lobbying on behalf of Karic to have him removed from the visa blacklist.
The Pennsylvania congressman was traveling with a large entourage, over ten people including his wife, three daughters and two sons. The Weldon family were put up in a private residence owned by the Karic family, who also covered $4000 worth of flights.
Prior to Belgrade, the Weldon family stopped in Moscow where they visited a factory that produced drones owned by Saratov Aviation. The $12,000 trip to Moscow was covered by the Moscow International Petroleum Club.
Upon the Weldon’s return to the US, Solutions North America was awarded a $240,000 contract to promote the Karic family.
Saratov Aviation began to pay Solutions $20,000 dollars a month to promote its sale of a saucer-shaped drone, plus 10% of any sales of any new business she generated.
Luckily for Karen Weldon, her father sat on the House subcommittee that oversaw $60 billion in military acquisitions. The U.S. Navy signed a letter of intent, signalling an interest in the Russian drone technology.
On October 16th, 2006, the FBI executed search warrants on four homes and other locations in the Philadelphia area and two in Jacksonville.
Among the locations raided were the home of Curt’s daughter Karen Weldon and ITERA’s Jacksonville headquarters.
Representative Weldon was three weeks out from an election that he would lose. Law enforcement officials had been looking at him for months.
Though the FBI publicly claimed to be looking into whether Weldon had improperly helped his daughter obtain lobbying and public relations contracts, they unfolded within a broader series of investigations into the influence of organized crime in Russian and Ukrainian natural gas deal.
In particular, the FBI was focusing on the activities of Semyon Mogilevich.
In the year 2000, the FBI was alarmed enough that they opened their first ever office abroad staffed by full time agents in Budapest, Hungary, which was known to be Mogilevich’s base of operations at the time.
“I can think of no other company that represents what Russia is today and offers in the future,” Weldon said of ITERA, speaking at the opening of the companies American headquarters in Jacksonville.
Corporate records establish that Olga Schnayder, a lawyer who had worked with ITERA, set up Highrock Holdings, a company believed to be associated with Mogilevich.
Schnayder is also the part-owner of a funeral parlor in Moscow listed as owned by Arigon Ltd, another company believed to be associated with Mogilevich.
Dmytro Firtash, the head of Highrock, told Ambassador William Taylor that Makarov, the man Weldon celebrated with over 30 members of the U.S. Congress, was a close associate of Highrock.
Firtash also claimed that ITERA’s head of security was a former member of the KGB.
Weldon’s former congressional aide Russell Caso later pled guilty to failing to disclose a $19,000 dollar payment made to his wife by a Russian organization named the International Exchange Group (IEG).
From his position on the Armed Services Committee, Weldon had described IEG as, “comprised of senior [Russian] military, intelligence and political officials,” and claimed that it was “established by President Vladimir Putin’s plenipotentiary representative to the Duma.”
In 2004, Weldon convinced the U.S. Missile Defense Agency to sign a $97 million dollar contract with IEG to facilitate Russian “cooperation” before higher ups in the Pentagon pulled the plug on the project.
When asked about IEG, Weldon said, “you can get access to any [WMD] sites you want in Russia, you can get cooperation with any project in Russia. We’ll give you access the inner circle of President Putin.”
In late-2005, just a week after Gehard Schröder had accepted a position at Nord Stream AG, Putin held a meeting at the Kremlin with a Texas oil man and former US Commerce Secretary Donald Evans, and offered him a top job at Rosneft. Evans was a close personal confidant of President Bush, having worked on both his successful gubernatorial campaigns and served as chairman of the Bush/Cheney 2000 campaign.
Though initially flattered by the proposal, Evans turned the offer down after considering it for a week.
The next article will describe Putin’s relations with the American Presidents Bill Clinton and George W. Bush.